Bombay High Court

Freedom City Ventures vs State Of Maharashtra And Ors on 9 January, 2023

Bench: Abhay Ahuja

                                                  WP 8021-2019.odt


        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               CIVIL APPELLATE JURISDICTION

                     WRIT PETITION NO. 8021 OF 2019

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.

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

3. The Joint District Registrar,Thane Rural       ... Respondents
                                 -------
Ms. Preeti Walimbe i/b Mr. Bhushan Walimbe for Petitioner .
Mr. Sachin H. Kankal, AGP for State-respondents No. 1 to 3.
                                 -------

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

JUDGMENT

1. By this petition, the Petitioner seeks to challenge order dated

21st June, 2014 passed by the respondent no.2-Inspector General of

Registration and Chief Controller of Stamps, Maharashtra State

Nikita Gadgil 1 of 27 WP 8021-2019.odt

rejecting application dated 24th July, 2013 for refund of stamp duty

as being barred by limitation.

2. 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

Nikita Gadgil 2 of 27 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 30th January, 2013.

3. 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 24th 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 24th July, 2013.

     Nikita Gadgil                                               3 of 27
                                                     WP 8021-2019.odt

4. 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.

     Nikita Gadgil                                                4 of 27
                                                      WP 8021-2019.odt

5. 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.

6. Vide communication dated 31st January, 2014, the Deputy

Inspector General of Registration, Konkan Division, Thane

forwarded the case papers of the Petitioner to the respondent no.2-

The 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.

7. 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

Nikita Gadgil 5 of 27 WP 8021-2019.odt

Freedom City Ventures through its partner Shri Santosh Pandurang

Naik was made on 10th 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.

8. 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:-

"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;

9. Ms. Walimbe, learned counsel for Petitioner submits that since

the correction dated 10th 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

Nikita Gadgil 6 of 27 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.

     Nikita Gadgil                                              7 of 27
                                                    WP 8021-2019.odt

10. 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 24th August, 2015 filed on behalf of

Respondent No.3.

11. 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 24th July, 2013, by one of the

partners of the Petitioner, the application on behalf of Petitioner

was only made on 10th 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

Nikita Gadgil 8 of 27 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.

12. 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.

13. 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.

14. 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,

Nikita Gadgil 9 of 27 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.

15. Before proceeding further, it would be useful to set out the

relevant provisions of the Maharashtra Stamp Act.

16. 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:-

"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

Nikita Gadgil 10 of 27 WP 8021-2019.odt

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

Nikita Gadgil 11 of 27 WP 8021-2019.odt

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."

(emphasis supplied)

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

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.

18. 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,

Nikita Gadgil 12 of 27 WP 8021-2019.odt

where after Petitioner had also prepared draft of the development

agreement and had the same adjudicated by the Respondent No.3-

Joint District Registrar, Thane Rural, for payment of stamp duty at

Rs. 40,78,940/- but subsequently since five out of the eleven co-

owners 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.

19. 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:-

      Nikita Gadgil                                           13 of 27
                                                     WP 8021-2019.odt

"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 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;

(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."

20. There are three situations mentioned in Section 48 covering

the circumstances in Section 47 and the period within which

application has to be made in respect of the said three situations. In

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

Nikita Gadgil 14 of 27 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.

21. Pursuant to adjudication order dated 30th 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

Nikita Gadgil 15 of 27 WP 8021-2019.odt

Stamps, Thane Rural, on 24th 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 10th 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.

22. 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

Nikita Gadgil 16 of 27 WP 8021-2019.odt

General of Registration, Konkan Division as well as the

communication dated 31st 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 10th 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 24th July, 2013.

23. 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

Nikita Gadgil 17 of 27 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 31st 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 24th 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.

     Nikita Gadgil                                                 18 of 27
                                                     WP 8021-2019.odt

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

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

under:

"52. Allowance for stamps not required for use

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 -

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

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

(c) that they were so purchased within the period of six months next preceding the date on which they were so delivered:

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."

25. This provision obliges the State Government to repay to a

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

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

Nikita Gadgil 19 of 27 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.

26. It is not in dispute that the original application for refund of

stamp duty was made on 24th 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 10th 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:-

      Nikita Gadgil                                              20 of 27
                                                    WP 8021-2019.odt


      "52B. Invalidation of stamps and saving

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

(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.

(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."

27. This is a non-obstante provision which clearly provides that

notwithstanding anything contained in Sections 47, 50, 51 and 52,

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-

      Nikita Gadgil                                             21 of 27
                                                    WP 8021-2019.odt

section 2 of the stamps being rendered invalid.

28. 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

Nikita Gadgil 22 of 27 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 24th 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. 30th January, 2013, which is well within the

period of limitation prescribed in Section 48(3) of the Maharashtra

Stamp Act.

    Nikita Gadgil                                                23 of 27
                                                     WP 8021-2019.odt

29. 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.

30. 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.

31. 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

Nikita Gadgil 24 of 27 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.

32. 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:-

"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."

33. Even Section 52 as mentioned above requires the State

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

stamps are not used and given to Collector for cancellation.

      Nikita Gadgil                                              25 of 27
                                                        WP 8021-2019.odt

34. 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.

35. 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.

36. 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.

      Nikita Gadgil                                                 26 of 27
                                                                WP 8021-2019.odt

37. Writ Petition stands allowed in the above terms. Parties to

bear their own costs.

(ABHAY AHUJA, J.)

Digitally signed by NIKITA NIKITA YOGESH YOGESH GADGIL GADGIL Date: