BBMP’s JV partner strikes deal without its consent

BBMP’s JV partner strikes deal without its consent
New Indian Express

BANGALORE: Bruhat Bangalore Mahanagara Palike (BBMP) has virtually lost control on its joint venture partner in Maharaja Complex on K G Road.

The JV partner has sold a portion of parking-cum-commercial complex by signing on behalf of Palike while the JV agreement itself is not valid for want of stamp duty.

On June 9, 2006, the JV partner Maharaja BuildTech executed a sale deed in favour of Arvind Gupta, Anil Gupta and Mohan Gupta. The JV partner sold 272.1 sq ft of space for Rs 21.76 lakh. However, no BBMP official has signed the deed.

The managing director of Maharaja, Bhavarlal Khivesra said that Palike had given a general power of attorney (GPA) to Maharaja based on which the property was sold. But the problem with the GPA is that it is issued as per provisions of original JV agreement which is rendered invalid due to stamp duty default.

The GPA issued to Maharaja on April 5, 2003 says, that under clause 18, the JV partner could enter into agreements for sale of portions of the complex as per JV agreement dated March 6, 2002. This JV agreement was registered on a stamp paper of Rs 200 and it was agreed that Palike would seek exemption from stamp duty.

However, the government refused exemption and deputy commissioner of stamps ordered last month that Maharaja BuildTech must pay Rs 1.45 crore stamp duty on JV agreement along with a penalty of Rs 1000. Until the stamp duty is paid, the agreement is invalid and hence, the GPA infructuous.

Khivesra said that the sale deed was executed much before the orders of stamps department and that the issue was before the government. But how can sale be effected when no decision was taken on stamp duty? “We will pursue this with the government,” he said.

Interestingly, Gandhinagar sub-registrar’s office has refused to register the transaction.