Allowed

Freedom City Ventures v. State of Maharashtra and Ors.

Bombay HC9 Jan 2023WP/8021/2019

Case brief

AI extract

What is this about?

The court allowed a writ petition seeking refund of stamp duty purchased for a development agreement that could not be executed. It held that a bona fide correction to the applicant's name in a time-barred manner relates back to the original filing date, placing the application within the six-month limitation period.

What did the court decide?

Impugned order of 21.06.2014 set aside; respondent directed to consider refund application afresh and pass a reasoned order within two months.

Freedom City Ventures Vs State of Maharashtra and Ors. — Cheque Dishonour | Bombay HC (2023)

¶1

WP 8021-2019.odt

¶2

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

¶3

WRIT PETITION NO. 8021 OF 2019

¶4

Freedom City Ventures, A registered Partnership firm Registered under the provisions of Indian Partnership Act, having its office at 301-302, Orian Business Park, Ghodbunder Road, Kapurbawadi, Thane (W) 400 610. Through its partner Shri Santosh Pandurang Naik … Petitioner Vs. 1.State of Maharashtra Through Department of Registration & Stamps.

¶5

The Inspector General of Registration and Chief Controller of Stamps Maharashtra State, Pune, having office at New Administrative Building, Pune-1

¶6

The Joint District Registrar,Thane Rural … Respondents

¶7

Ms. Preeti Walimbe i/b Mr. Bhushan Walimbe for Petitioner . Mr. Sachin H. Kankal, AGP for State-respondents No. 1 to 3.

¶8

CORAM : ABHAY AHUJA, J. RESERVED ON : 22^nd DECEMBER, 2022 PRONOUNCED ON: 9^th JANUARY, 2023

¶9

JUDGMENT

¶10

By this petition, the Petitioner seeks to challenge order dated

¶11

21^st June, 2014 passed by the respondent no.2-Inspector General of Registration and Chief Controller of Stamps, Maharashtra State

1 of 27

Nikita Gadgil

WP 8021-2019.odt

rejecting application dated 24^th July, 2013 for refund of stamp duty as being barred by limitation.

¶16

The brief facts are that Petitioner herein, which is a partnership firm engaged in the business of buying, selling, developing, plotting lands and selling the same, for the purposes of its business in the year 2013 entered into discussions with some agriculturists, who were desirous of entering into development agreement with the Petitioner for developing survey no. 31, 35/0, 36/0, 37/1A, 37/2 situated at Mouje Jambhulwada, Tal. Shahapur, Dist. Thane (the “said property”). It has been submitted on behalf of the Petitioner that after negotiations and rounds of discussion, the owners of the land, in principle, agreed to execute a development agreement for a consideration of Rs. 1,35,62,000/- in favour of the Petitioner. Petitioner, thereafter, prepared the draft of the development agreement and submitted the same to the office of the respondent no.3- the Joint District Registrar,Thane Rural, for the purposes of adjudication and determination of the stamp duty that would be payable on the said document. By order dated 30^th January, 2013, respondent no.3- the Joint District Registrar, Thane Rural fixed the stamp duty at Rs. 40,78,940/- by calculating the

2 of 27

Nikita Gadgil

WP 8021-2019.odt

same on the basis of the ready reckoner price. Pursuant to the said order the Petitioner purchased stamps of Rs. 40,78,940/- on 30^th January, 2013, which is evidenced by Challan bearing No. 0089 dated 30^th January, 2013.

¶21

It is the case of the Petitioner, that subsequently, the Petitioner was informed by the owners that out of 11 co-owners, of the subject property, 5 of them have refused to enter into the development agreement and therefore, the agreement could not be executed. Since, the owners were not desirous of executing the agreement, Petitioner had no other option but to cancel his plan to execute the agreement. It is submitted that accordingly, as per the provisions of Sections 47 and 48 of the Maharashtra Stamp Act, 1958, (the “Maharashtra Stamp Act”), Petitioner submitted an application on 24^th July, 2013 to the Joint District Registrar, Thane Rural, for the refund of stamp duty of Rs. 40,78,940/- after deducting the necessary charges. It is submitted that the Petitioner also filed statement of its partner in support of the application for refund on 24^th July, 2013.

3 of 27

Nikita Gadgil

WP 8021-2019.odt

Ms. Walimbe, learned counsel for the Petitioner submits that since in the statement/application, the partner of the Petitioner firm had mentioned his name alone, the office of the respondent no.3 raised an objection that since the stamps were purchased in the name of the Petitioner partnership firm and therefore, the refund application must also be preferred by the same partnership firm and that since in the statement/application in the opening line, only the name of the partner had been mentioned, the office of the respondent no. 3 had asked the Petitioner to correct the said error. Learned counsel submits that to avoid technical difficulties, the partner of Petitioner firm had corrected the said application by circling his name and instead of the same it was mentioned that “I, Freedom City Ventures, through partner Shri Santosh Pandurang Naik”. It is submitted that the said amendment was duly initialled and signed by the partner of the Petitioner firm on 10^th December, 2013. It is further submitted that in support of the application, the Petitioner also filed a notarised affidavit of the other partner of the partnership firm viz. Shri Sohil Munshi that he shall not have any objection if the stamp duty amount as prayed in the application is refunded.

4 of 27

Nikita Gadgil

WP 8021-2019.odt

Thereafter, the respondent no. 3 after considering the application and the documents filed in support thereof forwarded the papers with his opinion to allow the grant of refund to the office of the Deputy Inspector General of Registration, Konkan Division, Thane.

¶30

Vide communication dated 31^st January, 2014, the Deputy Inspector General of Registration, Konkan Division, Thane forwarded the case papers of the Petitioner to the respondent no.2The Chief Controlling Revenue Authority, Maharashtra State, Pune, with his opinion to allow the grant of refund of Rs. 36,71,046/remaining after deducting 10% of the amount as per rules as the refund amount involved in the case was more than Rs. 10 lacs as per the then prevailing provisions of the Maharashtra Stamp Act. The respondent no.2 numbered the refund case as no 11/2014.

¶31

However, the respondent no.2 has by order dated 21^st June, 2014, refused to grant refund of stamp duty to the Petitioner on the ground of non-compliance of the provisions of sub-Section (3) to Section 48 of the Maharashtra Stamp Act, holding that since the correction in the application in the name of the applicant as being

5 of 27

Nikita Gadgil

WP 8021-2019.odt

Freedom City Ventures through its partner Shri Santosh Pandurang Naik was made on 10^th December, 2013 the application was therefore filed beyond the limitation period of six months under the provision of Section 48(3) of the Maharashtra Stamp Act and therefore time barred.

¶36

Being aggrieved and dissatisfied by the order dated 21^st June 2014 passed by the respondent no.2, the Petitioner has approached this court seeking the following principal reliefs:-

¶37

“a. This Hon’ble Court be pleased to call for records and proceedings and after examining the legality, propriety and validity, be pleased to quash and set aside the Order dated 21.6.2014(Exh. “E”) passed by the Respondent No.2 and further be pleased to allow the application dated 24.7.2013 filed by the Petitioner for refund of the stamp duty;

¶38

Ms. Walimbe, learned counsel for Petitioner submits that since the correction dated 10^th December, 2013 was pursuant to objection raised by Respondent no. 3 and the same was corrected pursuant thereto, the original date of filing of application would be material and not the date of correction. And, therefore, the application for refund is within the time limit prescribed in Section 48(3) of the Maharashtra Stamp Act. Learned counsel would submit that there

6 of 27

Nikita Gadgil

WP 8021-2019.odt

is no denial that the stamps worth Rs. 40,78,940/- have been purchased. She submits that the Respondent No.3 as well as the Deputy Inspector General of Registration have recommended refund. That the State cannot claim revenue on a transaction that has not been executed and in any event the State is duty bound to refund the stamp duty under Section 52 of the Maharashtra Stamp Act. Ms. Walimbe, learned counsel for Petitioner relies upon the decision of this Court in the case of M/s S. K. Realtors and another Vs. The Inspector General of Stamps and Controller of Stamps, Maharashtra State, Pune and another, (2016) SCC OnLine Bom 14536 , to submit that the purpose behind incorporating Section 48 of the Maharashtra Stamp Act is to ensure that in cases where transaction is not executed or cancelled before execution, then the State is not entitled to claim revenue for execution of the said document and the State is under an obligation to refund the said amount and cannot resort to profiteering on the basis of document which is not executed. Learned counsel therefore urges this Court to interfere and quash the impugned order dated 21^st June, 2014 passed by Respondent No.2.

7 of 27

Nikita Gadgil

WP 8021-2019.odt

On the other hand, Mr.Kankal, learned AGP vehemently opposes the submissions made on behalf of the Petitioner and supports the impugned order dated 21^st June, 2014 and relies upon affidavit in reply dated 24^th August, 2015 filed on behalf of Respondent No.3.

¶47

He submits that though the stamps were purchased on 30^th January, 2013 pursuant to an adjudication and an application for refund of the same was filed on 24^th July, 2013, by one of the partners of the Petitioner, the application on behalf of Petitioner was only made on 10^th December, 2013, that too by voluntarily changing the name of applicant to the name of Petitioner, which is beyond the period of six months stipulated in Section 48(3) of the Maharashtra Stamp Act and although there is no provision to amend, alter, change and modify the name of applicant in the Maharashtra Stamp Act and which is also contrary to Section 52-B of the Maharashtra Stamp Act. Learned AGP submits that neither the statutory period of six months can be extended nor is the date of inserting the name of Petitioner would relate back to the date of the original application. He would submit that the language of Sections 48(3) as well as Section 52 (c) of the Maharashtra Stamp Act

8 of 27

Nikita Gadgil

WP 8021-2019.odt

clearly stipulates application for refund to be made within six months from the date of purchase of stamp. That beyond six months, the application, as in the facts of this case, would be time barred. And once the application is time barred, the Respondent authority has no power to grant refund.

¶52

Learned AGP refers to paragraphs 8 and 10 of the affidavit in reply and submits that not only the purchaser of stamp and the applicant are different persons, but the Petitioner has failed to prove that he has filed the claim for refund within the period of limitation and therefore, the Petition be dismissed.

¶53

Learned AGP submits in the alternative that in the event this Court is inclined to set aside the impugned order, then the Petition be remanded to the Respondent No.2 for fresh consideration.

¶54

I have heard Ms. Walimbe, learned counsel for the Petitioner and Mr. Kankal, learned AGP for Respondents and with their able assistance, I have perused the papers and proceedings and considered the rival contentions. It must be noted that when on 22^nd December, 2022, this matter was heard and arguments concluded,

9 of 27

Nikita Gadgil

WP 8021-2019.odt

parties/counsel were given liberty to file judgments by the first week of January, 2023. However, it appears that no further judgments, except as tendered by counsel for Petitioner during the course of hearing have been submitted and this Court is proceeding on that basis.

¶59

Before proceeding further, it would be useful to set out the relevant provisions of the Maharashtra Stamp Act.

¶60

Section 47 of the Maharashtra Stamp Act provides for allowance for spoilt stamps. The said Section provides that the Collector may on application made within the period prescribed in Section 48 and if he is satisfied as to the facts make allowance for impressed stamps spoiled in the cases mentioned therein. For the sake of convenience, the said Section set out as under:-

¶61

“ 47. Allowance for spoiled stamps

¶62

Subject to such rules as may be made by the State Government as to the evidence to be required, or the inquiry to be made, the Collector may on application, made within the period prescribed in section 48, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely:—

¶63

(a) the stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in writing or any other means rendered unfit for the purpose

10 of 27

Nikita Gadgil

WP 8021-2019.odt

intended before any instrument written thereon is executed by any person;

¶68

(b) the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto;

¶69

¶70

(1) has been afterwards found by the party to be absolutely void in law from the beginning;

¶71

( 1A) has been afterwards found by the Court, to be absolutely void from the beginning under section 31 of the Specific Relief Act, 1963;

¶72

(2) has been afterwards found unfit, by reason of any error or mistake therein, for the purpose originally intended;

¶73

(3) by reason of the death of any person by whom it is necessary that it should be executed, without having executed the same, or of the refusal of any such person to execute the same, cannot be completed so as to effect the intended transaction in the form proposed;

¶74

(4) for want of the execution thereof by some material party, and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended;

¶75

(5) by reason of the refusal of any person to act under the same, or to advance any money intended to be thereby secured, or by the refusal or nonacceptance of any office thereby granted, totally fails of the intended purpose;

¶76

(6) becomes useless in consequence of the transaction intended to be thereby effected by some other instrument between the same parties and bearing a stamp of not less value;

¶77

(7) is deficient in value and the transaction intended to be thereby effected had been effected by some other instrument between the same parties and bearing a stamp of not less value;

¶78

(8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is

11 of 27

Nikita Gadgil

WP 8021-2019.odt

executed and duly stamped:

¶83

Provided that, in the case of an executed instrument, except that falling under sub-clause (1A), no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled, or has been already given up to the Court to be cancelled.

¶84

Explanation.—The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable has been paid is an impressed stamp within the meaning of this section.”

¶85

(emphasis supplied)

¶86

As can be seen from Section 47(c)(4), one of the circumstance

¶87

mentioned therein is the instance of a stamp used for an instrument executed by any party thereto which for want of the execution thereof by some material party and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended.

¶88

As can be seen from the facts of this case, that Petitioner herein had in the year 2013 entered into some discussions with agriculturists, desirous of entering into a Development Agreement with the Petitioner for developing the said property at Shahapur in village Jambhulwada, who, after negotiations and discussions had agreed to execute a development agreement in favour of Petitioner,

12 of 27

Nikita Gadgil

WP 8021-2019.odt

where after Petitioner had also prepared draft of the development agreement and had the same adjudicated by the Respondent No.3Joint District Registrar, Thane Rural, for payment of stamp duty at Rs. 40,78,940/- but subsequently since five out of the eleven coowners of the said property had refused to enter into the said development agreement, the agreement could not be executed. Therefore, although the Petitioner was ready to go ahead with the transaction but since some of the co-owners refused to proceed further, Petitioner had no option other than to cancel the plan. Therefore, the case of the Petitioner appears to be covered under the circumstance mentioned in Section 47 (c) (4) of the Maharashtra Stamp Act as the stamped development agreement could not be executed by the five co-owners as they refused to sign the same. In other words, the stamps were spoiled stamps.

¶93

Section 48 provides for the procedure or the manner and the time line within which the refund can be claimed in respect of the circumstances set out in Section 47. For the sake of convenience Section 48 is set out as under:-

13 of 27

Nikita Gadgil

WP 8021-2019.odt

“ 48. Application for relief under section 47 when to be made

¶98

The application for relief under section 47 shall be made within the following period, that is to say, —

¶99

(1) in the cases mentioned in clause (c) (5), within six months of the date of the instruments:

¶100

Provided that where an agreement to sale of immovable property on which stamp duty is paid under Article 25 of the SCHEDULE I, is registered under the provisions of the Registration Act, 1908 and thereafter such agreement is cancelled by a registered cancellation deed for whatsoever reasons before taking the possession of the property which is the subject matter of such agreement, within a period of five years from the date of execution of the agreement to sale, then the application for relief may be made within a period of six months from the date of registration of cancellation deed;

¶101

(2) in the case when for unavoidable circumstances any instrument for which another instrument has been substituted cannot be given up to be cancelled, the application may be made within six months after the date of execution of the substituted instrument.

¶102

(3) in any other case, within six months from the date of purchase of stamp.”

¶103

There are three situations mentioned in Section 48 covering

¶104

the circumstances in Section 47 and the period within which application has to be made in respect of the said three situations. In

¶105

cases mentioned in Clause (c) (5), the application for relief of a refund of stamp duty under Section 47 has to be made within six

14 of 27

Nikita Gadgil

WP 8021-2019.odt

months of the date of the instruments. In case when for unavoidable circumstances any instrument for which another instrument has been substituted cannot be given up to be cancelled, the application can be made within six months after the date of the execution of the substituted instrument. In any other case, the application is to be made within a period of six months from the date of purchase of the stamp. The facts of the present case appear to fall under Section 48(3) viz. any other case. Therefore, the period of limitation for making an application would be within six months from the date of purchase of the stamp.

¶110

Pursuant to adjudication order dated 30^th January, 2013 by the Respondent No.3, fixing the stamp duty of the development agreement at Rs 40,78,940/-, stamp duty of the said amount was purchased in the name of Petitioner viz. M/s Freedom City Ventures and admittedly, the Petitioner executed the development agreement with intention to obtain rights to develop the property on the same date viz. 30^th January, 2013. As five executants amongst the vendors refused to execute the said document, the stamp became useless and spoiled. Thereafter, an application for refund of the said stamps was filed in the office of the Collector of

15 of 27

Nikita Gadgil

WP 8021-2019.odt

Stamps, Thane Rural, on 24^th July, 2013, which is within a period of six months as prescribed in Section 48 (3) of the Maharashtra Stamp Act. Although originally this application for refund of stamp duty was preferred by one of the partners of Petitioner viz. Shri Santosh Pandurang Naik, however, since the stamps were originally purchased in the name of Petitioner, according to Petitioner the office of Respondent No. 3 indicated the said error, which error came to be corrected on 10^th December, 2013 by mentioning, “I, Freedom City Ventures, through partner Shri Santosh Pandurang Naik.” It appears that in support of the said application, Petitioner also filed a notarized affidavit of the other partner of Petitioner viz. Shri Sohil Munshi that he shall not have any objection if the stamp duty amount as prayed in the application was refunded. These facts are not disputed by the learned AGP except to say relying upon the affidavit in reply that the name of applicant was voluntarily changed to the name of Petitioner.

¶115

Even the fact that Respondent No. 3, after considering the application and the documents filed in support thereof, forwarded the refund application alongwith with other papers with his opinion to allow the grant of refund to the office of the Deputy Inspector

16 of 27

Nikita Gadgil

WP 8021-2019.odt

General of Registration, Konkan Division as well as the communication dated 31^st January, 2014 by the Deputy Inspector General of Registration, forwarding the case papers to the Respondent No.2-Inspector General and Chief Controlling Revenue Authority of Maharashtra State with his opinion to allow the refund of Rs. 36,71,046/- remaining after deducting 10% of the amount as per rules, is not disputed. However, the learned AGP contends that the date of filing of the correct application made by Petitioner, which has been held to be time barred in view of Section 48 (3) of the Maharashtra Stamp Act is 10^th December, 2013, the date on which the name of Petitioner was added to the application and not the date of the original application which is of 24^th July, 2013.

¶120

A perusal of a copy of the said application at Exh.D, page 17, to the writ petition, indicates that the application has been corrected by circling the name of the partner and instead of the same it has been mentioned above that circled name, “I, Freedom City Ventures, through partner Shri Santosh Pandurang Naik,” instead of simply “I, Santosh Pandurang Naik.” Admittedly, this correction has been made on 10^th December, 2013. It is after this correction that the Respondent No. 3 has forwarded the papers with

17 of 27

Nikita Gadgil

WP 8021-2019.odt

his opinion to allow grant of refund to the office of the Deputy Inspector General of Registration, Konkan Division, Thane. Not only that, the Deputy Inspector General of Registration, Konkan Division, Thane has on 31^st January, 2014 i.e. after the correction of the error forwarded the case papers of Petitioner to Respondent No. 2 with his opinion to allow the grant of refund of Rs. 36,71,046/stating that since the amount of refund involved was more than 10 lacs, therefore, the papers were being forwarded to Respondent No. 2 for necessary action. However, despite the favourable recommendations from the lower authorities the application of Petitioner has come to be rejected vide order dated 21^st June, 2014 on the ground that the original application was made by Shri Satosh Pandurang Naik on 24^th July, 2013, whereas the name of Petitioner was, after certain corrections on 10^th December, 2013, added in the said application. Therefore, considering that the application on behalf of Petitioner was made only on 10^th December, 2013, the Respondent No. 2 passed an order under Section 52-A of the Maharashtra Stamp Act, rejecting/dismissing the claim of refund of stamp duty being barred by limitation.

18 of 27

Nikita Gadgil

WP 8021-2019.odt

24. At this stage, it would also be worthwhile to refer to Section

¶129

52 of the Maharashtra Stamp Act, which is usefully quoted as under:

¶130

“ 52. Allowance for stamps not required for use

¶131

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, deducting therefrom such amount as may be prescribed by rules made in this behalf by the State Government, upon such person delivering up the same to be cancelled, and proving to the Collector’s satisfaction -

¶132

(a) that such stamp or stamps were purchased by such person with a bona fide intention to use them; and

¶133

(b) that he has paid the full price thereof; and

¶134

¶135

Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.”

¶136

This provision obliges the State Government to repay to a

¶137

person the value of stamps in money where a person is possessed of a stamp which has not been spoiled or rendered unfit or useless for

¶138

the purpose intended but for which he has no immediate use, when the said stamps are delivered to the Collector for cancellation and also proving to the Collector satisfaction that such stamps were

19 of 27

Nikita Gadgil

WP 8021-2019.odt

purchased by the person with a bonafide intention to use them and that he had paid the full price thereof and that they were so purchased within the period of six months next preceding the date on which they were so delivered for cancellation to the Collector. Even this Section 52 limits the period to six months.

¶143

It is not in dispute that the original application for refund of stamp duty was made on 24^th July, 2013 by one of the partners of the Petitioner, although the stamp duty was originally purchased in the name of the partnership firm viz the Petitioner. It is also not in dispute that on 10^th December, 2013 Petitioner had filed the statement with changes in name as to M/s Freedom City Ventures, through partner Shri Santosh Pandurang Naik. It has been contended on behalf of the Respondent that there is no provision under the Maharashtra Stamp Act for making any amendments or alterations or changes or modification to the name of the applicant in the application for refund of stamp duty. It has been submitted that such an action would be contrary to the provisions of Section 52-B of the Maharashtra Stamp Act. Section 52-B of the Maharashtra Stamp Act is therefore quoted as under:-

20 of 27

Nikita Gadgil

WP 8021-2019.odt

“ 52B. Invalidation of stamps and saving

¶148

Notwithstanding anything contained in sections 47, 50, 51 and 52,—

¶149

(a) Any stamps which have been purchased but have not been used or in respect of which no allowance has been claimed on or before the day immediately preceding the date of commencement of the Bombay Stamp (Amendment) Act, 1989 (hereinafter referred to as “the commencement date”) and the period of six months from the date of purchase of such stamps has not elapsed before the commencement date, may be used before a period of six months from the date of purchase of such stamps is completed, or delivered for claiming the allowance under the relevant provision of this Act; and any stamps not so used or so delivered within the period aforesaid shall be rendered invalid.

¶150

(b) Any stamps which have been purchased on or after the commencement date but have not been used, or no allowance has been claimed in respect thereof, within a period of six months from the date of purchase thereof, shall be rendered invalid.”

¶151

This is a non-obstante provision which clearly provides that notwithstanding anything contained in Sections 47, 50, 51 and 52,

¶152

any stamps which have been purchased but have not been used or in respect of which no allowance has been claimed within a period of six months from the date of purchase or an allowance has not been claimed within the provisions of this Act, such stamps shall be rendered invalid. Section 52-B requires stamps to be used within six months of its purchase and where not used or for failure to apply for allowance, in either case entails consequences as provided in sub-

21 of 27

Nikita Gadgil

WP 8021-2019.odt

section 2 of the stamps being rendered invalid.

¶157

In my view, the absence of any provision to amend, alter, change or modify the name of the applicant in the application for claiming refund of stamp duty should not come in the way of making a bonafide correction as long as there is no express statutory prohibition to do so. In fact, the authority to correct ministerial errors is an inherent power vested in every authority. This is not a case where some unconnected person has preferred an application. It is not unheard of that persons who may not have complete knowledge of procedures may make applications which applications are then checked or scrutinized for any errors and then those errors or objections are duly corrected. It also happens in the filings made in the various courts of our country including this Court. It is not in dispute that Shri Santosh Pandurang Naik was a partner of the Petitioner. This is a case where erroneously the application was made, though, in time but in the name of partner, which error or objection was corrected and the correct name of the applicant i.e. the Petitioner’s name in whose name the stamps were bought was inserted. In my view, the error was a bona fide error. Therefore, the averment of the Respondents that the partner of

22 of 27

Nikita Gadgil

WP 8021-2019.odt

Petitioner has voluntarily changed the name of applicant to M/s Freedom City Ventures, through its partner Shri Santosh Pandurang Naik in the absence of any allegation of tampering with the record or mala fides cannot be used to time bar the application. It is also not in dispute that the stamps were purchased which is evidenced by the challan referred to above. The provisions of the Maharashtra Stamp Act are to facilitate execution of documents. There are provisions which also provide for various situations when the stamps which have been purchased cannot be used or are spoiled due to want of execution or a failure for the transaction to go through. Obviously, there should be a limitation period on the claim for an allowance or for refund of stamp duty as the State funds cannot be kept in a limbo for an uncertain period. However, this is not a case where the application for refund of stamp duty has been made beyond the period of limitation. The application for refund of stamp duty was made on 24^th July, 2013, which is within the period of six months from the date of purchase of the stamp as well as the date of execution viz. 30^th January, 2013, which is well within the period of limitation prescribed in Section 48(3) of the Maharashtra Stamp Act.

23 of 27

Nikita Gadgil

WP 8021-2019.odt

Correction/removal of objections in any proceeding before a Court or an authority does not render proceeding time barred, particularly when the objection does not alter the nature of the proceeding. In this case, it is an admitted fact that Petitioner had purchased the stamps and it is only a ministerial act that Petitioner’s partner’s name was voluntarily corrected to include the Petitioner’s name. Naturally, therefore, removal of such objection would relate back to the date of the original application.

¶166

Having held that the application for refund was be made within the period of six months as prescribed in Section 48(3) of the Maharashtra Stamp Act, the question of extending the period of six months would not arise.

¶167

It is also not disputed that under Section 52-B of the Maharashtra Stamp Act, the stamps will be rendered invalid, if they have not been used or no allowance has been claimed, in respect thereof, within a period of six months from the date of purchase. But as held above, the application for refund has been made within a period of six months i.e., an allowance has been claimed within a period of six months and therefore, Section 52-B of the

24 of 27

Nikita Gadgil

WP 8021-2019.odt

Maharashtra Stamp Act would not come in the way of such an application although the stamps may be rendered invalid as not used.

¶172

This Court in the case of M/s S. K. Realtors and Anr Vs Inspector General of Stamps and Controller of Stamps (supra) has while considering a case involving refund of stamp duty and interpreting Section 48 of the Maharashtra Stamp Act has in paragraph 10 observed as under:-

¶173

“10. The purpose behind incorporating section 48 of the Maharashtra Stamp Act is clearly to ensure that in cases where transaction is not executed, or cancelled before execution, then the State is not entitled to claim revenue for execution of the said document, and the State, therefore, is under an obligation to refund the said amount. The State, therefore, in our view, cannot resort to profiteering on the basis of a document which is not executed. The Dy. Inspector General of Stamps, Pune was not justified on relying on the circular issued by the Department, which stated that application has to be made online. It is not in dispute that the Petitioners had not opportunity to make application online, since the server was not working, and therefore, he could not make application online. The Jt. District Registrar-I and Stamp Collector in his report has accepted this position.”

¶174

33. Even Section 52 as mentioned above requires the State

¶175

Government to repay the value of stamps in money in case the

¶176

stamps are not used and given to Collector for cancellation.

25 of 27

Nikita Gadgil

WP 8021-2019.odt

There is no doubt in the facts of the present case that the stamp duty of an amount of Rs. 40,78,940/- has been purchased by the Petitioner, which has not been used as the development agreement was not executed in view of the five co-owners refusing to execute the same. The State exchequer has received this amount. Going by the aforesaid decision, the State is under an obligation to refund the said amount as per rules on the basis of a document which is not executed. In this case also the application has, as observed, been made in time and the State would be obliged to refund the same, as per rules.

¶181

In the circumstances, the impugned order dated 21^st June, 2014 holding the application for refund of stamp duty to be time barred requires to be set aside and is hereby set aside.

¶182

The Respondent no. 2- Chief Controller of Stamps, Maharashtra State, is directed to consider the Petitioner’s application for refund afresh in the light of the aforesaid discussion and to pass a reasoned speaking order within a period of two months from today after affording an opportunity of hearing to the Petitioner.

26 of 27

Nikita Gadgil

WP 8021-2019.odt