ADARSH SAHKARI GRIH NIRMAN SWAWLAMBI SOCIETY LTD v. THE STATE OF JHARKHAND

Supreme Court Invalidates Mandatory Recommendation for Stamp Duty Exemption: A Case of Superfluous Administrative Burden on Cooperative Societies.

Court: Supreme Court of India
Citation: 2025 INSC 1389
Decision Date: 05-12-2025

List of Laws

The Indian Stamp Act, 1899; The Indian Stamp (Bihar Amendment) Act, 1988; The Jharkhand Self-Supporting Cooperative Societies Act, 1996; Constitution of India, Article 226; Administrative Law

Case Brief

Facts: A cooperative society, registered under the Jharkhand Self-Supporting Cooperative Societies Act, 1996, challenged a memo issued by the Principal Secretary, Department of Registration, Jharkhand. The memo mandated that stamp duty exemption under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988, for transfer of premises by Cooperative Societies to their members, would only be granted upon recommendation by the Assistant Registrar, Cooperative Society. The cooperative society argued this requirement was an unnecessary hurdle and ultra vires the Stamp Act.
Procedural Posture: The cooperative society filed a writ petition before the High Court under Article 226 of the Constitution of India, challenging the memo. The Single and Division Benches of the High Court refused to exercise judicial review. The cooperative society then appealed to the Supreme Court.
Issue: Was the Principal Secretary's memo, mandating 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, for transfer of premises by Cooperative Societies to their members, a legal and valid administrative instruction?
Holding: No, the Supreme Court held that the impugned memo issued by the Principal Secretary, Department of Registration, was illegal and set it aside.
Reasoning: The Court reasoned that the requirement of recommendation by the Assistant Registrar, Cooperative Society, was a superfluous and unnecessary condition. Section 5(7) of the Jharkhand Self-Supporting Cooperative Societies Act, 1996, states that the certificate of registration of a cooperative society is conclusive evidence of its existence. Therefore, mandating an additional recommendation was an irrelevant consideration leading to illegality in action. The Court emphasized that executive actions imposing unnecessary requirements must be set aside. The court stated, "Irrelevant consideration includes insistence or performance of acts or submission of documents, which neither have relevance nor are value additions to the purpose or object of law or policy in place." The court found the memo disruptive of ease of transaction and without any value addition to the integrity of the transaction.