Maharashtra transfer premium on court-auctioned property must use auction price, not Ready Reckoner value, Bombay High Court rules

Facts

Sonal Garments (India) Pvt. Ltd. was ordered to be wound up, and its Office Unit No. 134-A at Mittal Court was sold to Rohstoffe International Pvt. Ltd. through an auction overseen by the Company Court for ₹2.65 crore; the sale was approved on October 10, 2018.

Source reference: paras. 6(A)–(B), p. 3

The State sought transfer premium under Section 37A of the Maharashtra Land Revenue Code, 1966 (MLRC), calculating the 6% component on the Ready Reckoner Value of ₹5,93,26,567 rather than the auction price.

Source reference: paras. 6(C)–(D), pp. 3–4

Under an interim arrangement, the purchaser paid the disputed premium and amounts demanded by Mittal Court Premises Co-operative Society Ltd. (the Society), including ₹3,92,515 towards its common amenity fund; the purchaser then sought determination of the amounts properly payable and any refund due.

Source reference: paras. 6(E)–(F), pp. 4–6

Issues

Whether the State could charge a transfer premium for the transfer of a unit in a building standing on State-leased land.

Source reference: para. 8(A), p. 6

Whether the 6% component of the premium under the 2017 Government Resolution (GR) should be calculated on the Ready Reckoner Value or the price approved by the Company Court after auction.

Source reference: paras. 8(B), p. 7

Whether the Society could collect the common amenity fund from the auction purchaser, or whether the amount was payable from the liquidation estate.

Source reference: para. 8(C), p. 7

Law Applied

Section 37A of the MLRC requires prior State permission for specified transfers involving Government land and authorises recovery of a premium or charge; “Government land” includes rights or interests arising from a building on such land.

Source reference: paras. 12–13, pp. 8–10

The 2017 GR prescribes the premium for the relevant commercial or industrial units as the higher of ₹2,000 per square foot and 6% of the applicable market value.

Source reference: paras. 20–21, p. 13

Rule 4(6) of the Maharashtra Stamp (Determination of True Market Value of Property) Rules, 1995 recognises a value determined by Government or another specified authority as the true market value in the circumstances set out in its provisos.

Source reference: paras. 29–30, pp. 18–19

State of Maharashtra v. Kamal R. Bulchandani, 2026 SCC OnLine Bom 8500, held that Section 37A and the relevant Government orders provide a basis for charging premium on transfers of units in premises societies; Hindustan Unilever Ltd. v. State of Maharashtra, 2018 SCC OnLine Bom 930, upheld the relevant statutory provisions.

Source reference: paras. 10–18, pp. 8–12

The Court also relied on Union of India v. G.S. Chatha Rice Mills, 2020 INSC 561, concerning the use of common sense to address statutory silence, and Registrar of Assurances v. ASL Vyapar Pvt. Ltd., (2024) 17 SCC 572, on the reliability and sanctity of a court-monitored auction price.

Source reference: paras. 35–40, pp. 22–26; paras. 47–48, pp. 29–31

As to the Society’s claim, Income Tax Officer v. Venkatesh Premises Co-operative Society Ltd., (2018) 15 SCC 37, recognised the basis for common amenity fund collections under society bye-laws and resolutions; the Court held the 2001 notification under Section 79-A of the Maharashtra Co-operative Societies Act did not apply to premises societies.

Source reference: para. 56, pp. 34–35

Reasoning

The Court held that Bulchandani resolved the State’s authority to charge premium, including in a Company Court-approved transfer; the purchaser accepted that position.

Source reference: paras. 9–19, pp. 7–12

On valuation, the Court reasoned that although the MLRC and Stamp Act serve distinct purposes, the 2017 GR adopts the Stamp Act’s Ready Reckoner framework. It therefore read the GR’s silence consistently with Rule 4(6): where the Company Court approves the price discovered through its supervised auction, that price should be used as the market value for the 6% premium component.

Source reference: paras. 26–39, pp. 16–25

Otherwise, the same transfer would be assigned materially different values for stamp duty and premium, despite the GR’s adoption of the Stamp Act framework.

Source reference: paras. 26–39, pp. 16–25

The Court further considered the transparency and reliability of a court-supervised auction.

Source reference: paras. 40, 43–48, pp. 25–31

For the Society’s claim, it found that the common amenity fund was supported by the Society’s bye-laws and resolution, and that Clause 14 of the auction terms placed post-confirmation outgoings on the purchaser; past dues were treated separately.

Source reference: paras. 49–58, pp. 31–36

It found it unnecessary to decide the broader jurisdictional objection under the Maharashtra Co-operative Societies Act.

Source reference: para. 59, p. 36

Holding

The Court held that the State was entitled to charge transfer premium, but the 6% component had to be calculated on the auction purchase value of ₹2.65 crore, not the Ready Reckoner Value; the higher of that amount and the ₹2,000-per-square-foot charge was payable under the 2017 GR.

The State was directed to refund any excess premium deposited, with 6% annual interest, within eight weeks.

Source reference: para. 60(D), p. 37

The Society’s ₹3,92,515 common amenity fund claim was upheld, with no refund of that amount; any excess paid by the purchaser towards past Society dues was to be refunded by the Society or Official Liquidator, as applicable, with 6% annual interest within eight weeks.

Source reference: paras. 58, 60(E)–(F), pp. 35–38

IA 2173 was disposed of with no order as to costs; separate applications concerning the Official Liquidator’s adjudication remained pending.

Source reference: paras. 61–62, p. 38