Bombay High Court · Judgment · 11.01.2024
Stamp duty refunded though the agreement was cancelled after five years — the delay was not the buyer’s fault
The Bombay High Court allowed a flat buyer a refund of stamp duty on a cancelled agreement for sale, although the cancellation deed came more than five years after the agreement, because the delay was caused by the developer’s default and the proceedings against it.
Key points
- The proviso to Section 48(1) of the Maharashtra Stamp Act bars refund where the instrument is cancelled more than five years after execution.
- Here the buyer could not get the agreement cancelled in time because the developer defaulted on RERA orders; he applied for refund within weeks of the cancellation deed.
- The Court held that a party should not suffer for delay beyond its control, and ordered the refund to be processed within two months.
The facts
A retired bank officer registered an agreement to buy a flat in November 2014 and paid ₹4.76 lakh in stamp duty. The developer did not build or refund the money. MahaRERA ordered a refund and cancellation in December 2017, but the developer defaulted, appealed, and only paid the last instalment under consent terms in February 2021. The cancellation deed was executed in March 2021, and the buyer applied for a stamp-duty refund on 31 March 2021. The Collector of Stamps and the Chief Controlling Revenue Authority rejected it because the agreement was cancelled more than five years after it was made.
What the Court held
The Court accepted that the Stamp Act authorities had no discretion under the statute, but held that the High Court, in its writ jurisdiction, can relieve a party from a time condition it was impossible to meet because of factors beyond its control. Following the principle applied by the Supreme Court in similar refund cases, it held that refusing the refund would be unjust and unconscionable. It set aside the orders and directed the refund of stamp duty on the agreement, to be processed within two months.
Why it matters
Home buyers whose projects collapse often recover their money only after years of litigation. This judgment supports a refund claim where the delay in cancelling the agreement was caused by the developer and the proceedings — provided the buyer acts promptly once the cancellation deed is executed.
20-page judgment in English. This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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