Column

Land has not been conveyed in favour of our society. Is there any stamp duty on transfer of shares? Can society refuse to transfer membership without registration? Can a society charge fees on transfer of garage?
In case of transfer of shares in a co-operative housing society, what is conveyed by the instrument of transfer is not only the transfer of shares but suchtransfer of shares is coupled with right, title and interest in the immovable property and therefore on such a transfer, stamp duty becomes payable.

Merely because no conveyance has been executed by the builder or landlord in favour of co-operative society, it cannot be said that flat owners are transferring only the shares and not right, title and interest in immovable properties. Instruments of transfers of shares in a CHS by virtue whereof ultimately flats get transferred are conveyance under the provisions of the Bombay Stamp Act, 1958.

With regard to registration, one may like to take a stand that section 41 of the Maharashtra Co-operative Societies Act, 1960 provides, with overriding effect, exemption to any instrument of transfer of shares in a co-operative society.

However, there is a circular of department of co-operation requiring committee to ensure stamping and registration before effecting transfer of shares in a CHS. A flat purchaser may contest validity of the said circular being in contradiction of the specific provisions of law.

As far as society is concerned, committee would have to implement the said circular. Registrar of co-operative societies would go by the circular. Registration Act, 1908 also requires registration of an agreement for sale, but section 41 of MCS Act, 1960 overrides Registration Act, 1908 in respect of transfer of shares in a co-operative society.

Courts have consistently taken a view that transfer of shares in a CHS is in substance transfer of immovable property. Flat purchaser having paid various kinds of considerations would like to get transfer effected by the society in his favour at the earliest.

On such considerations, a strong case lies in favour of requirement of registration of an agreement for sale of a flat in a CHS. If, however, the shares have already been transferred in favour of a member, then the CHS cannot enforce registration.

Under the provisions of MOFA, 1963 read with model bye laws of a CHS, a garage is also a flat and therefore transfer of garage would attract transfer fees.

The writer is a chartered accountant and can be contacted at ghiatarun@rediffmail.com