In a significant ruling on stamp duty concessions, the Madras High Court has held that grandparents do not fall within the definition of “family” under the Indian Stamp Act for the purpose of lower stamp duty on settlement deeds.
A three-judge bench comprising Justices S.M. Subramaniam, D. Bharatha Chakravarthy and C. Kumarappan delivered the verdict on February 11, 2026, resolving conflicting decisions on the issue.
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At the heart of the case was a simple but important question: When a grandchild settles property in favour of a grandparent, can the transaction enjoy the reduced stamp duty meant for “family” settlements?
The Court’s answer was clear - no.
Background of the Case
The matter arose from two writ petitions. In one case, a young petitioner challenged the refusal of registration authorities to extend the concessional stamp duty for a settlement deed executed in favour of a grandparent. In the other, a similar grievance was raised after a Sub-Registrar declined to register a settlement deed at the lower family rate.
Under Article 58(a)(i) of the Indian Stamp Act, as amended in Tamil Nadu, settlement deeds in favour of “family” members attract lower stamp duty. The Explanation to this provision defines “family” to include father, mother, husband, wife, son, daughter, grandchild, brother and sister.
The dispute arose because while “grandchild” is expressly mentioned, “grandfather” and “grandmother” are not.
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Over the years, different benches of the High Court had taken opposing views. Some had held that if a grandchild is included, grandparents must logically be covered as well. Others ruled that the definition is strict and cannot be expanded.
Because of these conflicting judgments, the matter was placed before a larger bench.
Arguments Before the Court
Counsel for the petitioners urged the bench to adopt a broader and practical interpretation.
They argued that the term “family” should not be read narrowly. If the law recognises a grandchild as part of the family, then a grandparent must naturally be included. The lawyers pointed to earlier judgments where courts had interpreted “family” liberally in different contexts.
On the other hand, the State, represented by the Additional Advocate General, contended that the Indian Stamp Act is a fiscal statute - a law meant to generate revenue.
“In a fiscal law, the definition must be read strictly,” the State argued. The provision uses the word “means,” which signals an exhaustive definition. Courts, it was submitted, cannot add new categories that the legislature did not include.
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Court’s Observations
The bench began by examining the nature of the Indian Stamp Act. It noted that the Act is a revenue-generating law and therefore must be interpreted carefully.
“The Indian Stamp Act, 1899, being a fiscal and revenue generation law, gives its own definition for the term ‘Family’,” the Court observed.
It stressed that when a definition clause uses the word “means,” it is intended to be complete. “What is defined as a ‘family’ is, and alone, the family,” the bench said in substance, adding that the meaning “can neither be restricted nor expanded.”
The judges also rejected the argument that general or social meanings of the word “family” could be imported into the statute.
“When fiscal statutes create legal fiction for their purposes, there is no scope for importing common meaning,” the bench noted.
On the policy aspect, the Court reasoned that concessional stamp duty is typically granted for settlements made out of love and affection among close relations. However, allowing grandchildren-to-grandparents settlements at concessional rates could open the door to misuse.
The Court pointed out that such arrangements could potentially be used as a medium to pass property onward and avoid higher stamp duty otherwise payable on sale or conveyance.
“Therefore, no exception whatsoever can be taken for leaving out grandfather/grandmother while including grandson/granddaughter,” the bench held, adding that the exclusion is “neither illegal nor illogical.”
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The Decision
Answering the reference, the larger bench held that the term “family” in Explanation 58(a)(i) of the Indian Stamp Act, as applicable in Tamil Nadu, does not include grandfather or grandmother.
As a result, settlements executed by grandchildren in favour of grandparents cannot claim the concessional stamp duty available for family settlements. Such documents must be charged under the appropriate higher provisions.
With this clarification, the bench directed that the individual writ petitions be placed before the appropriate bench for disposal in light of its ruling.
Case Title: V. Shiva v. Inspector General of Registration & Anr. (with connected matter)
Case No.: W.P. Nos. 24173 of 2019 and 3480 of 2021
Decision Date: 11 February 2026
