P.Mu.3623/P1/2021, Final Order on Deed of Ratification

What the proceedings decide

Proceedings P.Mu.3623/P1/2021 dated 22 September 2022 concern a Deed of Ratification executed on 25 March 2015 and kept pending as document P48/2015 at the Padappai Sub-Registrar Office. The document ratified gift deed 4189/2007, which had been executed in favour of the St Thomas Mount Panchayat Union.

The South Chennai District Registrar had treated the ratification as a transfer under Article 23 of the Indian Stamp Act. The District Registrar demanded deficient stamp duty of Rs.1,85,988 and a penalty of Rs.4,012, although the document carried stamp duty of Rs.100.

Why the classification was changed

The Head of the Tamil Nadu Registration Department and Chief Controlling Revenue Authority examined the revision petition, written arguments, original district file and submissions made at the hearing on 18 March 2022.

Key findings were:

• The original property owners had not been included as parties to the earlier gift deed.
• Their agent later executed the Deed of Ratification to confirm that gift.
• Section 4 of the Indian Stamp Act permits a supplementary deed for a sale, mortgage or settlement, but does not provide for a supplementary deed to a gift deed.
• The reference to mutual benefits concerned the use of public areas by people who had purchased plots in the layout. It did not establish that the persons executing the ratification received consideration.
• The District Registrar’s treatment of the document as a transfer under Article 23 was therefore not sustainable.

The Deed of Ratification was instead classified as a new gift deed under Article 33 of the Indian Stamp Act.

Stamp duty outcome and who is affected

Proceedings P.Mu.3623/P1/2021 found that the document was executed in favour of a local authority and qualified for the stamp duty concession under Government Order No. 455, Commercial Taxes and Religious Endowments Department, dated 23 April 1983. It was therefore held to bear the appropriate stamp duty, and the South Chennai District Registrar’s earlier order was set aside.

The decision directly affects the parties to pending document P48/2015, the St Thomas Mount Panchayat Union and the registration authorities handling it. It also explains the authority’s reasoning for treating this particular ratification of a gift as a gift deed rather than a transfer for consideration.