# GPA Sale Papers Owe Stamp Duty Plus Penalty: Delhi HC

By Saurabh Garg, founder·9 min read·Published 2026-09-12
**Short answer:** On 8 September 2026 the Delhi High Court held that an unregistered agreement to sell can still be the basis of a suit for specific performance, but cannot be used to claim part-performance protection under Section 53-A of the Transfer of Property Act, 1882. Because the agreement recorded delivery of possession, the Court charged it as a conveyance in the nature of part performance under Article 23-A of the Indian Stamp Act, 1899, and ordered the buyers to deposit ₹59,950 of deficient duty and a ₹5,99,500 penalty within one month before the suit could proceed. The case is Dharmendra Singh & Anr. v. Fazlu Rehman, RFA (COMM) 134/2023.

# An Unregistered Agreement to Sell Still Gets You to Court. The Stamp Duty Gets There First

**On 8 September 2026 the Delhi High Court revived a suit built on an unregistered agreement to sell, a GPA and a Will. The agreement can be used to sue for specific performance. Before the trial court will read it, the buyers have to deposit the stamp duty the agreement never paid and a penalty of ten times that shortfall, within one month of the order.**

The case is *Dharmendra Singh & Anr. v. Fazlu Rehman*, RFA (COMM) 134/2023, decided by a Division Bench of Justice Anil Kshetarpal, who wrote the order, and Justice Shail Jain. The order was reserved on 31 August 2026 and pronounced on 8 September 2026. The copy we read carries no neutral citation and no reportable marking.

## What the buyers signed in 2019

On 10 May 2019 the parties signed an agreement to sell for Shop No. 113, 16 square yards, at Sabzi Mandi, Okhla, New Delhi, for ₹12,00,000. The buyers paid the whole price. The same day the parties also executed a General Power of Attorney, a Will, a possession letter and a receipt.

The seller was still sitting in the shop. So the same day the parties also signed a rent agreement making him the buyers' tenant for 11 months from 11 May 2019, at ₹10,000 a month, with a 10% increase on renewal. He paid for a while, stopped in May 2020 during the COVID-19 lockdown, resumed at the old rate, refused to sign a fresh agreement, and stopped again from December 2021.

The buyers ended the tenancy by notices dated 14 March 2022 and 5 April 2022. That is when the seller denied their title and disputed the 2019 documents. The buyers sued for specific performance, possession and arrears. On 9 May 2023 the District Judge at Saket Courts rejected the plaint at the threshold under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, holding the agreement inadmissible because it was unregistered and under-stamped.

## What the court held on registration

The High Court set that aside. It followed a Division Bench of the Punjab and Haryana High Court in *Ram Kishan v. Bijendra Mann*, 2012 SCC OnLine P&H 19839. Since the Registration and Other Related Laws (Amendment) Act, 2001, an agreement that falls within Section 53-A of the Transfer of Property Act, 1882 has to be registered under Section 17(1-A) of the Registration Act, 1908. An unregistered one cannot be used to claim part-performance protection.

The same 2001 amendment added a proviso to Section 49 of the Registration Act, which lets an unregistered document be received in evidence as proof of the contract in a suit for specific performance. The Court put the result this way: an unregistered agreement to sell involving possession "can form the basis of a suit for specific performance and can be admitted in evidence, but it cannot be used to obtain the protection available under Section 53-A".

## What it held on stamp duty

Under-stamping, the Court held, is not a ground to reject a plaint. The trial judge "appears to have conflated three distinct concepts": whether an instrument is admissible in evidence, whether a stamp defect can be cured, and whether the suit can be brought at all.

Instead of sending the agreement to the Collector for impounding under Section 33 of the Indian Stamp Act, 1899, the Court used proviso (a) to Section 35, under which the court itself can admit the document once the deficient duty and penalty are paid.

On how much, the Court treated the agreement as a "conveyance in the nature of part performance" under Article 23-A of Schedule I, as it applies to Union Territories, which charges 90% of the duty on a conveyance. It gave its reason in one line: the set of documents is executed "to avoid execution of the Sale Deed and avoiding the corresponding liability to pay stamp duty."

For the rate, the Court read Article 23 as amended by the Indian Stamp (Delhi Amendment) Act, 2007: 3% of the consideration, reduced to 2% on the share held by a woman. The buyers are a man and a woman, their shares were not stated, so the Court took them as equal. It put the duty at ₹60,000, against ₹50 of stamp paid, a deficiency of ₹59,950.

Do not read that figure as a formula. The order sets out the 90% rule and the 3% and 2% rates, then arrives at ₹60,000, which is 5% of ₹12,00,000. It does not show the working in between. The duty on your own agreement is for the Collector of Stamps or the court to compute.

## The tenfold penalty, and the way to claw part of it back

Relying on the Supreme Court in *Peteti Subba Rao v. Anumala S. Narendra*, the High Court held that a court acting under Section 35 has no discretion to reduce the penalty. It fixed the penalty at ten times the deficiency: ₹5,99,500.

The order then opens a second door. Citing *H.C. Dhanda Trust v. State of Madhya Pradesh*, it noted that the Collector, under Section 40(1)(b), has discretion to impose a penalty "not exceeding ten (10) times" the deficient duty. The buyers may apply to the Collector for a refund of part of the penalty, and the Court forwarded the matter to the Collector without holding up the suit.

The operative direction: deposit ₹59,950 and ₹5,99,500 before the District Judge within one month of 8 September 2026, after which the agreement "shall stand admitted in evidence" and the suit proceeds. The appeal was allowed and the suit sent back to the District Judge.

## What the order leaves open

The order does not decide that the buyers own the shop. It states that "All contentions of the parties on merits are left open."

It records three arguments without ruling on them. The seller said the buyers were blowing hot and cold by claiming to own the shop and to be his landlord at the same time. The buyers said the seller's admitted signatures put the burden on him to prove he signed blank papers. And the buyers relied on Section 3 of the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorized Colonies) Act, 2019. The order leaves each of them open.

The stamp articles and rates the order applies are the Delhi ones.

## What it means if you own from abroad

If your family bought in Delhi on an agreement to sell, a GPA, a Will and a possession letter, with no registered sale deed, this order says that paper can still carry a suit for specific performance. It also says the court will not look at the agreement until the stamp duty is made good, and, reading the Supreme Court's ruling in *Peteti Subba Rao*, that a court acting under Section 35 cannot cut the penalty below ten times the shortfall.

If you sold that way years ago and stayed on as the tenant, as the seller here did, the order shows the other side of it. Non-registration did not end the buyers' suit.

A GPA and a Will are not a sale deed. Our guide on [whether a general power of attorney can transfer title](/guides/can-general-poa-transfer-property-title-india) sets out why a registered sale deed is the document that passes ownership. The August Supreme Court ruling on [an agreement to sell with a sitting tenant](/guides/nri-tenant-agreement-to-sell-tenancy-supreme-court-aug-2026) covers the tenancy half of an arrangement like this one.

## What to do

If you hold a set of GPA-sale papers on a Delhi property, take the documents and the stamp paper to a Delhi property lawyer before you rely on them in any dispute, and get the duty and penalty computed on your own facts. If you are buying, our [guide to buying property in India as an NRI](/guides/nri-buying-property-in-india) covers the registered sale deed route. For a flat you already own in the capital, see [NRI property management in Delhi](/nri-property-management-delhi).

## FAQ

**I bought property in Delhi on an unregistered agreement to sell, a GPA and a Will. Can I still sue on the agreement?**
On 8 September 2026 the Delhi High Court held, in *Dharmendra Singh v. Fazlu Rehman*, that an unregistered agreement to sell involving possession can form the basis of a suit for specific performance and be admitted in evidence under the proviso to Section 49 of the Registration Act, 1908. It cannot be used to claim protection under Section 53-A of the Transfer of Property Act, 1882. Your position turns on your own documents, so confirm it with a lawyer.

**How much stamp duty did the Court say the agreement owed?**
The Court treated the agreement as a conveyance in the nature of part performance under Article 23-A of the Indian Stamp Act, 1899, which charges 90% of conveyance duty, and applied Delhi's rates of 3%, and 2% on a woman's share. On a price of ₹12,00,000 it put the duty at ₹60,000, found ₹50 paid, and fixed the deficiency at ₹59,950.

**Is the tenfold penalty final?**
The Court held that a court admitting a document under Section 35 of the Stamp Act has no discretion to reduce the penalty, and fixed it at ₹5,99,500, ten times the deficiency. It also held that the buyers may apply to the Collector under Section 40(1)(b), who has discretion to impose less, for a refund of part of the penalty.

**Does this order apply to an agreement to sell outside Delhi?**
The order applies Article 23-A of Schedule I to the Indian Stamp Act, 1899 as it applies to Union Territories, and Article 23 as amended by the Indian Stamp (Delhi Amendment) Act, 2007. It is a Delhi High Court order on those Delhi provisions and does not address the stamp schedule of any other state.

**Did the Court decide that the buyers own the shop?**
No. The High Court set aside the rejection of the plaint and sent the suit back to the District Judge at Saket. It left all contentions on the merits open, including the Delhi unauthorised colonies law the buyers relied on.

*66 MG Road newsdesk*

## Sources

- Order, *Dharmendra Singh & Anr. v. Fazlu Rehman*, RFA (COMM) 134/2023, CNR DLHC010256322023, High Court of Delhi, Division Bench of Justice Anil Kshetarpal and Justice Shail Jain, pronounced 8 September 2026. The court's signed 15-page PDF, carrying its digital signature block, read in full on 12 September 2026. The High Court's own judgment search sits behind a CAPTCHA, so the copy read is the signed PDF as republished at: [https://rawlaw.in/wp-content/uploads/2026/09/DHARMENDRA-SINGH.pdf](https://rawlaw.in/wp-content/uploads/2026/09/DHARMENDRA-SINGH.pdf)

- High Court of Delhi, Pronouncement of Judgment list for 8 September 2026, Court No. 06, Division Bench-IX, item 1, RFA(COMM) 134/2023, confirming the case, the bench and the date: [https://delhihighcourt.nic.in/files/2026-09/announcements/j_08092026.pdf](https://delhihighcourt.nic.in/files/2026-09/announcements/j_08092026.pdf)

About the author: [Saurabh Garg](/about)

Saurabh Garg has run the venture studio C4E for twenty years. He founded 66 MG Road in 2026, reads every proposal request, and replies within one business day.

[saurabhgarg.com](https://saurabhgarg.com) · [@saurabh](https://x.com/saurabh) · [LinkedIn](https://www.linkedin.com/in/saurabhgarg)

Information on this page is as on 2026-09-12. Rules, rates, deadlines and government portals change without notice, so verify against the official source before you act. This page is for information only. It is not tax or legal advice, and it is not a substitute for a qualified adviser who knows your position.

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- [You Agree to Sell the Flat to Your Tenant. The Supreme Court Says He Is Still Your Tenant](/guides/nri-tenant-agreement-to-sell-tenancy-supreme-court-aug-2026)
- [NRIs Buying Property in India: The Rules, the Money, the Paperwork](/guides/nri-buying-property-in-india)
- [NRI Property Management in Delhi](/nri-property-management-delhi)

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