P.Mu. 3623/P1/2021, Final Order on Revision Petition

What the proceedings decide

Proceedings Number P.Mu. 3623/P1/2021 concerns a deed titled “Deed of Ratification”, executed on 25 March 2015 and held as pending document P48/2015 at the Padappai Sub-Registrar Office. Uma Maheswari and Ramasubramanian were the principals, Sangupathi acted as their agent, and the document was written in favour of the Saint Thomas Mount Panchayat Union.

The deed ratified an earlier gift deed, document number 4189/2007, written in favour of the Panchayat Union Commissioner. The property value was not stated, and the ratification deed carried stamp duty of Rs.100.

Dispute over document classification

The South Chennai District Registrar treated pending document P48/2015 as a transfer under Article 23 of the Indian Stamp Act. The District Registrar fixed deficient stamp duty of Rs.1,85,988 and a penalty of Rs.4,012.

That conclusion relied on wording stating that ratification of the gift deed was for “mutual benefits”. The District Registrar considered the transaction not to be voluntary and therefore classified it as a transfer rather than a gift.

The revision petitioner argued that:

• No consideration or exchange payment was received.
• The deed was executed in the public interest to confirm the Panchayat Union's ownership.
• “Mutual benefit” referred to the benefit available to plot purchasers using public purpose areas in the layout, not a benefit received by the layout promoter.

Final findings

The Inspector General of Registration and Chief Controlling Revenue Authority found that Section 4 permits supplementary deeds only for sale, mortgage and settlement documents. It does not provide for a supplementary deed relating to a gift deed, so the ratification could not be classified under that provision.

The authority also found that the wording about mutual benefit did not mean that the persons executing the deed received consideration. Pending document P48/2015 was therefore classified as a new gift deed under Article 33, rather than a transfer under Article 23.

Because the deed was written in favour of a local authority, it qualified for the stamp duty concession under Government Order Number 455, Commercial Taxes and Religious Endowments Department, dated 23 April 1983. The authority concluded that the document bore the proper stamp duty and set aside the District Registrar's order dated 15 February 2016.

Who is affected

The decision directly affects the parties to pending document P48/2015 and the Saint Thomas Mount Panchayat Union. It is also relevant to registration professionals dealing with ratification of gift deeds made to local authorities, particularly where no consideration is received.