"Simplicity in Public Transactions" as a Ground of Illegality in Administrative Action – Commentary on Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand (2025 INSC 1389)

“Simplicity in Public Transactions” and Superfluous Administrative Conditions as Illegality: A Commentary on Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand, 2025 INSC 1389

1. Introduction

The Supreme Court’s decision in Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand (2025 INSC 1389, judgment dated 05 December 2025) is a concise but normatively rich ruling at the intersection of:

  • Administrative law (judicial review on the ground of illegality and “irrelevant considerations”);
  • Fiscal law (stamp duty exemptions under the Indian Stamp Act, 1899 as amended by the Bihar Amendment Act, 1988); and
  • Co-operative law (status and evidentiary value of registration of co-operative societies under the Jharkhand Self-Supporting Cooperative Societies Act, 1996).

The central controversy concerns a 2009 Memo issued by the Principal Secretary, Registration Department, Government of Jharkhand. This Memo directed all District Sub-Registrars and Sub-Registrars that the exemption from stamp duty under Section 9A of the Indian Stamp Act (Bihar Amendment) for transfers of cooperative society premises would be granted only if there was a prior recommendation from the Assistant Registrar, Cooperative Society.

The appellant, a registered housing cooperative society, challenged this Memo as:

  • Ultra vires the Indian Stamp Act and the Registration Act;
  • Contrary to the autonomy of co-operative societies under the 1996 Act;
  • Unsupported by any statutory power; and
  • Arbitrary and in breach of natural justice.

Both the Single Judge and the Division Bench (LPA No. 553 of 2022) of the Jharkhand High Court upheld the Memo, viewing it as an administrative aid to ensure that only genuinely registered co-operative societies avail the stamp duty exemption.

The Supreme Court, in an opinion authored by Justice Pamidighantam Sri Narasimha and concurred in by Justice Atul S. Chandurkar, reverses the High Court and sets aside the Memo. The Court’s key intervention is to crystallise a powerful administrative-law principle:

“Simplicity in public transactions is good governance,” and executive actions that impose unnecessary and superfluous procedural requirements, adding no value to the lawful purpose, are illegal because they rest on irrelevant considerations.

This decision thus elevates regulatory simplicity and avoidance of redundant bureaucracy from a policy aspiration to a justiciable criterion of legality when executive instructions interfere with statutory rights.

2. Summary of the Judgment

2.1 Statutory Context

  • Indian Stamp Act, 1899 (a fiscal statute): Section 9 empowers the government to reduce, remit, or compound stamp duty.
  • Section 9A, inserted by the Indian Stamp (Bihar Amendment) Act, 1988, provides that:
    • Instruments relating to transfer of premises by a registered co-operative society to its members are not chargeable with stamp duty.
    • This creates:
      • A right in favour of co-operative societies to effect such transfers without stamp duty; and
      • A correlative duty on registering authorities to register such instruments without collecting stamp duty.
  • Jharkhand Self-Supporting Cooperative Societies Act, 1996:
    • Section 5 – registration of cooperative societies;
    • Section 6 – confers on a registered cooperative society the status of a body corporate, with perpetual succession, common seal, and capacity to own property and sue/be sued;
    • Section 7 – requires display and use of the society’s name;
    • Section 5(7) – the certificate of registration “signed and sealed by the Registrar shall be conclusive evidence” of registration.
  • Registration Act, 1908:
    • Section 34 – empowers the registering authority to enquire into identity of executants, proper execution, representation, and due stamping of instruments.

2.2 The Impugned Memo (20.02.2009)

The Principal Secretary, Registration Department, issued Memo No. 494 (translated summary):

  • Recognised that under Section 9A there is complete exemption from stamp duty and registration fee on instruments presented by registered co-operative societies for transfer of land and properties.
  • Directed that:
    1. “In case of registration of co-operative societies, exemption will be given only when this matter is recommended by the Assistant Registrar, Co-operative Society.”
    2. “In the absence of such recommendation, exemption will not be given.”

The purported rationale: to ensure that “unfair advantage” is not taken and that “fake co-operative societies” do not misuse the exemption.

2.3 High Court’s View

The High Court refused interference, essentially reasoning that:
  • The Memo is not contrary to the Stamp Act or Section 9A; it merely ensures that only validly registered co-operatives benefit.
  • While the registering authority has some power of enquiry under Section 34 of the Registration Act, this does not extend to verifying:
    • the validity of registration of the co-operative society, or
    • whether conditions for availing exemption under Section 9A are met.
    Hence, the Assistant Registrar’s recommendation “assists” the process.
  • The Memo simplifies and benefits the process for co-operatives rather than obstructing it.

2.4 Supreme Court’s Holding

The Supreme Court:
  • Condones delay, grants leave, and confines itself to the legality of the exercise of power (rather than examining whether the Principal Secretary had jurisdiction at all).
  • Reaffirms that judicial review looks at whether an administrative decision is based on:
    • Relevant considerations; and
    • Avoids irrelevant considerations.
  • Holds that:
    • The requirement of a recommendation by the Assistant Registrar, Cooperative Society, as a pre-condition to registration with stamp duty exemption, is superfluous, unnecessary, and based on an irrelevant consideration.
    • Once a co-operative society is registered and issued a certificate under Section 5(7) of the 1996 Act, that certificate is conclusive evidence of its existence as a body corporate.
    • The State and its instrumentalities are bound by this certificate; no further question about existence or authenticity of the co-operative society can legitimately arise for the purpose of Section 9A.
    • The Memo imposes an additional, redundant tier that does not enhance the “integrity” of transactions but disrupts ease of transaction, wastes time and resources, and is thus illegal.
  • Sets aside the Memo and allows the appeal, thereby reversing the High Court’s judgment in LPA No. 553 of 2022.

3. Key Legal Principles Emerging from the Judgment

  1. Simplicity as a component of legality in administrative action: Executive directions that introduce unnecessary, excessive, or redundant procedural steps, which add no legal or practical value to the statutory objective, are vulnerable to being struck down as illegal.
  2. Irrelevant consideration includes superfluous procedural requirements: Requiring a recommendation from the Assistant Registrar, when a statutory certificate is already declared “conclusive proof” of existence of a co-operative society, is an irrelevant consideration and therefore unlawful.
  3. Conclusive-evidence clauses bind the State: When legislation declares that a registration certificate is “conclusive evidence” of a fact (here, the existence and status of a cooperative society), the State and its authorities cannot insist on additional certifications to re-verify that fact for purposes of another statute (here, stamp duty exemption).
  4. Fiscal exemptions can create both rights and corresponding public duties: Section 9A of the Stamp Act (Bihar Amendment) creates:
    • A right for cooperative societies to transfer premises to members without stamp duty; and
    • A statutory duty on registering authorities to register such instruments without demanding stamp duty.
    Executive instructions cannot impose new conditions on this right-duty relationship.
  5. Good governance and efficiency are justiciable concerns: The Court links elimination of redundant bureaucratic layers to the “rule of law” and “good governance,” stressing that public administration must avoid burdens that waste time, expense, and peace of mind.

4. Detailed Analysis

4.1 The Statutory Framework and Its Interaction

4.1.1 Section 9A of the Indian Stamp (Bihar Amendment) Act, 1988

Section 9A is a special provision introduced to promote the co-operative movement by reducing transaction costs in property transfers between co-operative societies and their members. Its effect is that:

  • Any instrument relating to transfer of premises by a co-operative society registered or deemed to be registered under any law for co-operative societies in force is exempt from stamp duty, if it relates to the business of the society and is in favour of its members.

The Court draws an important conceptual distinction:

  • Right aspect: The society and its members can transact without stamp duty burden for such transfers.
  • Duty aspect: The registering authority must process and register these instruments without insisting on payment of stamp duty.

By emphasising the duty aspect, the Court underscores that the State cannot, by executive fiat, thicken or dilute the conditions of the statutory exemption.

4.1.2 Jharkhand Self-Supporting Cooperative Societies Act, 1996

The 1996 Act is pivotal to the Court’s reasoning. Key provisions cited or relied on:

  • Section 5 – provides for registration of co-operative societies by the Registrar.
  • Section 6 –
    • declares that a registered co-operative society is a body corporate,
    • with perpetual succession and a common seal, and
    • is empowered to acquire, hold, and dispose of property, enter into contracts, and sue or be sued in its own name.
  • Section 7 – deals with display and use of the society’s name in its operations.
  • Section 5(7) – the cornerstone:
    “Where a cooperative society is registered, the certificate of registration signed and sealed by the Registrar shall be conclusive evidence.”

The Court interprets Section 5(7) to mean:

  • The certificate of registration is conclusive evidence of the existence of the co-operative society and its registration.
  • All State authorities are bound to accept this without re-questioning authenticity for routine transactional purposes like property transfers.
  • Consequently, no further “recommendation” from the Assistant Registrar can be justified as a “verification” of existence for Section 9A exemption purposes.

4.1.3 Registration Act, 1908 – Section 34

The High Court invoked Section 34 to argue that:

  • The registering authority’s enquiry is limited to:
    • identity of executants and representatives;
    • proper execution of the document;
    • payment of proper stamp duty and verification of the document presented.
  • It does not extend to verifying the legal status of a co-operative society or its entitlement to a fiscal exemption.
  • Hence, the Assistant Registrar’s recommendation fills a “gap” and is helpful.

The Supreme Court turns this reasoning on its head:

  • Even if the Registrar cannot perform deeper inquiries into a society’s registration, he does not need to, because:
    • Section 5(7) of the 1996 Act already declares the registration certificate to be conclusive evidence.
    • The Society’s certificate of registration, produced with the instrument, suffices to establish its status.
  • Requiring yet another authority (Assistant Registrar, Cooperative) to “certify” what is already conclusively certified by the Registrar of Cooperative Societies is legally pointless.

4.2 Judicial Review and Irrelevant Considerations: The Court’s Reasoning

4.2.1 The Ground of “Illegality” in Administrative Law

The Court frames the case firmly within classic judicial review doctrine. It reiterates that:

  • An administrative decision is unlawful if:
    • It is not based on relevant considerations, or
    • It relies on irrelevant considerations.
  • This evaluation must be grounded in:
    • The text and purpose of the statute, rules, or regulations under which power is exercised;
    • The broader public-law objectives, including the rule of law and good governance.
  • The Court must inspect whether the exercise of discretion furthers the object of the law or policy, or instead frustrates it.

Though the appellants had faintly questioned the jurisdiction of the Principal Secretary to issue such a Memo (ultra vires argument), the Supreme Court expressly limits its analysis to the exercise of power on the ground of arbitrariness and unreasonableness. It assumes arguendo that some administrative power exists to issue directions for registration processes, and tests whether the way that power was exercised is lawful.

4.2.2 “Simplicity in Public Transactions” as a Legal Value

Paragraph 2 of the judgment is normatively significant:

“Simplicity in public transactions is good governance. Constitutional courts uphold this virtue to strengthen the rule of law and ensure access to justice… Administrative procedures should avoid complexity, redundant requirements, and unnecessary burdens, which waste time, expense, and disturb peace of mind.”

The Court goes further in para 2.1:

“Executive actions that mandate certain unnecessary, excessive requirements, must equally be set aside as illegal.”

The Court thereby:

  • Elevates simplicity and non-redundancy in public procedures from mere administrative “best practice” to an enforceable standard of legality.
  • Links this requirement to:
    • Rule of law (clarity, predictability, and non-arbitrary state action); and
    • Access to justice (non-onerous compliance pathways for citizens and bodies like co-operatives).

4.2.3 Why the Assistant Registrar’s Recommendation is an “Irrelevant Consideration”

The State defended the Memo on the ground that it was necessary to prevent “fake” co-operative societies from exploiting stamp duty exemptions. The Principal Secretary, in effect, treated the “risk of fake societies” as a relevant concern justifying additional verification. The Court decisively rejects this.

The reasoning unfolds as follows:

  1. Conclusive proof of existence:
    • Section 5(7) of the 1996 Act makes the registration certificate “conclusive evidence” of the society’s registration and existence.
    • When a co-operative society produces its registration certificate, the law precludes further questioning on that point in routine transactions.
  2. Superfluity and lack of value addition:
    • The Assistant Registrar’s recommendation does not establish a new fact that the registration certificate has not already conclusively established.
    • It offers no value addition to the “integrity of the transaction” or to fraud prevention.
  3. Redundant bureaucracy as illegality:
    • Imposing a redundant layer—without statutory basis and without adding to the lawful purpose—constitutes an irrelevant consideration.
    • Irrelevant considerations vitiate the administrative decision, rendering the Memo illegal.
  4. Misplaced anti-fraud concern:
    • If there is a concern about fraudulent or sham registration of co-operative societies, that is a matter to be addressed at the stage of:
      • registration under the 1996 Act; and/or
      • cancellation or deregistration proceedings under that Act.
    • It is not a sound ground to alter the mechanics of stamp duty exemption under Section 9A via executive instructions.

The Court calls the requirement “disruptive of ease of transaction” and holds that it wastes limited time and human resources, undermining efficiency and good governance.

4.2.4 Fiscal Exemptions: Rights and Duties

The Court’s treatment of Section 9A is notable. Fiscal exemptions are often said to be construed strictly, but here:

  • The Court accepts that Section 9A was intended to encourage the co-operative movement by reducing transfer costs.
  • It emphatically treats Section 9A as conferring:
    • a substantive right on co-operative societies; and
    • a statutory duty on authorities to grant exemption and register documents without stamp duty.

This is important because:

  • Once such a right-duty framework is created by statute, the executive cannot superimpose additional preconditions (such as a “recommendation”) that are absent in the statute and unrelated to its object.
  • The Memo, in effect, turns Section 9A’s automatic statutory exemption into a discretionary, recommendation-based benefit, which the Court finds impermissible.

4.3 “Precedents Cited” and Doctrinal Lineage

The reported text of the judgment, as reproduced, does not explicitly cite prior case-law or mention specific authorities by name. However, the Court’s reasoning is firmly anchored in well-established doctrinal strands in Indian public law. It is consistent with, and likely influenced by, the following broader precedents and principles:

4.3.1 Relevant and Irrelevant Considerations in Administrative Law

The principle that administrative authorities must act on relevant considerations and eschew irrelevant ones is deeply rooted in Indian jurisprudence (deriving from common law and concepts akin to the Wednesbury principle). Although not named in the text, the decision resonates with well-known cases such as:

  • S.G. Jaisinghani v. Union of India, AIR 1967 SC 1427 – emphasising rule of law and non-arbitrariness in administrative discretion;
  • Tata Cellular v. Union of India, (1994) 6 SCC 651 – crystallising grounds of judicial review like illegality, irrationality, and procedural impropriety;
  • Other cases emphasising that power must be exercised for the purpose for which it is conferred and based on relevant material.

The Adarsh Sahkari judgment fits neatly into this doctrinal frame by:

  • Identifying the “concern about fake societies” as misdirected in this context, because the law already treats the registration certificate as conclusive;
  • Declaring that requiring a redundant recommendation is an irrelevant step which cannot lawfully justify interference with a statutory exemption.

4.3.2 Effect of “Conclusive Proof” Clauses

The notion that a statutory declaration of “conclusive evidence” ousts the need (and often the possibility) of further proof is widely recognised. While no particular decision is cited in the text, Indian courts have repeatedly held that:

  • When a statute says a certificate or entry is “conclusive proof,” courts and authorities cannot seek to go behind it in ordinary proceedings, short of showing that the certificate itself is void, fraudulent, or set aside in appropriate jurisdiction.

By applying Section 5(7) in this way, the Court reaffirms this approach and extends it into the operational sphere of registration and stamp duty exemption.

4.3.3 Executive Instructions vs. Statute

Though the Court expressly declined to examine the pure ultra vires question (whether the Principal Secretary had any authority at all to issue such a Memo), its conclusion is in line with a long line of cases establishing that:

  • Executive instructions cannot override or be inconsistent with statutory provisions; and
  • Where a statute has created a right or a status, no subordinate authority may defeat it through administrative circulars.

Adarsh Sahkari reinforces this by holding that an executive Memo cannot dilute the unqualified exemption under Section 9A or the conclusive-evidence clause under the 1996 Act.

4.4 Impact and Future Implications

4.4.1 Immediate Impact on Co-operative Societies and Property Transfers

For co-operative societies in Jharkhand (and, by analogy, in states following the Bihar Amendment model):

  • The decision removes the additional approval layer of obtaining the Assistant Registrar’s recommendation for availing Section 9A exemption.
  • Transfer of premises by a registered co-operative society to its members can proceed based on:
    • a valid instrument of transfer; and
    • production of the registration certificate (conclusive evidence of the society’s existence).
  • Registering authorities must grant the stamp duty exemption without insisting on the impugned recommendation.

This leads to:

  • Reduction in transaction time and costs;
  • Greater certainty and predictability for co-operative housing and similar entities;
  • Strengthening of the housing co-operative movement that Section 9A was designed to encourage.

4.4.2 Broader Administrative Law and Governance Implications

The more significant legacy of this judgment lies in its conceptualisation of simplicity as a legally cognisable value in public administration:

  • Authorities cannot create superfluous procedural hoops for citizens and institutions when the underlying law already provides a complete and conclusive framework.
  • Bureaucratic insistence on additional NOCs, recommendations, or certifications—especially where a statute already declares some document to be “conclusive proof”—is open to challenge as an irrelevant consideration.
  • The judgment will likely be cited in future litigation challenging:
    • Redundant “No Objection Certificates” in land, building, environmental, or trade-license contexts;
    • Excessive documentation requirements in revenue, GST, or registration processes that go beyond statutory prescriptions;
    • Administrative circulars that indirectly whittle down statutory exemptions or benefits by adding extra conditions.

From a governance standpoint, the decision dovetails with contemporary policy emphases on:

  • Ease of doing business;
  • Digital and paperless governance;
  • Rationalisation and pruning of approvals and intermediary certifications.

Yet the key contribution of this judgment is that it converts these policy aspirations into a judicially enforced standard wherever such unnecessary steps rest on irrelevant considerations and conflict with statutory design.

4.4.3 Fiscal Law and Regulatory Overreach

In fiscal law, the decision affirms that:

  • When the legislature grants an exemption in clear terms, executive action cannot import conditions that are:
    • Nowhere in the statute; and
    • Unrelated to the statutory purpose (here, promotion of co-operative movement).
  • Authorities must implement both revenue-raising and revenue-remitting provisions faithfully. Over-zealous anti-evasion measures that trespass into statutory rights (like Section 9A exemptions) are liable to be struck down.

5. Complex Concepts Simplified

5.1 What Does “Irrelevant Consideration” Mean?

When an administrative authority takes a decision, it must base that decision only on those facts and reasons that the law regards as relevant to the power in question.

  • A relevant consideration is a factor the statute or policy intends the authority to weigh.
  • An irrelevant consideration is a factor the law does not permit the authority to rely on, or one that has no rational connection to the statutory objective.

In this case:

  • The statutory objective of Section 9A is to facilitate stamp duty exemption for transfers by registered co-operative societies.
  • Once registration is conclusively evidenced by the Registrar’s certificate, the insistence on an Assistant Registrar’s recommendation to confirm the same fact is an irrelevant consideration.
  • It introduces complexity without serving any lawful objective; hence, the Memo is illegal.

5.2 What is a “Conclusive Proof” Clause?

A “conclusive evidence” or “conclusive proof” clause in a statute means:

  • The fact certified by the document in question must be treated as established; and
  • No further evidence can be demanded to disprove or go behind that fact in ordinary proceedings.

Here, Section 5(7) of the 1996 Act declares the certificate of registration to be conclusive evidence of the co-operative society’s registration and existence. Therefore:

  • For purposes of processing property transfers and stamp duty exemption, authorities must accept the certificate at face value.
  • They cannot insist on additional certifications merely to reaffirm what is already conclusively established.

5.3 What Does it Mean to Call Executive Action “Illegal”?

In judicial review, an administrative act can be held “illegal” for several reasons, including:

  • Acting without any legal power (lack of jurisdiction);
  • Using a power for an improper purpose;
  • Relying on irrelevant considerations or ignoring relevant ones;
  • Contravening a statute or higher-ranked law (like the Constitution).

In this judgment, the Supreme Court uses “illegality” in a specific sense:

  • The Memo is illegal because it is founded on an irrelevant consideration (the Assistant Registrar’s recommendation), which is superfluous and not required by the statutory framework.

5.4 What is a “Body Corporate” and Why Does it Matter?

When a co-operative society is registered as a “body corporate,” it:

  • Has a separate legal personality from its members;
  • Can own property, enter contracts, and sue or be sued in its own name;
  • Has perpetual succession, i.e., it continues irrespective of changes in membership.

The Court notes that upon registration under Section 5 and by virtue of Section 6, the co-operative society:

  • Acquires this corporate status; and
  • Acts through its own name in property transactions (like transfers of premises to members).

This supports the conclusion that:

  • Once such a society is duly registered and carries a certificate of registration, its status is sufficiently and conclusively established.
  • There is no need for an additional opinion from the Assistant Registrar to confirm its existence or authenticity as a co-operative society for Section 9A purposes.

6. Conclusion: Significance of the Judgment

The Supreme Court in Adarsh Sahkari Grih Nirman Swawlambi Society Ltd. v. State of Jharkhand does more than strike down a single Memo. It articulates and reinforces a principle of considerable systemic importance:

Executive action that imposes unnecessary, superfluous procedural requirements, offering no value addition to the statutory objective and ignoring conclusive statutory evidence, is based on irrelevant considerations and is therefore illegal.

Key takeaways include:

  • Simplicity in public transactions is not merely desirable; it is a component of legality.
  • Where a statute (like Section 9A) creates a clear right and a correlative duty, administrative authorities cannot lawfully interpose fresh, extra-statutory conditions that frustrate or delay enjoyment of that right.
  • “Conclusive proof” clauses (like Section 5(7) of the 1996 Act) bind the State; additional “recommendations” to re-verify the same fact are legally redundant and cannot be used to alter the operation of other statutes.
  • Concerns about potential fraud must be addressed within the framework of the law governing registration or deregistration, not by distorting unrelated statutory schemes (like stamp duty exemptions).

In the broader legal context, this judgment strengthens the constitutional commitment to non-arbitrary governance and the rule of law, emphasising efficiency, clarity, and respect for legislatively conferred rights. It provides a robust precedent for challenging bureaucratic practices that burden citizens and institutions without any genuine legal or practical justification.

Case Details

Year: 2025
Court: Supreme Court Of India

Judge(s)

Justice Atul Sharachchandra ChandurkarJustice Pamidighantam Sri Narasimha

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