Stamp Duty Not Payable by Wife for Flat Acquired as Part of Compromise in Divorce Case: Supreme Court [Read Judgment]

The Supreme Court recently excluded a wife from paying stamp duty under the Registration Act, 1908 ("Act") if she got an apartment as part of a settlement with her husband in a divorce dispute.

In the case heard by the two-judge bench consisting of Justices Vikram Nath and Sandeep Mehta, the husband and wife decided to end their marriage amicably through mediation while the husband's petition to transfer the wife's divorce case was still pending.

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During the mediation processes, a dispute occurred between the parties regarding their respective rights to a flat in Bombay, as each claimed to have contributed to its acquisition. Consequently, a settlement was struck wherein the petitioner-husband agreed to waive his rights over the flat in favor of the respondent-wife, who, in return, consented to forgo any claim for alimony.

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The question that came up for the Court's consideration was whether the respondent-wife could transfer the exclusive title of the apartment in question into her name without having to pay the stamp duty.

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Relying on the recent case of Mukesh v. The State of Madhya Pradesh & Anr. (2024), the Court responded in the affirmative, stating that the transfer would be exempt from stamp duty under Section 17(2)(vi) of the Act because the flat was the subject of the compromise and was a part of the court proceedings.

The court noted that the disputed flat is clearly the focus of the agreement and, as such, is a component of the proceedings before this court. Therefore, the exclusion stipulated in Section 17(2)(vi) of the Registration Act, 1908 will be applicable, and stamp duty will not be required for the registration of the flat in question in the respondent-wife's sole name.

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Consequently, the Court ordered the Sub-Registrar in question to register the apartment in question under the respondent-wife's sole name as the owner.

To Read the full text of the Order CLICK HERE

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