Patel Builders And Developers Thr Its ... vs The State Of Maharashtra Thr Its ...
2026 Latest Caselaw 2177 Bom

Bombay High Court

Patel Builders And Developers Thr Its ... vs The State Of Maharashtra Thr Its ... on 26 February, 2026

2026:BHC-AS:9826


                                                                                   F-J-905-WP-12061-2024.doc



                                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                               CIVIL APPELLATE JURISDICTION

                                              WRIT PETITION NO. 12061 OF 2024

                            Patel Builders and Developers Through                            ...Petitioners
                            Its Partners Bilal Rauf Patel & Ors
                                  Versus
                            The State of Maharashtra Through                                 ...Respondents
                            Its Secretary & Ors


                            Mr. Nitin Gaware Patil, a/w Mr. Prajwal Thorat, i/b Sachin
                            Thorat for the Petitioners.
                            Mr. R. S. Pawar, AGP for Respondents.


                                CORAM:                        SOMASEKHAR SUNDARESAN, J.

                                RESERVED ON:                  February 23, 2026
                                PRONOUNCED ON:                February 26, 2026

                       Judgement :

1. Rule. Rule made returnable forthwith. By consent of the

parties, heard finally.

Context and Background :-

2. This is a Petition challenging the validity, legality and

propriety of an order dated August 1, 2024 (" Impugned Order"), passed Digitally signed by

ASHWINI ASHWINI JANARDAN JANARDAN VALLAKATI by Respondent No. 2, the Chief Controller of Revenue Authority VALLAKATI Date:

2026.02.26 10:51:42 +0530 ("CCRA"), who has re-assessed the value of stamp duty payable by the

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Petitioners in connection with a Development Agreement that governed

a development already completed on a plot of land in close proximity to

a railway line.

3. The property in question is land bearing Survey No.47, Hissa

No.1A and Survey No.47, Hissan No.1H situated in village Uttekhol, Tal.

Mangaon, Dist. Raigad ("Subject Land"). On April 18, 2022, the

Petitioners submitted the Development Agreement for adjudication of

stamp duty to Respondent No.3, Collector of Stamps (" Stamp

Collector"), Raigad-Alibaug under Section 31 of the Maharashtra

Stamps Act, 1958 ("Stamp Act"). On April 19, 2022, the Stamp Collector

valued the property at Rs.5,14,73,000/- and asked the Petitioners to pay

Rs.25,73,700/- at the rate of 5% of the market value of the property

under Article 5(g-a)(i) of Schedule-I of the Stamps Act. The entire

amount was paid and a certification was issued with a final order under

Section 31 for the aforesaid sum.

4. On December 29, 2022, the Petitioners received a notice

from the Stamp Collector stating that a review of the adjudication is

being taken up on the premise that the adjudication had been made with

a deficit of Rs.82,84,155/-. The Petitioners filed a reply on January 11,

2023, pointing out that the amount originally adjudicated by the Stamp

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Collector was accurate. To demonstrate the same, it was submitted that

the original computation had accurately taken into account the actual

constructed area based on the development potential and the

constraints and restrictions on the development that had actually been

applicable to the Subject Land.

5. The permission granted by the Town Planning Officer,

Alibaug, by letter dated March 4, 2022, was relied upon to indicate that

the Floor Space Index ("FSI") of 1.1 had been granted and the total

actual constructed area aggregated to 4,386.59 square metres. Out of

this, 45% was to be given to the landowner and 55% was attributable to

the developer, and therefore, the original adjudication by the Stamp

Collector was asserted as being accurate.

6. On April 26, 2023, the CCRA issued a notice contending that

the deficit stamp duty was Rs. ~82.84 lakhs, as stated above, and taking

up revision under Section 53A of the Stamp Act. A detailed reply was

filed and a personal hearing followed on May 26, 2023, and a final

hearing took place on December 5, 2023. The CCRA adjudicated the

market value for purposes of stamping the Development Agreement at

Rs.25,31,04,500/- and called for stamp duty payment in the sum of

Rs.1,26,55,255/-.

February 26, 2026 Ashwini Vallakati

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Contentions of the Parties:

7. Mr. Nitin Gaware Patil, Learned Advocate for the Petitioners

would submit that the original computation was accurate and was in

conformity with the guidelines for computation of market value as

applicable to Development Agreements. He would submit that the FSI

of 1.1 that had been taken into account was accurate and was also in

conformity with the actual approval for the development and the actual

potential that had been permitted. The development had even been

completed, with Occupation Certificate and Completion Certificates

have also been issued. The CCRA's computation, he would submit, is

totally incorrect since, in the teeth of the applicable FSI of 1.1, the CCRA

has adopted FSI of 4.0 on the total land admeasuring 5,010 square

metres.

8. Mr. Gaware Patil would contend that the Konkan Railway

line passes through the plot of land, which is why two parts of the survey

number, with an appropriate distance from the railway line have been

developed. The development was subject to approval by the Konkan

Railway Corporation Limited ("Konkan Railway"), which too had

granted its No Objection Certificate with specific terms and conditions

that would ensure that the building height is limited such that, in the

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event of its collapse, no debris would fall on the railway line. He would

submit that a 15-metre area adjoining the railway track is required to be

kept vacant, and therefore, the assumption of the entire land being

available for development is also wrong. The Konkan Railway imposed

height restrictions led to one building being limited to ground plus four

storeys and another being limited to ground plus seven storeys. The

overall height of these buildings has been specifically stipulated, and

therefore, any assessment of market value that ignores these factors

would be totally inappropriate.

9. Mr. R. S. Pawar, Learned AGP on behalf of the Respondents,

would submit that the Development Agreement nowhere refers to an

FSI of 1.1, and therefore, the assessment cannot be faulted with. He

would point to the reply affidavit filed by the Respondents to contend

that the adoption of an FSI of 4.0 is consistent with the applicable

Development Control Regulations and that the remaining FSI could be

used in the future, if and when there is a change in the regulatory

framework, particularly since the Development Agreement is silent.

Therefore, he would defend the Impugned Order and the computation

of the deficit stamp duty in revision on the premise that the original

adjudication had missed this element and had simply adopted the

contentions of the Petitioners.

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Analysis and Findings:

10. Having heard the Learned Advocates for the parties and

having examined the material on record, it is seen that the Petitioners

are right and the re-computation of stamp duty in revision is

unsustainable. The Annual Statement of Rates (" ASR") applicable for

areas falling in all Municipal Corporations, Municipal Councils, Nagar

Panchayats, etc., other than the Municipal Corporation of Greater

Mumbai, is noteworthy. Guideline No. 46 in the ASR specifically

requires consideration of the fact that where properties entail

restrictions on development, such as a site abutting a railway line,

resulting in the permissible FSI being incapable of exploitation due to

height limits and other restrictions, the constructed area certified by the

Competent Authority should be considered for valuation.

11. The said guideline is extracted as under:

46 fodklkoj izfrca/k vlysys {ks= ¼mnk- Funnel of vision, Vicinity of aerodrome / airport, existing fuel station, site abutting Railway tack boundry etc½ feGdrhps ewY;kadu½ :-

eatwj fodkl fu;a=.k fu;ekoyhe/;s bekjr map e;kZnk o brj fucZ/a kkeqGs vuqKs; pVbZ {ks= funsZ'kkadkuqlkj cka/kdke {ks= okijys tkÅ 'kdr ukgh v'kk Hkw[kaMkoj @ feGdrhoj LFkkfud izkf/kdj.kkps l{ke izkf/kdkjh ;kauh izekf.kr dsY;kuqlkjps cka/kdke {ks= eqY;kaduklkBh fopkjkr ?;kos-

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12. It is obvious that the factor to be considered is the limitation

and restriction on development owing to regulatory stipulations due to

the land abutting a railway line. The actual limitations imposed by

Konkan Railway are part of the record and were highlighted to the

CCRA. The conditions imposed by the Maharashtra State Road

Development Corporation ("MSRDC"), which have also stipulated the

distance to be maintained from the highway of MSRDC, form part of the

record. Based on the stipulations by Konkan Railway and MSRDC, the

building plans sanctioned by the Mangaon Nagar Panchayat on March

29, 2022, are explicitly clear - the built-up area explicitly permitted was

4,386.59 square metres.

13. The No Objection Certificate issued by Konkan Railway on

October 5, 2020, and by the MSRDC on March 24, 2022, form the basis

of the sanction granted by the Mangaon Nagar Panchayat on March 29,

2022, which renders a specific computation of built-up area.

14. The total area of the Subject Land was indeed 5,010 square

metres, but on such land, factoring in the restrictions, the two buildings

of specific height alone could be developed, and evidently, the built-up

area aggregated to 4,386.59 square metres.

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15. Evidently, the initial computation made by the Stamp

Collector factored in these precise heads of data and arrived at an

adjudication of the originally assessed stamp duty. This is seen in the

adjudication order dated April 20, 2022, in which, the market value has

been arrived at, taking into account the aforesaid factual data that is

evident from the material on record. Needless to say, the assessment

effected on April 19, 2022, factors in the restrictions applicable to the

development and arrived at the computation of market value and the

resultant stamp duty.

16. Therefore, it is evident that the CCRA indeed had before him

the entire material that formed part of the record, and therefore, the

CCRA ought to have made his adjudication in conformity with the

applicable guidelines. The CCRA ought to have taken into account the

limitations on the development to arrive at the actual built-up area in

order to compute the market value for purposes of adjudication of

stamp duty. Such objective material is writ large in the record made

available to the CCRA. Indeed, the height restrictions set out in the

sanction by the Mangaon Nagar Panchayat are directly in conformity

with the limits imposed by Konkan Railway, and therefore, it is clear

that the built-up area was 4,386.59 square metres.

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17. It is clear that the CCRA, in ignoring relevant material, has

effected two errors. First, he has adopted the entire area of 5,010 square

metres as the area being developed. Second, he has applied an FSI of

3.68, which is inappropriately inflated and has unduly returned a

finding that is in direct conflict with the applicable guidelines that

govern the assessment of market value, and indeed in conflict with the

regulatory restrictions actually applicable to the Subject Land and set

out in the approvals applicable to the development.

18. It is also clear that a detailed reply to the purported valuation

report dated August 11, 2023, was submitted by the Petitioners, squarely

pointing out all these facets to the CCRA. The specific restrictions

imposed by Konkan Railway were also highlighted. Therefore, while an

FSI of 4 could have been theoretically adopted from the Development

Control Regulations applicable locally, the specific restrictions to which,

the development was subject, and were in fact subjected to, have been

totally ignored. The guidelines to be applied for purposes of the

computation also form part of the record, and it is evident that applying

an FSI in excess of 1.1 is totally untenable. Therefore, the CCRA was

entirely arbitrary in ignoring relevant material before him in the form of

the limits applicable under the approvals granted by Konkan Railway

and by MSRDC, and taking into account irrelevant material such as the

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blanket and blind application of the full hypothetical potential under the

Development Control Regulations. This approach has rendered the

Impugned Order to be arbitrary in nature, necessitating that it be

quashed and set aside.

19. In these circumstances, I am satisfied that a case has been

made out for quashing and setting aside the Impugned Order. The

Respondents were required to specifically apply their minds to the

computations that have been made in the original order of the Stamp

Controller, and the restrictions imposed by Konkan Railway and

MSRDC, and indeed the approved sanction plans approved by the

Mangaon Nagar Panchayat.

20. Learned Advocate for the Petitioners submits that his

statement may be recorded, that in the unlikely event of the restrictions

currently imposed being revisited by the authorities, should there be any

change at all to the development potential in future, it would never be

covered by the Development Agreement that is being stamped. He

submits that exploiting such potential would necessitate a new

development project, for which a new instrument would need to come

into being. Such statement is accepted and taken on record. The

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Petitioners shall also issue a written confirmation to this effect to the

Respondents.

21. With the aforesaid directions, the Petition is allowed, and

Impugned Order is quashed and set aside. No order as to costs.

22. All actions required to be taken pursuant to this order shall

be taken upon receipt of a downloaded copy as available on this Court's

website.

[ SOMASEKHAR SUNDARESAN, J.]

February 26, 2026 Ashwini Vallakati