SC: Additional Recommendation for Stamp Duty Exemption is Illegal & Superfluous.

Headnote:

The Supreme Court held that the Memo dated 20.02.2009 issued by the Principal Secretary, Registration Department, Jharkhand—requiring a recommendation from the Assistant Registrar, Cooperative Society as a pre-condition for stamp duty exemption under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988—is illegal, unnecessary and based on irrelevant considerations.

The Court ruled that once a cooperative society is registered, the certificate of registration is conclusive evidence of its existence under Section 5(7) of the Jharkhand Self-Supporting Cooperative Societies Act, 1996. The added requirement imposed by the Memo is superfluous, impedes ease of transactions, and provides no value addition.

Consequently, the Supreme Court set aside the Jharkhand High Court judgment and struck down the Memo as arbitrary and unlawful.

Background:

• The appellant is a registered cooperative society engaged in providing housing and utilities to its members.

• Section 9A of the Stamp Act (Bihar Amendment) grants complete exemption from stamp duty for instruments relating to transfer of premises by cooperative societies to their members.

• In 2009, the Principal Secretary issued Memo No. 494 dated 20.02.2009, directing all District Sub-Registrars to grant exemption under Section 9A only on receipt of a recommendation from the Assistant Registrar, Cooperative Society.

• The appellant challenged the Memo, arguing that it creates an extra-statutory hurdle, violates statutory rights, and burdens cooperative societies with an unnecessary requirement.

• The Single Judge and Division Bench of the Jharkhand High Court upheld the Memo, leading to the appeal before the Supreme Court.

Court’s Observations:1. Principle of Relevant and Irrelevant Considerations

• Administrative decisions are invalid if they:

– fail to consider relevant factors, or

– consider irrelevant factors.

• Imposing extra, unnecessary requirements with no statutory backing is also a form of illegality, as it burdens citizens and disrupts good governance.

2. Nature & Purpose of Section 9A

• Section 9A creates a statutory right: cooperative societies may transfer premises without stamp duty.

• It also creates a duty on registering authorities to register such documents without seeking additional compliance.

3. Memo’s Additional Requirement is Illegal

The Court found the Memo illegal because:

• The certificate of registration under Section 5(7) of the 1996 Act is conclusive proof of a cooperative society’s existence.

• Requiring additional certification from the Assistant Registrar is superfluous.

• It does not strengthen the integrity of the transaction.

• It imposes unnecessary administrative complexity contrary to principles of simplicity and good governance.

• The State is already bound to accept the cooperative society’s certificate of registration.

4. Irrelevant Consideration: “Preventing Fake Societies”

• The Memo justified the added requirement to prevent misuse.

• The Court held this justification as irrelevant because statutory conclusive proof already exists.

• If the State suspects registration fraud, the remedy lies elsewhere, not in obstructing statutory benefits.

5. High Court’s Error

• The High Court failed to examine the statutory scheme and wrongly upheld the Memo.

• It also misunderstood the purpose of administrative directions and their limits under the Registration Act.

Legal Provisions Discussed:

• Section 9 & 9A – Indian Stamp Act (Bihar Amendment), 1988

– Stamp duty exemption for transfer of premises by cooperative societies.

• Section 5(7) – Jharkhand Self-Supporting Cooperative Societies Act, 1996

– Certificate of registration is conclusive evidence.

• Registration Act, 1908

– Registrar’s powers. Administrative instructions cannot contradict statutory rights.

• Article 226 – Constitution of India

– Judicial review of administrative action.

Decision:

• The appeal is allowed.

• Judgment of the Jharkhand High Court in LPA No. 553 of 2022 is set aside.

• Memo No. 494 dated 20.02.2009 issued by the Principal Secretary, Department of Registration, Jharkhand is declared illegal.

• The Court reaffirmed that simplicity in public transactions is a constitutional value that supports good governance.

Citation: 2025 INSC 1389

Case: Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand & Ors.

Court: Supreme Court of India

Coram: Justice Pamidighantam Sri Narasimha & Justice Atul S. Chandurkar

Date of Decision: 05 December 2025

Civil Appeal: Arising out of SLP (C) Diary No. 7678 of 2024