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.

Supreme Court - an executing court cannot go behind a decree and re-examine the merits of the case of the parties

 in the matter of S. Bhaskaran vs. Sebastian (dead) by LRs in Civil Appeal No. 7800 of 2014 decided on 13.09.2019 before Supreme court of india.

The suit 

• Temple was administered by three brothers. 
• Vide a settlement deed these original owners endowed the property to the temple. 
• The deed also included a provision that the eldest son of the deceased trustee would become his successor. 
• A suit was filed on behalf of the temple by the Appellant in his capacity as trustee, seeking permanent injunction against Gnanambal and her husband, who were tenants in the suit properties at that time. 
• One Umapathymurthy was impleaded in this suit as a defendant who claimed that he was the eldest son of one of the original owners and that he had been dispossessed from the trusteeship of the temple by his younger brother.
• The Trial Court decreed the suit in favour of the Appellant holding that he was a trustee and rejected the claim of Umapathymurthy. 
• The said decree was affirmed by the first appellate court. 
• The decree holders subsequently filed an Execution Petition. 
• However, the judgment debtors (Respondents herein) filed an execution application under Section 47 of the CPC seeking dismissal of the execution petition on the basis that the original decree was vitiated by fraud as the heir certificate was falsely prepared. 
• The said application under Section 47 of CPC was dismissed by the executing court as non-maintainable on the ground that the judgment of the Trial Court had been confirmed by the First Appellate Court after considering all relevant evidence, and had therefore become final. 
• The said order of the executing court was challenged in revision before the High Court where the said order was reversed.

Held by Supreme Court

• The Supreme Court disagreed with the view of the High Court and reiterated that it is well-settled that an executing court cannot travel beyond the order or decree under execution. 
• In the present case, the Trial Court had already considered the evidence on record and given a finding that the Appellant was the trustee of the temple.
•  This judgment was confirmed by the First Appellate Court and no further appeal was preferred by the Respondents against it. 

Therefore, an affirmed decree could not be varied now at the stage of execution.