Stamp Duty Exemption Applies When Property Transfer Is Part of Court-Ordered Divorce Settlement: Supreme Court

Supreme Court Dissolves Marriage, Grants Property to Wife Without Stamp Duty - In a significant ruling the Supreme Court of India dissolved the marriage by mutual consent under Article 142 of the Constitution. The case, originally a transfer petition filed by the husband, took a different course when both parties agreed to a divorce settlement during mediation. The Court also held that the transfer of a jointly owned flat to the wife would be exempt from stamp duty, relying on Section 17(2)(vi) of the Registration Act, 1908.

Justice Vikram Nath and Justice Sandeep Mehta, while delivering the judgment, observed, “The exclusion provided by Section 17(2)(vi) of the Registration Act, 1908 will apply, and the registration of the flat in the exclusive name of the respondent-wife would be exempted from the payment of stamp duty.”

Background of the Case – A Matrimonial Dispute Turns into an Amicable Settlement

The case began as a transfer petition in which the husband sought to move the divorce proceedings from the Family Court in Bandra, Mumbai, to Karkardooma, Delhi. However, during the pendency of the petition, the parties were referred to mediation, which led to a complete resolution of their disputes.

A major issue in the case was the ownership of a jointly held flat located at Flat No. 601, 6th Floor, Panorama, Green Hills Co-operative Housing Society Ltd., Godrej Hill, Kalyan (West), Maharashtra. Both husband and wife initially made conflicting claims regarding their financial contributions toward acquiring the property.

During mediation, the husband consented to relinquish his ownership rights over the flat, while the wife agreed not to demand alimony or any financial settlement. The matter was then placed before the Supreme Court for final adjudication.

Legal Issue – Could the Wife Get Sole Ownership Without Paying Stamp Duty?

The Court had to decide whether the exclusive title of the flat could be transferred to the wife without requiring her to pay stamp duty. Addressing this, the bench referred to the precedent set in Mukesh v. The State of Madhya Pradesh & Anr. (2024 SCC OnLine 3832) and examined Section 17(2)(vi) of the Registration Act, 1908.

The Court clarified that under this provision, a decree or order of the Court does not require payment of stamp duty if the immovable property in question was the subject matter of the proceedings.

"Manifestly, the flat-in-question is the subject matter of the compromise and as a consequence, it forms part of the proceedings before this Court. Hence, the exclusion provided by Section 17(2)(vi) of the Registration Act, 1908 will apply and the registration of the flat in the exclusive name of the respondent-wife would be exempted from the payment of stamp duty," the Court ruled.

This meant that the wife could register the flat in her sole name without paying stamp duty, making the settlement both legally sound and financially fair.

Final Decision – Marriage Dissolved, Property Ownership Settled

The Supreme Court granted mutual consent divorce under Article 142, stating, "The applications under Article 142 of the Constitution of India are hereby allowed. Accordingly, the marriage of the parties is dissolved by mutual consent."

The Court then directed, "The absolute ownership of the said flat shall henceforth vest in the name of the respondent-wife, i.e., Parul Singh, without any encumbrances. The petitioner-husband shall not be entitled to claim any rights or privileges in relation to the said flat hereinafter."

Furthermore, the Court clarified that the wife would not be required to pay any stamp duty and ordered the concerned Sub-Registrar to register the property in her name without additional charges.

Conclusion – A Landmark Judgment on Divorce Settlements and Property Rights

This ruling sets an important precedent in matrimonial law by reinforcing that court-ordered property transfers, as part of a divorce settlement, are eligible for stamp duty exemption under the Registration Act. The judgment also highlights the effectiveness of mediation in resolving complex family disputes and the Supreme Court’s power under Article 142 to ensure fair and equitable settlements.

Justice was ultimately served through a mutual, amicable resolution that allowed both parties to move forward with clarity and finality.

Date of Decision: February 28, 2025