Bombay High Court Orders Stamp Duty Refund Despite Delayed Application
The Bombay High Court has ruled in favor of a petitioner seeking a refund of stamp duty, despite the application being filed beyond the five-year limitation period. The court observed that the delay was justified due to the petitioner's need to first approach authorities under the RERA Act for the cancellation of the Agreement for Sale.
Stamp DutyRera ActBombay High CourtRefundLegal ProceedingsReal EstateSep 10, 2025
The case involved a registered Agreement for Sale entered into by the petitioner to purchase a flat in a building for a consideration of Rs 5,12,79,327. The petitioner paid a stamp duty of Rs 25,64,120 along with registration charges on 26-12-2013. The developer was to deliver possession of the flat by 31-12-2017, but upon failure, he unilaterally extended the date to 31-12-2018. However, the developer again failed to deliver the flat, and the petitioner terminated the Agreement for Sale on 25-03-2019, calling upon the developer to refund the consideration paid along with interest.
When the developer failed to refund the requested amount, the petitioner filed a complaint under Section 18 of the RERA Act before the Real Estate Regulatory Authority (RERA). On 11-12-2020, RERA dismissed the complaint, holding that the developer was entitled to a further grace period till 31-12-2019. The petitioner then preferred an appeal before the Maharashtra Real Estate Appellate Tribunal, which quashed RERA’s order and directed the developer to refund the amount paid by the petitioner, along with interest. The developer filed a Second Appeal before the High Court, and during its pendency, the parties amicably resolved the dispute. The developer agreed to pay an amount of Rs 6,80,00,000, and the parties executed a Deed of Cancellation on 28-12-2022.
The petitioner subsequently filed an application before the Collector of Stamps seeking a refund of the stamp duty. The proceedings were transferred to the Inspector General of Registration & Superintendent of Stamps (Respondent 1), who rejected the application on 13-03-2025, holding that the Cancellation Agreement was not executed within five years of the Agreement for Sale, as required by the proviso to Section 48(1) of the Maharashtra Stamp Act, 1958 (Stamp Act). The petitioner’s counsel argued that the claim for refund was delayed due to the necessary legal proceedings under the RERA Act, and that the authorities were bound to refund the stamp duty and compensate the petitioner with interest.
The Additional Government Pleader (AGP) contended that, according to Sections 47 and 48 of the Stamp Act, the Deed of Cancellation must be executed within five years from the date of the Agreement for Sale, and the application for refund must be filed within six months from the date of registration of the cancellation deed. In the present case, only the second condition was met, and therefore, the rejection of the refund was justified.
The Court, however, relied on the case of Satish Buba Shetty v. Inspector General of Registration & Collector of Stamps (2024 SCC OnLine Bom 108), which had similar facts. The Court observed that the petitioner was constrained to approach the authorities under RERA for the cancellation of the Agreement for Sale and the refund of the consideration. It was only after the resolution of the dispute in the Second Appeal before the High Court that the developer agreed to refund the consideration and execute the deed of cancellation. Thus, the Court held that to deny the refund of the stamp duty to the petitioner was wholly unjustified and inequitable.
The Court also addressed the issue of whether interest could be awarded on the refund. The Court noted that interest represents a payment to be made by the debtor to the creditor when the money was due but was not paid. The Court referred to Rajeev Nohwar v. State of Maharashtra (2021) 13 SCC 754 and Harshit Harish Jain v. State of Maharashtra (2025) 3 SCC 365, wherein the Supreme Court and the High Court, respectively, directed the refund of the stamp duty along with interest at the rate of 6 per cent per annum.
Consequently, the Court allowed the petition, quashed the order passed by Respondent 1, and directed that the amount of stamp duty be refunded to the petitioner along with simple interest at the rate of 6 per cent per annum from the date of the application.
Frequently Asked Questions
What was the main issue in the petition?
The main issue was whether the petitioner was entitled to a refund of the stamp duty despite the application being filed beyond the five-year limitation period as stipulated by the Maharashtra Stamp Act, 1958.
Why did the petitioner file a complaint under the RERA Act?
The petitioner filed a complaint under the RERA Act because the developer failed to deliver the flat as per the agreed terms, and the petitioner sought the cancellation of the Agreement for Sale and the refund of the consideration.
What was the Court's reasoning for allowing the refund?
The Court allowed the refund because the delay in filing the application was justified due to the necessary legal proceedings under the RERA Act, and denying the refund would be unjust and inequitable.
What was the outcome of the RERA complaint?
The RERA complaint was initially dismissed, but the petitioner's appeal before the Maharashtra Real Estate Appellate Tribunal was successful, leading to the developer's agreement to refund the consideration and execute a Deed of Cancellation.
What rate of interest was awarded by the Court?
The Court directed that the refund of the stamp duty be made along with simple interest at the rate of 6 per cent per annum from the date of the application.
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