Bombay HC Quashes ₹3 Cr+ Stamp Duty Demand on Romell Real Estate’s Malad Slum Project

The Bombay High Court has delivered major relief to real estate developers involved in slum rehabilitation schemes by quashing a stamp duty deficit demand exceeding ₹3 crore (including penalty) against Romell Real Estate Pvt. Ltd. for its Malad land acquisition.

In a detailed judgment delivered today, Justice Somasekhar Sundaresan allowed Writ Petition No. 18259 of 2024 filed by Romell Real Estate Pvt. Ltd. and set aside:

• The Impugned Order dated June 20, 2024 passed by the Chief Controlling Revenue Authority (CCRA),
• Demand Notices dated December 9, 2021 and December 21, 2023 issued by the Collector of Stamps.

The authorities had demanded an additional ₹1,01,66,250 as deficit stamp duty plus a penalty of ₹2,08,05,700, alleging under-valuation of the 2017 Agreement for Sale.

Background of the Transaction Romell Real Estate had entered into a draft Agreement for Sale in 2017 to purchase land parcels in Malad (CTS Nos. 19/A(Pt.), 19/B1, 19/C(Pt.), 20/B(Pt.), 20/C(Pt.), 25/D) from M/s Ashish Enterprises for development under the Slum Rehabilitation Authority (SRA) scheme.

The SRA had issued a Letter of Intent (LOI) on August 14, 2015, specifying:

• Total land area: 12,035.29 sqm
• Net plot area after deductions: 6,747.76 sqm
• Permissible built-up area: 10,844.51 sqm (zonal)
• Free sale component: 8,133.38 sqm
• Permanent Transit Camp (PTC) for slum rehabilitation: 8,133.38 sqm (to be handed over free to SRA)

The draft agreement was adjudicated under Section 31 of the Maharashtra Stamp Act, 1958. The Collector of Stamps assessed market value under Article 25(b) at ₹63 crore consideration, computed stamp duty at ₹3.15 crore, which was paid on March 18, 2017. The final Agreement for Sale was registered on April 21, 2017.

In 2021, nearly five years later, the Collector of Stamps issued a demand notice claiming a deficit, allegedly on the basis of an internal audit by the Inspector General of Registration. The authorities argued that the construction cost/value of the PTC component (₹20,33,25,000 at ready reckoner rate of ₹25,000/sqm) should be added to the ₹63 crore consideration, raising the total market value to ₹83.33 crore and stamp duty to ₹4.16 crore.

The CCRA confirmed this position in its June 20, 2024 order.

Court’s Two Independent Grounds for Relief

1. Wrong Application of Valuation Guideline – PTC Excluded in Slum Projects Justice Sundaresan held that stamp duty on agreements for slum rehabilitation projects must be computed strictly as per Guideline No. 26 of the Annual Statement of Rates (ASR/Ready Reckoner), not under general redevelopment guidelines (Guideline No. 24) or ad-hoc additions.Guideline No. 26 provides a specific formula:
   • (A) Value received by landowner (cash + any built-up area share + other consideration)
   • (B) Higher of: (i) value of developer’s free sale area minus rehab construction cost, or (ii) 50% of full land value
   • Market value = higher of (A) and (B)
   The PTC component, statutorily handed over free of cost to the SRA for slum dwellers, is a cost to the developer and not consideration received by the landowner. There is no provision in Guideline 26 — or any other guideline — to add the PTC construction cost or its market value to the consideration paid to the original owner.The court noted that the original 2017 adjudication correctly excluded the PTC and followed the slum-specific guideline. The later attempt to include it was arbitrary and unsupported by law.The judgment referred to the earlier Bombay High Court ruling in Shree Krishna Realtors (2022), where the CCRA itself defended and applied Guideline 26 by deducting/excluding PTC value — a position it deviated from without justification in the present case.
2. Revision Time-Barred Under Section 53A Section 53A of the Maharashtra Stamp Act allows the CCRA to revise a Collector’s adjudication and recover deficit duty, but only within six years from the date of the Collector’s certificate (here, January 19, 2017). The six-year period expired around January 2023.The final Impugned Order was passed on June 20, 2024 — more than 7 years later. Following recent Bombay High Court precedents (Sony Mony Electronics, 2025 and Kolte Patil Developers, 2026), Justice Sundaresan held that the entire process — from initiation to passing the final recovery order — must be completed within the six-year window. Merely initiating proceedings within time is insufficient.The court emphasized that the Maharashtra Stamp Act is a fiscal statute and its limitation provisions must be construed strictly to provide certainty to property transactions.

Final Outcome The High Court quashed the Impugned Order and both Demand Notices in their entirety. No directions were issued for fresh computation, as the six-year limitation had already expired.

The petitioner was represented by Senior Advocate Girish Godbole, while the State was represented by AGP P. J. Gavhane.

This ruling is expected to bring clarity and relief to developers across Maharashtra in pending or future slum rehabilitation projects, particularly on the non-inclusion of PTC/rehabilitation components in stamp duty valuation and the strict enforcement of the six-year limitation under Section 53A.

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