When in doubt, use the higher rate of stamp duty

G P Khungar

My father, who is 90 years old, had secured a Power of Attorney duly registered with the Registrar of Assurances at Kanpur in my favour to enable me represent him in Mumbai for the sale of his property in the city's suburb of Byculla. As per the laws subsisting in Uttar Pradesh, the POA was prepared on a Rs 15 stamp paper. However, when this POA was presented before the Registrar at Mumbai, he refused to act upon the same on the ground that the document was understamped and could only be acted upon after additional stamp duties had been deposited, with the prior permission of the collector of stamps of Mumbai. Is this correct?

-- P C Jain, Mumbai

The Registrar not only has the responsibility to see that the Power of Attorney presented before him does indeed convey the various powers that are required to complete a particular transaction, but also to check that it is adequately stamped in keeping with the subsisting laws of the state in which the property rests and is sought to be actedupon.

It needs to be appreciated that stamp duties are regulated as per the Stamp Acts of various states and vary from state to state. While the Maharashtra Stamp Act stipulates that the Power of Attorney be drawn up and executed on a Rs 100 stamp paper, the law in Uttar Pradesh specifies stamp paper worth Rs 15 only. As such the Registrar is within his rights to demand that for the Power of Attorney to be valid in the state of Maharashtra, it ought to have been drawn up on a Rs 100 stamp paper.

It needs to be emphasised here that though understamping is an offence, you can always pay the higher rate of stamp duties without inviting any punitive action. In the present instance, care ought to have been taken to ensure that stamp papers of correct value were used in the preparation and execution of the Power of Attorney -- Rs 100. When in doubt, use the higher rate of duties.

The minister for housing & urban development, whilst unfolding the incentive package to facilitate participation by privatedevelopers to augment the supply of houses for the economically weaker sections of society, stipulated a few conditions that the developers would have to satisfy as a prelude to participating in the housing bonanza. Could you kindly explain the policy succinctly because press reports have left a lot of questions unanswered and concepts unexplained.

-- B B Mathur, New Delhi

The ministerial announcement has specified certain pre-conditions to permitting participation by private developers to supplement the government's efforts to boost the housing stock. The main conditions are:

Builders must privately assemble 30 acres of contiguous land and agree to undertake development of the same as per end use stipulated in the City Master Plan -- 2001.

The developer, before the issue of the Development Licence, will be required to deposit 20 per cent of the land cost with the Delhi Development Authority -- determined as per the fair market value fixed by the L&DO for the year in which thedevelopment licence is sought -- into the Shelter Fund of the government. However, till such time as the ULCRA is repealed, such deposits would continue to be made in the Shelter Fund of the government of the NCT of Delhi.

The government will initiate the concept of one-window clearances and any projects not cleared during this period can be reported to the high-power committee for further directions.

The developer must provide the land required for establishing an electric sub-station, a pump house and a sewage treatment plant, a police post, a milk booth and a healthcare centre, etc, free of cost to the concerned department. The government, on its part, will exempt such transfers from the payment of stamp duties and registration charges.

The developers will retain the land for undernoted community services: Schools, Shopping Complex, Community Centre, Ration Shop and Hospital/Dispensary, etc. These community services will be developed by the developer himself and shall be operational bythe time the houses are ready for occupation.

The developer will surrender free to the local authorities lands post-development that in the approved development plan had been identified for use as parks and play fields.

It may be observed that the scheme announced by the minister is totally silent on the vital issue of pricing and allocation of homes intended for EWS/LIG category personnel. Also, developers fear that it would largely remain a paper scheme because of the inadequate availability of 30 acres of contiguous land in the areas identified as habitation zones in MPD-2001.

Though the scheme was announced by the minister in June last, it has been a non-starter largely because the basic issue of the repeal of ULCRA has been referred to a select committee of the Parliament and till such time as this is repealed or amended, the issue of assemblage of land would continue to be a stumbling block. Furthermore, the developers have also represented that the minimum area requirement be dispensed withaltogether, but the government is still to take a view on this request.

My family owns a small island, measuring 30 hectares, within 200 metres of the Goa coast, which is currently being exploited as a coconut plantation yielding little in terms of annual returns. As this is located close to the world famous Paloleum blue water-white sand beach surrounded by green hills in South Goa, we have been considering its utilisation for tourism development purposes.

As there is a lot of confusion regarding the coastal development guidelines that would be applicable to island properties, could you tell us specifically what these guidelines are and also what specific approvals will be required by us prior to commencing site work?

-- N Sridhar Rao, South Goa

The Ministry of Environment & Forests of the Government of India has issued coastal development guidelines under which it has been specified that no development will be permitted within 100 metres of the high tide line in respect ofbeach-fronted properties. However, where coastal water islands are concerned, the No Development Zone has been prescribed at 50 metres from the high tide mark. There is a further stipulation that the minimum height above the high tide water mark should be 10 metres. The state government, in order to ensure that concrete jungles are not created in the name of tourism development, has also specified that no basements would be permitted and also that the nature of structures to be developed would be ground plus one floor only. Further, more stringent rules have also been prescribed with regard to disposal of solid wastes and water-borne effluents. As a matter of fact, the laws stipulate zero discharge into the sea.

Before taking up island development, you need an NOC from the Coastal Naval Command to the island being used for tourism promotion. You will also have to ensure adequate arrangements for availability of potable water and commutation from the coast to the island and back. You will need to get yourproject cleared from the tourism and planning angles also and proceed with the commencement of site work only after securing development permissions and the project commencement licence from the area planning & development authority and the village panchayat.

G P Khungar is a real estate consultant and a former director (corporate affairs) of Ansals Ltd.

(Readers are requested to send in their queries to the Associate Editor, The Financial Express, Fortune Tower, 2nd Floor, 198/2/1, Ramesh Market, Near Sapna Cinema, East of Kailash, New Delhi-110 065)

Top

Printer-friendly page