• The compilation includes Adv Parth Yadav’s case made before the SC that Muslim Gift (hiba) should be subject to registration and consequently payment of stamp duty. Not done since 1950. Know two more examples of inequality before law. Lastly, is a recent opinion by Adv Rajesh Gehani on subject. Is India run by Shariat or Constitution?   

This piece is compiled based on tweets by Adv Parth Yadav and Legal Opinion shared by Advocate Rajesh Gehani. Credit and copyright theirs.

DRAFT FOR REVIEW 

Summary in brief

One of the good things about X (formerly Twitter) is the amount of knowledge sharing by some handles for e.g. Adv Parth Yadav. Subject - Muslim Gift (hiba) is excluded from Registration. Under the Stamp Act a gift i.e. not registered is not liable for stamp duty. This is because of the Transfer of Property Act 1882 and Shariat Act, 1937. The Supreme Court has granted the petitioners the liberty to approach the Law Commission

Simply put, it means that from 1950 to when the law is amended, when a Hindu made a gift he had to register the gift and pay stamp duty. A Muslim did not have to register the gift under Shariat so did not pay stamp duty.

Recently, SC reiterated the need for a Uniform Civil Code whilst hearing a petition to solve discrimination against Muslim women w.r.t. Inheritance Rights. My FAQ tells how Muslim women are discriminated in inheritance as compared to Hindus. This tells that Equality before Law Art 25 is a sham since 1950.

First sharing Adv Parth tweets and then an opinion by Adv Rajesh Gehani.

Advocate Parth Yadav Tweets

1. Tweet 1 – “Today, the Hon’ble Supreme Court has been pleased to dispose off my Petition challenging Section 129 of Transfer of Property Act, 1882 and Section 2 of Shariat Act, 1937 on ground of violation of Articles 14 and 15 of the Constitution of India Let’s understand what is the issue:”

2. Tweet 2 – “As we can discern from the reading of Section 129 of TP Act and Section 2 of Shariat, Muslim Gift (hiba) is excluded from Registration and is part of “personal law of Muslims.”

3. Tweet 3 – “Further, if we analyse the provisions of Stamp Act which are as follows, we come to the conclusion that Gift which is not registered is consequently not liable to be levied Stamp Duty as by virtue of Sections 3(a) and 17, instruments in Schedule to stamp act are chargeable with Stamp duty. For better understanding the Entry 33 of the Schedule is as follows which effectively means that Gift (gift deeds) are to be stamped and stamp duty is payable:”

4. Tweet 4 – “Further, if we read Section 123 of TP Act, it brings us to the conclusion that not only Section 129 is violative of Articles 14 and 15, but also in conflict with other provisions of law like Section 123 itself which mandates registration of all instruments of gift:”

5. Tweet 5 – “What is more interesting is that both Shariat Act, 1937 and TP Act, 1882 are pre constitutional laws and are therefore, in teeth of Article 13(1) of the constitution rendering both the laws void:”

6. Tweet 6 – “Today the Hon’ble Court has granted us liberty to approach the Law Commission. I will send a representation to the Law Commission regarding the above two provisions.”

Indians often hear we are a Constitution run state. In ways, we are a Shariat run state.

The British introduced such laws to divide India. Framers of the Colonial Constitution and political parties thereafter continued. To assume that politicians, lawmakers and courts were unaware is being generous towards them.

To read SC order in PDF, click on PDF

Here is second example of a British era law that I discovered in 2019.  I wrote in the Financial Express, “A Madras High Court judgment ruled that salaries received by missionaries and nuns of catholic church for teaching services are liable to be subjected to Tax Deducted at Source (TDS) under Section 192 of the Income-Tax Act, 1961. Simply put, the court held that the salaries were received in their individual capacity so tax had to be deducted.” 

“Catholic institutions argued that since priests/nuns had taken a “vow of poverty as per which they had to surrender their personal income to church/diocese, no income effectively accrued to them.” 

Arguing in the Supreme Court, respected senior advocate Arvind Datar said, “Recognising this, they have not been subjected to income tax since 1944.” 

From 1944 onwards to date of SC order no tax was deducted on salaries received by missionaries and nuns of the Catholic Church for teaching services.

A third example. In Manipur, the Meitei community (Hindus) are liable to pay income tax, whilst scheduled tribes (who are Christians today) are not liable to pay income tax because of Section 10(26) of the Income-Tax Act.

PART 2

Returning to the first issue, here is the Legal Opinion by Adv Rajesh Gehani to a co-operative society that had received a flat for change of owner name. The flat was not registered under the Maharashtra Stamp Act.

Summary of the Conflict

“There appears to be a significant conflict between: 1. Supreme Court Judgement in Mansoor Saheb v. Salima (2024): Which reiterates that under Mohammedan Law, gifts (Hiba) do not require registration if the three essential requirements are fulfilled. And (Print enclosed) 2. Maharashtra Stamp Act, 1958 - Article 34 and Section 123: Which mandates registration for gifts of immovable property.

Detailed Analysis

1. Position under Mohammedan Law (As per Supreme Court)

The Supreme Court has held that registration of gifts (Hiba) is not required under Mohammedan Law, and if the valid requisites of the gift are fulfilled, then the validity of the gift cannot be affected even if it remains unregistered.

The three essential conditions for a valid gift under Mohammedan Law are: (a) declaration of the gift by the donor, (b) acceptance of the gift by the donee, and (c) delivery of possession.

Under Mohammedan Law, a gift is valid if the conditions prescribed by that law are fulfilled, even though it is not effected by a registered instrument.

2. Position under Transfer of Property Act, 1882

Section 129 of the Transfer of Property Act provides, “Nothing in this Chapter related to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of Muhammadan law.”

This section preserves the rules of Mohammedan Law regarding gifts and excludes the application of Section 123 (which requires registration for gifts of immovable property exceeding Rs. 100).

3. Position under Maharashtra Stamp Act, 1958

Article 34 of Schedule I provides that gifts of immovable property require:

1. Registration under Article 123 of the Transfer of Property Act.

2. The same duty as is leviable on conveyance based on market value.

Section 34 states: “No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence... unless such instrument is duly stamped.”

4. Position under Maharashtra Cooperative Societies Act, 1960

Specific provisions applicable to a cooperative society typically require:

1. Proper transfer documentation

2. Registration with the society

3. Compliance with society byelaws

4. Clear title verification.

The Conflict Resolution - Constitutional and Legal Hierarchy:

1. Personal Law Protection: Personal Law has constitutional protection under Article 25 of the Constitution, giving it the stature of a fundamental right.

2. Provisions of the Maharashtra Stamp Act - Section 2(g) defines “Conveyance”. Section 2 (ja) defines “immovable property”, Section 2(l) defines “instrument”.

3. Section 129 TPA Protection: This explicitly saves Mohammedan Law from the registration requirement under Section 123.

However, Critical Practical Considerations arise:

1. Registration Act, 1908: Section 17(1)(b) mandates compulsory registration of "non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish... any right, title or interest... of the value of one hundred rupees and upwards, to or in immovable property."

The same reads: Section 17. Documents of which registration is compulsory.—

(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:— 

(a) instruments of gift of immovable property; 

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;

(c) …

2. Admissibility in Evidence: Unregistered documents affecting immovable property cannot be received as evidence of title under Section 49 of the Registration Act. The same reads:

49. Effect of non-registration of documents required to be registered.—No document required by section 17 (1) [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall— 

(a) affect any immovable property comprised therein, or 

(b) confer any power to adopt, or 

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: 

1 [Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) 2 , 3 *** or as evidence of any collateral transaction not required to be effected by registered instrument.]

3. Society's Concern: The society needs documentary evidence that can be relied upon for its records and for third-party verification.

My Detailed Legal Opinion and Advice to the Cooperative Housing Society:

I would advise the society may not accept an unregistered gift deed, despite its validity under Mohammedan Law, for the following reasons:

A. Primary Reasons:

1. Registration Act Overrides for Immovable Property

1. Section 49 of the Registration Act provides that no document required to be registered under Section 17 shall affect immovable property or be received as evidence of any transaction affecting such property, unless it has been registered.

2. This provision is mandatory and affects the admissibility of the document.

2. Society's Fiduciary Duty-

1. The society has a duty to maintain clear and marketable title records.

2. It must protect the interests of all members.

3. Unregistered documents create legal uncertainty.

3. Third-Party Rights and Future Transactions-

1. Banks and financial institutions will not accept unregistered documents for mortgage/loan purposes.

2. Future purchasers or legal heirs may challenge the transaction.

3. The society may face litigation risk.

4. Stamp Duty Compliance

1. Article 34 of Maharashtra Stamp Act makes proper stamping and registration mandatory for gifts of immovable property.

2. Non-compliance can result in penalties and inadmissibility.

Reconciliation of the Conflict:

The Supreme Court judgment establishes that:

1. Between the parties (donor and donee), an unregistered gift is valid under Mohammedan Law if the three conditions are met

2. The gift cannot be challenged on grounds of non-registration as between the parties

However:

1. As against third parties (including the society), the Registration Act requirements apply.

2. The document cannot be used as evidence of title without registration.

3. Section 17 of the Registration Act is a mandatory provision for immovable property transactions.

4. Payment of Stamp duty is mandatory under the Maharashtra Stamp Act on a Gift deed.

Practical Solution: I would advise the society to require the following:

1. Registration and payment of Stamp duty on the Gift Deed

1. Insist that the gift deed be properly stamped and preferably registered under the Registration Act, 1908.

2. This does not invalidate the gift under Mohammedan Law.

3. It merely complies with the procedural requirement for immovable property.

2. Due Diligence

1. Verify that the donor had clear title.

2. Check for any encumbrances.

3. Ensure proper identification of both parties.

4. Confirm consideration (or lack thereof) is properly stated.

Draft a Resolution/Policy stating:

"While respecting the personal law rights of Mohammedan members, the Society requires all transfers of flats/units, including gifts, to be:

1. Properly stamped as per Maharashtra Stamp Act.

2. Registered under the Registration Act, 1908.

3. Submitted to the Society for approval with supporting documents.

4. Accompanied by evidence of delivery of possession.

It is not my intent to malign or defame any individual or community.  As always, am happy to stand corrected. Love.

Also read

1. How Muslim women are discriminated in inheritance as compared to Hindus.

2. Tax Laws should be the same all citizens