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CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.241 OF 2015
M/s. Satyam Construction ...Petitioner
Authority and Ors. ...Respondents
Sangle for the Petitioner.
Mr. A.I. Patel, Addl. GP with Ms. M.S. Bane, AGP for
Respondent Nos.2 to 4-State.
ORAL JUDGMENT
1) By this Petition, Petitioner challenges order dated 12 August 2014 passed by the Chief Controlling Revenue Authority rejecting Petitioner’s application for refund of stamp duty on the ground that the same does not fit into the ambit of Proviso to sub-section (1) of Section 48 of the Maharashtra Stamp Act, 1958 (the Stamp Act).
2) Briefly stated, facts of the case are that Petitioner entered into Development Agreement with one Shri Rajiv Ghule and others on 2 June 2011, which was registered in the office of 2025:BHC-AS:37168 Sub-Registrar, Haveli No.6. Under the said agreement, development rights were granted in favour of the Petitioner in respect of land bearing Survey No.80 Hissa 2/1 admeasuring 01 Hectare 37 R at Village-Manjri Budruk, Taluka-Haveli, District- Pune. The Development Agreement was valued at Rs.10,05,45,000/- and the Petitioner paid stamp duty of Rs.20,10,900/- calculated @ 2% as per Article 25 (1-a)(A) Schedule I of the Stamp Act. The Petitioner however could not receive possession of the land in respect of which Development Agreement was executed and finally parties decided to cancel the transaction. Accordingly, Deed of Cancellation was executed and registered on 3 August 2011. The Petitioner made an application for refund of stamp duty under Section 48 of the Stamp Act to Respondent No.2-Collector of Stamps, Pune, on 22 October 2012. The Collector of Stamps recommended Petitioner’s application for rejection to Chief Controlling Revenue Authority (CCRA). By impugned order dated 12 August 2014, CCRA has rejected Petitioner’s application for refund of stamp duty on the ground that the case does not fit into ambit of Proviso to sub-section (1) of Section 48 of the Stamp Act. Aggrieved by order dated 12 August 2014, the Petitioner has filed the present Petition.
3) Mr. Nikte, the learned counsel appearing for the Petitioner would submit that CCRA has erroneously considered the case of the Petitioner under Proviso to sub-section (1) of Section 48 of the Stamp Act. That Petitioner is entitled for refund of stamp duty under Proviso to Section 47(c)(1) of the Stamp Act. That at the relevant time, the period prescribed under sub-section (1) of Section 48 of the Stamp Act for seeking refund of stamp duty under Section 47(c)(5) was two years. He would submit that the issue is squarely covered by judgment of this Court in Sangita Sandip Jadhav and Anr. V/s. The State of Maharashtra and Ors.[1] Additionally, he would submit that for the purposes of Section 48(1), a development agreement is required to be treated on par with a conveyance as stamp duty payable on a development agreement is also under Article 25 of Schedule -I of the Act. That at the relevant time, the period for registration of cancellation instrument was two years and the permissible period for filing application for refund was 2 years from the date of execution of cancellation deed. That therefore Petitioner’s application for refund is clearly covered by the Proviso to Section 48(1) of the Act. That the Division Bench of this Court in Sandeep Dwellers Pvt. Ltd., Nagpur V/s. State of Maharashtra[2] has held that stamp duty paid under Article 25 of Schedule I of the Stamp Act is on par with the stamp duty payable under Article 5(g-a)(i) of Schedule I of the Stamp Act. He would also rely upon judgment of this Court in Sanman Trade Impex Pvt. Ltd. V/s. State of Maharashtra and Ors.3. Mr. Nikte would accordingly submit that the impugned order passed by the CCRA on 12 August 2014 deserves to be set aside. He has also relied on judgment of this Court in Shweta Infrastructure and Housing (I) Pvt. Ltd. V/s. State Writ Petition No.4681 of 2024 decided on 2 April 2025 (2022) 5 Mah LJ 345 (2005) 1 Mah LJ 1037 of Maharashtra and Others[4] He would submit that the Petitioner is also entitled to interest on refunded amount of stamp duty. In this regard, he would place reliance on judgment of the Apex Court in Dr. Poornima Advani and Another V/s. Government of NCT and Another 5 4) Per contra, Mr. Patel, the learned Additional Government Pleader for Respondent-State would oppose the Petition. He would submit that refund of stamp duty paid on Development Agreement is not covered by the Proviso to subsection (1) of Section 48 of the Stamp Act. That the Petitioner has not paid stamp duty under Article 25 of the Schedule I of the Stamp Act but has paid the same under Article 5(g-a)(i). That therefore Proviso to sub-section(1) of Section 48 would not cover the case for refund of stamp duty paid under Article 5(g-a)(i) of Schedule I of the Stamp Act. That Development Agreement cannot be treated on par with the Conveyance for applying extended period of limitation prescribed under proviso to Section 48(1) of the Act. He would therefore submit that CCRA has rightly rejected Petitioner’s application for refund of stamp duty.
5) Rival contentions of the parties now fall for my consideration.
6) There is no dispute to the position that the transaction of Development Agreement dated 2 June 2011 has failed. The failure of the transaction has occurred essentially on account of inability of the Petitioner to secure possession of the property in question. This is a reason why the transaction of Development Agreement came to be cancelled by the parties by execution and registration of Deed of Cancellation dated 3 August 2011.
7) If the statutory scheme of the Stamp Act is taken into consideration, it is seen that refund of paid stamp duty is permissible under Section 47 of the Stamp Act, which provides thus:-
47. Allowance for spoiled stamps 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:- (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 intended before any instrument written thereon is executed by any person; (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;
(c) the stamp used for an instrument executed by any party thereto which-
(1) has been afterwards found by the party to be absolutely void in law from the beginning; (1A) has been afterwards found by the Court, to be absolutely void from the beginning under section 31 of the Specific Relief Act, 1963; (2) has been afterwards found unfit, by reason of any error or mistake therein, for the purpose originally intended; (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; (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; (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 non-acceptance of any office thereby granted, totally fails of the intended purpose; (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; (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; (8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped: 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. 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.
8) Thus, under Section 47(c) (5), refund of stamp duty can be sought if the transaction fails the intended purpose on account of refusal by a person to act under the Agreement or to advance any money, etc. there is no dispute to the position that refund of stamp duty in the present case is admissible under Section 47 (c) (5) of the Act on account of failure of the transaction. The issue really is about the period of limitation within which the refund could be sought.
9) Section 48 provides for time limit during which application for refund of stamp duty can be made. Section 47 of the Stamp Act, before its amendment in the year 2015 and 2024, read thus:-
48. Application for relief under section 47 when to be made. The application for relief under section 47 shall be made within the following period, that is to say.- (1) in the cases mentioned in clause (c) (5), within six months of the date of the instruments: Provided that where an Agreement to sell immovable property, on which stamp duty is paid under Article 25 of the
SCHEDULE I, is presented for registration under the provisions of the Registration Act, 1908 and if the seller refuses to deliver possession of the immovable property which is the subject matter of such agreement the application may be made within two years of the date of the instrument or where such agreement is cancelled by a registered cancellation deed on the grounds of, dispute regarding the premises concerned, inadequate finance, financial dispute in terms of agreed consideration, or afterwards found to be illegal construction or suppression of any other material fact, the application may be made within two years from the date of such registered cancellation deed; (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. (3) in any other case, within six months from the date of purchase of stamp. Before proceeding further, it must be clarified here that the Proviso to sub-section (1) of Section 48 of the Stamp Act has been amended and substituted by Maharashtra Act No.20 of 2015 w.e.f. 24 April 2015. In the present case, said amendment is not relevant as the original Development Agreement was executed on 2 June 2011, the Cancellation Deed was executed and registered on 3 August 2011 and application for refund was made on 22 October 2011. Therefore, the Proviso to sub-section (1) of Section 48 as it stood prior to 24 April 2015 is relevant for the purpose for deciding the issue at hands.
10) Thus, the normal period of limitation provided for in sub-section (1) of Section 48 of the Stamp Act was six months at the relevant time from the date of execution of instrument. Thus, the Petitioner could have ordinarily applied for refund of stamp duty paid on the Development Agreement dated 2 June 2011 within a period six months from 2 June 2011 and for seeking such refund, it was not even necessary for the Petitioner to execute a registered cancellation Deed. However, in the present case the application for refund of stamp duty was not made by the Petitioner within a period of six months from 2 June 2011 and the same was done only on 22 October 2012. Here, the Proviso to sub-section (1) to Section 48 of the Stamp Act comes into play. The said Proviso prescribed a special period of limitation in cases where stamp duty is paid on an agreement for sale of immovable property where stamp duty is paid under Article 25 of Schedule I of the Stamp Act. In such cases, parties can execute registered Cancellation Deed within a period of two years from the date of original instrument and thereafter apply for refund of stamp duty within further period of two years from the date of registration of the Cancellation Deed. As per special exception carved out by Proviso to sub-section (1) to Section 48 of the Stamp Act, it was permissible to execute a registered Cancelled Deed within a period of two years from the date of registration of the original instrument and thereafter apply within further period of two years from the date of execution of the Cancellation Deed.
11) Thus, what the Proviso to sub-section (1) of Section 48 does is not creation of right in favour of the parties for seeking refund of stamp duty. The right essentially flows from Section 47 and what Section 48 does is merely to prescribe the period of limitation during which application for refund for stamp duty can be made. This position has been discussed by this Court in Sangita Sandip Jadhav (supra) in which it is held in paragraphs 17 to 27 as under:-
17) Section 48 of the Stamp Act provides for the period of limitation within which application for refund under Section 47 can be made. Section 48 provides thus:
48. Application for relief under section 47 when to be made. The application for relief under section 47 shall be made within the following period, that is to say, (1) in the cases mentioned in clause (c)(5), within six months of the date of the instruments: Provided that where an Agreement to sale 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 for whatsoever reasons before taking the possession of the property which is subject matter of such agreement to sale, then the application for relief may be made under within a period of six months from the date of registration of cancellation deed; (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 instruments; (3) in any other case, within six months from the date of purchase of stamps.
18) It must be clarified that by Mah. Act 32 of 2024, the period of ‘six months’ prescribed for making application for refund of stamp duty in all three sub-sections of Section 48 has been amended to ‘one year’. However since the present case deals with execution of the instruments and making of applications and decision thereof before coming into effect of the Mah. Act of 2024, the unamended provisions of Section 48 have been taken into consideration.
19) Thus, Section 47 of the Stamp Act provides for refund of stamp duty where the stamp is used for an instrument executed by parties which fails for the intended purpose either by reason of refusal of any person to act under the same or to advance any money intended to secure thereby or by refusal of non-acceptance of any office thereby granted. In other words, upon failure of the transaction for which the instrument is executed and stamp is used for its execution, refund of stamp duty is admissible under Section 47(c)(5) of the Stamp Act.
20) Under sub-section (1) of Section 48, the application for refund of stamp duty in cases governed by Clause (c)(5) of Section 47 could be made within six months of the date of the instrument.
21) Proviso to sub-section (1) of Section 48 makes a special exception in case of Agreement for Sale of immovable property on which stamp duty is paid under Article 25 of Schedule-I and which is registered. In case of cancellation of such Agreement for Sale by a registered Cancellation Deed before taking possession of the property within a period of 5 years from the date of execution of the Agreement for Sale, the application for refund can be made within a period of six months from the date of registration of the Cancellation Deed. Thus, in case the transaction in respect of which stamp duty is paid ultimately fails, there are two different periods of limitation prescribed under Section 48 of the Stamp Act for filing application for refund as under:
(i) When the transaction does not involve Agreement for Sale, but the transaction has failed the intended purpose under Section 47(c)(5), the application for refund can be made within six months of the date of instrument.
(ii) If the transaction involves execution of Agreement for Sale which is registered and with execution of which possession is not handed over, the parties can execute Deed of Cancellation and register the same within a period of five years from the date of execution of the original Agreement for Sale and thereafter application for refund can be filed within a period of six months from the date of registration of Cancellation Deed. Thus, the Proviso is essentially intended to carve out a special exception by providing for longer time of five years plus six months in case of execution of registered Agreement for Sale, whereas in all other cases governed by Section 47(c)(5), shorter period of six months from the date of execution of the instrument has been prescribed.
22) In my view, there are three classes of cases governed by the provisions of Section 48 for which different periods of limitation are prescribed for making an application for refund of stamp duty. The three classes of cases are as under:
(i) in cases governed by Section 47(c)(5) (failure of intended transaction), application for refund must be made within six months from the date of the instrument.
(ii) where substituted instrument has been executed and the original instrument cannot be given up for cancellation, application for refund can be made within six months from the date of execution of the substituted instrument.
(iii) in any other case governed by various clauses and subclauses of Section 47, application for refund can be made within six months from the date of purchase of stamp duty.
23) The Proviso to sub-section (1) of Section 48 does not create a separate category of cases. It is merely a sub-category of the first category governed by sub-section (1). Thus, every transaction which fails of the intended purpose and which is governed by Section 47(c)(5) would be the one governed by the first category. Therefore, even an Agreement for Sale is actually governed by Section 47(c)(5). Where the transaction intended to be executed through the Agreement for Sale fails, the application for refund can be made within six months from the date of execution of the agreement. However, a special dispensation is made by creating a sub-category in the first category. For this special category governed by the Proviso, following conditions must be fulfilled: i) Agreement for Sale must be for immovable property.
(ii) Stamp duty thereon must be paid under Article 25 of
(iii) Agreement for Sale must be registered.
(iv) Possession of the property forming subject matter of the
(v) Cancellation Deed is executed within a period of five years from the date of execution of Agreement for Sale.
(vi) Cancellation Deed is also registered.
24) If all the above conditions are satisfied, a special dispensation is made in the Proviso, where application for refund need not be made within six months from the date of Agreement for Sale but the same can be made within six months of execution of the Deed of Cancellation.
25) The Proviso to Section 48(1) thus creates a sub-category within the first category and is not a separate category within itself. Every Agreement for Sale of immovable property is essentially governed by Section 47(c)(5) and an application for refund of stamp duty paid on such agreement must ordinarily be made within six months from the date of the instrument. It is when such Agreement for Sale satisfies the above six conditions that the extended period of limitation applies for making application for refund where a person can wait upto 5 years, execute registered Cancellation Deed and then apply for refund of stamp duty within 6 months. In my view, therefore it is a choice available to a party to either avail period of normal limitation prescribed under Section 48(1) or the extended period of limitation under the Proviso. The submission of Ms. Bane that every Agreement for Sale must be governed by the Proviso and cannot be governed by ordinary period of limitation prescribed under Section 48(1) deserves outright rejection. True it is that in ordinary circumstances, no one would opt for shorter period of limitation when the Proviso makes a special dispensation of extended period of limitation. However, in a given case where the transaction does not fulfill all the six conditions enumerated above, the parties will be left with no alternative but to avail normal period of limitation prescribed under Section 48(1).
26) This would essentially mean that within Section 48(1), there are three sub-categories as under:
(i) Cases not involving execution of Agreement for Sale of immovable property but are covered by Section 47 (c)(5).
(ii) Cases involving execution of Agreement for Sale of immovable property and satisfy all 6 conditions specified in the Proviso.
(iii) Cases involving execution of Agreement for Sale of immovable property, but which do not fulfill one or more conditions specified in the Proviso. Thus, the cases governed by illustration No.
(i) and (iii) would be governed by normal period of limitation of 6 months, whereas the cases governed by illustration No.
(ii) would be governed by extended period of limitation of 5 years plus 6 months.
27) In the present case, no doubt there is execution of registered Agreement for Sale and ordinarily, the case would be governed by proviso to sub-section (1) of Section 48. However, it is contended by the Petitioners that they do not desire to avail the benefit of extended period provided for in the Proviso and the claim for refund is made under the provisions of sub-section (1) of Section 48. This submission is premised on the fact that the application for refund of stamp duty was filed before expiry of period of six months from the date of execution of Agreement for Sale. The Agreement for Sale was executed on 19 March 2020, whereas the application for refund of stamp duty was filed on 15 September 2020. It is therefore contended that since the refund application was filed within the period prescribed under Section 48(1), the Petitioners are not desirous of taking benefit of extended period of Proviso. This submission is essentially made with a view to obviate the objection of handing over possession of the flat raised in both the impugned orders. In short, what Petitioners contend is that though they were never handed over possession of the flat upon execution of Agreement for Sale dated 19 March 2020, in the event of any covenant of the said Agreement being construed to mean handing over of possession, the application for refund could still be considered as the one made under Section 47(c)(5) read with Section 48(1) of the Stamp Act. On the other hand, if the transaction is correctly read to mean non-handing over possession of the flat to the Petitioners, the case would fit even in Proviso to subsection (1) of Section 48.
12) In the present case, Petitioner’s application for refund of stamp duty is rejected on the ground that stamp duty is not paid under Article 25 of Schedule I of the Stamp Act and that the same is paid under Article 5(g-a)(i) of Schedule I of the Stamp Act. In other words, CCRA has held that Proviso to sub-section (1) of Section 48 of the Stamp Act does not apply to a case where stamp duty is paid under Article 5(g-a)(i) of Schedule I of the Stamp Act on a Development Agreement and that special period of limitation prescribed under the Proviso is applicable only when stamp duty is paid under Article 25 of the Stamp Act. This issue again is no more res integra and is covered by Division Bench Judgment of this Court in Sandeep Dwellers Pvt. Ltd. (supra), in which issue before the Division Bench was whether the notification dated 28 August 2020 providing for charging of only 2% stamp duty chargeable on instrument of conveyance under Article 25 of Schedule I of the Stamp Act would be applicable even to a Development Agreement on which stamp duty is payable under Article 5(g-a)(i) of Schedule I. This Court held that Development Agreement will have to be treated on par with instrument of conveyance and that therefore the reduced stamp duty provided for instrument of conveyance would under Notification dated 28 August 2020 would apply to Development Agreement as well. It would be apposite to reproduce findings of the Division Bench judgment in Sandeep Dwellers Pvt. Ltd. (supra) recorded in paragraphs 11 to 14, which read thus:
11. Now, the question is whether the development agreements executed by the petitioner on 28-12-2020, 31- 12-2020 and 31-12-2020 would fall within the definition of conveyance which is chargeable with stamp duty as per Article 25(b) or not. To answer the question, we would first consider the development agreements in question and then relevant provisions of law, which are contained in Section 2(g) and Article 5(g-a)(i) of Schedule I of the Stamp Act.
12. The development agreements have been filed on record of the case. On going through the development agreements, one can see that they have been entered into between owners of the immovable property in question and the petitioner and that they create various rights in respect of immovable property which is the subject-matter of each of these development agreements. By these agreements, the owners and developer i.e. petitioner have agreed for development jointly of immovable property mentioned in each of the agreements. They further show that parties thereto have agreed to share the built up area with 25% of built up area going to the owners jointly and remaining 75% of the built up area being owned by developer i.e. the petitioner. There are also other rights and liabilities created in favour of and against the petitioner which are akin to transfer of immovable property to the petitioner by the owners and, therefore, in our considered opinion, the development agreements are conveyances within the meaning of definition of conveyance as given in section 2(g) of the Stamp Act. For the sake of convenience section 2(g) is reproduced below:— “Section 2 Definitions. ………. [(g) “Conveyance” includes,—
(i) a conveyance on sale,
(ii) every instrument, (x)
(iii) every decree or final order of any Civil Court,
(iv) every order made by the High Court under section 394 of the
Companies Act, 1956 or every order made by the National Company Law Tribunal under sections 230 to 234 of the Companies Act, 2013 or every confirmation issued by the Central Government under sub-section (3) of section 233 of the Companies Act, 2013, in respect of the amalgamation, merger, demerger, arrangement or reconstruction of companies (including subsidiaries of parent company); and every order of the Reserve Bank of India under section 44A of the Banking Regulation Act, 1949, in respect of amalgamation or reconstruction of Banking Companies and every order made by the Board or Industrial and Financial Reconstruction under section 18 or 19 of the Sick Industrial Companies (Special Provisions) Act, 1985, in respect of sanction of Scheme specified therein or every order made by the National Company Law Tribunal under section 31 of the Insolvency and Bankruptcy Code, 2016, in respect of approval of resolution plan by which property, whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I; Explanation. — An instrument whereby a co-owner of any property transfers his interest to another co-owner of the property and which is not an instrument of partition, shall, for the purposes of this clause, be deemed to be an instrument by which property is transferred inter vivos;]”
13. It would be seen that even an instrument by which any property whether movable or immovable, or any interest or interest in any property is transferred, inter vivos, to, or vested in any other person and which is not otherwise specifically provided for by Schedule I, would be a conveyance. Development agreement is provided for in Article 5(g-a)(i) of Schedule I of the Stamp Act. But, the duty on the development agreement is the same as is chargeable under Article 25 of Schedule I of the Stamp Act. In order to have clarity on this issue, Article 5(g-a)(i) of Schedule I is reproduced thus:— Description of Instrument Proper Stamp Duty [(g-a) [(i) if relating to giving authority of power to a [The same duty as is leviable on a Conveyance undzer clauses (b) [or (c)], as promoter or a developer, by whatever name called, for construction on, development of or, sale or transfer (in any manner whatsoever) of, any immovable property. the case may be, of Article 25, on the market value of the property;] Provided that, the provisions of section 32- A shall, mutatis mutandis, apply to such agreement, records thereof or memorandum, as they apply to an instrument under that section; Provided further that, if the proper stamp duty is paid under clause (g) of article 48 on a power of attorney executed between the same parties in respect of the same property then, the stamp duty under this article shall be one hundred rupees].
14 So, even though a development agreement has been provided for specifically under Article 5(g-a)(i) of Schedule I, ultimately the stamp duty payable on the development agreement is as per the duty payable on a conveyance under Article 25 and, therefore, development agreement would have to be treated at par with an instrument of conveyance and hence it is an instrument which is squarely covered by the notification dated 28.8.2020. It then follows that all the three development agreements having been executed between 1st September 2020 and 31st December 2020, would be covered by first part of concession given in the notification dated 28.8.2020 and so would be eligible for reduced stamp duty to the extent of two per cent. These agreements may have been registered later but it is the date of their execution and not the registration, which is relevant for calculation of stamp duty and, therefore, these agreements would fall under the first part of the concession given in the notification dated 28.8.2020.” (emphasis supplied)
13) Thus, for the purpose of application of reduced stamp duty under Notification dated 28 August 2020, a development agreement has been treated on par with the instrument of conveyance. The comparison is done on account of the fact that the stamp duty payable on a development agreement is also same as payable on a conveyance under Article 25 of the Schedule.
14) The judgment in Sandeep Dwellers Pvt. Ltd. (supra) has been followed by a Single Judge of this Court in Sheweta Infrastructure and Housing (I) Pvt. Ltd. (supra) which related to the issue of refund of stamp duty under extended period of limitation under Proviso to Section 48(1) of the Stamp Act. This Court held in paragraphs 34 to 37 as under:
34. Learned counsel for the Petitioner has drawn this Court's attention to the decision of the Nagpur Bench of this Court in the case of Sandeep Dwellers Private Limited v. State of Maharashtra in Writ Petition No. 3622 of 2021 dated 5th May, 2022 (authored by my learned brother Hon'ble Shri Justice Sunil B. Shukre), where the Division Bench of this Court after examining Article 25 of Schedule-I to the Stamp Act as well as Article 5(g-a)(i) of the said Schedule has observed that since the duty on the Development Agreement is the same as is chargeable under Article 25 and even though the Development Agreement has been provided for specifically under Article 5(ga)(i), ultimately the stamp duty payable on the Development Agreement is as per the duty payable on a conveyance under Article 25 and therefore, the Development Agreement would have to be treated at par with an instrument of conveyance.
35. Paragraph 14 of the said decision is usefully quoted as under:—
36. What emerges from the above discussion is that whether the instrument entitled “Agreement” is a Development Agreement or an Agreement for Sale would not be material in as much as the stamp duty payable on a Development Agreement which has been specifically provided under Article 5(g-a) (i) of Schedule-I to the Stamp Act is as per the duty payable on a conveyance under Article 25 and therefore, the Development Agreement is to be treated at par with an Agreement for Sale or an instrument of conveyance is referred to in the proviso to section 48(1) of the Stamp Act.
37. Having perused the decision in the case of Sandeep Dwellers Private Limited v. State of Maharashtra (supra) and being in respectful agreement with the said decision, I am of the view that whether the instrument which is subject matter of discussion is a Development Agreement or an Agreement of Sale should not make any difference since the stamp duty that has been paid on the said instrument has admittedly been paid as per Article 25 of Schedule I to the Stamp Act. Therefore, the subject instrument would fall within the proviso to section 48(1) of the Stamp Act; admittedly the said instrument was registered under the provisions of the Registration Act and thereafter it was cancelled by a registered cancellation deed within the said period of 5 years from the date of its execution. The application for refund has also been made within a period of six months from the date of registration of the cancellation deed in accordance with the said proviso. Therefore in my view, it would not be necessary or relevant to decide whether the instrument is a Development Agreement or an Agreement for Sale.
15) Thus, though Division Bench judgment in Sandeep Dwellers Pvt. Ltd. has dealt with the different issue of application of reduced stamp duty under notification dated 28 August 2020, the judgement of the learned Single Judge in Shweta Infrastructure has applied the analogy of treating Development Agreement on par with instrument of conveyance for the purpose of application of extended period of limitation under Proviso to Section 48(1) of the Act. It however appears that in Shweta Infrastructure additional issue of execution of original instrument prior to amendment in Proviso to Section 48(a) of the Stamp Act was also involved, which is not the case here. This appears to be the reason why this Court remanded the proceedings for being decided afresh in Shweta Infrastructure. The present case pertains to the period prior to coming into effect of amendment of 24 April 2015, which provides for period of five years for execution of Deed of Cancellation, which was only two years under the unamended proviso till 24 April 2015. In the present case the Deed of Cancellation is executed within a period of two years of date of execution of Development Agreement. Therefore, the ratio of the judgment in Shweta Infrastructure squarely applies to the present case.
16) Thus, for the purpose of application of Proviso to subsection (1) of Section 48 of the Stamp Act, it has been held that Development Agreement would stand on par with an instrument of conveyance on which stamp duty is paid under Article 25 of the Schedule -I of the Stamp Act. Following the ratio of the judgments in Sandeep Dwellers Pvt. Ltd. and Shweta Infrastructure and Housing (I) Pvt. Ltd. (supra) in my view Petitioner would also be entitled to special period of limitation prescribed under Proviso to sub-section (1) of Section 48 of the Stamp Act.
17) In the present case, the registered Cancellation Deed has been executed within a period of two years, which was applicable at the relevant time. The Development Agreement dated 2 June 2011 has been cancelled by a registered instrument executed on 3 August 2011. Thereafter Petitioner had period of two years to apply for refund of stamp duty from the date of execution of Cancellation Deed. Accordingly, the Petitioner preferred an application for refund of stamp duty on 22 October
2012. In my view, the case is squarely covered by Proviso to subsection (1) of Section 48 of the Stamp Act. The CCRA has thus erred in holding that the case falls outside the ambit of Proviso to sub-section (1) of Section 48 of the Stamp Act. Petitioner is thus entitled to refund of stamp duty on Development Agreement.
18) Coming to the aspect of interest, Mr. Nikte has relied on the Apex Court judgment in Dr. Poornima Advani and Another (supra) in which the Apex Court has invoked the principle of restitution while directing payment of interest on refund of stamp duty. The Apex Court held in paragraphs 23 to 25 as under: Interest is normal accretion on capital
23. If on facts of a case, the doctrine of restitution is attracted, interest should follow. Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the court or in direct consequence of a decree or order. The term “restitution” is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another.
24. In Hari Chand v. State of U.P., the Allahabad High Court dealing with similar controversy in a stamp matter held that the payment of interest is a necessary corollary to the retention of the money to be returned under order of the appellate or revisional authority. The High Court directed the State to pay interest @ 8% for the period, the money was so retained i.e. from the date of deposit till the date of actual repayment/refund.
25. In ONGC Ltd. v. Commr. of Customs, SCC para 6, the facts were that the assessment orders passed under the Customs Act creating huge demands were ultimately set aside by this Court. However, during pendency of appeals, a sum of Rs 54,72,87,536 was realised by way of customs duties and interest thereon. In such circumstances, an application was filed before this Court to direct the respondent to pay interest on the aforesaid amount w.e.f. the date of recovery till the date of payment. The appellants relied upon the judgment in South Eastern Coalfields Ltd. v. State of M.P. This Court explained the principles of restitution in ONGC? as under: (ONGC casea, SCC pp. 485- 86, para 6)
20) Following the ratio in Dr. Poornima Advani and Another (supra) I am of the view that the Petitioner would be entitled to interest on the amount to be refunded from the date of making the application. considering the facts and circumstances of the case, simple interest @ 6% would meet the ends of justice.
21) Writ Petition accordingly succeeds, and I proceed to pass the following order:-
(i) Order dated 12 August 2014 passed by the CCRA is set aside.
(ii) Petitioner is held entitled for refund of entire stamp duty of Rs.20,10,900/- together with simple interest @ 6% per annum from the date of filing of application dated 22 October 2012.
(iii) The amount arising out of the order shall be paid to the Petitioner within a period of four months.
22) With the above directions, Petition is allowed. Rule is made absolute. There shall be no order as to costs. [SANDEEP V. MARNE, J.] Designation: PA To Honourable Judge