The Supreme Court has ruled that a condition imposed by a state government requiring additional verification by an Assistant Registrar before granting stamp‑duty exemption to cooperative societies is illegal and must be struck down. The case arose from a directive issued by the state government which made the benefit under Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988 conditional upon a recommendation by the Assistant Registrar of Cooperative Society — a step not mandated by the statute.
The Court observed that once a cooperative society obtains its certificate of registration, that certificate constitutes conclusive proof of its existence and continued existence as a body corporate. Accordingly, the State and its instrumentalities are bound by that registration. Any further verification requirement, like the additional recommendation by the Assistant Registrar, amounts to an unnecessary and irrelevant hurdle. The Court held that such extra‑statutory conditions are “superfluous, redundant and illegal.”
The directive in question traced back to a 2009 memo which had instructed district sub‑registrars to demand the Assistant Registrar’s approval before allowing a cooperative society to transfer premises to its members without levy of stamp duty. The memo was presumably aimed at preventing misuse by “fake” societies. However, the Supreme Court found this objective insufficient to justify imposing a pre‑condition not contemplated by the statute, especially when the statutory certificate under the cooperative societies law already ensures the society’s legitimacy.
In quashing the memo, the Court emphasized the principle that executive action cannot override statutory law or add extra procedural burdens unnecessarily. It underscored that administrative procedures ought to be simple and transparent; complexity, redundant requirements and unnecessary burdens violate the rule of law and obstruct ease of compliance. The Court’s intervention reinforces that courts will set aside executive actions founded on irrelevant considerations or imposing hurdles beyond statutory mandate.
The appeal by the cooperative society that challenged both the state government’s directive and a decision of the higher court was allowed. The Supreme Court thus restored the society’s right to claim stamp‑duty exemption under Section 9A, without being subjected to the extra verification requirement.
The judgment reaffirms that registration under the cooperative societies law suffices as conclusive proof of a society’s legal existence; once that is established, no additional certifications or approvals are justified for the purpose of statutory benefits.
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