The transfer of immovable property in an NCLT scheme is effected by the sanction order, which operates as a statutory conveyance. The order vests the property in the transferee company without the need for a separate sale deed. But the stamp duty and the registration requirements are not eliminated; they are triggered by the order, and the transferee company must comply with the State Stamp Act and the Registration Act.
The Stamp Duty Classification
The NCLT order is treated as an “instrument” of conveyance for stamp duty purposes. The Madras High Court has held that the NCLT order sanctioning a scheme of amalgamation can be treated as an instrument of conveyance, and the stamp duty is chargeable on the market value of the immovable property. The Haryana Government has directed the compulsory registration of NCLT orders, and it has clarified that the stamp duty is payable at 1.5 per cent under Article 23-A of the Schedule to the Indian Stamp Act, 1899, subject to a maximum of ₹7.5 crore.
The Valuation
The stamp duty is computed on the market value of the property or the consideration stated in the scheme. The Bombay High Court has held that where the property is sold through a liquidation auction, the stamp duty can be computed on the auction value rather than the Annual Statement of Rates (“ASR”) value, where the auction process is transparent. The principle is relevant to schemes where the property is transferred at a negotiated value, and it supports the use of the transaction value where it reflects the market price.
The Registration and Mutation
The NCLT order must be registered with the Sub-Registrar, and the mutation must be effected in the revenue records. The Haryana Government has noted that the failure to register the order and to update the revenue records has caused stamp duty losses and has created disputes. The transferee company should ensure that the registration and the mutation are completed within the prescribed timeline.
A technically sound real estate transfer addresses the stamp duty, the registration, and the mutation before the effective date. The scheme should identify the properties, the States in which they are situated, and the basis of the valuation.
Call to Action
Anuj Desai & Associates advises companies on the real estate aspects of an NCLT scheme—from the stamp duty classification and the state-wise rates to the registration and the mutation of the title. If your scheme involves immovable property, we can help you plan the transfer and the stamping.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
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