2015 (9) TMI 1759 - SC - Indian Laws

Applicants entitled to Rs. 6.22 crore stamp duty refund despite limitation period expiry under Section 50 Indian Stamp Act 1899

The SC held that applicants were entitled to refund of stamp duty amounting to Rs. 6.22 crores despite limitation period expiry under Section 50 of Indian ... Entitlement to refund of stamp duty - Purchase Of properties - Applicability of Sections 49 and 50 of the Indian Stamp Act, 1899 - Principle of equity and the maxim 'actus curiae neminem gravabit' -Limitation period for claiming refund - HELD THAT:- 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, 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 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. 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. It is not in dispute that this Court on 26.09.2012 cancelled the transaction in question, and hence by reason of the orders of this Court, the stamps used for an instrument executed by the applicants were found unfit thereby defeating the purpose originally intended. This occurred either due to some error or mistake therein. Since the execution of sale deeds and its implementation was subject to the orders of the court, the parties were required to apply the court for appropriate orders for every step. It is due to this reason, the right to claim the refund of the amount of stamp duty arose for the first time in applicants' favour on 26.09.2012. The applicants had accordingly filed their applications within 6 months from the date of this order, as provided in Section 50. Thus, the applications should have been entertained treating the same to have been filed Under Section 49 (d)(2) read with Section 50 of the Act for grant of refund of stamp duty amount claimed therein by the applicants. Even if we find that applications for claiming refund of stamp duty amount were rightly dismissed by the SDM on the ground of limitation prescribed Under Section 50 of the Act yet keeping in view the settled principle of law that the expiry of period of limitation prescribed under any law may bar the remedy but not the right, the applicants are still held entitled to claim the refund of stamp duty amount on the basis of the grounds mentioned above. In other words, notwithstanding dismissal of the applications on the ground of limitation, we are of the view that the applicants are entitled to claim the refund of stamp duty amount from the State in the light of the grounds mentioned above. Thus, I.A. Nos. 9 and 10 filed by the applicants deserve to be allowed and are accordingly allowed. The State of Punjab through the SDM, Dera Bassi is directed to refund the entire stamp duty amounting to Rs. 6.22 crores spent by the applicants for purchasing of stamps papers for execution of sale deeds in relation to purchase of the properties in question. Issues Involved:1. Entitlement to refund of stamp duty.2. Applicability of Sections 49 and 50 of the Indian Stamp Act, 1899.3. Principle of equity and the maxim 'actus curiae neminem gravabit.'4. Limitation period for claiming refund.Summary:1. Entitlement to Refund of Stamp Duty:The applicants sought a direction for the State of Punjab and S.D.M. Dera Bassi to refund the full amount of stamp duty paid for the execution of sale deeds. The Supreme Court noted that the original purpose of the transaction, i.e., the sale of properties by the GFIL Committee to the applicants, failed due to reasons beyond the parties' control. Consequently, the Court had previously directed the refund of the entire sale consideration with interest to the applicants. The Court held that the applicants are also entitled to claim the refund of the entire amount of stamp duty from the State exchequer, as the State has no right to retain the stamp duty money when the contract's performance failed.2. Applicability of Sections 49 and 50 of the Indian Stamp Act, 1899:The applicants argued that the refund of stamp duty could be issued against the State Government u/s 49 and 50 of the Indian Stamp Act, 1899, read with Section 65 of the Indian Contract Act, 1872. The Court found that the applicants' case could be brought u/s 49(d)(2) read with Section 50(3) of the Act, enabling the State to entertain the application for refund of stamp duty. The Court emphasized that the interpretation advancing the cause of justice and based on equity should be preferred.3. Principle of Equity and the Maxim 'Actus Curiae Neminem Gravabit':The Court applied the maxim 'actus curiae neminem gravabit,' meaning an act of the court shall prejudice no man. The Court held that the applicants, who performed their part of the contract, should not be penalized for the failure of the transaction due to reasons beyond their control. The Court cited previous judgments to support the principle that a person cannot be prejudiced by the act of the court.4. Limitation Period for Claiming Refund:The S.D.M. Dera Bassi rejected the applicants' claims for refund on the ground of being time-barred. The Court disagreed, stating that the right to claim the refund arose on 26.09.2012, when the Court directed the GFIL Committee to refund the sale consideration and allowed the applicants to approach the State Government for a refund of stamp duty. The applicants filed their applications within the prescribed time u/s 50 of the Act. The Court held that even if the applications were dismissed on the ground of limitation, the applicants are still entitled to claim the refund based on the grounds mentioned above.Conclusion:The Supreme Court allowed I.A. Nos. 9 and 10, directing the State of Punjab through the S.D.M. Dera Bassi to refund the entire stamp duty amounting to Rs. 6.22 crores to the applicants within four weeks from the date of the order.