A Pune developer who told stamp authorities that a 2013 joint venture agreement should attract only ₹100 in stamp duty has been told by the Bombay High Court to pay an additional ₹16.79 lakh. Justice Amit Borkar, in a judgment pronounced on 28 August 2026, dismissed Writ Petition No. 11127 of 2018 filed by M/s Star Developers and upheld both the Collector of Stamps’ 2016 order and the 2017 appellate order.
The case is not only about one project in Bavdhan. It settles, once again, a question that keeps returning in Maharashtra real estate: when a landowner is to receive a percentage of future flat sale proceeds instead of a fixed cash amount, can the stamp office treat that percentage as “consideration” and demand duty on a much higher figure than the raw land value?
The High Court has answered yes.
The deal that started it
The land measures 5,109.62 square metres — Survey Nos. 47/1, 47/2 and 47/3 at Village Bavdhan (Budruk), Taluka Haveli, District Pune. It was owned by Dnyaneshwari Ashok Phadke. In May 2005 a development agreement was executed in favour of David Koli Pillai. On 29 April 2013, Star Developers and Pillai signed a Joint Venture Agreement to develop a residential and commercial project.
Under the JV:
- Pillai (owner side) was to get 42% of the revenue.
- Star Developers was to get 58%.
- Star Developers had to get plans sanctioned, obtain NA permission, arrange funds and construct.
- Brochures and publicity were to show both parties as “co-ventures”.
At registration, stamp duty was paid on the then land / Ready Reckoner value of about ₹3.25 crore. Star Developers paid ₹16.26 lakh under Article 5(g-a) of the Maharashtra Stamp Act.
That is where the matter rested — until an audit objection arrived.
How the demand jumped
After the audit flagged possible undervaluation, the Collector of Stamps issued notices in 2015 and, following a High Court direction in an earlier writ, passed an order on 7 May 2016 under Section 32A.
The authority did not value the document as bare land. It treated the owner’s 42% share of future sale proceeds as the real consideration. Using the then ASR rate for constructed residential flats (₹45,300 per sq.m) and a 0.85 deferment factor (because the money would come later), it arrived at this calculation:
5,109.62 × 0.42 × 45,300 × 0.85 = ₹8.26 crore (rounded).
Stamp duty at 4% on that figure came to ₹33.05 lakh. After giving credit for the ₹16.26 lakh already paid, the deficit was ₹16.79 lakh, plus penalty.
The appellate stamp authority confirmed the demand on 3 November 2017. Star Developers then approached the High Court.
What the developer argued
Star Developers’ case was simple on paper and ambitious in law.
They said the document was a Joint Venture Agreement, not a Development Agreement. Both parties were co-ventures; neither was a mere contractor for the other. The specific “Partnership – Joint Venture” entry was inserted in the Stamp Act only from 24 April 2015. Therefore, in 2013, the instrument was “not otherwise provided for” and should attract only the residuary duty of ₹100 under Article 5(h)(b).
They also argued:
- Future sale proceeds cannot be treated as present consideration because the exact amount was unknown in 2013.
- The 42% formula used by the department (area × 42% × flat rate × 0.85) was hypothetical and had no basis in the agreement.
- Revenue sharing is profit-sharing between two developers, not consideration for transfer of development rights.
- The land was landlocked and under litigation; those facts reduced its market value and were ignored.
- The 2015 ASR Guidelines could not be applied retrospectively to a 2013 document.
- CAG or audit cannot decide stamp duty; only the statutory stamp authority can.
In short, the developer’s position was: we already paid ₹16.26 lakh on land value; at worst, if the document is a pure JV, only ₹100 more is due. The extra ₹16.79 lakh demand is illegal.
What the government argued
The State said Collectors across Maharashtra have, at least since 1997, been valuing revenue-sharing development agreements by taking the owner’s percentage of sale proceeds as consideration. The 2015 Guidelines did not invent a new method; they only clarified a long-standing practice.
Market value under Section 2(na) is the higher of:
- the price the property would fetch in the open market on the date of the instrument, or
- the consideration stated in the instrument.
Here the consideration was the 42% revenue share. That share could be valued on the date of the agreement by using the then-prevailing ASR rates for flats and applying a deferment factor. There was no need to wait till the project was completed and actual sale prices were known.
The State relied heavily on the Bombay High Court’s own 2024 judgment in Kolte Patil Developers Ltd. v. Chief Controller of Stamps, where a similar 38:62 revenue-sharing development agreement was held to attract duty on the owner’s share of gross sale proceeds.
What went wrong for the developer
The High Court accepted almost none of the developer’s points.
1. The label did not save the document.
Calling the paper a “Joint Venture Agreement” and putting “co-ventures” in publicity material was not enough. The Court looks at substance. One party was to fund, construct and sell. The other was to receive a fixed percentage of sale proceeds. That, the Court said, is the grant of development rights against consideration. Article 5(g-a) — which covers an instrument giving authority or power to a promoter or developer for construction, development or sale of immovable property — therefore applied. The residuary ₹100 entry cannot be used just because a different name was given to the document.
2. Revenue share is consideration, even if the rupees are not written.
Consideration need not be a lump-sum figure in the agreement. A contractual right to 42% of future sale proceeds is still consideration. The exact amount may be unknown on the date of signing, but the method of calculating it was already agreed. Future receipt does not make the consideration “imaginary”.
3. Valuation on the date of the agreement is valid.
Stamp duty cannot be kept pending till flats are sold. The authority used the development potential as on 29 April 2013, the then ASR rate for residential flats, the agreed 42% share and a 0.85 deferment factor to bring future money to present value. The Court held this method is consistent with Section 2(na) and with the Kolte Patil ruling. The figure of ₹8.26 crore may not match the money that is finally received years later. That is not the test. The test is market value as on the date of the instrument.
4. The 2015 Guidelines did not create the liability.
This was one of the developer’s strongest-sounding points, and the Court partly agreed with the principle: a later administrative guideline cannot invent a new fiscal liability for a 2013 document. But it did not help Star Developers. Article 5(g-a) and Section 2(na) were already on the statute book in 2013. The liability comes from the Act, not from the 2015 instructions. Those instructions only explained how to calculate a consideration that the statute already required the authority to examine.
5. Landlocked land and pending litigation were not enough.
The Court accepted that such factors can matter when deciding open-market value. But there was not enough material on record to show that they necessarily displaced the consideration found in the agreement. Once a valid consideration clause exists and is valued under the statutory method, disadvantages of the land do not automatically wipe that consideration out.
6. The CAG argument failed on facts.
The Court agreed that audit cannot itself fix stamp duty. The final determination must be by the Collector under Section 32A. That is exactly what happened. Section 32A(5) allows the Collector to act “on receipt of information from any source”. An audit objection is such information. Notices were issued, replies were filed, hearings were held, and a reasoned order was passed. The process was valid.
7. “Double stamp duty” and “tax on profits” did not work.
Duty on the JV/development agreement is for the grant of development rights. When individual flats are later sold, those sale deeds are separate instruments. That is not double taxation of the same transaction. Nor is the exercise an income-tax assessment of future profits. It is only a valuation of the instrument for stamp duty.
How the government won
The State won because the Court treated the case as a repeat of a principle already laid down in Kolte Patil, not as a special “joint venture” exception.
Three statutory pegs carried the day:
- Article 5(g-a) covers the substance of giving a developer power to construct, develop and sell.
- Section 2(na) requires the higher of open-market price and consideration stated in the instrument.
- Section 32A allows the Collector to reopen undervaluation within ten years, including on information from audit.
Once those three applied, the developer’s narrative — “this is only a JV, future money is not consideration, 2015 rules cannot apply, therefore only ₹100 is due” — collapsed.
The numbers that survived are these:
- Consideration taken by the authority: ₹8.26 crore
- Stamp duty at 4%: ₹33.05 lakh
- Already paid: ₹16.26 lakh
- Deficit upheld: ₹16.79 lakh, plus penalty as per law
The writ petition was dismissed. The 3 November 2017 appellate order and the 7 May 2016 Section 32A order were both upheld. No costs.
Why this matters beyond one Pune plot
For developers and landowners structuring projects as “joint ventures” with a percentage of sale proceeds going to the landowner, the judgment is a warning. The name on the cover page will not decide the stamp duty. If one side gets development rights and the other gets a share of gross sale proceeds, stamp authorities can value that share on the date of the agreement using current constructed-unit ASR rates and a deferment factor.
Paying duty only on raw land value, and later arguing that the document was a partnership attracting ₹100, is now a much weaker defence — especially after Kolte Patil (2024) and this Star Developers ruling (2026).
The government did not win because of a new 2015 circular. It won because the High Court held that the Stamp Act already allowed this valuation in 2013, that revenue sharing connected to development rights is consideration, and that a developer cannot reduce a multi-crore instrument to a ₹100 residuary stamp by calling it a joint venture.
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