• Stamp duty registration not paid by previous owner

I have purchased a shop in an old building in 2014 and have duly paid the stamp duty and registration fees. Now, that the building is proposed to go for redevelopment, we are getting the conveyance of the society done. While doing so, we found out that the previous owner of the shop that I own, had not paid stamp duty and registration fees at the time when he had purchased from the builder. Am I liable to pay those fees now ? The lawyer who is getting the conveyance done is saying that I have to pay 29800 as previous stamp duty and 4 times penalty i.e. 1,19,200 (One lakh nineteen thousand ) so overall, I have to pay approx a lakh and a half. He is putting too much pressure to pay as the conveyance deed is stopped only because of me as all other papers are clear of other members. 

Please advice.
Asked 2 years ago in Property Law
Religion: Hindu

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15 Answers

You can make payment and sue the previous owner to recover the said dues 

 

there must be indemnity clause in your sale deed to indemnity you in case any claims are made 

Ajay Sethi
Advocate, Mumbai
94723 Answers
7535 Consultations

5.0 on 5.0

Without payment of stamp duty the property could not have been registered on the name of the previous owner. 

In that case he had no title to sell this property. 

If he sold it to you by managing a different story then it was your fault for having not verified this fact or for not obtaining legal opinion at the time of purchase. 

At this stage you cannot approach the previous owner and demand him to pay the stamp duty. 

Hence if you want to retain the property after redevelopment you may have to comply with the legal requirements. 

Even now you consult a local advocate and proceed as suggested by him after scrutinizing the relevant papers pertaining to the property. 

If the property needs to be regularized,  you may have to abide by the law and rules in this regard. 

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

1. As per law, no body can convey better title than what he holds.

 

2. In the instant case, the earlier purported owner did not hold the title of the shop since he did not get the deed of Conveyance registered in his favour.

 

3. So, the earlier purported owner can not register the sale deed in your favour since he did not legally own it.

 

4. First get the sale deed in his havour registered by paying the stamp duty and thereafter get the sale deed in your favour registered by him.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0

As there is default in payment  to stamp of vendor, it is s buyer who has to make the stamp duty but without penalty. Buyer has option to recover the stamp duty paid from previous vendor by filing a suit for recovery of money paid towards stamp duty. This is the procedure  

Ravi Shinde
Advocate, Hyderabad
4042 Answers
42 Consultations

5.0 on 5.0

- Without being a registered owner of the said shop , how the previous seller sold and execute a sale deed in your favour , and it amount to cheating .

- However , for making the said property legal , you will have to pay the stamp duty , and further you can recover the said amount from the previous seller .

Mohammed Shahzad
Advocate, Delhi
13230 Answers
198 Consultations

5.0 on 5.0

Hard luck but you have to bear the brunt 

In absence of a registered title document held by the previous owner, he has not passed on any better title to you 

So your title is also defective 

The conveyance deed will be liable for a nominal stamp duty only if all the sale agreements for all the units in the building are duly stamped 

So you have to pay and then recover that amount from the previous owner by filing a suit 

Yusuf Rampurawala
Advocate, Mumbai
7514 Answers
79 Consultations

5.0 on 5.0

Sir, to get the CD, you have to pay for the stamp duty.  Had the papers been checked thoroughly in 2014, you can reduce the price to the extent of stamp duty.  Get it done, otherwise you would face problems in selling the said shop in future.

Dalip Singh
Advocate, New Delhi
1084 Answers
36 Consultations

5.0 on 5.0

Dear Client, 

As the property is now registered in your name, only you will be liable to pay the stamp duty and registration fees going by the concept of caveat emptor.  

Thank you. 

Anik Miu
Advocate, Bangalore
8883 Answers
110 Consultations

4.7 on 5.0

You need to recover it through indemnity bond if signed by previous owner or pay the same yourself

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

You are not liable to pay past stamp duty dues 

 

society should recover it from previous owner 

 

rely upon Bombay HC judgment 

Ajay Sethi
Advocate, Mumbai
94723 Answers
7535 Consultations

5.0 on 5.0

that order will not come to your aid

that order applied when a owner puts his flat for sale and the owner himself claims title under a document which is not stamped and registerd

thus if the purchaser proceeds to enter into a sale deed with the seller and the sale deed is lodged for registration, then the sub-registrars were previously requiring the parties to pay stamp duty with penalty for even the previous transactions i.e. on the previous agreements which were not stamped and registered. it was in this context that the High Court clarified that the sub-registrar has no power to demand stamp duty with penalty for previous unstamped documents

the court had clarified that stamp duty is to be charged on INSTRUMENTS and not on the transactions 

so if a present sale deed is lodged for registration and that sale deed recites the title history of previous transactions of sale which were not stamped, then the sub-registrar cannot demand stamp duty on those unstamped transactions, from the parties presenting the present sale deed. so the sub-registrar only has to look into the applicable stamp duty on the present sale deed and NOT whether or not proper duty was paid on all previous transactions 

in your case you are not selling your flat

it is the land and building being conveyed to the society under a deed of conveyance

such a conveyance attracts only a nominal duty if all the FIRST agreements for sale for all the flats in the building are properly stamped and registered

as in your case the first agreement concerning your flat is unstamped, the authority can demand the stamp duty to be paid on that agreement and only then it can be said that conveyance attracts a nominal duty 

in the case of conveyance deed by builder to society, no consideration is passing from society to builder. the builder executes the conveyance deed in favour of society because the law requires him to do that

no property is being sold by a builder to the society

the builder merely has to complete and close the project by registering a conveyance deed in favour of society of flat purchasers

thus the authority in such cases checks the stamp duty payable on all the flats sold by the builder to the flat purchasers in the society building 

if all these agreements are duly stamped then no duty is payable on the conveyance deed

the conveyance deed merely gets registered on a stamp duty of Rs. 100/-

 

 

Yusuf Rampurawala
Advocate, Mumbai
7514 Answers
79 Consultations

5.0 on 5.0

You can invoke the remedy on basis of the said judgement

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

- Yes, The Bombay High Court, held that the recovery of stamp duty for past transactions at the time of subsequent sale, is not proper

Mohammed Shahzad
Advocate, Delhi
13230 Answers
198 Consultations

5.0 on 5.0

The lawyer who is demanding 4 times of the stamp duty to be paid now under tthe redevelopment scheme, perhaps is not aware of the latest judgment rendered by Bombay high court in this regard.

While deciding the dispute, justice Gautam Patel, took an out-of-the-box stand and held that the stamp duty authorities had no right to collect the stamp duty, for inadequately stamped past documents of any property, at the time of registration of its subsequent sale. Patel observed that the stamp duty was payable with respect to an instrument and not with respect to a transaction, as per the provisions of the Indian Stamp Act.

He also held that stamp duty cannot be recovered at the present rate, with respect to past instruments which were executed at a time when the instrument was not liable for stamp duty, as these documents could not be treated as ‘unstamped’ or ‘inadequately stamped’ at the relevant time. He also observed that as there were no clear cut provisions in the law, about the recovery of stamp duty retrospectively, the stamp duty authorities have no authority to insist on payment of stamp duty on such past instruments that formed part of the chain of documents.

 

Therefore on the basis of the above referred judgment you may refuse to pay the exorbitantly demanded stamp duty and produce this citation for his reference so that he may not insist on it again.  

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

1. The earlier transaction was not registered.

 

2. So, the transaction with retrospective effect  will be registered now paying the stamp duty at present rate.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0

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