When the State Deals with a Citizen it should Not Ordinarily Rely on Technicalities: SC directs the State to refund the Stamp Duty amount of Rs. 25,34,400

While hearing the Bano Saiyed Parwaz vs. Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps & Ors. case on May 17, 2024, the Supreme Court (SC) of India said that when the State deals with a citizen it should not ordinarily rely on technicalities. The SC bench was hearing an appeal against the order of the Bombay High Court dismissing the appellant’s (Bano Saiyed Parwaz) demand for a refund of Stamp Duty paid towards an un-executed conveyance deed. The two-judge bench constituting Justice BR Gavai and Justice Prashant Kumar Mishra noted that the appellant was pursuing her remedies in law and was not lax in her approach towards seeking a refund of the said stamp duty paid by her. Yet, the same was denied to her on the ground of limitation. 

In this case, Bano Saiyed Parwaz (appellant) agreed to purchase the property in Kurla, Mumbai, from the Vendor - Mohammed Hanif Ahmed Fitwala, and to that effect, they prepared a deed of conveyance which was sent for adjudication to respondent no.1 on 07.05.2014 for payment of stamp duty, which was assessed at Rs. Rs. 25,34,350. On May 13, 2014, the appellant paid this sum and purchased the stamp duty for registration of the conveyance deed. It was further observed that the vendor committed fraud against the appellant as he had already sold the property to a third party in 1992. However, before executing the said conveyance deed, the appellant had given a public notice but nobody objected to the said transaction. Thereafter, the appellant decided to cancel the said transaction and tried to contact the vendor but he was not available, compelling the appellant to file a complaint with the Police Authority. 

Later, the vendor executed the cancellation deed. However, the appellant had already applied online for a refund of the said amount as per Section 48 of the Maharashtra Stamp Act, 1958, and had filed a written application along with the documents. The appellant’s case was rejected by respondent nos.1 & 2 on the ground that the application filed by her was beyond the limitation period as per Section 48 of the Act. Holding of inquiry and leading of evidence as per Rules made by the State Government, to satisfy the Collector that case of refund is covered by one or more of the circumstances (a) (b) and (c) [1] to [8] set out in Section 47 of the Act. High Court, dismissed the appellant’s demand for a refund of Stamp Duty paid towards an un-executed conveyance deed. The matter was therefore mentioned before the SC. 

After hearing the contentions, the SC bench observed, “Admittedly, the appellant being a bonafide purchaser is a victim of fraud played upon her by the vendor. She has paid a sum of Rs. 25,34,400/- towards stamp duty for registration of conveyance deed. However, the conveyance deed was not lodged for registration as she become aware of the fraud played by the Vendor and thereafter, she immediately applied online on 22.10.2014 for refund of the stamp duty. Her effort to contact the vendor to execute a cancellation deed did not fructify immediately because of unavailability of the Vendor which Led to a police complaint and it is only at this point of time, due to intervention of the Police, the vendor could be traced, and a cancellation deed was executed.” It further added, “prima facie it appears that the appellant herein was pursuing her remedies in law and she was not lax in her approach towards seeking refund of the said stamp duty paid by her and she has been denied the same only on the ground of limitation.”

While hearing the matter, the SC bench considered its decision in the Libra Buildtech case stating that “when the State deals with a citizen it should not ordinarily rely on technicalities, even though such defences may be open to it.” The top court held that “the appellant is fit for refund of stamp duty in so far as it is settled law that the period of expiry of limitation prescribed under any law may bar the remedy but not the right and the appellant is held entitled to claim the refund of stamp duty amount on the basis of the fact that the appellant has been pursuing her case as per remedies available to her in law and she should not be denied the said refund merely on technicalities as the case of the appellant is a just one wherein she had in bonafide paid the stamp duty for registration but fraud was played on her by the Vendor which led to the cancellation of the conveyance deed.” The SC allowed the appeal and directed the State to refund the stamp duty amount of Rs. 25,34,400/- deposited by the appellant.