'Money Kept For Stamp Duty Isn’t Actual Statutory Payment': Bombay HC Upholds Developer’s Termination
Mumbai, September 25, 2026: Merely parking money in a bank account meant for stamp duty and registration charges does not amount to actually paying the statutory dues, the Bombay High Court has held while upholding a developer’s decision to cancel a homebuyer’s allotment for failing to complete the transaction. Justice Sandeep Marne observed that a homebuyer cannot claim to have paid stamp duty…
On September 25, 2026, the Bombay High Court upheld a developer's decision to cancel a homebuyer's allotment due to failure in paying stamp duty and registration charges. Justice Sandeep Marne clarified that merely transferring money to a bank account designated for such charges does not equate to the actual payment of statutory dues.
In the case of Santosh Sandhu, the court noted that the transferred Rs 4.65 lakh remained in the buyer's bank account and was not credited to the relevant stamp or registration authorities. The court held that Sandhu could not claim to have paid the stamp duty and registration charges, leading to the termination of the allotment.
The developer, JP Builders and Developers, had challenged orders from the Maharashtra Real Estate Regulatory Authority (MahaRERA) and Maharashtra Real Estate Appellate Tribunal (MahaREAT) to execute a registered agreement for sale. The dispute arose when Flat No. A-502 in the developer's Airoli, Navi Mumbai project could not be constructed after a reduction in floor heights.
Sandhu was offered an alternative flat, No. 1208, but failed to pay the required charges. The developer had repeatedly demanded completion of the agreement and payment of stamp duty and registration charges through notices issued in May 2019. Despite Sandhu's claims of arranging the money, bank records showed no transfer of funds to the authorities.
The High Court set aside the directions requiring the developer to execute the agreement and directed the developer to refund the amount paid by Sandhu, along with interest, as well as barred any deduction towards earnest money.
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