In a notable judgment, the Supreme Court of India directed a real-estate developer to issue refund of an amount of ₹27,00,000 received from a buyer, against the Agreement to sell while observing that no statutory functionary of the Government may assume or exercise any powers that have not been explicitly conferred upon it.
The decision was given by the Apex Court while adjudicating a Civil Appeal arising from a Special Leave Petition filed by Harshit Harish Jain and Another against the State of Maharashtra and Others assailing the final judgment rendered by the Bombay High Court dismissing the Appellant’s appeal seeking refund of stamp duty under the provisions of the Maharashtra Stamp Act, 1958.
The Appellant had entered into an Agreement to Sell with real estate developer, M/s. Krona Realties Pvt. Ltd. to purchase an apartment worth ₹5.46 crores in the “Lodha Venezia” project at Mumbai. The Appellant had paid an advance amount of ₹1.08 crores, ₹27,34,500 as stamp duty prior to execution of the agreement, and an additional registration charge of ₹30,000.
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The Developer later informed the Appellant of inadvertent delays in the construction of the property, prompting the Appellant to cancel the purchase against which a cancellation deed was executed in March and registered in April of 2015.
Meanwhile, an amendment dated 24.04.2015 made to Section 48(1) of the Maharashtra Stamp Act, 1958 reduced the time limit for seeking refund of stamp duty against a cancellation deed from two years to six months from the date of registration of the cancellation deed.
The Appellant sought refund of the ₹27 Lakh which was initially allowed by the Chief Controlling Revenue Authority, Maharashtra State, Pune (CCRA) who later revoked the application citing limitation period.
Following a back-and-forth shuttling of the case between the CCRA and the Bombay High Court, the Bombay High Court proceeded to dismiss the application citing the Applicant’s claim to be covered by the amended six-month limitation for refund.
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Advocate Santosh Krishnan appearing for the Appellant argued the crystallization of the Appellant’s claim to refund at the time of execution of the cancellation deed which was before the amendment of Section 48(1) on April 24, 2015.
Meanwhile, Aaditya Aniruddha Pande appearing for the Respondents vitiated the Appellant’s arguments while contending that the CCRA was justified in its action of recalling its first order to correct what is considered an error in interpreting the amended law.
The three-judge Bench constituted by Justice Vikram Nath, Justice Sanjay Karol, and Justice Sandeep Mehta observed that the CCRA had overstepped its statutory powers in first granting relief to the Appellant, and later recalling its own order.
Further the Apex Court disagreed with the view of the Bombay High Court which stated that the Appellant had submitted themselves to the review process by CCRA, by which the refusal of refund should be deemed valid.
Holding that “Jurisdiction cannot be created by consent or waiver”, the Supreme Court set aside the impugned High Court order, while restoring the previous order by which the CCRA allowed the Refund of Stamp Duty to the Appellant.
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