Sh Harish Chander Bhardwaj vs Govt Of Nct Of Delhi
- Court
- Delhi High Court
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Judgment pronounced on: 01.07.2026
W.P.(C) 9751/2021 and CM APPL.30061/2021
+
SH HARISH CHANDER BHARDWAJ .....Petitioner
Through: Mr. Gurpreet Singh Sethi, Mr. Pawan
Dhoot, Advs.
versus
GOVT OF NCT OF DELHI .....Respondent
Through: Mr. Raghvendra Upadhyay (PC)
along with Ms. Purnima Jain, Mr.
Madhur, Advs.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The present petition under Article 226 of the Constitution of India
assails the order dated 02.07.2021 (“Impugned Order”) passed by the
Collector of Stamps/Sub-Divisional Magistrate, Hauz Khas, New Delhi
(“the Collector”). By the Impugned Order, a Collaboration Agreement dated
17.05.2016 (“Collaboration Agreement”) entered into between the petitioner
(in his capacity as builder), and the co-owners of plot bearing No. R-39,
South Extension Part–II, New Delhi–110049 (“the subject property”) was
impounded, and stamp duty together with penalty aggregating to Rs.
59,66,052/- was sought to be levied upon the petitioner. The petitioner
further seeks a direction for return of the original Collaboration Agreement.
2. The Impugned Order proceeds on the premise that the Collaboration
Agreement is a contract of the nature referred to in Section 53-A of the
Signature Not Verified
W.P.(C) 9751/2021 Page 1 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
Transfer of Property Act, 1882 (“TP Act”), chargeable to stamp duty as an
agreement to sell under Article 23A of Schedule I-A of the Indian Stamp
Act, 1899 (“Stamp Act”), as applicable to the National Capital Territory of
Delhi.
FACTUAL MATRIX
3. The factual matrix, as set forth by the petitioner, is that the
Collaboration Agreement dated 17.05.2016 was entered into for the
redevelopment and reconstruction of the subject property. Under the said
Agreement, the petitioner, in the capacity of a builder, undertook to
demolish the existing structure and to construct, entirely at his own cost, a
new building comprising a basement, stilt, ground floor, first floor, second
floor and third floor with terrace.
4. In consideration of undertaking the said construction, the petitioner
was to receive a defined share in the redeveloped property comprising the
entire ground floor, Space for one utility with common W.C. in stilt along
with 25% of the stilt area for car parkings, and a 22.5% undivided and
impartible ownership right in the said plot of land. The co-owners were to
retain the balance, including the basement, entire first floor, entire second
floor, and the entire third floor of the subject property.
5. Pursuant to the Collaboration Agreement, the petitioner demolished
the existing structure on the subject property and, after obtaining the
requisite sanctions and approvals from the concerned authorities,
commenced reconstruction at his own cost.
6. Disputes arose with the owner of an adjacent property, i.e., one Mr.
Sanjiv Zutshi, who raised various grievances with the authorities concerning
Signature Not Verified
W.P.(C) 9751/2021 Page 2 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
the redevelopment and the alleged damage caused to his property. On
17.02.2021, Mr. Zutshi filed a complaint before the Collector, seeking the
impounding of the Collaboration Agreement. Pursuant thereto, notices dated
17.02.2021 and 02.03.2021 were issued to the petitioner and the co-owners,
calling upon them to produce the original Collaboration Agreement and to
submit their written responses thereto. The said notices read as under:
Signature Not Verified
W.P.(C) 9751/2021 Page 3 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
7. The petitioner appeared before the Collector, produced the original
Collaboration Agreement and filed detailed replies. Thereafter, upon
conclusion of proceedings, the Impugned Order came to be passed on
02.07.2021.
8. By the Impugned Order, the Collector held that the Collaboration
Agreement resulted in a part performance of transfer of a portion of the
subject property from the co-owners of the subject property to the builder
Signature Not Verified
W.P.(C) 9751/2021 Page 4 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
(i.e. the petitioner). The Collector also applied the Circular bearing No.
F.1(92)/RB/DivCom/HQ/2012/311-320 dated 12.11.2014 issued by the
Department of Revenue, GNCTD (“Circular”), which proceeds on the
footing that collaboration/development agreements involving delivery of
possession attracts Article 23A of the Stamp Act.
9. Accordingly, the Impugned Order held that the Collaboration
Agreement attracted stamp duty “as applicable to an agreement to sell under
Section 53-A of the Transfer of Property Act, 1882”. The stamp duty on the
Collaboration Agreement in the Impugned Order was computed in terms of
Article 23A of Schedule I-A of the Stamp Act (as applicable to Delhi). The
operative portion of the Impugned Order reads as under:
Signature Not Verified
W.P.(C) 9751/2021 Page 5 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
10. Aggrieved thereby, the present petition has been instituted, inter alia ,
seeking the following prayers:
Signature Not Verified
W.P.(C) 9751/2021 Page 6 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
11. Certain subsequent developments may be noticed. In this regard, it is
pertinent to note that an impleadment application filed by Mr. Zutshi on
18.02.2022 was pending before this Court. By order dated 04.12.2025
passed by this Court, the parties were referred to mediation.
12. Pursuant thereto, on 19.03.2026, the petitioner and Mr. Zutshi entered
into a settlement under which the petitioner agreed to pay Rs. 17,00,000/-
towards alleged damage caused to Mr. Zutshi’s property, in return for
withdrawal of all pending proceedings by Mr. Zutshi. The impleadment
application was, accordingly, withdrawn.
13. Further, on 21.10.2025, the petitioner and the co-owners executed a
registered Sale Deed in favour of the petitioner in respect of defined portions
of the subject property, comprising the entire ground floor, space for one
Signature Not Verified
W.P.(C) 9751/2021 Page 7 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
utility with common W.C. in the stilt, a 25% share in the stilt area, two car
parkings, and a 22.5% undivided and impartible ownership interest, for a
sale consideration of Rs. 1,90,00,000/-, on which stamp duty of Rs.
13,30,000/- was duly paid.
SUBMISSIONS ON BEHALF OF THE PETITIONER
14. Learned counsel for the petitioner contends that the Impugned Order
is wholly without jurisdiction and has been passed in excess of the powers
vested in the respondent/ Collector under the Indian Stamp Act, 1899. It is
submitted that the proceedings were initiated at the instance of a third party
who was neither a party to the Collaboration Agreement nor authorized by
any of its executants to seek adjudication in respect thereof.
15. It is further contended that the respondent/ Collector could not have
invoked powers under Section 33 of the Act in the facts of the present case.
According to the petitioner, the scheme of the Act clearly distinguishes
between adjudication proceedings under Chapter III and impounding
proceedings under Chapter IV. It is submitted that once the instrument is
brought before the Collector for adjudication, its jurisdiction is confined to
rendering an opinion as to the duty chargeable thereon and does not extend
to impounding the instrument and imposing penalty.
16. It is further submitted that the Collaboration Agreement was merely a
redevelopment arrangement whereby possession of the property was granted
to the petitioner for the limited purpose of carrying out construction and
redevelopment activities. According to the petitioner, the agreement neither
effected a transfer of ownership nor constituted an agreement for sale.
Signature Not Verified
W.P.(C) 9751/2021 Page 8 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
17. Learned counsel further submits that the Impugned Order proceeds on
an erroneous assumption that the collaboration agreement is compulsorily
registrable and chargeable to stamp duty as a conveyancing instrument. It is
contended that the true nature of the instrument has not been examined and
that the respondent has mechanically proceeded without appreciating the
terms of the agreement in question.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
18. Learned counsel for the respondent submits that the proceedings
before the respondent/ Collector of Stamps were validly initiated upon
complaints received from one Mr. Sanjiv Zutshi alleging deficiency of
stamp duty in respect of the Collaboration Agreement. It is submitted that
upon receipt of the said complaints, notices were issued to the executants of
the instrument and due opportunity of hearing was afforded before the
Impugned Order came to be passed.
19. It is submitted that, upon examination of the Collaboration Agreement
and the nature of rights created thereunder, the Collector of Stamps
concluded that the instrument was not merely a construction or service
agreement but was in the nature of a document attracting the provisions of
Section 53A of the Transfer of Property Act, 1882. It is submitted that the
instrument was, therefore, compulsorily registrable and chargeable to stamp
duty in accordance with law.
20. Learned counsel lastly submits that the present petition is liable to be
rejected on the ground of availability of an efficacious statutory remedy. It is
contended that the petitioner ought to have availed the remedy of revision
Signature Not Verified
W.P.(C) 9751/2021 Page 9 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
under Section 56 of the Indian Stamp Act, 1899 before approaching this
Court under Article 226 of the Constitution of India
REASONING AND CONCLUSION
21. It is well settled that the exigibility of an instrument to stamp duty is
determined not by the label the parties choose to attach to it, or by any
characterization ascribed to it by a revenue authority, but by its true nature
and legal effect, as gathered from a reading of the instrument as a whole.
The title or nomenclature of a document is not determinative of its character;
rather, its true nature and purpose must be ascertained from its terms, which
reflect the intention of the parties.
22. It follows that the Collector was obliged, before proceeding to levy
stamp duty under Article 23A of the Stamp Act, to examine the
Collaboration Agreement in order to determine whether, on its true
construction, it was a contract of the kind falling within the sweep of Section
53-A of the TP Act. A reading of the Impugned Order reveals that this
foundational inquiry was not undertaken in the light of the extant legal
position. The conclusion arrived at in the Impugned Order, was based on a
cursory and selective reading of the Collaboration Agreement.
23. Section 53-A of the TP Act, which is the statutory gateway to Article
23A of the Stamp Act, reads as follows:
“53-A. Part performance.—Where any person contracts to transfer
for consideration any immoveable property by writing signed by
him or on his behalf from which the terms necessary to constitute
the transfer can be ascertained with reasonable certainty, and the
transferee has, in part performance of the contract, taken
possession of the property or any part thereof, or the transferee,
Signature Not Verified
W.P.(C) 9751/2021 Page 10 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
being already in possession, continues in possession in part
performance of the contract and has done some act in furtherance
of the contract, and the transferee has performed or is willing to
perform his part of the contract, then, notwithstanding that … the
transfer has not been completed in the manner prescribed therefor
by the law for the time being in force, the transferor or any person
claiming under him shall be debarred from enforcing against the
transferee and persons claiming under him any right in respect of
the property of which the transferee has taken or continued in
possession, other than a right expressly provided by the terms of
the contract: Provided that nothing in this section shall affect the
rights of a transferee for consideration who has no notice of the
contract or of the part performance thereof.”
24. The conditions necessary for the applicability of Section 53-A of the
TP Act were authoritatively laid down by the Supreme Court in Shrimant
Shamrao Suryavanshi & Anr. v. Pralhad Bhairoba Suryavanshi (D) by
LRs. & Ors. , (2002) 3 SCC 676. The issue before the Supreme Court was
whether a transferee in possession pursuant to an agreement to sell could
defend such possession under Section 53-A of TP Act in a suit for recovery
instituted by the vendor, notwithstanding the expiry of the limitation period
for seeking specific performance. While answering the said issue, the
Supreme Court authoritatively set out the conditions that must be satisfied
for Section 53-A of the TP Act to afford protection. The same are
reproduced as under:
“16. But there are certain conditions which are required to be
fulfilled if a transferee wants to defend or protect his possession
under Section 53-A of the Act. These are: (1) there must be a
contract to transfer for consideration of any immovable property;
(2) the contract must be in writing, signed by the transferor, or by
someone on his behalf; (3) the writing must be in such words from
which the terms necessary to construe the transfer can be
ascertained; (4) the transferee must in part-performance of the
Signature Not Verified
W.P.(C) 9751/2021 Page 11 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
contract take possession of the property, or of any part thereof; (5)
the transferee must have done some act in furtherance of the
contract; and (6) the transferee must have performed or be willing
to perform his part of the contract.”
25. Article 23A of Schedule I-A of the Stamp Act, as applicable to Delhi,
levies stamp duty on “ Contracts for the transfer of immovable property in
the nature of part performance in any Union territory under Section 53A of
the Transfer of Property Act, 1882 .” The said provision directly tracks the
language of Section 53-A of the Transfer of Property Act, 1882.
26. A Coordinate Bench of this Court, in Sharad Bhansali & Anr. v.
Mukesh Aggarwal & Anr. , 2024 SCC OnLine Del 4999, held that Article
23A of the Stamp Act clearly applies to contracts for the transfer of
immovable property, covered by Section 53-A of the TP Act, and that all the
conditions of Section 53-A must be satisfied before Article 23A of the
Stamp Act can be invoked. The said Article 23A is not attracted merely by
the delivery of possession. Its applicability is predicated, first and foremost,
upon the existence of an instrument embodying a “contract to transfer
immovable property for consideration”
, of which the delivery of possession
is only a consequential element. The relevant extracts of the said judgement
are as under:
“16.
Article 23A of Schedule I-A to the Stamp Act, as applicable to Delhi,
clearly applies to contracts for the transfer of immovable property,
covered by Section 53A of the TPA. Mr. Paul is correct in his submission
that the applicable clause of the Schedule to the Stamp Act in Delhi is
different from the clause which applies in Andhra Pradesh or Punjab and
Haryana. Explanation I in the Schedule, as applicable to Andhra Pradesh
clearly deems an agreement to sell followed by or evidencing delivery of
possession of the property to be chargeable as a “sale” and, therefore,
liable to stamp duty under Article 47A. Similarly, Article 5(cc) of Schedule
Signature Not Verified
W.P.(C) 9751/2021 Page 12 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
I-A of the Stamp Act, as applicable to the State of Punjab refers to an
“agreement to sell followed by or evidencing delivery of possession of the
immovable property agreed to be sold”. These clauses, therefore, do not
incorporate, by reference, the provisions of Section 53-A of the TPA, as
thus Article 23A of Schedule I-A to the Stamp Act, as applicable in Delhi.
17. Mr. Sahni also sought to contend that Article 23A applies only way
they contract itself actually conveys the property and would not, therefore,
apply to an ATS. This submission is directly contrary to Article 23A itself,
as Article 23A is expressly made applicable to Section 53A of the TPA.
Incidentally, a learned Single Judge of this Court, in Vinod Kumar,
adopted the view which Mr. Sahni seeks to canvass and the Division
Bench, in its judgment in appeal in Ajit Singh, expressed his prima facie
disagreement with this point of view. Paras 8 to 10 of the judgment of the
Division Bench may, in this context, be reproduced, to the extent relevant:
“8. A plain reading of article 23A shows that it refers to contracts for
the transfer of immoveable property in the nature of part performance
in any union territory under Section 53A of the Transfer of Property
Act, 1882. In the present case the agreement dated 05.08.2011
purports to be on stamp paper of Rs. 10/- only. The learned Single
Judge while considering this aspect of the matter has dealt with it as
under:—
“11. Now, with regard to the submissions that the agreement was not
properly stamped, as per Article 23A of Schedule 1A of ISTA, I may
state without hesitation that Article 23A also was not attracted
inasmuch as it applies to the contracts for transfer of properties
under Section 53A of the Transfer of Property Act. As noted, the
plaintiffs suit is not based on the part performance under Section 53A
of the T.P. Act and the agreement to sell could not be said to be
conveyance in the nature of part performance as envisaged in Article
23A. As per Section 2(10) of ISTA, “conveyance” includes
conveyance of sale and other instruments by which property, whether
movable or immovable, is transferred intra-vivous and which is not
otherwise specifically provided for by Schedule-I. By any
interpretation, such an agreement to sell cannot be termed as
conveyance as defined in Section 2(10) of ISTA. That being so, and
the agreement to sell in question not creating any right, title or
interest over the suit property, except that of the cause of action
asking for the execution of the sale deed, Article 23A was not
attracted and thus, the provisions of Sections 33 of ISTA is not
attracted. As there is no Article in Schedule-I specifically providing
for agreement to sell of immovable property, it would come within the
ambit of residuary clause (c) of Article 5 of Schedule 1 of ISTA, which
is extended to union territory of Delhi by Delhi Amendment Act of
Signature Not Verified
W.P.(C) 9751/2021 Page 13 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
2001
. The stamp duty as per residuary clause (c) of Article 5 thereof
is Rs. 50/-. The agreement to sell in question being on stamp paper of
Rs. 10/-, is seen to be deficient of Rs. 40/- only and as per Section 35
proviso (a), the same would become admissible in evidence on
payment of penalty equivalent to 10 times of the deficient portion of
the stamp duty. The deficiency being of Rs. 40/- only, the penalty
payable comes to Rs. 400/- and thus, this penalty and the deficiency
of Rs. 40/- i.e. Rs. 440/- would be payable by the plaintiff for seeking
admissibility of this agreement. The plaintiff would be required to do
the needful in this regard.”
(underlining added)
9. It will be evident from the above extract that the learned Single
Judge held that the agreement would not fall under article 23A and
would fall under residuary provision of article 5(c) of Schedule 1A
and would, therefore, require a stamp duty of Rs. 50/. Since,
according to the learned Single Judge, the agreement was on a stamp
paper of Rs. 10/- only, it was held that it was deficient by Rs. 40/-
and, consequently, by virtue of Section 35 the same could only be
admissible in evidence on payment of penalty equal to ten times of the
deficient portion of the stamp duty. Consequently, the learned Single
Judge held that the penalty payable would be Rs. 400/- and the
deficient stamp was Rs. 40/- and, therefore, the respondent/plaintiff
was required to pay a sum of Rs. 440/- (Rs. 40/- towards deficient
stamp duty and Rs. 400/- as penalty) before seeking admissibility of
the said agreement.
10. Prima facie, we do not agree with the conclusion arrived at by the
learned Single Judge with regard to the quantification and the
applicability of article 5(c) and the non-applicability of article 23A of
Schedule 1A to the facts of the present case. However, we refrain
from making any conclusive pronouncement on this aspect of the
matter, inasmuch as we feel that the stage at which the document
could be impounded and the penalty could be imposed has not been
reached.”
(Emphasis supplied)
27. In the present case, the predominant object of the Collaboration
Agreement is to record the terms governing the redevelopment of the subject
property. Under the Agreement, the co-owners agreed to make the
land/property available for redevelopment, while the petitioner undertook to
carry out the demolition and construction entirely at its own cost. In
Signature Not Verified
W.P.(C) 9751/2021 Page 14 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
consideration of executing the redevelopment, the petitioner is entitled to a
defined share of the developed property as its allocation. The instrument,
therefore, cannot be construed as a simplictor agreement for the transfer of
ownership in consideration of a sale price. Consequently, the first and
foundational requirement for the applicability of Section 53-A of the
Transfer of Property Act, namely, the existence of a contract to transfer
immovable property for consideration, is not satisfied in the present case.
28. The Collector's reliance on the delivery of possession does not cure
this fundamental deficiency. Section 53-A of the TP Act contemplates that
the transferee must have taken possession “in part performance of the
contract.” This expression necessarily postulates the existence of a contract
to transfer immovable property for consideration, with possession being
delivered in furtherance of such contract. Possession granted solely to enable
the petitioner to discharge its obligations of demolition, construction and
redevelopment under the Collaboration Agreement cannot be equated with
of a contract to transfer immovable
possession taken “in part performance”
property. In the present case, the possession is not taken in part performance
of a contract to transfer immovable property, but solely in performance of
the contractual obligation to undertake construction.
29. It is pertinent to note that where the first condition of Section 53-A of
the TP Act (i.e., the existence of a contract to transfer for consideration) is
not met, delivery of possession cannot independently trigger the said
section. The Impugned Order proceeds in the reverse order. It infers the
existence of a contract to transfer immovable property from the mere fact of
delivery of possession and, on that basis, applies Article 23A of the Stamp
Signature Not Verified
W.P.(C) 9751/2021 Page 15 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
Act. This approach is fundamentally erroneous. The inquiry must begin with
the true nature and character of the instrument, and only thereafter consider
whether the delivery of possession is referable to a contract to transfer
immovable property for consideration, rather than treating possession itself
as determinative.
30. The Collaboration Agreement is equally not an agreement to sell in
any recognized sense. An agreement to sell requires certainty as to the
parties (vendor and vendee); certainty as to the subject matter (the property
to be sold); and a sale consideration. None of these elements are present in
the present case.
31. As per the Collaboration Agreement, the petitioner is not purchasing
the subject property from the co-owners for a sale consideration. Rather, the
petitioner has undertaken to construct the building entirely at its own cost
and, in consideration of rendering such development services, is entitled to
receive a defined share in the developed property. What flows from the
petitioner to the co-owners is the redevelopment of the property;
correspondingly, what flows to the petitioner is not the transfer of title to the
land for a price, but the contractual right to develop the property and retain
its agreed share in the completed development.
32. In Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd. , (2008) 10 SCC
345, the Supreme Court was concerned with a situation where the Court was
required to examine whether a landowner who had entered into a
collaboration agreement for the construction of a building and the sharing of
the constructed area was a “consumer” under the Consumer Protection Act,
1986. It was observed that such arrangements, whether described as
Signature Not Verified
W.P.(C) 9751/2021 Page 16 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
“collaboration agreements” or “joint-venture agreements”, involve the
landowner providing the land; the builder putting up the building; and the
two sharing the constructed area, with the builder delivering the owner’s
share and retaining the builder’s share.
33. The Court further held that the title or nomenclature of an instrument
is not determinative of its true character. Rather, the nature and purpose of
the document must be ascertained from its terms, which reflect the intention
of the parties. Accordingly, the mere use of expressions such as
“collaboration” or “joint venture” in an agreement does not, by itself, render
the transaction a joint venture unless the terms of the instrument disclose the
essential attributes of such an arrangement, including shared control and
shared liability. The relevant observations of the Supreme Court are as
under:
“20. There is no dispute or doubt that a complaint under the Act will be
maintainable in the following circumstances:
(a) Where the owner/holder of a land who has entrusted the construction
of a house to a contractor, has a complaint of deficiency of service with
reference to the construction.
(b) Where the purchaser or intending purchaser of an
apartment/flat/house has a complaint against the builder/developer with
reference to construction or delivery or amenities.
But we are concerned with a third hybrid category which is popularly
called as “joint-venture agreements” or “development agreements” or
“collaboration agreements” between a landholder and a builder. In such
transactions, the landholder provides the land. The builder puts up a
building. Thereafter, the landowner and builder share the constructed
area. The builder delivers the “owner's share” to the landholder and
retains the “builder's share”. The landholder sells/transfers undivided
share(s) in the land corresponding to the builder's share of the building to
the builder or his nominees. As a result each apartment owner becomes
the owner of the apartment with corresponding undivided share in the
land and an undivided share in the common areas of the building. In such
a contract, the owner's share may be a single apartment or several
Signature Not Verified
W.P.(C) 9751/2021 Page 17 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
apartments. The landholder who gets some apartments may retain the
same or may dispose of his share of apartments with corresponding
undivided shares to others
. The usual feature of these agreements is that
the landholder will have no say or control in the construction. Nor will he
have any say as to whom and at what cost the builder's share of
apartments are to be dealt with or disposed of. His only right is to demand
delivery of his share of constructed area in accordance with the
specifications. The builders contend that such agreements are neither
contracts for construction, nor contracts for sale of apartments, but are
contracts entered for mutual benefit and profit and in such a contract, they
are not “service providers” to the landowners, but a co-adventurer with
the landholder in a “joint venture”, in developing the land by putting up
multiple-housing (apartments) and sharing the benefits of the project. The
question is whether such agreements are truly joint ventures in the legal
sense.
xxx xxx xxx
28. The basic underlying purpose of the agreement is the construction of a
house or an apartment (ground floor) in accordance with the
specifications, by the builder for the owner, the consideration for such
construction being the transfer of undivided share in land to the builder
and grant of permission to the builder to construct two floors. Such
agreement whether called as a “collaboration agreement” or a “joint
venture agreement”, is not, however, a “joint venture”. There is a
contract for construction of an apartment or house for the appellant, in
accordance with the specifications and in terms of the contract. There is a
consideration for such construction, flowing from the landowner to the
builder (in the form of sale of an undivided share in the land and
permission to construct and own the upper floors). To adjust the value of
the extent of land to be transferred, there is also payment of cash
consideration by the builder. But the important aspect is the availment of
services of the builder by the landowner for a house construction
(construction of the owner's share of the building) for a consideration. To
that extent, the landowner is a consumer, the builder is a service provider
and if there is deficiency in service in regard to construction, the dispute
raised by the landowner will be a consumer dispute. We may mention that
it makes no difference for this purpose whether the collaboration
agreement is for construction and delivery of one apartment or one floor
to the owner or whether it is for construction and delivery of multiple
apartments or more than one floor to the owner. The principle would be
the same and the contract will be considered as one for house construction
for consideration. The deciding factor is not the number of apartments
deliverable to the landowner, but whether the agreement is in the nature
Signature Not Verified
W.P.(C) 9751/2021 Page 18 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
of a joint venture or whether the agreement is basically for construction of
certain area for the landowner
.
xxx xxx xxx
30. Learned counsel for the respondent contended that the agreement was
titled as “collaboration agreement” which shows an intention to
collaborate and, therefore, it is a joint venture. It is now well settled that
the title or caption or the nomenclature of the instrument/document is not
determinative of the nature and character of the instrument/document,
though the name may usually give some indication of the nature of the
document. The nature and true purpose of a document has to be
determined with reference to the terms of the document, which express the
intention of the parties.
Therefore, the use of the words “joint venture” or
“collaboration” in the title of an agreement or even in the body of the
agreement will not make the transaction a joint venture, if there are no
provisions for shared control of interest or enterprise and shared liability
for losses.”
34. Importantly, it was held by the Supreme Court that an important
aspect of of such Collaboration Agreements was the “availment of services
of the builder by the landowner for a house construction (construction of the
owner’s share of the building)”. It was, accordingly, held that to that extent,
the landowner is a “consumer” and the builder is the “service provider”.
35. The determinative tests for distinguishing a
development/collaboration agreement from a conveyance, in the context of
stamp duty, were also comprehensively articulated by the Bombay High
Court in Suhas Damodar Sathe v. State of Maharashtra & Ors . , (2025) 1
HCC (Bom) 626. Although the case arose under the Maharashtra Stamp Act,
1958, the Court laid down certain guiding principles for determining
whether an instrument is, in substance, a conveyance or a development
agreement for the purposes of stamp duty.
Signature Not Verified
W.P.(C) 9751/2021 Page 19 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
36. The principal test laid down in the said judgment is whether the
instrument effects an immediate transfer of title or any proprietary interest in
favour of the developer. In the case of a conveyance, ownership vests in the
transferee upon execution of the instrument; in contrast, under a
development arrangement, title continues to remain with the owner until
separate conveyance deeds are executed in favour of the end purchasers.
37. The Court further identified certain relevant indicia, including:
whether possession is handed over solely to facilitate development, without
conferring upon the developer any independent right to alienate the property
in its own name; whether the developer's entitlement is founded on the
opportunity to develop the property and derive its consideration from the
agreed allocation or future sales, rather than from the acquisition of the land
for a price; and whether the instrument contemplates that title will ultimately
pass to purchasers through separate conveyance deeds executed by the
original owner, thereby affirming that the owner retained the underlying title
throughout. The relevant portion of the said judgment reads as under:
“28. The following tests, distilled from the above precedents and
reasoning, may be regarded as determinative in ascertaining whether a
document is an instrument of conveyance or a development agreement for
stamp duty purposes :
Test of transfer of title or interest
(i) The principal test is to ascertain whether the instrument effects
a transfer of title or any proprietary interest in the developer. In an
instrument of conveyance, there is either an immediate vesting of
ownership or an unequivocal agreement that upon execution, the
ownership stands or shall stand transferred.
(ii) By contrast, a development agreement ordinarily envisages
that the developer will construct and market the project but the
title remains with the owner until a separate deed of conveyance is
executed with prospective buyers.
Control and possession
Signature Not Verified
W.P.(C) 9751/2021 Page 20 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
(i) Another crucial indicator is the degree of control exercised by
the owner over the land. If possession is handed over merely for
the limited purpose of development—without conferring upon the
developer the right to alienate or create third-party rights in its
own name—this usually points to a mere development agreement.
(ii) However, if the developer obtains the right to dispose of the
property in its own capacity, collect the sale consideration for
itself and thereby stands in the shoes of an owner, it suggests a
conveyance under the Stamp Act.
Recitals concerning consideration
(i) The recitals regarding the nature of consideration can be telling.
If the agreement reflects that the developer has paid a lump sum to
the owner in exchange for all development and sale rights, the
instrument may be seen as transferring beneficial interest.
(ii) Conversely, if the developer's only “consideration” is the
opportunity to construct and earn profit from prospective
purchasers, with no immediate purchase of title from the owner, it
points more towards a licence to develop rather than a conveyance.
Requirement of separate conveyance or sale deeds
(i) If the instrument itself contemplates that ownership will be
conveyed to end purchasers solely by the original owner (or by the
owner and developer jointly) in separate sale deeds, it indicates
that the original owner retains the fundamental title.
(ii) In cases where the developer unilaterally executes sale deeds
with no further recourse to the owner, collecting the entire
purchase price, that instrument is more likely to be classified as a
conveyance.
Intention of the parties
(i) While intention is to be gleaned from the terms of the document,
extrinsic evidence of the surrounding circumstances can also assist
in interpretation. The Court must examine if the arrangement is
essentially one of development (where the developer acts as a
contractor with a right to share in revenue from the sale of
flats/units) or if the developer acquires the property rights with the
freedom to deal with the property independently.”
38. Applying the aforesaid tests to the Collaboration Agreement in the
present case, it is evident that the instrument is a development/collaboration
arrangement and not a conveyance. The Agreement does not, by itself, effect
any transfer of title or proprietary interest in favour of the petitioner. The
Signature Not Verified
W.P.(C) 9751/2021 Page 21 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
petitioner's entitlement to a defined share in the developed property arises
solely from the obligation undertaken by it to carry out the demolition,
construction and redevelopment of the subject property, and not from any
sale transaction.
39. The Collaboration Agreement expressly contemplates the execution
of separate conveyance deeds in respect of the petitioner's allocated
portions, thereby unequivocally demonstrating that title to the land was not
intended to pass under the Agreement itself. Further, the consideration under
the Agreement is the petitioner's obligation to undertake construction and
redevelopment, and not the payment of a price for the land. Likewise,
possession was handed over solely to enable the petitioner to perform its
contractual obligations of demolition, construction and redevelopment, and
not as an incident of any transfer of ownership.
40. The express terms of the Collaboration Agreement reinforce the
aforesaid position. In this regard, two clauses merit consideration. The first,
relating to possession, provides as follows:
“That the OWNERS in accordance with the terms and conditions herein
recorded, has placed at the complete disposal of the BUILDER, the vacant
physical possession of the said property to the BUILDER, from the date of
getting the sanction plans, the possession of the said property shall
irrevocably, vest in the BUILDER, with all the powers and authorities of
the OWNERS as may be considered necessary by the BUILDER for
obtaining the requisite permissions/sanctions of the concerned authorities
for demolition/reconstruction of the proposed building and for the sale of
the BUILDER’S share (fully described below). However, the BUILDER
shall hand over the possession of the OWNERS allocation to the OWNERS
upon completion of the building.”
41. The second clause, relating to the execution of conveyance
documents, provides as follows:
Signature Not Verified
W.P.(C) 9751/2021 Page 22 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
“That the OWNERS shall on or before the completion of the building
execute or join in the execution of all documents necessary for giving the
flat(s)/portion(s) buyers of BUILDER’s portion legal title to their
respective flats/portions including their undivided share in the land
underneath, without asking for any further payment, except as herein
agreed.”
42. A conjoint reading of the aforesaid clauses unequivocally
demonstrates that the possession handed over to the petitioner is co-
extensive with its contractual obligations of obtaining the requisite
sanctions, carrying out the demolition and undertaking the reconstruction of
the property. The Agreement further provides that possession of the owners'
allocated portion is to be restored to them upon completion of the building.
43. Equally significant is the express stipulation requiring the owners to
execute, or join in the execution of, separate conveyance deeds in favour of
the purchasers of the petitioner's allocated portions. This conclusively
establishes that neither title to the land nor any proprietary interest therein
was transferred to the petitioner under the Collaboration Agreement itself.
The Collector's failure to examine these express terms of the Agreement
constitutes a fundamental flaw in the Impugned Order
44. In M/s Grovy India Ltd. v. Balbir Singh , 2021 SCC OnLine Del
4783, the dispute arose out of a Property Development Agreement ("PDA")
executed between the owner of a property in New Delhi and a developer for
its demolition and reconstruction. One of the objections raised by the owner
was that the suit was not maintainable as the PDA was insufficiently
stamped under Article 23A of the Stamp Act. Upon examining the terms of
the PDA, this Court noted that the agreement contemplated the execution of
Signature Not Verified
W.P.(C) 9751/2021 Page 23 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
separate sale documents, including an agreement to sell, general power of
attorney, will and affidavits, upon completion of construction.
45. The Court, therefore, held, prima facie , that "it cannot, therefore, be
said that transfer of right or ownership in the suit property was conveyed by
the PDA itself."
Consequently, the Court held that Article 23A of the Stamp
Act was inapplicable, as the PDA was merely a contract contemplating the
future sale of property and not an instrument effecting the transfer of the
property itself.
46. Section 17(1-A) of the Registration Act, 1908, mandates the
compulsory registration of
“documents containing contracts to transfer for
consideration, any immovable property for the purposes of Section 53-A of
the Transfer of Property Act, 1882.” The qualifying words “for the purposes
are of critical significance, as they confine the requirement
of Section 53-A”
of compulsory registration to those instruments that constitute contracts to
transfer immovable property for consideration, within the meaning of
Section 53-A of the Transfer of Property Act. Consequently, an instrument
(such as the present collaboration agreement) that does not answer that
description does not attract the mandate of registration under Section 17(1-
A) of the Registration Act, 1908.
47. In the present case, the subsequent conduct of the parties further
supports this conclusion. Had the Collaboration Agreement itself been
intended to operate as a conveyance or agreement to sell (transferring title to
the petitioner upon delivery of possession), the parties would have had no
occasion to execute a separate registered Sale Deed for the express purpose
of transferring defined portions of the subject property to the petitioner for a
Signature Not Verified
W.P.(C) 9751/2021 Page 24 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
sale consideration of Rs. 1,90,00,000/-, with stamp duty of Rs. 13,30,000/-
separately paid.
48. The execution of the Sale Deed on 21.10.2025, is wholly inconsistent
with any suggestion that the Collaboration Agreement had itself served as a
transfer instrument. It is also pertinent to note that the Sale Deed makes no
reference to the Collaboration Agreement as the antecedent or foundational
transaction. Incidentally, the Sale Deed was executed before the very same
authority (Collector of Stamps, Hauz Khas), who had itself characterized the
Collaboration Agreement as an agreement to sell.
49. Since the Collaboration Agreement in the present case does not satisfy
the ingredients of Section 53-A of the TP Act, it was not compulsorily
registrable under Section 17(1-A) of the Registration Act, 1908, and the
Circular, which treats collaboration/development agreements as falling
within Article 23A on the basis that they are compulsorily registrable under
Section 17(1-A), cannot be applied to it. The Circular proceeds on the
premise that the conditions for the applicability of Section 53-A of the TP
Act are satisfied. However, that premise does not hold good in the context of
the nature and character of the Collaboration Agreement in the present case.
The Collector erred in mechanically applying the Circular without first
undertaking the threshold inquiry into the true nature and legal character of
the instrument, as though the Circular could substitute such an inquiry.
50. In view of the foregoing, it is held that the Collaboration Agreement
dated 17.05.2016 does not satisfy the conditions for the applicability of
Section 53-A of the TP Act and, consequently, does not attract Article 23A
of the Stamp Act. By erroneously treating the Collaboration Agreement as a
Signature Not Verified
W.P.(C) 9751/2021 Page 25 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
contract of the nature contemplated under Section 53-A of the TP Act and
levying stamp duty and penalty under Article 23A on that basis, the
Collector assumed a jurisdiction not vested in him under the statute. In view
of this jurisdictional transgression, this Court also rejects the objection that
the petition ought not to be entertained on account of the availability of an
alternate statutory remedy by way of revision under Section 56 of the Stamp
Act.
51. The Supreme Court in Radha Krishan Industries v. State of
1
Himachal Pradesh
, (2021) 6 SCC 771, has affirmed that although the
availability of an alternative statutory remedy is a relevant consideration in
the exercise of writ jurisdiction, it does not operate as an absolute bar. The
rule is subject to well-recognised exceptions, one of which arises where the
Impugned Order/proceedings are wholly without jurisdiction.
1
“27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the
enforcement of fundamental rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the
power of the High Court is where an effective alternate remedy is available to the aggrieved person.
27.3. Exceptions to the rule of alternate remedy arise where : (a) the writ petition has been filed for the
enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation
of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the
vires of a legislation is challenged.
27.4. An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the
Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an
efficacious alternate remedy is provided by law.
27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the
right or liability, resort must be had to that particular statutory remedy before invoking the discretionary
remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of
policy, convenience and discretion.
27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction
in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy
requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.”
Signature Not Verified
W.P.(C) 9751/2021 Page 26 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
52. The petitioner has also raised two further contentions challenging the
Collector’s jurisdiction to impound the instrument and impose penalty. The
first contention is that the Stamp Act draws a clear distinction between the
power of adjudication under Chapter III (Sections 31–32), which is
voluntarily invoked by the instrument holder and is confined to determining
the duty chargeable, and the power of impounding under Chapter IV
(Section 33 onwards), which is exercisable when an instrument chargeable
with duty “is produced or comes in the performance of his functions” before
the Collector and is found not to be duly stamped.
53. The Supreme Court, in Government of Uttar Pradesh v. Raja
Mohammad Amir Ahmad Khan , AIR 1961 SC 787, considered a case in
which a stamped instrument had been voluntarily presented before the
Collector under Section 31 of the Stamp Act for his opinion as to the proper
stamp duty payable. The Supreme Court held that the powers under Sections
31 and 33 of the Stamp Act are distinct and mutually exclusive. It further
held that an instrument voluntarily presented under Section 31 is not one
that is produced or comes before the Collector in the performance of his
functions, within the meaning of Section 33. Consequently, once the
Collector has rendered his determination under Section 31, he becomes
functus officio and lacks the jurisdiction thereafter to impound the
instrument or demand deficit stamp duty and penalty. As such, the petitioner
contends that the Section 33 power could not, in any event, have been set in
motion by Mr. Zutshi, a stranger to the Collaboration Agreement who was
neither an executant nor authorised by the executants.
Signature Not Verified
W.P.(C) 9751/2021 Page 27 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05
54. Once it is held that the Collaboration Agreement does not attract
stamp duty under Article 23A, the very foundation for its impounding is
absent, as the instrument cannot be regarded as one “chargeable with duty”
but “not duly stamped.”
Consequently, the jurisdiction to determine and
recover deficit stamp duty and impose penalty under Section 40 also falls. In
these circumstances, the further question whether the power under Section
33 could at all have been invoked at the instance of a third party becomes
moot.
55. In view of the foregoing, the petition is allowed.
56. The Impugned Order dated 02.07.2021 passed by the Collector of
Stamps/SDM (Hauz Khas), New Delhi is hereby quashed and set aside. The
consequential demands towards deficient stamp duty and penalty
aggregating to Rs. 59,66,052/- are quashed. The respondent is directed to
release and return the original Collaboration Agreement dated 17.05.2016 to
the petitioner forthwith.
57. The present petition stands disposed of in the above terms. Pending
application (CM APPL. 30061/2021) also stands disposed of.
SACHIN DATTA, J
JULY 1, 2026/ ka
Signature Not Verified
W.P.(C) 9751/2021 Page 28 of 28
Digitally Signed
By:UMANG
Signing Date:01.07.2026
19:39:05