Bombay High Court
M/S Shweta Infrastructure And ... vs State Of Maharashtra And Ors on 23 August, 2022
Bench: Abhay Ahuja
Priya Soparkar 1 6 wp 6034-21-c.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.6034 OF 2021
M/s Shweta Infrastructure and Housing (I) Pvt. Ltd. ... Petitioner
V/s.
PRIYA State of Maharashtra and ors. ... Respondents
RAJESH ---
SOPARKAR
Mr. Bhushan Deshmukh i/by Mr. Viral Vora, Advocates for the Petitioner.
Digitally signed by
PRIYA RAJESH Ms.V.S. Nimbalkar, AGP for the Respondents/State.
SOPARKAR ---
Date: 2022.08.25
18:22:22 +0530
CORAM : ABHAY AHUJA, J.
RESERVED ON : JULY 22, 2022.
PRONOUNCED ON : AUGUST 23, 2022.
JUDGMENT:-
1. By this petition filed under Article 227 of the Constitution of India
Petitioner seeks to challenge orders dated 12 th December, 2019 (Ex-E) and
order dated 18th June, 2020 (Ex-H) passed by the Respondent No.2-Chief
Controlling Revenue Authority (CCRA) rejecting/dismissing Petitioner's
application and appeal for refund of stamp duty under sections 47 and 48
of the Maharashtra Stamp Act, 1958 (the "Stamp Act").
2. The brief facts leading upto the petition are as under :-
On 29th September, 2014 an instrument entitled "agreement for sale"
was entered into in respect of the property being non-agricultural land,
survey No.44/2 ad-measuring 21646 sq. meters situate in the limits of Nashik
Municipal Corporation at mouje Anandvalli (the "said property") between the
Petitioner and Mohammed Bhauddin Khatib and 15 others (the "Khatib
family") pursuant to which the Khatib family would sell and Petitioner would
Priya Soparkar 2 6 wp 6034-21-c.odt
purchase the said property for a total consideration of Rs.51,51,50,000/- out
of which Petitioner had paid an amount of Rs.1,51,50,000/- and upon the
payment of the entire consideration the Khatib family would execute a Sale
Deed. The said instrument was stamped and duly registered by payment of
e-stamp of Rs.3,09,09,000/- and registration fee of Rs.30,000/- as
"Agreement " registered in the office of the Joint Sub-Registrar, Nashik on
29th September, 2014 itself. The Khatib family also executed an irrevocable
power of attorney on 30 th September, 2014 in favour of Petitioner and the
same was duly stamped and registered on 3rd November, 2014.
3. Petitioner states that thereafter applications were made for various
approvals and sanction of building permission and commencement certificate
was granted on 11th April, 2019.
4. It is submitted by the Petitioner that there was a reversal/down trend
in the real estate market and the overall financial condition of the economy
of the country was also not encouraging; they were also not able to obtain
other approvals in time and were unable to honour their commitment of
completing the transaction and making payment of balance consideration of
Rs.50 crores to members of the Khatib family by 30 th April, 2017. On the
ground that it was not possible for them to arrange such large sums of
money, it was mutually decided between the members of the Khatib family
and Petitioner to cancel the said instrument entitled "agreement for sale".
Priya Soparkar 3 6 wp 6034-21-c.odt
5. Pursuant to negotiations between the parties a Cancellation Deed in
respect of the said agreement was entered into on 24 th June, 2019, which
was registered with the Sub-Registrar of the Assurances on the same date.
6. Thereafter, on 25th June, 2019 Petitioner filed an application for refund
of stamp duty with the Joint District Registrar, Class-I and Collector of
Stamps, Nashik viz. Respondent No.3 under section 47(c)(5) read with
section 48(1) of the Stamp Act. Petitioner relied upon the proviso to
section 48 which permits filing of application within 6 months from the
date of registration of the cancellation deed in the event, the agreement for
sale is cancelled by a registered cancellation deed within 5 years from the
date of the agreement for sale before taking possession of the property
which is subject matter of the agreement. Petitioner submits that the
application was made well within time.
7. The Respondent No.3 forwarded the file to the office of the Deputy
Inspector General of Registration and Deputy Controller of Stamps, (Nashik
Division), Nashik as per the provisions of section 52A of the Stamp Act as
the amount of refund involved was more than Rs.5 lakhs. While forwarding
the file, the Respondent No.3 remarked that the document/instrument
entitled agreement for sale and irrevocable power of attorney, as per their
contents amounted to development agreement and recommended in his
report that Petitioner was not eligible for grant of refund. The Deputy
Inspector General of Registration and Deputy Controller of Stamps forwarded
the file to the office of the Respondent No.2 under section 52A as the amount
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of refund was more than Rs.20 lakhs, with a recommendation that as per
proviso to section 48(1) of the Stamp Act, refund could be given only for
registered Agreement for Sale under Article 25 of the Schedule to the Stamp
Act and since the said document was a development agreement, it would
fall under Article 5(g-a) and not under Article 25, the Petitioner was not
entitled for grant of refund. Thereafter, a notice of hearing dated 13 th
November, 2019 was issued by Respondent No.2 to the Petitioner. The
following three issues were framed for consideration:-
"1. Whether the document in present return case is an
agreement or development agreement?
2. Whether there is development right in the document
of Power of Attorney made with this document and whether
the said document has been cancelled?
3. Does the said refund case come in the scope of proviso
under section 48(1) of the Stamp Act and does it stand
payable for the refund of stamp duty?"
8. The Respondent No.2-CCRA rejected the application of Petitioner for
refund of stamp duty on 12th December, 2019 as the same was not falling
within the scope of proviso to section 48(1) of the Stamp Act, concluding
as under :-
"1. Although the present document of the title of
Agreement for Sale, the said document stands as the
Development Agreement considering points in para no.VIII to
XIII in page no.17 and 18 under documents as well points
in page no.6 to 11 in Irrevocable Power of Attorney alongwith
this document.
2. It is mentioned in page no.5, point no.2 in the
Cancellation Deed of Agreement for Sale bearing No.
2843/2019 that the said Power of Attorney document has not
made permanent till date. Hence the said document of Power
of Attorney has not been cancelled till date.
3. It is necessary to make written application within six
months on cancelling the registered Sale agreement document
within five years from date of execution in proviso under
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section 48(1) of the Stamp Act. These provisions do not
stand applicable to this refund case due to above reasons."
9. On 2nd January, 2020 Petitioner executed a deed of cancellation of the
power of attorney and registered the same.
10. Being aggrieved by order dated 12 th December, 2019 passed by
Respondent No.2 in his administrative capacity, Petitioner preferred an appeal
under section 53(1A) of the Stamp Act on (27 th/31st) January, 2020 before
the same authority viz. Respondent No.2-CCRA.
11. By order dated 18th June, 2020 the Respondent No.2-CCRA rejected
the appeal of the Petitioner observing that since Respondent No.2 in his
administrative capacity had passed the impugned order dated 12 th December,
2019, it would not be proper to entertain the appeal before the same
authority sitting in Appeal and held that it does not stand eligible to allow
admission of the application under section 53 (1A) of the Act and rejected
the appeal as not maintainable.
12. Aggrieved by the order dated 12th December, 2019 and order dated
18th June, 2020 passed by Respondent No.2-CCRA in his administrative
capacity as well as quasi judicial capacity, Petitioner has approached this
Court for the following relief:-
"a. That this Hon'ble Court be pleased to issue a writ of
certiorari or any other appropriate writ, order and direction
under Article 227 of the Constitution of India calling for the
papers, records and proceedings, pertaining to the impugned
order dated 12.12.2019 (being Exhibit E) and Order dated
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18.06.2020 (Exhibit H) and after verifying the proprietary,
validity and legality thereof this Hon'ble Court be pleased to
quash and /or set aside the impugned orders (being Exhibit E
and H to the Petition) and the Application of the Petitioners
for refund of the stamp duty of Rs.3,09,09,000/- be allowed."
13. Mr. Bhushan Deshmukh, learned counsel for the Petitioner would
submit that at the time of registration of the subject instrument, stamp duty
has been accepted under Article 25 being the Article for conveyance and the
instrument being an agreement for sale would fall under the definition for
conveyance as well as the proviso to Section 48(1) of the Stamp Act.
14. He draws this Court's attention to the various clauses in the said
instrument to submit that it is an agreement for sale and not a development
agreement. He would submit that, if the agreement is read as a whole it
can be seen that:
a. The title/ nomenclature of the instrument
is Agreement for Sale.
b. The Recital (IV) of the instrument inter
alia states that the vendor being one of the
parties are writing the instrument as they want to
sell the property which came to the knowledge of
the Purchaser.
c. The operative part of the agreement starts
from the terms and conditions, as per the
operative clause (II) it is mentioned that the
consideration for the transfer of the above
property is Rs.51,51,50,000/- (Rupees Fifty One
Crores Fifty One Lakhs Fifty Thousand only).
The said Clause further reads that the property
is agreed to be purchased for the consideration
.....
d. Operative (V) states that the Purchaser i.e.
the first party (Petitioner ) has paid the amount
of Rs.1,51,50,000/- (Rupees One Crore Fifty One
Lakhs and Fifty Thousand only) prior to the
execution of the instrument and the balance of
Rs.50,00,00,000/- (Rupees Fifty Crores only) is to
be paid on or before 30th April 2017, whereafter
the second party being the Vendors are to execute
Priya Soparkar 7 6 wp 6034-21-c.odt
conveyance/sale deed of the property in favour
of the Purchaser i.e. the first party i.e. the
Purchaser being the Petitioner.
e. Operative (VII) further states that the
property is sought to be purchased by the first
party and it is for the said transaction the
Agreement of Sale is executed for the purchase of
the property by the first party i.e. the Purchaser.
15. He submits that the above clauses clearly demonstrate that the
transaction contemplated is of an absolute sale and not grant of
development rights as alleged.
16. With respect to the clauses relied upon by the Respondents to submit
that the said instrument/document is a Development Agreement, it is
submitted that clauses VIII to XII only disclose the parties' intentions about
the transaction contemplated in the instrument. The intention disclosed by
the parties is that transaction under the instrument is for a sale. The
reference to development in the said instrument is in the nature of a
disclosure as to what the Purchaser wishes to do on the property, post
acquisition. The rights granted for development are only a facility to the
Purchaser to obtain approvals by the time the sale is concluded. Such a
condition does not alter an Agreement for Sale into a Development
Agreement.
17. It is further submitted by Mr. Deshmukh that the said instrument in
Paragraph XIII clearly records that the Vendors have not handed over the
possession of the property to the Purchaser i.e. the first party and the
possession continues with the Vendors i.e. the second party. Clause XIX
further records that the liability of the taxes on the property till the possession
Priya Soparkar 8 6 wp 6034-21-c.odt
is handed over continues with the Vendors i.e. the second party and first
party shall only be liable to pay the taxes after the possession is handed
over. Clause XXI elaborates on the fact regarding the intention of the parties
to the transaction which states that the transaction under the instrument is a
transaction of sale.
18. On the other hand, Ms.V.S.Nimbalkar, learned AGP submits that the
instrument is a Development Agreement and not an Agreement for Sale.
She draws my attention to clauses VIII to XII of the instrument in support of
her contention. She submits that under clause (VIII), it is provided that the
Purchaser is desirous of developing the property as per the sanctioned
plans. It further goes on to state that such right for development has been
granted by the Vendor to the Purchaser i.e second party to the first party.
The said clause further permits all works required to be undertaken for the
purpose of development. In clause (IX) it is provided that the Purchaser is
entitled to obtain permission from Nashik Municipal Corporation for
development. In addition to that whatever other permissions that may be
required for the development of the property, the first party i.e. the
Purchaser is entitled to do so. That clause (X) provides that the Purchaser is
entitled to mortgage the property. Clause (XI) stipulates that the Purchaser is
given all rights for carrying out the development and to ensure that the
Purchaser does not face any difficulty in developing the property. That the
Purchaser/first party has been given Power of Attorney which Power of
Attorney is subject to the provisions of Clause XVII of the said instrument.
Priya Soparkar 9 6 wp 6034-21-c.odt
19. She further submits that the Power of Attorney dated 30th September,
2014 accompanying the Development Agreement was alive and in force on
the date of application for refund and therefore, it cannot be said that the
said instrument claimed as Agreement for Sale was in effect cancelled. It is
only after the application was rejected by the Respondents that the Power of
Attorney was cancelled on 2nd January, 2020 and registered.
20. She would without prejudice also submit that even if the amended
proviso is applied, even then the application deserves to be rejected in as
much as the Power of Attorney dated 30th September, 2014 was still in force
even after the date of registration of the Cancellation Deed cancelling the
instrument entitled Agreement for Sale. The Power of Attorney was
cancelled on 2nd January, 2020, was not considered by the Respondent No.2
while passing the order dated 12th December 2019, after which an appeal
under section 53(1A) of the Stamp Act was filed before the said Respondent
who rejected the same as not maintainable.
21. Ld. AGP submits that under proviso to section 48(1) of the Stamp Act
the development agreement is not covered. The section only covers an
agreement for sale. Learned AGP further submits that Petitioner has sought
to apply the amended proviso to Section 48(1) whereas since the date of
the instrument is 29th September, 2014, the unamended proviso will apply
and in which case Petitioner is clearly time barred. She submits that
Petitioner has filed the refund application beyond the period of the limitation
of 2 years from the date of registration of the main instrument as per the
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earlier proviso. Her case is that the proviso as it stands has been amended
with effect from 24th April, 2015, whereas the agreement had been entered
into on 29th September, 2014, which is prior to the coming into effect of the
amended proviso. She submits that even if the extended time limit pursuant
to the new proviso was available to Petitioner, the same may not be
applicable as the power of attorney had been cancelled only on 2 nd January,
2020, which is beyond the period of 5 years.
22. The counsel for Petitioner as well as Respondents have argued the
matter at length and also submitted detailed written submissions in the
matter.
23. The controversy that is subject matter of this petition is whether the
subject instrument is an agreement for sale or a development agreement
and whether or not in the facts and circumstances noted above, Petitioner's
claimed for refund would fall under the new proviso to section 48(1) of the
Stamp Act.
24. To appreciate the controversy and its genesis it would be apposite to
set forth the relevant sections 47 and 48 of the Stamp Act as well as Article
5(g-a) (i) and Article 25 of Schedule-I of the Stamp Act:-
"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
Priya Soparkar 11 6 wp 6034-21-c.odt
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.
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 of immovable property on
which stamp duty is paid under Article 25 of the SCHEDULE I, is
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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;
This proviso was substituted by Mah. Act No.20 of 2015, s. 14,
(w.e.f. 24-4-2015).
Prior to substitution the proviso read as under :-
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."
Article 5 AGREEMENT OR ITS RECORDS OR MEMORANDUM
OF AN AGREEMENT
Article 5(g-a)(i) is quoted as under:-
Description of Instrument Proper stamp duty
Article 5 (g-a) (i) if The same duty as
relating to giving is leviable on a
authority or power to a Conveyance under
promoter or a clauses (b) or (c),
developer, by whatever as the case may be,
name called, for of Article 25, on
construction on, the market value
development of or, sale of the property.
or transfer (in any Provided that, the
manner whatsoever) of, provisions of
any immovable section 32A shall,
property. mutatis mutandis,
Priya Soparkar 13 6 wp 6034-21-c.odt
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.
Article 25 is set forth as under:
"Article 25
Description of Instrument Proper stamp duty
25. CONVEYANCE (not being a transfer
charged or exempted under Article 59)-
On the true market value of the property
which is the subject matter of the
Conveyance,-
(a) if relating to movable 3 Per cent. of the market value of
property the property;
(b) if relating to immovable
property situated,-
(i) within the limits of any 5 per cent. of the market value of
Municipal Corporation the property.
or any Cantonment area
annexed to it or any
urban area not mentioned
in sub-clause (ii).
Priya Soparkar 14 6 wp 6034-21-c.odt
(ii) within the limits of 5 per cent. of the market value of
any Municipal Council or the property.
Nagar Panchayat or
Cantonment. area
annexed to it, or any
rural area within the
limits of the Mumbai
Metropolitan Region
Development Authority,
or the Influence Areas as
per the annual statement
of rates published under
the Bombay Stamp
(Determination of True
Market Value of Property)
Rules, 1995.
(iii) within the limits of 4 per cent. of the market value of
any Gram panchayat area the property.
or any such area not
mentioned in sub-clause
(ii).
(c) if relating to both movable The same duty as is payable under
and immovable property. clauses (a) and (b).
(d) * * *
(da) if relating to the order of the 10 per cent. of the aggregate of the
High Court under section 394 of market value of the shares issued
the Companies Act, 1956 or the or allotted in exchange or
order of the National Company otherwise and the amount of
Law Tribunal under sections 230 consideration paid for such
to 234 of the Companies Act, amalgamation.
2013 or 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) or 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 for Industrial
Priya Soparkar 15 6 wp 6034-21-c.odt
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.
Provided that, the amount of duty,
chargeable under this clause shall
not exceed, -
(i) an amount equal to 5 per cent.
of the true market value of the
immovable property located within
the State of Maharashtra of the
transfer or company; or
(ii) an amount equal to 0.7 per
cent, of the aggregate of the
market value of the shares issued
or allotted in exchange or
otherwise and the amount of
consideration paid, for such
amalgamation, whichever is
higher :
Provided further that, in case of
reconstruction or demerger the
duty chargeable shall not exceed,-
(i) an amount equal to 5 per cent.
of the true market value of the
immovable property located within
the State of Maharashtra
transferred by the Demerging
Company to the Resulting
Company; or
(ii) an amount equal to 0.7 per
cent, of the aggregate of the
market value of the shares issued
or allotted to the Resulting
Company and the amount of
consideration paid for such
Priya Soparkar 16 6 wp 6034-21-c.odt
demerger, whichever is higher.
(e) * * *
Exemption
Assignment of copyright under the
Copyright Act, 1957 (XIV of 1957).
Provided that, the provisions of section
32A shall apply mutatis mutandis to
such agreement which is deemed to be a
conveyance as aforesaid, as they apply
to a conveyance under that section:
Provided further that, where
subsequently a conveyance is executed
in pursuance of such agreement of sale,
the stamp duty, if any, already paid and
recovered on the agreement of sale
which is deemed to be a conveyance,
shall be adjusted towards the total duty
leviable on the conveyance.
25. Section 2(g) of the Stamp Act defines "Conveyance" as under.
"(g) Conveyance includes,-
(i) a conveyance on sale,
(ii) every instrument,
(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 of Industrial and Financial Reconstruction
under sections 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
Priya Soparkar 17 6 wp 6034-21-c.odt
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."
26. A perusal of the definition of Conveyance indicates that for the
purposes of stamp duty under the Stamp Act, it covers an agreement for sale
of immovable property and even a development agreement as the same
would be an instrument by which property, movable or immovable
(immovable in this case), or any estate or interest in any property is
transferred to or vested in any other person, inter vivos and which is not
specifically provided in Schedule I to the Stamp Act.
27. It is also apparent that Article 5 (g-a)(i) covers within its scope, a
development agreement with respect to immovable property and that the
proper stamp duty would be the same duty as is leviable under clauses (b) or
(c), as the case may be, of Article 25, on the market value of the property. In
the case at hand, it is not in dispute that the stamp duty paid on the
instrument under consideration was paid under Article 25 of Schedule I to the
Stamp Act.
28. A perusal of Section 48(1) quoted above indicates that the limitation
prescribed for filing an application for refund of stamp duty is contained in
section 48. Under Proviso to section 48(1), if the instrument of the Petitioner
is an agreement for sale of immovable property on which stamp duty is paid
under Article 25 of Schedule I, is registered under the Registration Act and
thereafter such agreement is cancelled by a registered cancellation deed for
Priya Soparkar 18 6 wp 6034-21-c.odt
whatsoever reason before taking possession of the immovable property in
question within a period of five years from the date of the agreement for sale,
then the application for relief/refund can be made within 6 months from the
date of registration of Cancellation Deed.
29. The dates and events are not in dispute. The instrument/document
entitled Agreement for Sale was entered into on 29 th September, 2014 and
registered on the same date after paying a stamp duty of Rs. 3,09,09000/-.
The Power of Attorney is dated 3 rd November, 2014. The Deed of Cancellation
of the instrument in question was executed on 24 th June, 2019 and registered
on the same day, i.e. within 5 years of the date of registration of the subject
instrument as required under the proviso to section 48 (1). On the very next
day i.e. on 25th June, 2019, Petitioner filed an application for refund of stamp
duty paid on the said instrument i.e. within six months as required under
Section 48(1).
30. No doubt that the subject instrument /document has been entered
into on 29th September, 2014 i.e. prior to the date of coming into force of
the amended proviso to section 48(1) which was on 24 th April, 2015.
However, from the plain language of the said section 48(1) it is clear that
the application for relief is to be made within a period of six months of the
date of the instrument in cases mentioned in clause c(5) of section 47.
Clause c(5) of section 47 refers to cases where 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
Priya Soparkar 19 6 wp 6034-21-c.odt
granted totally fails of the intended purpose, then an application can be
made to the Collector for refund. That as the said instrument had to be
cancelled by a Cancellation Deed as admittedly, the Petitioner could not
honour its commitment of completing the transaction and making payment of
balance consideration of Rs. 50 crores to the members of Khatib family, the
case would squarely fall within the provisions of Section 47(c)(5) of the
Stamp Act quoted above.
31. In the instant case, the subject instrument/ document is dated 29 th
September, 2014 , but the Deed of Cancellation of the instrument is dated
24th June, 2019 and the application for refund of the same was made on
25th June, 2019 which is after the date of coming into force of the new
proviso to section 48. What is important for application of the proviso is the
date of registration of the Cancellation Deed; if the same is before 24 th April,
2015 then the old proviso would have applied and if the same is after 24 th
April, 2015 as in this case then the new proviso applies. The date of the
instrument that is cancelled would have no relevance for the application of
the new proviso. The said section nowhere suggests that the new proviso
would be applicable only to an agreement entered into after coming into
force of the said proviso; in fact the said section refers to making of an
application for relief under section 47 in the cases mentioned therein for
refund of stamp duty. There is also as mentioned earlier no dispute that the
stamp duty paid on the subject instrument was paid under Article 25 of
Schedule I to the Stamp Act. Also admittedly Petitioner was not put in
possession of the said property. I am therefore of the considered view that
Priya Soparkar 20 6 wp 6034-21-c.odt
the application for refund of stamp duty was correctly made by Petitioner
under the new proviso to section 48 within time.
32. Upon a query by this Hon'ble Court with respect to the description of
said instrument in the registration receipt, it was pointed out by the
Learned Counsel for Petitioner that the registration receipt dated 3 rd
November, 2014 at page no. 28 of the Petition discloses the nature of the
Instrument as an "Agreement"(Kararnama). Pursuant to a further query as to
how a development agreement was described in a receipt by the Department
of Stamps and Registration while registering a Development Agreement,
Petitioner has produced a specimen of a receipt in respect of the registration
of a development agreement which specifically refers to the instrument as
development agreement. Learned counsel for the Petitioner therefore submits
that because the Petitioner's instrument was an agreement and therefore the
same was described as an agreement in the receipt and if it had been a
development agreement the same would have been referred to as a
development agreement, which is not the case here.
33. 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 M/s Sandeep
Dwellers Private Limited Vs. The State of Maharashtra and ors. 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
Priya Soparkar 21 6 wp 6034-21-c.odt
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(g-a)(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.
34. Paragraph 14 of the said decision is usefully quoted as under:-
"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 31 st 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."
35. 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
Priya Soparkar 22 6 wp 6034-21-c.odt
or an instrument of conveyance is referred to in the proviso to section
48(1) of the Stamp Act.
36. Having perused the decision in the case of M/s Sandeep Dwellers
Private Limited Vs. The State of Maharashtra and ors. (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.
37. Evidently, the Respondent-authorities have neither considered the
decision of this Court in the case of M/s Sandeep Dwellers Private Limited Vs.
The State of Maharashtra and ors. (supra) nor the Deed of Cancellation of the
Power of Attorney and it would be in the fitness of things to remand the
matter back to the authorities to consider the same.
Priya Soparkar 23 6 wp 6034-21-c.odt
38. I am therefore, of the view that the impugned orders deserve to be
quashed and set aside. The orders dated 12 th December, 2019 and 18th June,
2020 are hereby quashed and set aside. Respondent No.2-CCRA is directed to
consider the Petitioner's application for refund afresh in light of the
aforesaid discussion and pass a reasoned, speaking order within a period of
2 months from today after affording an opportunity of hearing to the
Petitioner.
39. Writ Petition is allowed in the above terms. No costs.
(ABHAY AHUJA, J.)
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