Patel Builders and Developers Thr Its Partners Bilal Rauf Patel and Ors. vs the State of Maharashtra Thr Its Secretary and Ors.

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

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO. 12061 OF 2024

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Patel Builders and Developers Through …Petitioners Its Partners Bilal Rauf Patel & Ors

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Versus

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The State of Maharashtra Through …Respondents Its Secretary & Ors

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Mr. Nitin Gaware Patil, a/w Mr. Prajwal Thorat, i/b Sachin Thorat for the Petitioners.

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Mr. R. S. Pawar, AGP for Respondents.

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CORAM: SOMASEKHAR SUNDARESAN, J. RESERVED ON: February 23, 2026 PRONOUNCED ON: February 26, 2026

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Judgement :

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Rule. Rule made returnable forthwith. By consent of the parties, heard finally.

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Context and Background :-

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Digitally signed by ASHWINI ASHWINI JANARDAN JANARDAN VALLAKATI VALLAKATI Date: 2026.02.26 10:51:42 +0530

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This is a Petition challenging the validity, legality and propriety of an order dated August 1, 2024 (“ Impugned Order ”), passed by Respondent No. 2, the Chief Controller of Revenue Authority (“ CCRA ”), who has re-assessed the value of stamp duty payable by the

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Page 1 of 11

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February 26, 2026

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

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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.

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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.

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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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Page 2 of 11 February 26, 2026

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Ashwini Vallakati

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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.

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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.

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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/-.

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Page 3 of 11 February 26, 2026

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Ashwini Vallakati

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

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Contentions of the Parties:

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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.

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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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Ashwini Vallakati

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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.

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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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Page 5 of 11 February 26, 2026

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Ashwini Vallakati

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

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Analysis and Findings:

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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.

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11. The said guideline is extracted as under:

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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 :-

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eatwj fodkl fu;a=.k fu;ekoyhe/;s bekjr map e;kZnk o brj fucZa/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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Page 6 of 11 February 26, 2026

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Ashwini Vallakati

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

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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.

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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.

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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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Page 7 of 11 February 26, 2026

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Ashwini Vallakati

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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.

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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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Page 8 of 11 February 26, 2026

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Ashwini Vallakati

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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.

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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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February 26, 2026

Ashwini Vallakati

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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.

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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.

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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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February 26, 2026

Ashwini Vallakati

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

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

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With the aforesaid directions, the Petition is allowed , and Impugned Order is quashed and set aside. No order as to costs.

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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.

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[ SOMASEKHAR SUNDARESAN, J.]

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Page 11 of 11

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February 26, 2026

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Ashwini Vallakati

Patel Builders and Developers Thr Its Partners Bilal Rauf Patel and Ors. v. the State of Maharashtra Thr Its Secretary and Ors.

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Patel Builders and Developers Thr Its Partners Bilal Rauf Patel and Ors. v. the State of Maharashtra Thr Its Secretary and Ors.

Case brief

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