A Supreme Court Bench of Justice MR Shah and Justice Krishna Murari upheld a judgment passed by the Kerala High Court, and observed that "...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."

Senior Advocate Gopal Sankaranarayanan, Counsel K Rajeev and Counsel R Nedumaran appeared for the Appellants. Senior Advocate Jayanth Muthraj appeared for the Respondents.

In this case, appeals were preferred against judgments and orders passed by the High Court, where it was 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.

As per Section 35 of the Travancore-cochin Co-operative Societies Act, 1951, the Government may – in the case of any society or class of societies – remit the stamp duty with which, under any law for the time being in force, instruments executed in favour of or by or on behalf of a society or by an officer or member and relating to the business of such society or any class of such instruments or awards of the Registrar or Arbitrators under the Act are respectively chargeable, by notification in the gazette.

A similar provision was made under Section 30(2) of the Madras Co-operative Societies Act, 1932.

In exercise of the powers conferred under the two Acts, the Government of Kerala directed that in respect of a co-operative society registered in the State, there shall be remission of stamp duty, by way of SRO No. 75/1960.

The Travancore Act, 1951 and the Madras Act, 1932 were thereafter repealed by the introduction of the Kerala Co-operative Societies Act, 1969. Pertinently, Section 40 of the Kerala Act, 1969 provides for remission of stamp duty.

The Appellants were denied the benefit of remission of stamp duty considering Section 40 of the Kerala Act, 1969, more particularly the last part of the Section which provides that remission is available only 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. The Appellants claimed the benefit of the remission of stamp duty under Clause 1(a) of SRO No. 75/1960 and further contended that despite the repeal of the two Acts, SRO 75/60 - which was issued under the aforesaid Acts - is saved.

The Supreme Court found that Clause 1(a) of SRO 75/1960 was inconsistent with Section 40 of the Kerala Act, 1969, and therefore, it held that the said order was not saved and could not be said to be deemed to have been issued under the Section 110(2) of the Kerala Act, 1969. In that context, the Court held that as per Section 40(1)(a) if 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.

To that end, it was held that the Appellants would not be entitled to the benefit of remission of stamp duty on the instruments in question, as those instruments could not be said to be executed by or on behalf of a society or by an officer or member of the society.

Therefore, the appeals were dismissed.

Cause Title: Kerala Land Reforms & Development Co-operative Society Limited v. The District Registrar (General) & Another

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Supreme CourtJustice MR ShahJustice Krishna MurariStamp Duty

Ashish Shaji