27 August 2024 Property Registration >> Personal Law   |   Property/Real Estate Law >> Property & Real Estate  

In a recent judicial review in Nanji Dana Patel v/s State of Maharashtra, Through Government Pleader, Bombay High Court & Others, the Bombay High Court addressed the issue of delay in filing an application for the refund of stamp duty under the Maharashtra Stamp Act, 1958. The court's decision highlights significant aspects of legal remedies, the principles of justice, and the interpretation of procedural limitations.

Case Summary:

The case involved a petitioner challenging an order from July 3, 2018, which rejected their application for a refund of stamp duty. The rejection was solely based on the application's delay beyond the six-month period stipulated under Section 48(1) of the Maharashtra Stamp Act. Despite service of the petition over five years ago and the Attorney General's delay in filing a reply, the court decided to hear the matter finally.

Facts of the Case:

The petitioner had entered into a development agreement on March 3, 2014, with Keshav Krishanlal Syngal, paying a stamp duty of Rs. 78,65,000. A supplementary agreement was subsequently registered, and the original development agreement was later cancelled on June 26, 2015. A conveyance deed was then executed and registered, with stamp duty paid amounting to Rs. 1 crore. On February 15, 2018, the petitioner filed an application for a refund of the stamp duty paid on the now-cancelled development agreement, which was over two years late.

Legal Issues:

The primary issue was whether the delay in filing the refund application beyond the six-month period could bar the claim. The petitioner argued that the state had effectively collected double the stamp duty for the same transaction and that denying the refund would result in unjust enrichment.

Arguments and Precedents:

The petitioner’s counsel, Mr. Reis, argued that the state should not rely on technicalities when dealing with a citizen's just claim. He cited the Supreme Court's judgment in Bano Saiyed Parwad vs. Chief Controlling Revenue Authority (2024 SCC OnLine SC 979), which emphasized that procedural limitations should not prevent the enforcement of substantive rights. The court's observations in Libra Buildtech Pvt. Ltd. & Ors. reinforced this view, asserting that while limitations might bar remedies, they do not necessarily extinguish the right itself.

The Supreme Court also affirmed in Mool Chandra vs. Union of India (2024 SCC OnLine SC 1878) that Section 5 of the Limitation Act, 1963, which allows for the condonation of delays, applies unless explicitly excluded by the special law in question.

Court's Decision:

The Bombay High Court agreed that the denial of the refund based solely on delay, without considering the merits of the claim, was unjust. The court held that while the Stamp Act does not confer power to condone delays, the application could be treated under Article 226 of the Constitution of India, which allows for such relief.

The court emphasized that the state should act fairly and not retain funds paid in excess of the required amount. Consequently, the court condoned the delay and remanded the matter for reconsideration on merits. The refund application was to be decided by October 31, 2024, with a reasoned order to be passed, ensuring the petitioner’s right to a fair hearing.

Conclusion:

The court’s decision underscores the balance between procedural rigidity and substantive justice. It reflects a broader judicial approach that prioritizes the equitable treatment of citizens over technical compliance. By remanding the case for a merits-based review, the court reaffirmed the principle that while legal procedures are important, they should not overshadow the substantive rights of individuals. This ruling serves as a significant precedent in ensuring that procedural hurdles do not preclude the enforcement of rightful claims, particularly in matters of fiscal responsibility and public duty.

  MAHARASHTRA STAMP (AMENDMENT) ACT, 2015    Registration Act, 1908    Limitation Act, 1963