Stamp Duty and Registration

Part 2

v           Market Value

Government has fixed a market value for properties. Stamp duty has to be paid on the basis of market value or the agreement value whichever is higher. Market value of property is revised every year by the Government. Stamp duty is payable on the built up area of the flat. If the carpet area of the flat is mentioned in the agreement, 20% is added to arrive at the built up area. If the area is mentioned in super built up area, 20% is to be deducted to arrive at built up area. Government fixes the market value for one sq. ft. (built up area). That rate multiplied by the area of the flat will give the market value of the flat. Based on the market value of the flat, stamp duty can be calculated.

To arrive at the market value on old buildings depreciation is available as under:

If the age of building is

Upto 5 years                                                                   Nil

6 years to 10 years                                                          10%

11 years to 20 years                                                        20%

21 years to 30 years                                                        30%

31 years to 40 years                                                        45%

41 years to 60 years                                                        60%

61 years and above                                                         75%

v     Current Rate Of Stamp Duty (w.e.f. 1-5-2003)

(i)                  Residential flats

Market Value of flat                        Stamp duty

Upto Rs. 1 lakh                              Nil

Rs. 1 lakh – Rs. 2.5 lakh                 Rs. 0.5% of value

Rs. 2.5 lakh – Rs. 5 lakh                  Rs.1250/- + 3% of value above Rs. 2.5 lakh

Market Value of flat                        Stamp duty

Rs. 5 lakh - Rs.15 lakh                   Rs.8,750/- + 6% of value above Rs. 5 lakh

Above Rs. 15 lakh                          Rs.68,750/- + 8% of value above Rs. 15 lakh

(ii) Commercial Premises                10% of value at flat rate

Stamp Duty and Registration

Part 1

v           General

It is necessary to pay stamp duty on the agreement to sell flats in Co-operative Housing Societies. Documents on which proper stamp duty is not paid are invalid. Invalid documents will not be accepted as evidence by courts. Various authorities are empowered to impound documents on which proper stamp duty is not paid. If documents are impounded, penalty @ 2% per month of the deficit stamp duty, subject to a maximum of ten times of the deficit stamp duty, will be levied.

v           Who has to pay

Either party to the agreement can pay the stamp duty if there is an agreement to that effect. If there is no such agreement, the purchaser is liable to pay the stamp duty.

v           Adjudication of correct stamp duty

The purchaser of the property can approach the sub-registrar of the area in whose jurisdiction the property is situated to ascertain the market value of the property.

Under Section 31 of the Bombay Stamp Act, a party to a document can submit an application to the stamp office to adjudicate the correct stamp duty payable on a document. Such an application has to be accompanied by a draft of the document and an affidavit containing the following particulars:

(a)    Municipal Ward Zone and City Serve Number No.

(b)    Exact location of the property  --- Name of Village

(c)    Area of the property In sq. Mts, ( stamp duty is calculated on the built up area of the property)

(d)    Year of construction

(e)    Number of floors of the building

(f)      Whether lift is available in the building etc.

If the Society is registered, a letter from the society confirming the area of the flat, year of construction and the availability of lift, and property card should be furnished along with the application.

On the receipt of the above documents/details and the fee for adjudication, the stamp office will adjudicate the proper stamp duty payable on the document.

If the applicant pays the stamp duty, the stamp office will certify the documents as duly stamped.

If the applicant does not agree with the amount of stamp duty assessed by the stamp office, the applicant can request the stamp office to refer the matter to the competent authority, an appeal can be filed before the Deputy Inspector General of registration and Deputy Controller of Stamps of the area concerned under Section 32 B of the Bombay Stamp Act. Appeal has to be filed within sixty days from the date of order and must be accompanied by fees not exceeding Rs.300/- as may be decided by the government.

Special Issues

Part 10

v     Assessment of Property Taxes

Q.1   How the property taxes are worked out by BMC?

Ans. There taxes are worked out on the basis of Rateable Value of the properties determined by the assessment department of BMC.

Q.2    What is ratable value?

Ans. The ratable value is based on fair and reasonable Annual Rent of the property/premises presumably it would earned, deducting 10 percent statutory deduction.

Q.3    Whether the Rateable value can be challenged?

Ans.   Yes, It is experienced that the rateable value determined by the department initial stage (when the first notice is served to the assesses) is always on higher side unless challenged.

Under section 167 of BMC Act 1888, the assessee has to lodge objection for the ratable value, within 15 days in writing with the department, otherwise ratable so decided is treated as final.

It is advisable that the society should lodge objection in time. In spite of objections. If Rateable Value is not changed the society can appeal to the appropriate civic authority failing which it can be challenge in the court of law.

Q.  What is the percentage of taxes in relation to rateable value?

Ans.  Generally the taxes are 75 percent to 80 percent of the rateable value for residential premises. For commercial premises it is double and one half times for industrial premises.

Note:   The Municipal Corporation can charge additional taxes for larger residential premises under “Larger Premises Tax,” in case the carpet area of flat is 125 Sq.Mtrs. or above.

Q.  What is the percentage of taxes in relation to rateable value?

Ans.  Different heads of taxes are as under:

Description	Percentage of taxes related to retable value (w.e.f. 1-4-2000)
1. General Tax	30%
2. Water Tax	Not Included if there is authorizes connection to premises
3. Repair Cass Tax	By separate bill if property is cessed
4. Water benefit tax	12.50%
5. Sewerage benefit tax	7.50%
6. Education Cess Tax	12.00%
7. Tree Tax	0.50%
8. Street Tax	15.00%

Special Issues

Part 9

v     Share or interest not liable to attachment

The share or interest of a member in the capital of a society, or in the loanstock  issued by a housing society, or in the funds raised by a society from its members by way of savings deposit, shall not be liable to attachment or sale under any decree or order of a court for or in respect of any debt or liability incurred by the member : and accordingly, neither the Official Assignee under the presidency-towns Insolvency Act, 1909, nor a receiver under any corresponding law for the time being in force, shall be entitled to, or have any claim on, such share or interest.

v     Insolvency of Member

Notwithstanding anything contained in the Presidency – towns Insolvency Act, 1909, the Provincial Insolvency Act,1920, or any corresponding law for the time being in force, the dues of a society from a member, in any insolvency proceeding against him, shall in order of priority be next to the dues payable by him to Government or to local authority.

[Mapusa Urban Co-operative Bank Ltd. v. Dattarya A.P. Mhambre, 1999(2) Mh. L.J.505]

v           F.S.I. violation by the Promoter prior to formation of the societies

It is a rampant practice of promoters / Builders to construct multi-storeyed building in clear and flagrant violations of the B.M.C. Act, 1888, as amended such activity is also in clear and flagrant violations of the D.C. Regulations for greater Bombay, framed from time to time and in many cases it is the flat-purchasers who are the ultimate sufferers. However, in some cases the flat purchasers are aware of the said violations.

Padamchand J. Kothari and Ors. V/s. State of Maharashtra and Ors. [1985 C.T.J. 563 (Bom.H.C.)].

v       F.S.I. violation by the Registered C.H.Societies

  There are very few instances in which a Registered Co-operative Housing Society has constructed any additional structure in excess of the available F.S.I., on the property owned by it However, the decision of the Hon’ble Supreme Court, given on the said issue, in the case of pratibha C.H.S. Ltd is one of the Landmark Judgements and the same has been reproduced (i.e. partly) herein below:

Pratibha C.H.S. Ltd; and Anr. V/s State of Maharashtra and Ors. [1992 C.T.J. 274 (SC)]

v     F.S.I.  violation by the Promoter prior to formation of the societies

It is a rampant practice of promoters / Builders to construct multi-storeyed building in clear and flagrant violations of the B.M.C. Act,1888, as amended such activity is also in clear and flagrant violations of the D.C. Regulations for greater Bombay, framed time to time and in many cases it is the flat-purchasers who are the ultimate sufferers. However, in some cases the flat purchasers are aware of the said violations.

Padamchand J. Kothari  and Ors. V/s. State of Maharashtra and Ors. [1985 C.T.J. 563 (Bom. H.C.)]

v     F.S.I. violation by the Registered C.H. Societies

There are very few instances in which a Registered Co-operative Housing Society has constructed any additional structure in excess of the available F.S.I., on the property owned by it However, the decision of the Hon’ble Supreme Court, given on the said issue, in the case of pratibha C.H.S. Ltd is one of the Judgements and the same has been reproduced (i.e. partly) hereinbelow:

Prathibha C.H.S. Ltd; and Anr. V/s State of Maharashtra and Ors. [1992 C.T.J. 274 (SC)]

Special Issues

(i)                  The nominations received till the last date and hour fixed for receiving nominations shall be scrutinized by the Returning Officer on the date fixed for scrutiny of nominations, in the presence of the candidates or their duly authorised representatives and the list of the valid nominations, in the presence of the candidates or their duly authorised representatives and list of valid nominations shall be published on the Notice Board of the society as per election program. The candidate whose nominations are rejected shall be informed by the Returining Officer, in writing, of the reasons for rejection of their nominations on the same day, in form.

(ii)                The candidates, whose nominations have been declared valid shall be allowed a time of 15 days ( as required u/s. 152A  of Maharashtra Co-operative State Act 1960) from the date of publication of the list of valid nominations, to withdrawn of candidature by means of a letter handed over to the Returning Officer.

(iii)               Immediately after the expiry of period allowed for withdrawal of candidature, a final list of the candidates contesting the election shall be notified on the notice board of the society.

(iv)              The voting at the election shall be by Secret Ballot.

(v)                The ballot paper shall be in the form appended to these Rules. It shall bear the seal of the society and the counterfoil thereof shall bear the initials of the Returning Officer.

(vi)              The names of the candidates in the ballot paper shall be arranged in alphabetical order with surname appearing first.

(vii)             The date, time and place of voting shall be as declared in the election program.

(viii)           The ballot box shall be so constructed that ballot papers could be conveniently put into it but could not be taken out, without the box being unlocked.

(ix)              On the date of the polling, the empty ballot box shall be shown to the candidates or their authorised agents, if any and present 15 minutes before the time fixed commencement of the poll and shall be locked and sealed in their presence.

(x)                Each member – voter shall be supplied with an authenticated ballot paper, after satisfying his identity and obtaining his signature on the counterfoil of the ballot paper.

(xi)              Member-Voter coming to the polling station after expiry of the time allowed for voting shall not be allowed to vote.

(xii)             Immediately after the completion of voting, the ballot box shall be sealed in the presence of the candidates or their authorised representative if present.

(xiii)           The counting of votes shall be done immediately after the polling is over.

(xiv)           The Returning Officer shall submit to the Chairman of the society a report indication the Number of voters who voted, number of valid and invalid votes, and the votes polled by each Candidate along with his certificate that the polling was peaceful and in accordance with the Election Rules.

(xv)            The names of the candidates with votes polled by each of them shall be put on the Notice Board of the society at the conclusion of the counting of votes.

(xvi)           The final result of the election shall be declared in the ensuing Annual General Body Meeting or Special General Body Meeting as the case may be.

(xvii)         All the records pertaining to the election shall be carefully preserved in box duly locked and sealed by the Secretary of the society for a period of 3 months and destroyed thereafter. However, if the result of the election is disputed, the records pertaining to election shall be preserved until the final decision of the dispute.

(xviii)        The Committee shall be constituted as enumerated under section 73(3) of the Maharashtra Co-operative Societies Act, 1960.

(xix)           If for any reasons beyond the control of the society, it is not possible to observe the time schedule prescribed under these Rules, the Returning Officer of the Society may revise the same with due notice to members and with due consent of the concerned Housing Federation. The Returning Officer shall inform such revision of schedule to the Registrar.

(xx)            It is to be noted that each member of the society has to cast one vote irrespective of the size of the flat or number of flats occupied by him.

Special Issues

Part 8

v     Election of Managing Committee

As per Bye-law No.116 (a)  election of all the members of the committee shall be held once in five years, in accordance with the Election Regulations. The retiring members of the committee shall be eligible for re-election.

The procedure of election is given as under:

(i)                  Every Managing Committee shall hold elections before expiry of its term.

(ii)                The Managing Committee first has to pass resolution in their meeting fixing date of the election and appointing the Returning Officer. The Returning Officer can be any member of the society or a professional person.

(iii)               Every member who has completed two years from the date of enrollment as a member is only eligible to vote in the election of the Managing Committee of the Society. Of course this is not in the case when election is called immediately after the First General Body Meeting, wherein, Provisional Managing Committee is nominated.

(iv)              The provisional list shall be prepared by the Managing Committee as per  (iii)  above and shall be notified on the Notice Board of the society, 60 (sixty) days before the date of election, inviting suggestions and objections in respect of the names of the members, within a period of 8 (eight) days, from the publication of such list.

(v)                After considering the suggestions and objections, if any, received, the Managing Committee shall publish a final list of members eligible to vote, within two days of the last date as mentioned at (iv) above.

(vi)              The provisional and final list of members referred to above shall be in the format.

(vii)             After the final list, the Managing Committee shall appoint from amongst the members who is/are not going to contest for election or who would neither propose nor second candidature of any member. The Committee may appoint any other person, as Returning Officer, The Managing Committee shall obtain an undertaking from such member that he will not contest the election nor propose or second any candidate. The Returning Officer shall have authority to appoint such polling staff as he deems necessary.

(viii)           Where the Managing Committee has failed to appoint a Returning Officer, the Registering Authority shall appoint a Returning Officer and Polling Staff. The cost of the Returning Officer and Polling Staff shall be borne by the society.

(ix)              The Returning Officer shall draw and declare a Program of various stages of election, on the Notice Board of the society, as indicated herein below, not later than seven days of the date of publication of final list of voters of the society. For draft of circular with the election schedule refer  Annexure 50-B.

(x)                The functions of the Returning Officer shall be as under :

(a)     To draw up a detailed program of election to the Managing Committee of the society, after taking into consideration the various stages of election process, as enumerated in (ix) above.

(b)     To invite nominations, to receive and scrutinize them, to exhibit list of valid nominations and list of final nomination remaining after withdrawal of nominations, if any

(c)     To arrange for election by ballot in accordance with the provisions of the Election Rules.

(d)     To furnish the result of election to the Chairman of the society for being declared at the General Body Meeting/Special General Body Meeting of the society.

(e)     To take such other actions as are necessary for and incidental to the election to the Managing Committee of the society.

     

(xi)              The nomination from the members shall be in form appended to the Rules.

(xii)             No members of the society shall be eligible to participate in the election of the Managing Committee of the society, if

(a)     he is in arrears in respect of any charges and any other amounts due to the society, as on the date of scrutiny of nomination papers.

(b)     he has incurred any of the disqualification as mentioned in the Maharashtra Co-operative Societies Rules, 1961 and the Bye-laws of the society.

(c)     he has not completed two years of his enrollment as a member of the society as on the last date of nomination.

Special Issues

Part 7

v     Restrictions on  the playing of games in the society’s compound

As per Bye-Law No.166 the meeting of the general body of the society may, after taking into consideration the location of the building or buildings of the society and their surroundings and the open space available for playing games by the members of the society and their children, allow such games to be played during such hours as may be fixed by the meeting of the general body of the society and subject to such restrictions, charges and penalties as it may impose.

v     Restrictions on the plying of games in the society’s compound

As per Bye-Law No.166 the meeting of the general body of the society may, after taking into consideration the location of the building or buildings of the society and their surroundings and the open space available for playing games by the members of the society and their children, allow such games to be played during such hours as may be fixed by the meeting of the general body of the society and subject to such restrictions, charges and penalties as it may impose.

v     Redressal Of Complaints           

As per Bye law No.173 complaint application to be submitted to the society.

Member/Members shall submit their complaint application to any of the office bearers of the society, in writing, giving thereby the details of the complaint.

As per Bye Law No.174 after receipt of such complaint application, the committee shall take decision thereof, at the next Managing Committee Meeting. Such decision shall be communicated to the concerned member, within 15 days thereafter of the said meeting.

As per Bye Law No.175 if the Member/Members are not satisfied with the decision of the Committee, or does not receive any communication from the committee within the time specified above, he/they may approach the Competent Authorities depending upon the nature of the complaints, as enumerated below:

(i)   Registrar

     

      Matters pertaining to following issues:

     

(a)    Registration of a Society by Misrepresentation

(b)    Non-issuance of the Share Certificate

(c)    Refusal of Membership

(d)    Non-registration of Nomination by the society

(e)    Non-occupancy charges

(f)      Demand of excess premium for transfers

(g)    Non supply of the copies of record and documents

(h)    Tampering, suppression and destruction of the records of the Society

(i)      Non acceptance of the Cheques or any other correspondence by the committee

(j)      Non maintenance or incomplete maintenance of records and books of the society

(k)    Non preparation of the annual accounts/reports within the prescribed period

(l)      Misappropriation/Misapplication of the funds of the society

(m)  Defaulter/Disqualified member on the committee

(n)    Investment of Funds without prior permission

(o)    Reconciliation of Account

(p)    Audit

(q)    Non conducting of election before expiry of the term of the committee

(r)     Rejection of Nomination

(s)     Non calling of General Body Committee within prescribed period

(t)      Non calling Managing Committee as prescribed in Bye-laws

(u)    Resignation by the Committee

(v)    Any other like matters which fall within the jurisdiction of the Registrar

(ii)   Co-operative Court

Disputes between the members and/or the members and society, which falls under Section 91 of the Act, such as:

Disputes pertaining to:

(a)    Resolutions of the Managing Committee and General Body

(b)    The election of the Managing Committee, except the Rejection of Nominations, as provided under Section 152-A of the Act

(c)    Repairs, including major repairs, internal repairs, leakages

(d)    Parking

(e)    Allotment of Flats/Plots

(f)      Escalation of construction cost

(g)    Appointment of Developer/Contractor, Architect

(h)    Unequal water-supply

(i)      Excess recovery of dues from the members

(j)      Any other like disputes which fall within the jurisdiction of the Co-operative Court

(iii)   Civil Court

Disputes pertaining to:

(a)       Non compliance of the terms and conditions of the Agreement, by and between the Builder/developer

(b)       Substandard Construction

(c)       Conveyance

(d)       Escalation of construction cost

(e)       Any other like disputes which fall within the jurisdiction of the Civil

(iv)              Corporation/Local Authority

Matters pertaining to:

(a)    Unauthorised construction/additions/alterations, made by builder/ member/ occupant of the flat

(b)   Inadequate water supply to the society

(c)    Change of use by the members/occupants

(d)   Building’s structural problems

(e)    Any other like matters which fall within jurisdiction of the Corporation/local Authority

(v)                Police

Matters pertaining to:

(a)  Nuisance carried on by the unauthorized use of the Flat/Shop/Parking space/Open space in the society, by the members, builder, occupants or any other persons

(b)   Threat/Assault by or to the members of the Society 

(c)    Any other like matters which fall within the jurisdiction of the Police.

(vi)              General Body

Matters pertaining to:

(a)                 Non-maintenance of the property of the Society by the managing committee

(b)                Non-display of the name of the society on the Board

(c)                 Levy of excess Fine by the managing committee for an act of a member which is in violation of the Bye-laws

(d)                Not allowing the authenticated use of the available open spaces of the society by the managing Committee

(e)                 Non-insuring the property of the Society by the managing committee

(f)                  Appointment of architect

(g)                 All other like matters which fall within the jurisdiction of the General Body

       (vii)  Federation                                                                                                                                            Matters pertaining to:

                 

(a)    Not allowing entry to the Secretary of the society, by the members

(b)   Non acceptance of any communication by the member/ managing committee

(c)    Convening Special General Meeting provided under Bye-law No.97 and Managing Committee meeting provided under Bye-law No.133

All other like matters