It is common knowledge that unused stamp papers are valid indefinitely as there is no specific mandate in the Indian Stamp Act, 1899 invalidating the unused stamp papers. However, the State of Maharashtra & Gujarat have by state amendments curtailed the validity of unused stamp papers to 6 months from the date of issue. Thereafter, the stamp papers would be rendered invalid in the aforesaid 2 states.

It is noteworthy that there are specific provisions in the Indian Stamp Act, 1899 regarding the refund of unused Stamp Papers. It would be trite to reproduce the relevant section 49, 50 & 54 which deal with the refund of the stamp papers, which read as under:

49. 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 enquiry to be made, the Collector may, on application made with the period prescribed in section 50, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely,-

1. the stamp on any paper inadvertently and undersigned 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;
2. the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto;
3. in the case of bills of exchange payable otherwise than on demand or promissory notes:
   1. the stamp on any such bill of exchange signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance:
      • PROVIDED that the paper on which any such stamp is impressed, does not bear any signature intended as or for the acceptance of any bill of exchange to be afterwards written thereon;
         
   2. the stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands;
   3.  the stamp used or intended to be used for any such bill of exchange or promissory note signed by, or on behalf of, the drawer thereof, but which from any omission or error has been spoiled or rendered useless, although the same, being a bill of exchange may have been presented for acceptance or accepted or endorsed, or, being a promissory note, may have been delivered to the payee:
      • provided that another completed and duly stamped bill of exchange or promissory note is produced identical in every particular except in the correction of such omission or error as aforesaid, with the spoiled bill or note;
         
4. the stamp used for an instrument executed by any party thereto which:
   1. has been afterwards found to be absolutely void in law from the beginning;
   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. become useless in consequence of the transaction intended to be thereby effected being 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 has been effected by some other instrument between the same parties and bearing a stamp of not less value;
   8. is inadvertently and undersigned 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, 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.

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.

Section 50 of the Indian Stamp Act, 1899 deals with the Application for relief under section 49 when to be made. It reads as under:

The application for relief under section 49 shall be made within the following periods, that is to say,-

1. in the cases mentioned in clause (d)(5), within two months of the date of the instrument;
2. in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled;
3. in the case of a stamped paper in which an instrument has been executed by any of the parties thereto, within six months after the date of the instrument, or, if it is not dated, within six months after the execution thereof by the person by whom it was first or alone executed;

PROVIDED that,-

1. when the spoiled instrument has been for sufficient reasons sent out of India, the application may be made within six months after it has been received back in India;
2. when, from unavoidable circumstances, any instrument for which another instrument has been substituted, cannot be given up to be cancelled within the aforesaid period; the application may be made within six months after the date of execution of the substituted instrument.

Section 54 deals with Allowance for stamps not required for use. It reads as under:
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 ten naye paise for each rupee or portion of a rupee, upon such person delivering up the same to be cancelled, and proving to the Collector's satisfaction-

1. that such stamp or stamps were purchased by such person with a bona fide intention to use them; and
2. that he has paid the full price thereof; and
3. 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.

From the plain reading of the aforesaid sections 49, 50 & 54 of the Indian Stamps Act it transpires that a limitation period has been prescribed for the refund and thereafter the stamp papers would be rendered void/ invalid.

A question therefore arises under the Indian Stamp Act is that how can the State have 'unjust enrichment' over the hard earned money of the common man especially when our nation is a 'Welfare State'. It is also argued the said provisions do not bar a right, it only bars the remedy to avail a refund of unused stamp although there is no express provision for condonation of delay in the Indian Stamp Act.

As per the mandate of section 49 of the Stamp Act, a refund can only be applied for within six months. There is no provision in the Indian Stamp Act for belated refund of unused stamp papers. The Courts have held that the provision imposing a time limit for refund is explicit and cannot be brushed aside making the provision 50(2) redundant and nugatory. It is true that in certain taxing statutes there is power for granting belated exemptions & refunds in cases of genuine hardship but no such power has been granted in the Indian Stamp Act.

In a landmark judgment of the Delhi High Court in the case of Dr. Poornima Advani & Anr vs Govt. Of Nct Of Delhi & Anr. AIRONLINE 2018 DEL 1334, the Court permitted a refund of a lost stamp paper on the premise that the State cannot indulge in undue enrichment. The Court took resort to Article 265 of the Constitution & observed thus:

21.1 Given the foregoing discussion, clearly, the amount retained by the respondents cannot be in the nature of tax as the taxing event has not occurred in the instant case. It cannot be also in the nature of fee as there was no quid pro quo.

21.2 In any event, the stand of the respondents is that the stamp duty is in the nature of tax. If that be the position, could the respondents retain money in anticipation of the taxing event occurring? Article 265 of the Constitution provides that no tax shall be levied or collected except by authority of law. Therefore, emphasis is not only on no tax being levied without the authority of law, but is also on collection of tax without authority of law.

22 Therefore, in my view, the continued retention of amount paid towards anticipated stamp duty in the hands of the respondents is illegal.......

It is pertinent that a Division Bench of the Delhi High Court in LPA No.188/2019 vide judgment and order dated 18.03.2019 upheld the aforesaid order. The Apex Court also dismissed the SLP of the State vide order dated 9 December 2019 and the judgment in Dr. Poornima Advani has become final.

The Apex Court has on many occasions dealt with the controversy in hand. It would be apposite to refer to the case of Committee-Gfil vs Libra Buildtech P.Ltd.(2015) 16 SCC 31 wherein the issue of refund of stamp duty under the stamp Act was in question.

The brief facts of the case are that the Apex Court constituted a Committee, namely, GFIL Committee to take over the assets of the company Golden Forests (India) Limited and dispose of the same for paying the debts of various investors/creditors. Accordingly, the GFIL Committee published an advertisement for the auction of certain properties of the company. The present applicants participated in the auction and submitted their bid to purchase the properties advertised for sale. After auction, the said applicants were declared as successful bidders in respect of five properties. In pursuance of the order of the Apex Court, a Division Bench of the High Court of Delhi by order dated 03.08.2011 directed the successful bidders/applicants herein to deposit the stamp papers within two weeks and further directed the GFIL Committee to execute the sale deed within a period of four weeks thereafter.

Accordingly, the applicants purchased the stamp papers for a sum of Rs.6.22 crores and gave the same to the GFIL Committee to execute the sale deeds and handover the possession of the properties to them. In December 2011, sale deeds were accordingly executed in favour of the applicants. However, despite payment and execution of sale deeds, the GFIL Committee did not handover the possession of the properties to the applicants and the High Court was constrained to direct the GFIL Committee to refund the amount deposited by the bidders within one week till they are in a position to handover the possession of the properties.

The Apex Court in 2012 directed GFIL Committee to refund the entire amount deposited by the applicants by way of sale consideration with interest and observed that on the issue of refund of stamp duty, the applicants be taken up with the State Government. Accordingly, the applicants applied for refund of stamp duty.

The SDM rejected the claims of the applicants for refund of stamp duty amount on the ground that the applications made by the refund applications to claim refund of stamp duty were time barred. The applicants aggrieved by the refusal to refund the stamp duty, moved an IA before the Apex Court for directing the State to refund the Stamp Duty.

On behalf of the applicants, it was contended that when the original purpose intended between the parties, namely sale of the properties to the applicants by the GFIL Committee failed or had become impossible to perform due to reasons beyond the control of the vendors (GFIL Committee), the applicants are entitled to claim the refund of the entire stamp duty amount from the State exchequer, because in such circumstances, the State has no right to retain the stamp duty money consequent upon failure of performance of contract in relation to sale of properties by the parties.

It was also contended that direction to refund the amount of stamp duty could always be issued against the State Government by taking recourse to powers contained in Sections 49 and 50 of the Indian Stamp Act, 1899 read with Section 65 of the Indian Contract Act, 1872. The applicants placed reliance upon the principle of law contained in the maxim actus curiae neminem gravabit, which implies that the act of the court shall prejudice no man and contended that there was no fault on the part of the applicants in execution of the entire transaction for which they could have been penalised for not getting their money back and hence keeping in view the principle contained in this maxim, the applicants were entitled to claim the return of amount of stamp duty.

The Court ordered the refund of Stamp Duty and observed thus:
35. In our considered opinion, keeping in view the undisputed facts mentioned above, the applicants are also entitled to claim the refund of entire stamp duty amount of Rs.6.22 crores from the State Exchequer, which they spent for execution of sale deeds in their favour in relation to the properties in question. This we say for the following reasons.

36. In the first place, admittedly the transaction originally intended between the parties, i.e., sale of properties in question by GFIL-Committee to the applicants was not accomplished and failed due to reasons beyond the control of the parties.

Secondly, this Court after taking into consideration all facts and circumstances also came to the conclusion that it was not possible for the parties to conclude the transactions originally intended and while cancelling the same directed the seller (GFIL-Committee) to refund the entire sale consideration to the applicants and simultaneously permitted the applicants to claim refund of stamp duty amount from the State Government by order dated 26.09.2012.

Thirdly, as a result of the order of this Court, a right to claim refund of amount paid towards the stamp duty accrued to the applicants. Fourthly, this being a court monitored transaction, no party was in a position to take any steps in the matter without the permission of the Court.

Fifthly, the applicants throughout performed their part of the contract and ensured that transaction in question is accomplished as was originally intended but for the reasons to which they were not responsible, the transaction could not be accomplished.

Lastly, the applicants in law were entitled to claim restoration of all such benefits/advantages from the State once the transaction was 13 cancelled by this Court on 26.09.2012 in the light of the principle contained in Section 65 of the Contract Act which enable the party to a contract to seek restoration of all such advantage from other party which they took from such contract when the contract is discovered to be void or becomes void. This was a case where contract in question became void as a result of its cancellation by order of this Court dated 26.09.2012 which entitled the applicants to seek restitution of the money paid to the State for purchase of stamp duty.

37. In our considered opinion, while deciding a case of this nature, we have to also bear in mind one maxim of equity, which is well settled namely  actus curiae neminem gravabit  meaning - An Act of the Court shall prejudice no man. In Broom's Legal Maxims 10th edition, 1939 at page 73 this maxim is explained saying that it is founded upon justice and good sense and afforded a safe and certain guide for the administration of law. This maxim is also explained in the same words in [(Jenk. Cent.118)]. This principle is fundamental to any system of justice and applies to our jurisprudence. (See: Busching Schmitz Pvt. Ltd. vs. P.T. Menghani & Anr.(1977) 2 SCC 835 and Raj Kumar Dey & Ors. vs. Tarapada Dey & Ors.(1987) 4 SCC 398) 14

38. It is thus a settled principle of law based on principle of equity that a person cannot be penalized for no fault of his and the act of the court would cause no prejudice to any of his right.

39. In our considered opinion, the aforesaid maxim would apply with full vigour in the facts of this case and if that is the position then applicants, in our opinion, are entitled to claim the refund of entire amount of stamp duty from the State Government which they spent in purchasing the stamp duty for execution of sale deed in relation to the properties in question. Indeed in the light of six reasons set out supra which, in our considered opinion, in clear terms attracts the principle contained in the aforesaid maxim, the State has no right to defend the order of SDM for retaining the amount of stamp duty paid by the applicants with them. The applicants' bona fide genuine claim of refund cannot be denied on such technical grounds.

The Apex Court further approved the observstions in Kaluram Sitaram v. Dominion of India 1953 SCC OnLine Bom 39 : AIR 1954 Bom 50 and observed thus:

40. This case reminds us of the observations made by the Chief Justice M.C. Chagla in a case reported in Firm Kaluram Sitaram vs. The Dominion of India (AIR 1954 Bombay 50).

41. The learned Chief Justice in his distinctive style of writing observed as under in para 19:

"…..we have often had occasion to say that when the State deals with a citizen it should not ordinarily reply on technicalities, and if the State is satisfied that the case of the citizen is a just one, even 15 though legal defences may be open to it, it must act, as has been said by eminent Judges, as an honest person."

42. We are in respectful agreement with the aforementioned observations, as in our considered opinion these observations apply fully to the case in hand against the State because except the plea of limitation, the State has no case to defend their action.

43. Even apart from what we have held above, when we examine the case of the applicants in the light of Sections 49 and 50 of the Act, we find that the case of the applicants can be brought under Section 49 (d)(2) read with Section 50(3) of the Act to enable the State to entertain the application made by the applicants seeking refund of stamp duty amount. The interpretation, which advance the cause of justice and is based on the principle of equity, should be preferred. We hereby do so.

In a nutshell, the Apex Court held that while dealing with the citizens the State should not rely on technicalities. The Court also categorically held that it is settled principle of law that the expiry of period of limitation prescribed under any law can only bar the remedy but not the right.

It would be apropos to refer to the Apex Court judgment in Rajeev Nohwar vs Chief Controlling Revenue Authority decided on 24 September, 2021

The brief facts are that the appellant had booked a residential apartment. In order to facilitate the execution of a conveyance, the appellant purchased an e-SBTR stamp paper for the execution of the agreement to sell on 16 August 2014. There arose a dispute with the builder which led to a consumer complaint and the litigation took a long time. The National Consumer Disputes Redressal Commission vide order dated 6 May 2016 permitted the appellant to opt for a refund of the price which he agreed along with interest and compensation. He applied for refund of stamp duty which was rejected by the revenue/ state on the ground that more than six months have elapsed as mandated by Section 48(3) of the Maharashtra Stamp Act 1958. The present Appellant filed a writ under Article 226 of the Constitution assailing the order of the Revenue but the Bombay High Court also rejected the claim of the appellant.

The High Court rejected the argument of the Petitioner that the six month limitation period under Section 48(3) would not be applicable since the appellant's case falls under Section 52A of the Act. It was observed that Sections 47, 48, 52 and 52A of the Act have to be interpreted harmoniously, and an application under Section 52A will also have to be made within six months from the date of purchase of the stamps. The order of the High Court was challenged in the Apex Court in the present Appeal.

Before the Apex Court it was pleaded that the application for refund was instituted within a reasonable period and cannot be held to be barred either on laches or limitation. It was inter-alia argued that the appellant was prevented by a sufficient cause in as much as the dispute in relation to the agreement with the developer was pending adjudication before the NCDRC. It was also asserted that the appellant had paid the stamp duty and purchased the e-stamp paper bona fide in order to facilitate the completion of the transaction pertaining to the residential flat and continued to retain the e-stamp paper pending the disposal of the proceedings to demonstrate the readiness and willingness of the appellant before the NCDRC and the stamp paper would have been used if the adjudication by the NCDRC had resulted in a resolution of the dispute. It was urged that Section 52A would come to the benefit of the appellant.

The Court dealt in detail the scope & ambit of Sections 47, 48, 52 & 52A of the Stamp Act. The Court first elucidated Section 47(a) to (c) thus:

13) .....the opening words of Section 47 also indicate that the application under Section 47 has to be made within the period which is prescribed by Section 48. The prefatory words of Section 47 advert to "impressed stamps spoiled in the cases" which are contained in clauses (a) to (c). Clause (a) deals with a situation where the stamp on any paper is inadvertently or undesignedly spoiled, obliterated or rendered unfit for the purpose intended either by an error in writing or by any other means before the instrument written on it is executed by any person. The object of clause (a) is to ensure that an allowance is made for impressed stamps which are spoiled inadvertently or unintentionally or where the stamp paper is rendered unfit for the purpose for which it was intended. That is why the expressions which have been used in clause (a) are spoiled, obliterated, or rendered unfit for the purpose.

14.Section 47 covers three classes of cases within it: (i) spoiled; (ii) obliterated; and (iii) unfit for the purpose by an error in writing or any other means. It is contended by the State that the case of the appellant would fall within the purview of the third category since it was rendered unfit for the purpose, i.e., the purpose of purchase of the property. This submission thus places reliance on the expression 'purpose' used in the provision. The submission does not accord with a plain reading of the provision. The expression "any other means" must be read in the context of the words which immediately precede it, namely, "error in writing". The expression "by any other means" would indicate that the legislature intended to refer to defacement of a stamp paper in any manner analogous to an error in writing the instrument on the stamp paper. "Any other means" refers to any other modality by which the stamp paper is rendered unfit for the purpose for which it was purchased.

Moreover, the prefatory words in Section 47 state that the collector must be satisfied that the stamp is spoiled. Clauses
(a) to (c) lay down the cases that are covered within the ambit of the expression „spoiled stamps. The emphasis of Section 47 is not on the purpose but on unfit stamps. Therefore, a case where the stamp has not been utilized at all because it is not needed subsequent to the purchase will not fall within the purview of Section 47. Only those cases where the stamp is unfit for the purpose by an error in writing or any other means would be covered by the provision. It is not the case of the appellant that the stamp paper has been spoiled or obliterated or rendered unfit for the purpose for which it was required. In the present case, it is common ground that the stamp paper is not spoiled but the purpose for which the stamp was purchased has become redundant in view of the judgment of the NCDRC. Therefore, there would be no occasion to apply the provisions of clause (a) of Section 47.

15.Clause (c) of Section 47 begins with the expression "stamp used for an instrument executed by any party thereto" and is followed by eight sub clauses. In other words, clause (c) of Section 47 applies only where a stamp paper has been used for an instrument which has been executed by one of the parties to the instrument. That is why, for instance sub clause (2) refers to the instrument being subsequently found unfit either by reason of an error or mistake for the purpose for which it was originally intended. Sub clause (4) adverts to a situation where the instrument has not been executed by a material party and by his inability or refusal to sign it renders the instrument incomplete and insufficient for the purpose for which it was intended. Clause (c) of Section 47 has no application to the facts of the present case since it is common ground that the stamp was not used for an instrument already executed by any party thereto.

The Apex Court further dealt with the ambit of Section 48 and explained thus:

16.Now it is in this backdrop that it becomes necessary to advert to Section 48 of the Act. Section 48 provides as follows:

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.

17. Section 48 begins with the statement that the application for relief under Section 47 shall be made within the periods which are indicated in clauses (1), (2) and (3). In other words, the periods of limitation which are prescribed in clauses (1), (2) and (3) are in respect of those cases which are governed by Section 47. Clause (1) stipulates that for cases governed by clause (c)(5), the period within which the application has to be filed will be six months of the date of the instrument. Clause (2) specifies that in case where for unavoidable circumstances, any instrument for which another instrument has been substituted cannot be given up to be cancelled, in such an event, the application may be made within six months after the date of execution of the substituting instrument. Clause (3) which is a residuary provision provides for a limitation of six months from the date of the purchase of stamp.

18.The revenue authorities rejected the application filed by the appellant on the ground that the application was not filed within six months from the date of the purchase of the stamp paper, treating the case to fall within the residuary provision in Section 48 of the Act. This view has been accepted by the Single Judge of the Bombay High Court. What this view misses is that Section 48 in its entirety applies only to those cases where the application for relief is governed by Section 47. If the application for refund is not with reference to the provisions of Section 47, the period of limitation in Section 48 clearly has no application. Since the application of the appellant does not fall within the purview of any of the clauses in Section 47, the 6 month limitation period prescribed in Section 48 would not be applicable to the application for allowance filed by the appellant.

The Court further elaborated the ambit of section 49 & 50 of the Stamp Act to infer that Section 49 & 50 have no application to the facts of the instant case & held thus:

19.Having observed that the application of the appellant for allowance is not covered by the Section 47, it is imperative to determine if it falls within the purview of any other provisions of the Act. Section 49 provides that allowance can be made without any limit of time for stamp papers that are used as printed forms of instruments by any banker or company, if the forms are not required by the banks or the companies. Thus, the application of the appellant is not covered by section 49. Section 50 states that allowance for misused stamps can be made.

The provision brings within the purview of the term misused stamps, the stamps of greater value than required or stamps of description other than that prescribed by any rules or stamps that are useless since the instrument is written in contravention of the provisions or where a stamp has been used when the instrument is not charged with stamp duty. Section 50 only covers those cases where inadvertent are made in the stamp paper. Therefore, the case of the appellant is not covered by Section 50 since there is no mistake in the e-stamp, be it with regard to the value or description. Section 51 lays down the procedure for seeking allowance for cases that fall under Section 47, 49 and 50 and is thus of no application to the appellants claim

The Court thereafter dealt with the applicability of Section 52 of the Stamp Act & held thus:

20.......Thus, Section 52 covers stamps that are not spoiled but which are of no use to the applicant by the occurrence of any subsequent event that renders the purpose of purchase of stamp void or nugatory. For the application of Section 52A, the applicant must have purchased the stamp on the payment of full price, with a bona fide intention to use it. However, within six months from the purchase of the stamp, the purpose of the purchase has not been fulfilled. Such a situation can arise in multiple circumstances. For example, a person may have obtained a stamp paper for purchasing a building.

However, before the agreement of sale could be executed, the building turns to shambles after an earthquake hits the area. In such a case, the stamp paper has no use. This may also cover a case where the seller has taken back his consent to sell the property after the purchase of the stamp paper. In such cases, the stamp purchased will not have any use since the purpose for which it was purchased could not materialize.

21.It could be argued that the use of the words "for which he has no immediate use" in Section 52 would only covers cases where the purpose for the purchase of the stamp is still valid but the execution of the purpose is delayed and not immediate. Such an interpretation, however, is erroneous in view of the holistic reading of the provision. The use of the phrase immediate must be read in the context of the limitation period prescribed by the provision. Since a six month limitation period has been imposed in Section 52 for the cases that fall within its purview, the use of the phrase no immediate use should be interpreted to mean either the permanent abandonment of the purpose or a delay (of more than six months from the purchase of the stamp) in the execution of the purpose.

22.However, Section 52 would only apply to those cases where the applicant had knowledge that the stamp purchased was not be required for use within six months from the date of purchase. The provision cannot be arbitrarily applied to cases where the purchaser of the stamp had no knowledge that the stamp would not be required for use within six months from the purchase of the stamp. In the instant case, the appellant had no knowledge of the fact that the stamp was not needed within six months from the purchase of it. He was in a bona fide contest over his rights with the builder. Therefore, the case of the appellant would not fall under Section 52 of the Act as well.

The Court then went on to interpret Section 52A of the Stamp Act and held that the non obstante clause does not apply to Sections 48 and 49 of the Act. The Court held thus:

26.The provisions of Section 52A as noticed above have overriding force and effect, inter alia, on the provisions of Sections 47, 50, 51 and 52. It is pertinent to note that the non obstante clause does not apply to Sections 48 and 49 of the Act. While Section 48 is a limitation clause applicable to cases that are covered by Section 47, Section 49 applies to a Corporation where no limitation period has been prescribed. Section 52A can be applied to the appellant's case only if the provision is interpreted to override the limitation period laid down in the preceding provisions and if it is regarded as a residual substantive provision that would cover all cases that are not covered by any of the provisions. We will now consider the validity of such an interpretation.

27. If Section 52A was enacted with the intent to override the limitation prescribed by Sections 50, 51 and 52 then Section 48 ought to have also been included specifically since Section 48 is the limitation provision applicable to Section 47. Section 48 is not incorporated in the non-obstante provision of section 52 A. This is hence intrinsic material to indicate that the purpose of the non-obstante clause in Section 52A was to override the jurisdiction of the adjudicating authority (i.e the Collector) under Sections 47, 50, 51 and 52 to decide the claims for allowances. Section 52A specifically divests the power of the Collector to decide the claims of allowance falling within those provisions and vests the power to other authorities if the payment of stamp duty exceeds Rupees five lakhs. In those cases, though the application is to be made to the Collector, he will have no adjudicatory capacity.

The Collector must forward the application to the concerned authority as mentioned in Section 52A along with remarks and such authority would have the power to decide the claim. The interpretation that Section 52A only overrides the authority of the Collector in adjudicating the case is evident since the provision does not override Section 49 where the adjudicating officer is the Chief Controlling Revenue Authority.

In such a case, Section 52A cannot be considered as a residual clause by applying it to classes of cases that do not fall within the purview of any other provisions. A contrary interpretation would create an artificial class based on economic capacity, as cases where the stamp duty paid exceeds Rupees five lakhs will alone be adjudicated without application of any limitation period as a residual case, while cases falling within the same class but where stamp duty paid is less than Rupees five lakhs cannot take recourse to the provision.

It is an established principle of interpretation that an interpretation that furthers the constitutionality of a provision will have to be undertaken. An interpretation which leads to an invidious discrimination must be eschewed. Thus, the intendment of Section 52A was neither to cover the applications that are not brought under any of the preceding substantive clauses nor to override the limitation clauses.

The Court held that the conduct of the appellant was not unreasonable and there was no intentional delay on the part of the appellant in applying for a refund of stamp duty. The Court held that the refund in the facts of the case was not covered by the statute. The Court therefore resorted to Article 142 of the Constitution with the intention to grant 'Substantial Justice' and observed thus:

28 Evidently, and for the reasons that we have indicated above, the application filed by the appellant did not fall within the ambit of Sections 47, 52 and 52A. It is true that the application for refund was titled with reference to the provisions of Section 47. But, it is well settled that a reference of a wrong statutory provision, cannot oust the citizen of an entitlement to refund which otherwise follows in terms of a statutory provision.

29 In the present case, the stamp paper was purchased bona fide in view of the agreement to sell which was to be executed by the appellant with the developer. There was a dispute with the developer which led to the institution of the proceedings before the NCDRC. There was nothing untoward in the conduct of the appellant and certainly no unreasonable delay on the part of the appellant in awaiting the outcome of the proceedings. The NCDRC allowed the complaint giving the option to the appellant of either going ahead with the agreement along with an award of compensation or, in the alternative, to seek a refund with interest. The appellant having exercised the latter option applied within two months from the order of the NCDRC for the grant of refund. The conduct of the appellant, therefore, cannot be held to be unreasonable nor was there any intentional or wanton delay on the part of the appellant in applying for a refund of stamp duty. Such an application must be filed within a reasonable period.
......

31 We are conscious of the fact that as a general rule of law, the right to refund is a statutory creation. A refund can be sought in terms envisaged by statute. As discussed above, the case of the appellant is not specifically barred by any substantive provision. It is an established principle that this Court while exercising its power under Article 142 of Constitution must not ignore and override statutory provisions but must rather take note of the express statutory provisions and exercise its discretion with caution. Therefore, if a statute prescribes a limitation period, this Court must be slow to interfere with the delay under Article 142. 3AR Anthulay v. RS Nayak, (1988) 2 SCC 602; Union Carbide Corporation v. Union of India, (1991) 4 SCC 584; Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409.

However, in the case of an eventuality such as the instant case where the facts of the case are not covered by the statute, this Court under Article 142 will have the power to do complete justice by condoning the delay. We are of the view that since the delay in filling the application for refund in the instant case was due to the prolonged proceedings before the NCDRC, the application cannot be rejected on the ground of delay. A litigant has no control over judicial delays. A rejection of the application for refund would violate equity, justice and fairness where the applicant is made to suffer the brunt of judicial delay. Therefore, this is a fit case for the exercise of the power under Article 142 of the Constitution.

Accordingly, the Apex Court allowed the appeal and set aside the impugned judgment and order of the learned Single Judge of the Bombay High Court. The Court directed that the appellant would be entitled to a refund of the stamp duty along with interest at the rate of 6% per annum within a period of one month of the delivery of the e-stamp paper to the Collector.

The Apex Court recently in the case of Bano Saiyed Parwaz v. Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps and Others in Civil Appeal No. of 2024 (arising out of SLP (C) No. 4111 of 2020) decided very recently on May 17, 2024 dealt with a similar situation. The brief facts of the case are that the stamp authorities as well as the Bombay High Court had dismissed the appellant's demand for refund of Stamp Duty paid towards an un-executed conveyance deed.

The present appellant purchased stamps of approx. Rs. 25 lakhs on 13-05-2014 for purchase of an immovable property in Mumbai from the Vendor - Mohammed Hanif Ahmed Fitwala. The said conveyance deed was not lodged for registration as it was found that the vendor of the appellant had played fraud on the appellant in as much as he had earlier sold the said property to a third party in 1992. The appellant had no option but to cancel the said transaction.

He tried to contact the said vendor but he was not available, compelling the appellant to file a complaint with the Police Authority. Thereafter, the Vendor executed the cancellation deed on 13.11.2014. However, the appellant had on 22.10.2014 already applied online for refund of the said amount as per Section 48 of the Maharashtra Stamp Act, 19581 and had filed written application on 06.12.2014 along with the documents. The appellant's case was rejected by the Stamp Authorities on the ground that the application filed by her was beyond the limitation period as per Section 48 of the Act.

The Apex Court looking to the facts of the case observed thus:
10. 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 on 13.11.2014.

11. From the above admitted facts, 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.

12. The finding returned by the High Court in the impugned order that the appellant's application for refund dated 22.10.2014 is not maintainable in law as it has been filed before the cancellation of the conveyance deed dated 13.11.2014 is misplaced in so far as while submitting the online application there was no caution to the appellant that all of the documents and materials for the satisfaction of the Collector should be filed with the application-either online or hard copy-itself and the finding of the learned single judge is contrary to the requirements stipulated by Sections 47 & 48 which envisages only the application for relief under Section 47 of the Act to be made within six months of the date of the instrument which prima facie is appeared to have been done by the appellant in the present case.

Following the dictum of the Apex Court in Committee-GFIL v. Libra Buildtech Private Limited (2015) 16 SCC 31, the Court held that the State should not rely on technicalities when it deals with it's own citizens. The Court also categorically held that the limitation prescribed under any law may bar the remedy but not the right. The Court held thus:

15. The legal position is thus settled in Libra Buildtech (supra) that when the State deals with a citizen it should not ordinarily rely on technicalities, even though such defences may be open to it.

16. We draw weight from the aforesaid judgment and are of the opinion that the case of 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.

17. For the foregoing reasons, the appeal is allowed, and we set aside the impugned order dated 02.08.2019 as well as orders of respondent nos. 1 and 2 dated 09.06.2015 and 25.02.2016 and direct the State to refund the said stamp duty amount of Rs. 25,34,400/- deposited by the appellant.

From the above deliberations it is explicit that lapse of time would not be a ground to refuse refund. It is no longer res integra that rejection of application for refund on the ground of delay would violate equity, justice and fairness. It is now a settled principle of law that the expiry of period of limitation prescribed under any law can only bar the remedy but not the right. Moreover, the Apex Court in genuine & bonafide cases can always resort to Article 142 to grant substantial justice in deserving cases of refund of stamp duty, where the mandate of Stamps Act do not permit grant of refund of unused stamp papers.

Written By: Inder Chand Jain
Ph no: 8279945021, Email: [email protected]