Kerala Cooperative Society Member Executing Instrument/Sale Deed In His Own Capacity Not Entitled To Benefit Of Stamp Duty Remission: Supreme Court

The Supreme Court observed that a member of a cooperative society in Kerala executing an instrument/sale deed in his own capacity shall not be entitled to the benefit of remission of stamp duty.

The bench of Justices MR Shah and Krishna Murari upheld the Kerala High Court Full Bench Judgment which held that (i) the benefit of remission of stamp duty is available only in respect of instruments executed by or on behalf of a society or by an officer or member thereof and instrument so executed should be relating to the business of the society; and (ii) the benefit of remission can be claimed by the society only if, but for such remission, the society, an officer, or the member, as the case may be, would have been liable to pay such stamp duty.

The court dismissed the appeals filed by Kerala Land Reforms & Development Cooperative Society Limited, Federal House Construction Cooperative Society Limited & Another, N.B.Krishna Kurup and Others, Aluva Town Cooperative Housing Society and the Central Excise & Custom Officers Housing Cooperative Society Limited. 

The appellants' case was that as per SRO 75/60 issued under Travancore-cochin Co-operative Societies Act, 1951, the instruments executed by or on behalf of any registered co-operative society; instruments executed by officer of such society and instruments executed by a member in his own capacity or/and in the capacity of a Guardian of minor and relating to the business thereof, there shall be remission of stamp duty ; that in view of Section 110(2) of the Kerala Act, 1969, the notifications issued under the Travancore Act, 1951 are saved and they are deemed to have been issued under the Kerala Act, 1969. The respondent, on the other hand, contended that, SRO 75/60 issued in exercise of powers under the aforesaid Acts are not saved as they are inconsistent with Section 40 of the Kerala Act, 1969.

The bench noted that, as per Section 40 (1)(a), the stamp duty chargeable under the Kerala Act, 1969 in respect of any instrument executed by or on behalf of a society or by an officer or member thereof and relating to the business of such society….. and in cases where, but for such remission the society, officer or member, as the case may be, would be liable to pay such stamp duty, there shall be remission of stamp duty.

"Thus, as clause 1(a) of SRO 75/60 is inconsistent with the relevant provisions of the Kerala Act, 1969, more particularly Section 40 thereof, the said order is not saved and cannot be said to be deemed to have been issued under the Kerala Act, 1969 (Section 110(2) of the Kerala Act, 1969) as has been contended on behalf of the appellants. Therefore, considering the express provision contained in Section 40(1) (a) of the Kerala Act, 1969, a member of the society executing the  document in his own capacity or in the capacity of a Guardian or a minor shall not be entitled to the benefit of remission of stamp duty. 9. In view of the above and for the reasons stated above, the appellants herein shall not be entitled to the benefit of remission of stamp duty on the instruments/sale deeds in question. Such instruments/sale deeds in question cannot be said to be executed by or on behalf of a society or by an officer or member thereof relating to the business of the society. We are in complete agreement with the view taken by the Full Bench of the High Court.", the bench observed while dismissing the appeals.

Case details

Kerala Land Reforms & Development Co-operative Society Limited vs District Registrar (General) | 2022 LiveLaw (SC) 882 | CA 6588 OF 2015 | 14 October 2022 | Justices MR Shah and Krishna Murari

Counsel: Senior Advocate Gopal Sankaranarayanan, Adv Haris Beeran, Adv K. Rajeev and Adv R. Nedumaran for appellants and Sr. Adv Jayanth Muthraj for respondents

Headnotes

Kerala Cooperative Societies Act, 1969 ; Section 40(1)(a) - A member of the society executing the document in his own capacity or in the capacity of a Guardian or a minor shall not be entitled to the benefit of remission of stamp duty - The benefit is available only in respect of instruments executed by or on behalf of a society or by an officer or member thereof and instrument so executed should be relating to the business of the society. (Para 8-9)

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