Bombay High Court: In a writ petition seeking the quashment of an order passed by Inspector General of Registration & Superintendent of Stamps (Respondent 1). rejecting petitioner’s application under Section 52-A of the Maharashtra Stamp Act, 1958, for the refund of the stamp duty paid by the petitioner on a registered Agreement for Sale, on the ground that the cancellation occurred beyond the five-year statutory limit, a Single Judge Bench of N.J. Jamadar, J., while allowing the petition, observed that the delay was caused because the petitioner was bound to approach the authorities under the Real Estate (Regulation and Development) Act, 2016 (‘RERA Act’), for the cancellation of the Agreement for Sale and the refund of the consideration. The Court quashed the order passed by Respondent 1 and directed the refund of the stamp duty along with six per cent per annum interest.
Background:
The petitioner entered into a registered Agreement for Sale to purchase a flat in a building for a consideration of Rs 5,12,79,327. He paid a stamp duty of Rs 25,64,120 along with the registration charges on 26-12-2013. The developer was to deliver possession of the flat by 31-12-2017, but upon failure, he unilaterally extended the date to 31-12-2018. However, as per the petitioner, the developer again failed to make the delivery, and hence, the petitioner terminated the Agreement for Sale on 25-03-2019 and called upon the developer to refund the consideration paid along with interest. When the developer failed to refund the requested amount, the petitioner filed a complaint under Section 18 of the RERA Act, before the Real Estate Regulatory Authority (‘RERA’).
On 11-12-2020, RERA dismissed the complaint holding that the developer was entitled to a further grace period till 31-12-2019. The petitioner then preferred an appeal before the Maharashtra Real Estate Appellate Tribunal, which quashed RERA’s order and directed the developer to refund the amount paid by the petitioner, along with interest. The developer preferred a Second Appeal before this Court and during its pendency, the parties amicably resolved the dispute. The developer undertook to pay an amount of Rs 6,80,00,000 and the parties agreed to execute a Deed of Cancellation, and thereupon, the petitioner could claim the refund of stamp duty. Accordingly, a Deed of Cancellation came to be executed on 28-12-2022.
The petitioner filed an application before the Collector of Stamps and sought a refund of the stamp duty. The proceedings were transferred to Respondent 1 and by an order dated 13-03-2025, Respondent 1 rejected the application holding that the Cancellation agreement was not executed within five years of the Agreement for Sale, and thus, as per proviso to Section 48(1) of the Stamp Act, 1958 (‘Stamp Act’), the claim for refund of the stamp duty was not maintainable.
The petitioner’s counsel submitted that Respondent 1 had rejected the claim for refund in a mechanical manner without appreciating the circumstances on account of which the claim for refund got delayed. He urged that not only were the authorities bound to refund the stamp duty paid, but the petitioner must also be compensated by award of interest for having been unjustifiably deprived of the substantial amount of the stamp duty.
However, the AGP contended that a cumulative reading of Sections 47 and 48 of the Stamp Act indicated that, to successively claim the refund in a case of the present nature, two conditions were required to be satisfied. Firstly, the Deed of Cancellation of the Agreement for Sale must be executed within a period of five years from the date of the execution of the Agreement for Sale. And secondly, the application for refund of the stamp duty must be filed within six months from the date of registration of the cancellation deed, as provided in the proviso to Section 48(1) of the Stamp Act. He argued that in the present case only the second condition was fulfilled and therefore, Respondent 1 was justified in rejecting the refund of the stamp duty.
Analysis and Decision:
The Court relied on Satish Buba Shetty v. Inspector General of Registration & Collector of Stamps, 2024 SCC OnLine Bom 108, which had similar facts as the present case, wherein the Court while considering the import of the time frame stipulated by the proviso to Section 48(1) of the Stamp Act, directed the refund of the stamp duty on an Agreement for Sale which was cancelled consequent to the proceedings initiated by the purchasers.
The Court noted that the petitioner was constrained to approach the authorities under RERA seeking the cancellation of the Agreement for Sale and the refund of the consideration. It was only in the Second Appeal before the High Court that the developer caved in and agreed to refund the consideration and execute the deed of cancellation, without which the petitioner could not have sought refund of the stamp duty. Thus, the Court observed that to deny the refund of the stamp duty to the petitioner was wholly unjustified and inequitable. The Court opined that the principles adverted to by the Court in Satish Buba Shetty (supra), namely, the act of Court must prejudice no man, and the law did not compel a man to do what he could not possibly perform, applied with equal force to the present case.
The Court then addressed the issue of whether the refund could be ordered to be paid along with interest. The Court clarified that interest denoted a payment to be made by the debtor to the creditor when the money was due to the creditor but was not paid or was withheld from the creditor after the time when the payment should have been made. Interest, whether it was statutory, contractual or awarded by the Courts and Tribunals, represented the profit the creditor would have made if he had the use of the money to which he was entitled to.
The Court referred to Rajeev Nohwar v. State of Maharashtra, (2021) 13 SCC 754, wherein the Supreme Court had observed that the appellant’s case for refund was not barred by any substantive provision and while exercising its power under Article 142 of the Constitution, directed that the refund be made along with interest. The Court also relied on Harshit Harish Jain v. State of Maharashtra, (2025) 3 SCC 365, wherein the Court had held that the amount of stamp duty was wrongfully retained by the State for almost seven years, and thus, directed the refund of the said amount along with interest at the rate of 6 per cent per annum.
Consequently, the Court, while allowing the petition, observed that Respondent 1 had unjustifiably rejected the application for the refund of the stamp duty and thereby deprived the petitioner of the amount covered by it from the date of the application. The Court quashed the order passed by Respondent 1 and directed that the amount of stamp duty be refunded to the petitioner along with simple interest at the rate of 6 per cent per annum, from the date of the application.
[Katmandu Apparel (P) Ltd. v. Inspector General of Registration & Supdt. of Stamps, 2025 SCC OnLine Bom 3124, decided on 04-09-2025]
Advocates who appeared in this case:
For the Petitioner: Mohit Khanna with Robin Fernandes, Sukrit Parashar i/by Vesta Legal, Advocate.
For the Respondents: D.S. Deshmukh, AGP.
Buy Constitution of India HERE
System failure. There should be a cavet or provision of refund for such circumstances in sec52A. (Bureaucrats )