The Supreme Court of India has set aside a Memo issued by the Principal Secretary, Department of Registration, Government of Jharkhand, which mandated a recommendation from the Assistant Registrar, Cooperative Society, as a pre-condition for registering documents under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988.
The Division Bench comprising Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar held that the additional requirement was “superfluous and unnecessary” and ruled that executive actions mandating excessive requirements must be set aside as illegal.
The legal issue before the Court was the validity of an executive instruction (Memo) that imposed an additional condition—a recommendation from the Assistant Registrar—for cooperative societies to avail of stamp duty exemption on property transfers. The Supreme Court allowed the appeal, setting aside the impugned Memo on the ground that it was based on “irrelevant considerations” and was not supported by the statutory framework, thereby overruling the decision of the High Court of Jharkhand.
Background of the Case
The controversy arose in 2009 following the issuance of Memo No. 494 dated February 20, 2009, by the Principal Secretary, Department of Registration (Respondent No. 2). The Memo instructed all District Sub-Registrars that the exemption from stamp duty under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988, would be granted only if the matter was recommended by the Assistant Registrar, Cooperative Society.
Section 9A provides for the exemption of stamp duty on instruments relating to the transfer of premises by registered Cooperative Societies to their members.
The Appellant, Adarsh Sahkari Grih Nirman Swawlambi Society Ltd., a cooperative society registered under the Jharkhand Self-Supporting Cooperative Societies Act, 1996, challenged the Memo. They argued that the directive adversely affected their freedom to transfer property efficiently. The High Court, in both Single and Division Benches, had refused to exercise judicial review, reasoning that the instruction was necessary to ensure that only validly registered societies received the benefit and to prevent misuse by “fake” societies.
Arguments of the Parties
The Appellant’s Contentions: The Appellant argued that:
- The mandate for approval by the Assistant Registrar created a “new tier” and a hurdle that was ultra vires the Stamp Act.
- The Memo impinged on the “independence and self-reliance” envisaged for cooperative societies under the 1996 Act.
- The Assistant Registrar had no authority under the Registration Act, 1908 to grant or reject approval for transfers.
- The Memo was passed without providing an opportunity for a hearing, violating principles of natural justice.
The Respondent’s Contentions: The State, represented by Mr. Kumar Anurag Singh, argued that:
- The instruction was in line with the spirit of Section 9A to ensure “fake cooperative societies do not avail the benefit of the exemption.”
- The Principal Secretary was the competent authority to issue administrative directions to ensure proper payment of stamp duty and registration.
Court’s Analysis
The Supreme Court examined the legality of the Memo through the lens of administrative law and good governance.
1. Simplicity in Governance Opening the judgment with the observation that “Simplicity in public transactions is good governance,” the Court noted that administrative procedures should be clear and avoid “redundant requirements.” The Bench stated:
“Administrative procedures should avoid complexity, redundant requirements, and unnecessary burdens, which waste time, expense, and disturb peace of mind.”
2. Irrelevant Considerations and Illegality The Court reiterated the principle that executive actions mandating unnecessary or excessive requirements are illegal. The Bench observed that while the State aimed to prevent misuse by fake societies, the method chosen was based on “irrelevant considerations.”
“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.”
3. Conclusive Proof of Existence The Court analyzed Section 5(7) of the Jharkhand Self-Supporting Cooperative Societies Act, 1996, which declares that a certificate of registration signed by the Registrar is “conclusive evidence” of the society’s existence. The Bench reasoned that since the society is already a body corporate capable of entering into contracts, the additional requirement of a recommendation was redundant.
“We have held that when the certificate serves the purpose, the additional requirement is unnecessary.”
4. No Value Addition The Court found that the Memo did not offer any “value addition to the integrity of the transaction.” The registration certificate itself acts as a declaration by the State that the society continues on the statutorily maintained roll.
Decision
The Supreme Court held that the requirement of a recommendation by the Assistant Registrar was “disruptive of ease of transaction” and “superfluous.”
Concluding the judgment, the Court held:
“In view of the above, we have no hesitation in holding that the impugned Memo issued by the Principal Secretary, Department of Registration is set aside on the ground of illegality, as it seeks to rely on a superfluous and redundant requirement.”
The appeal was allowed, and the judgment of the High Court of Jharkhand in LPA No. 553 of 2022 was set aside.
Case Title: Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. vs. The State of Jharkhand & Ors. (2025 INSC 1389)
