SUPREME COURT HOLDS THAT THE TIME LIMIT PRESCRIBED UNDER ANY LAW MAY BAR THE REMEDY BUT NOT THE RIGHT

A two-Judge Bench of the Hon’ble Supreme Court comprising of Justice B.R. Gavai and Justice Prashant Kumar Mishra passed a Judgment dated 17-05-2024 in the matter of Bano Saiyed Parwaz vs. Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps & Ors., Special Leave Petition SLP (C) No. 4111 of 2020 and observed that statutory limitation periods may block the remedies of an aggrieved party, but not its underlying rights. In the present case, as the Appellant had pursued her case lawfully, hence, the Bench held that she should not be denied a refund due to technicalities.

FACTS:

1) That the aforesaid Appeal was filed before the Apex Court by one, Bano Saiyed Parwaz (Appellant) against one Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps (Respondent No. 1), the Collector of Stamps (Kurla) (Respondent No 2) and the State of Maharashtra (Respondent No. 3), who challenged the decision of the Hon’ble High Court at Judicature, Bombay (High Court) which, vide, Impugned Order dated 02.08.2019 (Impugned Order), dismissed the Appellant’s request for a refund of the stamp duty paid for an unexecuted conveyance deed. Consequently, the Impugned Order upheld the decisions of Respondent Nos. 1 and 2 of 09.06.2015 and 25.02.2016 respectively, which rejected the Appellant’s demand for refund of stamp duty.

2)The Appellant agreed to purchase the Property bearing C.T.S. No. 340.340/1 to 340/14 of Kurla-1 Division, located at Fitwalla Cottage, Fitwalla Compound Bazaar Ward, Old Agra Road, Kurla (West), Mumbai-400070, from a Vendor- Mohammed Hanif Ahmed Fitwala.

3)Further, they prepared a Deed of Conveyance and sent it to Respondent No.1 on 07.05.2014 for adjudication about payment ofstamp duty, which was assessed at Rs. 25,34,350.00 (Rupees Twenty-Five Lakhs Thirty-Four Thousand Three Hundred and Fifty Only). Thereafter, the Appellant paid the said sum and purchased the stamp duty on 13.05.2014 to register the Conveyance Deed.

4)Although the Appellant paid the stamp duty to Respondent No.1 on 13.05.2014, they did not lodge the Conveyance Deed for registration because the Vendor had fraudulently sold the Property to a third party in 1992. Before executing the Conveyance Deed, the Appellant had given public notice, but no one objected to the transaction.

5) Consequently, the Appellant decided to cancel the transaction and tried to contact the Vendor, who was unavailable, leading the Appellant to file a Complaint with the Police. The Vendor eventually executed the Cancellation Deed on 13.11.2014.

6) However, on 22.10.2014, the Appellant had already applied online seeking a refund of the stamp duty under Section 48 of the Maharashtra Stamp Act, 1958 (the Act) (Application for relief under section 47), and filed a Written Application on 06.12.2014 along with the necessary documents.

7) The Respondent Nos.1 and 2 rejected the Appellant’s case, citing that the Application was filed beyond the limitation period specified in Section 48 of the Act i.e. within six months from the date of execution of the instrument.

8) The High Court, vide Impugned Order dated 02.08.2019, dismissed the Appellant’s request for refund of the stamp duty.

SUPREME COURT:

Aggrieved by the High Court Order dated 02.08.2019, the Appellant filed SLP (C) No. 4111 of 2020 before the Supreme Court. The Apex Court, vide Order dated 17.05.2024, held as follows:

ISSUES:

The issue before the Supreme Court was whether the Appellant was entitled to a refund of the stamp duty paid for the registration of a conveyance deed that was not executed due to fraud by the Vendor, despite the application for a refund being filed before the formal cancellation of the Deed and allegedly beyond the limitation period specified in Section 48 of the Maharashtra Stamp Act, 1958.

OBSERVATIONS:

1)Admittedly, the Appellant, a bona fide purchaser, is a victim of fraud by the Vendor. She paid Rs. 25,34,350.00 (Rupees Twenty-Five Lakhs Thirty-Four Thousand Three Hundred Fifty Only) towards stamp duty for the registration of the Conveyance Deed. However, the conveyance deed was not lodged for registration, after she discovered the Vendor’s fraud.

2)Subsequently, the Appellant immediately applied online on 22.10.2014 for a refund of the stamp duty. Her attempts to contact the Vendor to execute a cancellation deed were unsuccessful due to the Vendor’s unavailability, which led to the filing of a Police Complaint. The police intervention eventually enabled the Vendor to be located, and a Cancellation Deed was executed on 13.11.2014.

3)The Appellant diligently pursued legal remedies and was not lax in seeking a refund of the stamp duty. She has been denied the refund solely on the grounds of limitation. The High Court’s finding that the Appellant’s Refund Application dated 22.10.2014 is not maintainable because it was filed before the Cancellation Deed dated 13.11.2014 is misplaced. While submitting the online application, there was no requirement for the Appellant to include all documents and materials necessary for the Collector’s satisfaction, either online or in hard copy.

4)The learned Single Judge’s finding is contrary to Section 47 of the Act (Allowance for spoiled stamps) and Section 48 of the Act, which require only that the Application for relief under Section 47 be made within six months of the instrument’s date, a condition that the Appellant duly met.

5)The evidence and inquiry required under Section 47 is a separate process, and evidence is not required to be filed with the Application, either online or separately on the same day in hard copy.

6)In Committee-GFIL v. Libra Buildtech Private Limited & Ors. (2015) 16 SCC 31, the Court observed that the State should not rely on technicalities when dealing with a citizen. Even if the Applications for refund were dismissed on the grounds of limitation under Section 50 of the Act (Allowance for misused stamps), the principle that the expiry of the limitation period may bar the remedy but not the right applies, entitling the applicants to claim the refund.

CONCLUSION

Based on facts and observations mentioned above, the Appeal was allowed. The Apex Court set aside the Impugned Order dated 02.08.2019, as well as the decisions of the Respondent Nos.1 and 2 of 09.06.2015 and 25.02.2016 respectively, and directed the State to refund the stamp duty amount of Rs. 25,34,350.00 deposited by the Appellant.

Further, the Bench held that drawing from Libra Buildtech (supra), the legal position is that the State should not rely on technicalities. Further, that the Appellant is entitled to claim a refund of the stamp duty as she pursued her legal remedies diligently; hence, she should not be denied the refund on mere technical grounds, as her case is just, and she acted in good faith, by paying the stamp duty for registration but was eventually defrauded by the vendor, leading to the cancellation of the Conveyance Deed.

 

Sakshi Raghuvanshi

Senior Legal Associate

The Indian Lawyer