BOMBAY HIGH COURT Allowed the refund of Stamp Duty, even when the Agreement for Sale was not cancelled within the five years of the execution giving the rational that an act of Court shall prejudice no man and the law does not compel a man to do what he cannot possibly perform.

Satish Buba Shetty v/s Inspector General of Registration and Collector of Stamps and Others

WRIT PETITION NO.9657 OF 2022

Decided on JANUARY 11, 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY 

Fact of the Case:- 

1. On 10/11/2014 the Petitioner Purchased a flat in a building known as “ERA” of the M/s. Vijaykamal Properties Private Limited (the Developer.)
2. The Total Cost of Flat was Rs. 95 lakhs and the Petitioner paid 25% of it to the developer
3. On 19/11/2014 The Agreement to sale was duly registered with the Registrar of Assurances.
4. The stamp duty of Rs. 4,76,000/- was paid to the Exchequer.
5. The Developer had agreed to deliver possession of the flat by 30/06/2017. 

Time line of the Matter :-

1. On the Default of Developer in providing the Possession, the Petitioner filed the case in MahaRERA. 
2. On Date 26/12/2017 MahaRERA directed the the Developer to refund the amount and execute a Deed of Cancellation.
3. On the Non Compliance of the MahaRERA Order the petitioner filed an Execution Application u/s 63 of RERA Act, 2016. 
4. On Date 13/03/2018 MahaRERA imposed the penalty of Rs. 5,000/- per day on the Developer till the compliance of the order.
5. The Developer preferred an appeal before MahaRERA Appellate Tribunal (MREAT).
6. On 21/08/2018 the MREAT stayed the MahaRERA's order but subject to the Submission of 50% of the due amount plus interest, by the developer. 
7. The Developer defaulted on the Order of MREAT.
8. On Date 16/10/2018 MREAT dismissed the Developer's Appeal for want of compliance of order.
9. The petitioner filed for execution before the MREAT.
10. The Developer and the petitioner arrived at a settlement and Developer refunded the full amount by 22/02/2021.
11. On 09/03/2021 the Deed of Cancellation was executed by the petitioner.
12. On 19/03/2021 the Execution Application  was disposed off by the MREAT.
13.  On 31/03/2021 the petitioner applied to Collector of Stamps, Borivali for refund of Rs. 4,76,000/- paid as stamp duty. 
14. On 27/04/2021 the Collector of Stamps, Borivali declined to refund the stamp duty u/s 48(1) of the Stamp Act, 1958 holding that as Agreement for Sale was not cancelled within the five years of the execution.
15. The petitioner preferred an appeal before the Chief Controlling Revenue Authority. 
16. On 09/02/2022, in Appeal No. 111 of 2021 the Chief Controlling Revenue Authority also dismissed the petitioner's appeal u/s 53(1A) Stamp Act, 1958 holding that  the registered instrument was cancelled beyond five years of its execution.  
17. This petition filed this writ under Article 227 of the Constitution of India, on the legality, propriety and correctness of the impugned order.

Submissions by Appellant:-

1. The impossibility of performance of the condition within the period stipulated by the proviso was not properly appreciated by the authorities under the Stamp Act, 1958. 
2. A genuine claim of a bonafide Senior Citizen home buyer, was unjustifiably rejected by the authorities.

Submissions by Respondent:-

1. The petitioner had obtained the entire benefit under the Agreement for Sale.
2. The petitioner had never sought the cancellation of the agreement for sale within the period prescribed under the proviso to section 48(1) of the Stamp Act, 1958.
3. The Stamp Act, 1958 being a fiscal statute is required to be construed strictly.

Observations made by the Hon’ble Court:-

1. The Controversy at hand, is governed by the proviso to sub section (1) of section 48
2. The proviso to sub section (1) of section 48 thus envisages two time limits.
•  One, the registered Agreement for Sale must have been cancelled by another registered instrument within a period of five years of the execution of the Agreement for Sale.
• Two, the application for relief under section 47 be made within a period of six months from the date of registration of the Cancellation Deed.
3. In the case at hand, the authorities under the Act of 1958 have declined to grant the relief on the premise that there was non fulfilment of the first condition of cancellation of the Agreement for Sale within five years of its execution.
4. The submission of the petitioner  that there was, in a sense, an enforced impossibility of fulfillment of said stipulation cannot be said to be unworthy of consideration.
5. there was no indolence or other blameworthy conduct attributable to the petitioner.
6. The question that wrenches to the fore is, in such a situation, can a party who does all that which is in its control, be saddled with the consequence of non-compliance of a statutory prescription ?
7.  In my considered view, the answer has to be in the negative. 
8. The law recognizes impossibility of performance as a ground to relieve a person from forfeiture and penalty.
9. In the case of Shaikh Salim Haji Abdul Khayumsab v/s. Kumar and Others (2006) 1 Supreme Court Cases 46 the Supreme court recognized two maxims,
• “actus curiae neminem gravabit”; an act of Court shall prejudice no man. and 
• “lex non cogit ad impossibilia”; the law does not compel a man to do what he cannot possibly perform.
10. In the facts of the case, the first of aforesaid maxims may have an application in the context of the time which was consumed in prosecuting the remedies before the authorities under RERA. The petitioner could have compelled the Developer to execute the Deed of Cancellation if the transaction was not to materialize, only by invoking the remedies under the law. The time spent in pursuing legitimate remedies, in the absence of any bad faith or want of due diligence, can not be arrayed against the petitioner
11. Secondly, the petitioner could not have lodged a claim for refund of the stamp duty without there being a registered instrument to cancel the registered Agreement to Sale as Cancellation of earlier registered Agreement to Sale by another registered instrument is a prerequisite for the applicability of the proviso to sub section (1) of section 48.
12. Rajeev Nohwar vs. Chief Controlling Revenue, Authority Maharashtra State, Pune and Others 2021 SCC OnLine SC 863. was a case for refund of stamp duty which was purchased but no Agreement to Sale was executed. The Supreme Court found that the provisions of section 47 had no application to the facts of the said case. Yet, the Supreme Court allowed the application for claim for refund observing, inter alia, that a rejection of the application for refund would violate equity, justice and fairness where the applicant is made to suffer the brunt of judicial delay

Court’s Order:-

The petition stands allowed.

The order dated 9th February, 2022 passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune and the order dated 27th April, 2021 passed by the Collector of Stamps, Borivali are quashed and set aside.

The claim for relief under section 47 of the Stamp Act, 1958 stands allowed.

NCLAT - Creditors of a class for amended Section 7(1) threshold of 10% or 100 whichever is Lower must be from a particular project registered with RERA

Pankaj Mehta V/s M/s. Ansal Hi-tech Township Limited 

Company Appeal (AT) (INS) No. 248 of 2023 

(Arising out of the `Impugned Order’ dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI  

Time line of the Matter :-

1. The ‘Appellant / Financial Creditor / Applicant’, along with106 other ‘Financial Creditors / Applicants’, had preferred petition ,under Section 7 of the I & B Code, 2016 before NCLT PB New Delhi.
2.  Wherein, M/s. Ansal Hi-Tech Township Limited, was described as the ‘Corporate Debtor’ and the Total Amount of Debt, was mentioned as Rs.41,81,90,116/- 
3. On Date 06/01/2023, NCLT,  dismissed the main Company Petition as `Not Maintainable’ terming that the `Allottees’, belong to different Sub Projects.

Fact of the Case:- 

1. A Project by the name of  'Sushant Megapolis near Dadri Town, adjoining Greater Noida, Uttar Pradesh.  by Corporate Debtor M/s Ansal comprises of Plots / Built-up Plots/ Row Houses/ Flats / Floors /  Villas / High-rise Apartments, under various allocated Sites.
2. License for developing the Township, was granted  in Year2006, by the UP Government with the instruction of Entire Construction be completed by year 2016.
3. By 2016 the Project was incomplete and M/s Ansal registered 25 separate projects having separate `RERA Registrations’ in this Township with RERA.
4.  Appellants are 107 different Allottee  who purchased different types of Units such as Plots / Flats/ Apartments /EWS unit , in the Project.
5. The Possession date of all the allottees  was from 36 months to 42 months, from the date of sanction of the `Layout Plan’ of the `Allotted Unit’. 

Submissions by Appellant

1.  All the Applicants had entered into respective BBAs, much before the RERA Act,2016 came into force.
2.  The said `Agreements’, specifically, defines that `Sushant Megapolis’, as one complete `Project’.
3. The `Single Layout Plan of this project reflects Group Housing/ Plots and EWS Units as part of `One Project’, comprising of 2504 Acres of Property.
4. A Single  Application for Environmental Clearance, was filed for the entire project. 
5.  The Project in question, is a `Single Real Estate Project’, for the purposes of Section 7 of the IB Code, 2016.
6. It therefore, falls under the requisite ambit of the provisos of the amended Section 7(1) of the IB Code 2016 pertaining to the minimum threshold requirement of 100 Allottees or 10% of the Total Allottees, whichever is less, belonging to the `same Real Estate project’. 
7. The NCLT, Passed the impugned Judgment without considering the decision of Hon’ble Supreme Court in Manish Kumar v. Union of India & Ors  (2021) 5 SCC OnLine SCC 1, wherein, it is observed that a Real estate project can be a composite one for Plots and Apartments or for Plots & Buildings.
8. Further, the definition of `Allottee’, is split into broadly three Categories Plot, Apartment and Building and the `Purchasers’ of all these are covered under the term `Allottee’ 
9.  The interpretation, laid down by the was incorrect  that 100 or 10% of the `Allottees’, must be from the `same Building’, and `not from the same `Real Estate Project’.

Submissions by Respondent

1. The Township, consists of Multiple Residential  and Commercial Real Estate Project, and all the sub-projects, are independent of each other and are being developed and sold as separate Projects.
2. Each and Every phase, is registered as a stand-alone Real Estate Project under RERA with separate `RERA Registration Numbers’
3. As per Hon’ble Supreme Court of India, that the task of ascertaining who will be Allottees and therefore, what would constitute 10% of total number of Allottees must depend upon the nature of the `Real Estate Project’.
4.  The Petitioners do not satisfy the required threshold limit of 10% or 100 persons’, whichever is lower, in none of the Project / Project categories, 
5. Approximately 50 Petitioners are either Co-Applicants or Third Applicants for a Single Unit just to fulfill the requisite number of 100 Allottees. whereas in the matter of Manish Kumar v. Union of India, wherein, it is held that `one unit equals to one Allottees’, even though, the said Unit is jointly held. 
6. The NCLT  made ‘inquiry’ and considered all the records pertaining to the Project.

Observations made by the Hon’ble Court.

1. The Corporate Debtor, had executed, at least Three different kinds of Agreements, namely  (a) `Plot Allottee Agreement’ (b) `Built-up Unit Allottee Agreement’ and (c) `Apartment Allottee Agreement as the projects were of `different character’ with `different type of developments with independent, RERA Registrations. ’
2. In none of the Projects / Project Categories, the Applicants  fulfil the requirement of Threshold Limit’ of 10% or 100 persons, whichever is less. 
3. the Appellant are from different numerous projects, and they have not established their case, as `Creditors of a class’, concerning any `particular project’, registered with RERA, with a view to fulfil the requirement of  Section 7 (1) of the IBC in regards to 10% or 100 Allottees’
4. In the present case on hand, the foremost aspect to be taken into account is the RERA Registration of the Projects, of the Corporate Debtor, for ensuring the Initial limit for pressing into service of the ingredients of Section 7 of the Code. 
5. The `Impugned Order’ and the views expressed in dismissing the CP (IB) No. 596 (PB) / 2021, is free from any `legal flaws’. 

Court’s Order

Accordingly the instant `Appeal’ sans merits is `Dismissed’ with no costs.