Mumbai: Notoriety with notary no longer accepted

New circular by registration office asks police to stop accepting leave and license agreements that are notarised and not registered with the stamp duty paid; say taking system online to share data eventually

According to the records, only 15 per cent rentals in the state are registered properly
According to the records, only 15 per cent rentals in the state are registered properly

No longer is it going to be acceptable to simply notarise your leave and license agreement and bypass the stamp duty and registration payment to the government as a convenient out to solemnise renting out property. Sure, it saves a few bucks — notarising on a stamp paper costs a paltry Rs 100, whereas stamp duty and registration is calculated at .25 per cent of the taxable annual rent and deposit combined — but if the Inspector General of Registration, Pune, has his way, no longer will this arrangement be accepted by the police as part of the official record for the tenement.

Dual aim for system
In his circular to Maharashtra's DGP (a copy is with this paper), the newly-appointed Inspector General of Registration and Controller of Stamps, Anil Kawade, has requested the police to not accept these anymore and that appropriate notification be issued to police stations across the state. He added, "We are interacting with the state police department to bridge both the official portals and share data. The intent is to create a dually helpful process. One is to ensure that the exchequer doesn't miss out on stamp duty and registration charges; the other is that the police should be able to keep a tab on who is living where and check their credentials and background."

"In the long run, we want to do away with the public having to visit the local police station for verification. Through online data, the police can access and verify the credentials of the tenants, and in cases of fraud, take over further investigation," he explained.
Is notarising legal?

Kawade also claims, "As per our information, only 15 per cent of agreements in the state are brought in for registration; numerous transactions happen merely on the Rs 100 stamp paper or without paying proper stamp duty."

Property consultant Vijay Nair, however, counters that the new system will only cause hindrance to both the property owner and the tenant, as they will have to shell more money and it will be time consuming. He said, "A notarised agreement for 11 months, wherein the two parties are known to each other and do not have any malifide intent, is valid."

But Kawade insists that the circular strikes the right note. "We are following due course of law as per the provisions laid in Maharashtra Stamp Act, 1958 and Indian Registration Act, 1908. Evading stamp duty is an offence and such documents can even be impounded and the concerned defaulters penalised," he said.

Meanwhile, Rajesh Sampat, a stamp duty registration consultant from Ghatkopar said, "It is a good move, but we must understand that online registration is based on Aadhaar and PAN card. There have been instances wherein details furnished do not match or thumb impressions are not read properly, hampering online registration. So the option of manual registration always has to be left open."

Better security?
The second advantage being touted is better security. Satish Mathur, DGP, Maharashtra said, "The stamp and registration office have digitised and we are in the process of making a common IT platform. With that, we can share documents for verification." He added that it would also help keep tab on antisocial elements, saying, "It will be used for multi-level policing."

Additional DG (Anti-Terrorism Squad), Atulchandra Kulkarni concurred, "Any kind of safeguard is better for enforcement agencies, and if such measures don't cause any inconvenience to the public at large, it is a welcome move."

However, an ACP rank officer from Mumbai police has his doubts. "I am aware of this move, but at the same time, the documents are submitted to the police for security reasons. We (the police) need to know who stays where and hence it is mandatory for every tenement given on lease to be registered and stamped properly, so that records are with us."

Even Stamp Duty and Registration Payers Association founder, advocate Vinod Sampat said, "A document can be registered within a time period of four months from the date of execution of the agreement. So if law enforcement agencies feel they can keep tab on suspicious elements by sharing online information of tenants, they need to do better homework, as such suspicious people would commit the offence and leave the premises. They won't wait for registering documents." Sampat further added that for online registration, only a prescribed format is accepted, which is nothing but forcing terms and conditions on both parties.

Justifying their stand
Suresh Jadhav, Additional Controller of Stamps, General Stamp Office, Mumbai, said, "The work to bridge the online data is in process and this would save the public time from visiting the police station for submitting any documents for police verification." But when asked about the issue raised by the association, Jadhav said, "We cannot do much in such a case. Only once the data come to us can it be shared with the police."

Targets not met
The stamp duty and registration office is one of the major revenue generators for the state. Last year, its target was R23,548 crore, but it failed to meet it and managed Rs 21,016 crore — a shortfall of Rs 2,532 crore that was attributed to demonetisation and the BMC elections in February. Interestingly, the target for this year has not been declared as yet.

Rs 2.5k cr Shortfall in meeting the stamp duty collection target for 2016-2017

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