The Supreme Court on Friday ruled that an assistant registrar’s approval is not required to register or transfer a property of a cooperative housing society in the name of its members, and quashed as illegal the impugned provision formulated under the Indian Stamps Act, 1899.

A bench of Justices P.S. Narasimha and Atul S. Chandurkar held that once a cooperative society was registered and a certificate issued, it was conclusive proof of its existence and continuation as a body corporate.

“The requirement of recommendation by the assistant registrar, cooperative society, as a precondition for registering an instrument transferring premises of a cooperative society in favour of its members without stamp duty to prevent fake cooperative societies from claiming benefit of Section 9A is, in our opinion, an irrelevant consideration leading to illegality in action. Such a pre-condition is clearly superfluous and in fact, unnecessary…. The certificate of registration is conclusive evidence of the existence of the cooperative society,” Justice Narasimha, who authored the judgment, said.

Section 9A was inserted by the Indian Stamp (Bihar Amendment) Act, 1988, to provide stamp duty exemptions on the transfer of properties among members of cooperative societies.

The apex court passed the verdict while allowing an appeal filed by a housing cooperative society from Jharkhand challenging the concurrent judgments of a single-judge bench and a division bench of Jharkhand High Court upholding the provision mandating prior approval of the assistant registrar for property transfer.

The dispute traces back to a memo dated February 20, 2009, issued by the principal secretary of the Jharkhand government's registration department. The memo directed district sub-registrars to grant stamp-duty exemption under Section 9A only after obtaining a recommendation from the assistant registrar of the cooperative society confirming the society's existence.

The society, registered under a state law, had challenged the memo on the grounds that it created an unnecessary barrier to efficient transfer of property to its members and ran contrary to statutory requirements.

Allowing the appeal, the apex court said the requirement mandated by the government was “irrelevant and superfluous”.

“The reason is simple. Once a cooperative society is registered and a certificate is issued, Section 5(7) of the Act (cooperative societies) declares it to be a conclusive proof of its existence and continuation as a body corporate. Irrelevant consideration includes insistence or performance of acts or submission of documents, which neither have relevance nor are value additions to the purpose or object of law or policy in place,” it said.