The Supreme Court on Friday (December 5) invalidated a memo issued by the Jharkhand Government which mandated cooperative societies to secure a recommendation from the Assistant Registrar before availing stamp duty waiver under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988, for registering conveyances in favour of their members.

A Bench of Justices PS Narasimha and Atul S Chandurkar termed this pre-condition legally unsustainable, observing that imposing an administrative layer not contemplated under the statute results in an arbitrary exercise of power. The Court remarked, “Requiring the Assistant Registrar’s recommendation as a prerequisite to grant the stamp duty exemption is wholly irrelevant and leads to illegality in the administrative action. It is superfluous and without any statutory backing.” The Principal Secretary’s directive, therefore, was declared ultra vires.

Referring to statutory safeguards already in place, the Court emphasized that once a cooperative society is officially registered and issued a certificate, Section 5(7) of the Act treats such certification as conclusive proof of its legal existence as a corporate body. Hence, the memo requiring an additional verification step contributes nothing of substance to prevent fraud and is based on wholly irrelevant considerations.

The Bench noted that registration by the State itself affirms the legitimacy of the society, and executive authorities are not permitted to question that status through parallel approval processes. Any attempt to impose extra conditions, beyond what the statute prescribes, impermissibly undermines the legislative scheme.

Reiterating the limits on executive discretion, the Court stated that courts are duty-bound to annul administrative decisions that impose excessive and unnecessary compliance burdens not rooted in law. Additional procedural hurdles cannot be justified under the guise of preventing misuse.

Setting aside the ruling of the Jharkhand High Court, the Supreme Court allowed the appeal and clarified that cooperative societies cannot be compelled to obtain approvals outside the statutory framework to benefit from stamp duty relief.

Case Title: Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand & Ors.