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Rajeev Nohwar Vs Chief Controlling Revenue Authority Maharashtra State, Pune And Others: Refund Of Stamp Duty Cannot Be Denied Due To Judicial Delay

Rheaa Nair ,
  13 October 2021       Share Bookmark

Court :

Brief :

Citation :

Coram

J. Dr Dhananjaya Y Chandrachud

J. B V Nagarathna

Parties

Appellant- Mr Rajeev Nohwar

Respondent- Chief Controlling Revenue Authority Maharashtra State, Pune and Others

Subject

The Supreme Court has utilised Article 142 to order a refund on stamp duty to the appellant who was denied such a refund by the High Court and NCDRC on the grounds of delay in filing application.

Overview

  • The appellant booked a residential apartment with the builder, and paid a certain amount of the sale consideration. A dispute arose between the appellant and the builder, which led to the appellant filing a consumer complaint before the National Consumer Disputes Redressal Commission.
  • By an order in 2016, the complaint was allowed and the appellant was given a choice between executing the agreement with the developer with some compensation, or if the appellant did not want the agreement performed, the developer was to give a refund of the entire consideration with interest. The appellant opted for the refund.
  • The developer issued a cheque for refund on the NCDRC’s terms. The appellant subsequently applied for refund of the stamp duty to the Collector of stamps. The Collector sent a communication to the Deputy Inspector General of Registration recommending the refund should be denied as the appellant had filed for it after the lapse of the six-month period.
  • The appellant approached the Bombay High Court by way of writ petition, but the High Court agreed with the revenue authorities and found the claim to be stale. The claim was barred by limitation.
  • The argument that the six-month limitation period under Section 48(3) Maharashtra Stamp Act 1958 would not be applicable since the appellants case falls under Section 52A of the Act was rejected. The Court stated that an application under Section 52A would also have to be made within six months from the date of purchase of the stamps.

Relevant Provisions

Section 48 of Maharashtra Stamp Act 1958-When Application for relief under Section 47 can be made.

Section 52 of Maharashtra Stamp Act 1958- When any person is possessed of a stamp or stamps which have not been, spoiled or rendered unfit or useless for the purpose intended, but for which he has no immediate use, the Collector shall repay to such person the value of such stamp or stamps in money.

Article 142 of Constitution of India- Power of the Supreme Court to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.

Issues

  • Whether the refund on the stamp can be given despite the delay in filing application?

Analysis

  • The appellant had contended that the prolongation of the case had caused the delay and asked for an extension under Section 52A.
  • The respondents replied that the application was filed specifically under the provisions of Section 47 of the Maharashtra Stamp Act 1958, and thus the period of limitation under Section 48 should apply.
  • The Supreme Court states that the perspective adopted by the High Court misses the fact that Section 48 in its entirety applies only to those cases where the application for relief is governed by Section 47. If the application for refund is not with reference to the provisions of Section 47, the period of limitation in Section 48 clearly has no application. Since the appellant’s application is not governed by Section 47, the limitation period of 6 months should not apply.
  • With regard to the application of Section 52, the section is utilized when the applicant was aware that the stamp purchased would not be required for six months. The provision can’t be applied arbitrarily in a case where the purchaser was unaware of the possible delay. Therefore, the case of the appellant would not fall under Section 52 of the Act either.
  • But a wrong statutory reference cannot deny the citizen the entitlement of the refund which otherwise follows in terms of a statutory provision. The stamp paper in the present case was purchased with the bona fide expectation to execute in favour of the developer. The dispute with the developer led to the stalling, and there was nothing untoward in the appellant’s conduct. The delay on the appellant’s part was not unreasonable.
  • The court acknowledges the fact that the right to refund can be sought by the terms envisaged by a statute. The case is not barred by any substantive provision, and while normally a court should not interfere where a statutory provision exists, in a situation where the statute doesn’t cover the facts of the case, the court can intervene. Here the Court under Article 142 will have the power to do complete justice by condoning the delay.
  • The court observes that condoning rejection of application due to judicial delay will go against equity, justice and fairness. The appeal is allowed, and the decision of the High Court set aside. The appellant will be entitled to a refund.

Conclusion

In the present case, the appellant was denied a refund due to delay in filing of the application. However, the setback was caused by the prolonged judicial process, during which the limitation period for the refund lapsed. The NCDRC as well as the High Court were of the opinion that the refund cannot be granted, but the Supreme Court found it against the principles of justice to refuse a refund that was stalled due to judicial proceedings. Upon a review of the statutory provisions, the court was unable to find a provision in that legislation that could apply to the present case. It thus used its powers under Article 142 to deliver justice.

Click here to download the original copy of the judgement

Questions

  • What are the powers of the Supreme Court under Article 142?
  • Why was Section 52 of the Maharashtra Stamp Act not applicable in the current case?
 
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