Sale Agreements That Transfer Possession Must Be Stamped as ‘Conveyance’ Under Maharashtra Stamp Act:Supreme court

The Supreme Court ruled that if a sale agreement includes a clause for handing over property possession, it must be treated as a “conveyance” under the Maharashtra Stamp Act, 1958. This means stamp duty is due when the sale agreement is signed, regardless of whether a sale deed is later executed and stamped.

The Court clarified that an agreement for sale is considered a conveyance if possession is transferred immediately or promised within a specific timeframe. The duty applies to the agreement itself, not just the transaction.

In this case, the Appellants contested a Bombay High Court decision affirming a lower court’s ruling to impound their sale agreements because they lacked proper stamp duty. The agreements included clauses transferring possession but weren’t stamped accordingly.

The Trial Court stated that the sale deed couldn’t be seen as the main transaction; instead, the agreements were primary documents requiring stamp duty. The High Court upheld this decision.

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