Monday, 12 December 2016

Whether party is entitled to get refund of stamp duty upon cancellation of sale transaction?


 As mentioned above, 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.
In the light of these facts, 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.
45. In our considered opinion, 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.
[REPORTABLE]
 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
 I.A. Nos. 7-8 & 9-10 OF 2015
 IN
 SLP (C) Nos. 23886-23887/2012
The Committee-GFIL 
V
Libra Buildtech Private Ltd. & Ors.
Citation:2016(6) ALLMR486 SC

1. In the light of the order dated 22.01.2015
already passed by this Court in I.A. Nos. 7-8 as
mentioned in the Office Report dated 11.02.2015,
no further order on these IAs. is required.

2. I.A. Nos. 9 and 10 – these two applications are
filed by the applicants/respondent Nos.1- 4. - Libra
Buildtech Private Ltd. & Ors. (hereinafter referred to
as ‘the applicants’) for direction by this Court to
State of Punjab and S.D.M. Dera Bassi to refund the
full amount of stamp duty to the applicants.
3. In order to appreciate the nature of
controversy involved and the direction sought for
refund of the amount paid by the applicants for
purchase of stamp duty for execution of sale deeds
in relation to properties in question, it is necessary
to set out the undisputed factual background of the
case infra.
4. Golden Forest India Limited (GFIL),
(hereinafter referred to as ‘the company’) was a
company incorporated under the Companies Act on
23.02.1987. On 06.03.1987, it was granted
certificate of commencement of business. This

company went into liquidation. The creditors of
the company, therefore, filed various claim petitions
against the company in various courts across the
country. This Court therefore, on an application
filed, transferred all the cases pending in various
courts in the country to this Court.
5. This Court thereafter constituted a Committee,
namely, GFIL Committee (Petitioner in S.L.P.(C) Nos.
23886-87 of 2012) to take over the assets of the
company and dispose of the same for paying the
debts of various investors/creditors.
6. By order dated 05.09.2006 in I.A. Nos.28, 36.
etc. in T.C.(C) No. 2 of 2004 etc. this Court directed
the GFIL Committee to sell the properties of the
company. In compliance of the above said order,
the GFIL Committee published an advertisement for
the auction of certain properties of the company.
The applicants herein participated in the auction

and submitted their bid to purchase the properties
advertised for sale. After auction, the applicants
herein were declared as successful bidders in
respect of five properties namely –
(a) Property No.1 (Central Office Building
Village Jharmari, Tehsil Dera Bassi, bid
by Libra Buildtech Pvt. Ltd.) for Rs.34
crores,
(b) Property No.2 (Hotel behind Central
office at village Jharmari, bid by Saffron
Town Planners Pvt. Ltd.) for Rs.16.25
crores.
(c) Property No.3 (Farm lands & Buildings
behind semi-constructed Hotel at village
Jharmari, bid by Swans Town Planners
Pvt. Ltd.) for Rs.15.25 crores.
(d) Property No. 7 (10 Residential and 2
Office buildigs at village Jarout by Aries
Buildwell Pvt. Ltd.) for Rs.9.05 crores.
(e) Property No.9 (Farm Lands at village
Kurali, bid by Flamingo Propbuild Pvt.
Ltd.) for Rs.27.25 crores.
As per auction conditions, the applicants
immediately deposited 25% of the bid amount, i.e.,
4Page 5
Rs.25.45 crores with the GFIL Committee on
06.12.2006
7. By order dated 14.05.2007, this Court directed
the GFIL Committee to invest the bid amount
received by them in FDRs till the sale in favour of
the applicants was confirmed.
8. On 29.07.2009, this Court confirmed the sale
of the properties in favour of the then Director of the
applicant-Companies and granted them six months’
time to pay the balance amount of 75% towards the
sale price. However, the said time to pay the
balance amount was further extended by 14 days
vide order dated 29.01.2010. This Court also
directed that on deposit of the full amount, the GFIL
Committee would ensure that the properties in
question are put in possession of the purchasers
(applicants).
9. As per the direction of this Court, the

applicant-Companies accordingly deposited the
balance 75% of the bid amount on 10.02.2010 with
the GFIL Committee, i.e. (Rs.101.80 crores).
10. Thereafter, this Court transferred the pending
cases to the Delhi High Court for further action.
11. In pursuance thereof, the Division Bench of
the High Court of Delhi by order dated 03.08.2011
in W.P.(C) No. 1399 of 2010 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.
12. In terms of the directions issued by the High
Court, on 02.09.2011, 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.

13. On 23.12.2011, sale deeds were accordingly
executed in favour of the applicants and even
registration was effected in respect of two of the
applicants.
14. Despite payment and execution of sale deeds,
the GFIL Committee did not handover the
possession of the properties to the applicants and
hence this led to filing of applications by the
applicants being CMP No. 8029 of 2012 in W.P. No.
1399 of 2010.
15. By order dated 09.07.2012, the High Court
directed 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.
16. Against this order, the GFIL Committee filed a
review petition being R.P. No. 423 of 2012 in C.M.
No.8029 of 2012 in W.P.(C) No. 1399 of 2010. By

order dated 30.07.2012, the High Court dismissed
the same.
17. Instead of refunding the amount, the GFIL
Committee challenged both the orders dated
09.07.2012 and 30.07.2012 by way of
abovementioned special leave petitions i.e. SLP (C)
Nos.23886-23887 of 2012 before this Court.
18. This Court, by order dated 26.09.2012,
disposed of these Special Leave Petitions with a
direction to the GFIL Committee to refund the entire
amount deposited by the applicants by way of sale
consideration with interest and also recorded that
as far as payment of stamp duty amount is
concerned, the applicants would take up the matter
with the State Government for refund of the said
amount.
19. In pursuance of the aforesaid order of this
Court, the GFIL Committee on 06.10.2012 refunded

the entire sale consideration with interest to the
applicants. However, while refunding it, the GFIL
deducted the TDS on the interest accrued on the
amount deposited by the applicants despite the fact
that the bank had already deducted the same.
20. Aggrieved by the TDS deducted by the GFIL
Committee, the applicants filed I.A. Nos. 3-4 of 2013
before this Court for seeking refund of the said
amount.
21. By order dated 23.02.2015, this Court directed
the GFIL Committee as well as the Union of India to
refund a sum of Rs.3.4 crores because it was
noticed that TDS was already deducted twice over.
22. Out of five applicants, four of them, namely,
Libra Build Tech Pvt. Ltd., Saffron Town Planners
Pvt. Ltd., Aries Buildwell Pvt. Ltd. and Flamingo
Propbuild Pvt. Ltd. applied on 22.10.2012 to the
Government of Punjab through S.D.M. Dera Bassi

for refund of stamp duty amount. One applicant,
namely, Swans Town Planners Pvt. Ltd. applied to
the Government of Punjab through S.D.M., Dera
Bassi for refund of stamp duty amount on
02.11.2012.
23. The S.D.M., Dera Bassi, filed his reply stating
therein that vide letter dated 18.07.2013, he has
already rejected the claims of the applicants for
refund of stamp duty amount on the ground that
the applications made by the applicants to claim
refund of stamp duty amount were time barred and
hence the claims for refund have already been
consigned to the records as not maintainable.
24. It is with this background, as mentioned
above, I.A. No.9 and 10 are filed by the applicants
praying for a direction to the State of Punjab and
S.D.M. Dera Bassi to refund the entire amount of
stamp duty (Rs.6.22 crores) to the applicants.

Notice on IAs. was given to all the concerned parties
including State of Punjab and S.D.M. Dera Bassi
who were impleaded as party respondent by IA
Nos.7 and 8. They are served and duly represented.
25. Learned senior counsel Shri Shaym Divan
appearing for the applicants has urged three points
in support of the prayer made in the applications.
In the first place, he contended that when
admittedly the purpose for which the applicants had
deposited the money-sale consideration with the
GFIL Committee as per court’s directions has failed
namely – “purchase of the properties in questions
by the applicants” and when the Court as a
consequence thereof directed refunding of the entire
sale consideration money with interest to the
applicants by order dt. 26.09.2012, a fortiori, the
applicants are also entitled to claim refund of the
entire amount of stamp duty from the State

exchequer. In other words, the submission of the
learned counsel is 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.
26. In the second place, learned counsel
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 (for short called ‘the Act’) read with
Section 65 of the Indian Contract Act, 1872.
Learned counsel also placed strong reliance upon
the principle of law contained in the maxim actus
curiae neminem gravabit - (Act of the court shall
prejudice no man) and contended that admittedly,
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 are entitled
to claim the return of amount of stamp duty.
27. In the third place, learned counsel contended
that the SDM was not right in rejecting the
applicants’ claim of refund on the ground of it being
barred by limitation because according to learned
counsel, the right to claim refund of stamp duty
amount arose for the first time in applicants’ favour

on 26.09.2012 when this Court by order dated
26.09.2012 directed the GFIL Committee to refund
the entire sale consideration to the applicants due
to failure on the part of the GFIL Committee to
handover the possession of the properties in
question to the applicants and in the same order
granted liberty to the applicants to approach the
State Government to claim refund of stamp duty
amount. Learned counsel pointed out that the
applicants, in compliance to liberty granted, applied
to the State Government on 22.10.2012/02.11.2012
which was within the time prescribed in Section 50
of the Act. It was, therefore, his submission that
the State Government (SDM, Dera Bassi) should
have entertained the applicants’ application treating
the same to have been filed within time and
accordingly should have granted refund of entire
stamp duty amount to the applicants, as was

claimed by them in their applications.
28. In reply, learned counsel for the respondents
supported the impugned order of rejection passed
by the SDM and contended that the applicants’
claim was rightly rejected on the ground of
limitation.
29. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find force in the submissions urged by the learned
counsel for the applicants.
30. The question which arises for consideration in
this case is whether the applicants are entitled to
claim refund of stamp duty amount of Rs.6.22
crores.
31. From the facts set out supra which are part of
judicial record of the cases decided by this Court
and the Delhi High Court, it is clear that despite
applicants depositing the entire sale consideration
1Page 16
(Rs.101.80 crores) and Rs (6.22 crores) for stamp
duty to purchase the properties in question, and
having performed their part of contract, in letter and
spirit, the GFIL Committee i.e. seller failed to place
the applicants in possession of the properties. This
event resulted in frustrating the purpose as was
originally intended between the parties.
32. As mentioned supra, this Court, therefore,
passed an order on 26.09.2012 and cancelled the
transaction in question and directed the GFIL
Committee to refund the entire sale consideration
with interest to the applicants. So far as the refund
of stamp duty amount was concerned, this Court on
a statement made by counsel for the applicants
permitted the applicants to approach the State
Government to claim refund from the State
Government.
33. The order dated 26.9.2012 reads as under:-
1Page 17
“Whatever be the reason, it has been
submitted by Mr. Vivek Tankha, learned senior
counsel appearing for the respondents, that
they are willing to have the sale deeds
cancelled and to receive the entire amounts,
which they had paid along with the interest
accrued thereon. As far as payment of stamp
duty is concerned, it is submitted that the
respondents would take up the matter with the
Government for refund.
Having heard Mr. V.G. Jhanji, learned
senior counsel appearing for the CommitteeGFIL
and Mr. Vivek Tankha, learned senior
counsel for the respondents, and in view of the
offer, which has been accepted by the
respondents, we dispose of the special leave
petitions, with a direction to the Committee to
refund to the five concerned respondents the
amounts deposited by them by way of sale
consideration, together with the interest
accrued thereon till date, expeditiously, but if
possible, within a week from date. Upon refund
of the entire amount, the sale deeds shall
stand cancelled and the Committee will not be
bound by the same.”
34. In compliance to the aforesaid order, the
committee accordingly refunded the entire sale
consideration to the applicants on 06.10.2012. So far
as claim for refund of the stamp duty amount was
concerned, the applicants filed an application to the
State Government (S.D.M., Dera Bassi) on
1Page 18
22.10.2012/02.11.2012.
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
1Page 19
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
1Page 20
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
2Page 21
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)
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
2Page 22
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.
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 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
2Page 23
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.
44. As mentioned above, 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.
In the light of these facts, 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.
45. In our considered opinion, 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.
46. In view of the foregoing discussion, 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. Let the refund of money as
directed above be paid to the applicants within four
weeks from the date of this order.
 ………...................................J.
 [J. CHELAMESWAR]

 …...……..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi;
September 30, 2015.

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