Development Agreement Between Owner

   08-03-2019 -       UMESHCHANDRA YADAV -       no comment.

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As per Public Interest Litigation bearing No.54/2011 (Chandrakant Manekar V/S Govt. of Maharashtra & others which was filed before Bombay High Court in respect of Development Agreement of immovable property between Owner and Developer, sometimes owner by way of consideration retain for himself certain Galas/ premises. On such constructed area retained by owner and on such document which will be executed between owner and Developer the issue was for assessment of stamp duty to be payable on such document.

Honourable High Court in respect of PIL No.54/2011 has passed an order dated 19th March, 2014in respect of premises/ Galas retained by the owners on the issue of assessment of stamp duty on that premises Bombay High Court directed Government to to issue circular clarifying the above matter and to follow order dated 29/01/2004 (prabha Laxman Ghate V/S State of Maharashtra & others) in writ petition No.146/1997 passed by this Bombay High Court.

In the matter of Prabha Laxman Ghate V/S Government of Maharashtra matter (Petition No.146/1997). In the said writ petition petitioners (original owner of land ) has executed Development Agreement dated 10/4/1989 and as per the said Development Agreement Developer has to develop and out of total six premises, two premises has to be retained by original owner.

This document was produced before Stamp collector, Pune for fixation of stamp duty on document, the said Stamp collector has come to the conclusion that those two premises which are to be retained by the owner as per Development Agreement has the effect of an Assignment of property and therefore has demanded stamp duty. Smt. Prabha Ghate, petitioners has filed petition challenging this order passed by stamp collector, Pune. Bombay High court on 29/1/2004 has issue order quashing order of stamp collector, Pune and clarified two issues: ‐‐

1) In Smt. Prabha Ghate matter, as per Development Agreement two premises has to be retained by the landowner in lieu of Development rights of the owner and therefore there is no assignment in true meaning for the benefit of the owner.

2) As per Bombay Stamp Act, 1958 dated 16/5/1997 on Development Agreement Article 5‐G. The assessment of stamp duty is calculated with effect from 7/2/1990. In the case of Smt. Prabha Ghate matter since Development agreement was executed on 10th April, 1989. As per Bombay Stamp Act, 1958 (Now Maharashtra Stamp Act) amended Article 5‐G‐A provisions came to be implemented after 7/2/1990 said provisions are not applicable to present Development Agreement.


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