Case Note & Summary
The petitioner, a partnership firm, entered into a Development Agreement dated 15 April 2013 with the owners of property for development of approximately 8000 sq. mtrs. of land in Pune. The agreement was registered and stamp duty of Rs.70,12,500 was paid. Disputes arose when the owners were unable to obtain sanction of building plans within a reasonable period, leading to cancellation of the Development Agreement. A Cancellation Deed was executed on 18 February 2014 and registered on 24 February 2014. The petitioner applied on 7 April 2014 for refund of the stamp duty, but the respondent authorities refused. The Joint District Registrar and Collector of Stamps rejected the application by order dated 6 December 2014 on the ground that the application was not covered by the proviso to Section 48(1) of the Maharashtra Stamp Act, 1958. The petitioner challenged this order and the earlier order dated 11 August 2014 by which the Deputy Controller of Stamps did not recommend refund. The petitioner contended that the Development Agreement did not transfer legal possession but only granted a licence for development, as per Clause 11, and that Clause 13 should be read harmoniously with Clause 11. The petitioner argued that the refund was permissible under Section 47 because the instrument became ineffective and incapable of achieving its purpose. The petitioner also argued that the respondents could not raise new grounds in their affidavit that were not part of the impugned order, relying on Mohinder Singh Gill v. Chief Election Commr. The respondents contended that the petitioner had not complied with the proviso to Section 48(1) and that the refund application was filed beyond the six-month limitation period. The High Court reserved judgment on 18 August 2026 and pronounced judgment on 20 August 2026.
Headnote
A) Stamp Duty - Refund - Section 47, Maharashtra Stamp Act, 1958 - The petitioner sought refund of stamp duty paid on a Development Agreement that was mutually cancelled before development commenced, claiming the instrument became ineffective and incapable of achieving its purpose; the Court considered whether Section 47 applies when the underlying transaction failed and no legal possession was transferred (Paras 2-8).
B) Stamp Duty - Interpretation of 'Conveyance' - Proviso to Section 48(1), Maharashtra Stamp Act, 1958 - The authorities rejected refund on the ground that the Development Agreement was not a conveyance under the proviso to Section 48(1); the petitioner argued that the new ground of possession transfer raised in the affidavit was not part of the impugned order and could not be introduced later (Paras 3-4).
C) Contract Law - Interpretation of Development Agreement - Clauses 11 and 13 - The petitioner contended that Clause 11 granted only a licence for development and that Clause 13 must be read with Clause 11, so no legal possession was transferred; the respondents contended that possession was given, which would disentitle refund under Section 47; the Court examined whether the agreement transferred legal or exclusive possession (Paras 4-8).
D) Administrative Law - New Grounds in Affidavit - Mohinder Singh Gill v. Chief Election Commr., (1978) 1 SCC 405 - The petitioner relied on the principle that an order cannot be supported by fresh reasons through an affidavit when the ground was not part of the impugned order; the Court considered this objection in the context of the respondent's reliance on Clause 13 (Paras 4, 8).
E) Limitation - Refund Application - Section 48, Maharashtra Stamp Act, 1958 - The respondent argued that the refund application was required to be filed within six months from the date of the Development Agreement, i.e. by 14 October 2013, and that the petitioner filed later; the Court considered this limitation objection (Para 9).
Issue of Consideration
Whether the petitioner is entitled to refund of stamp duty paid on a Development Agreement that was mutually cancelled before development commenced; whether the Development Agreement falls within the meaning of 'conveyance' under the proviso to Section 48(1) of the Maharashtra Stamp Act; whether the respondent authorities can raise new grounds in their affidavit that were not part of the impugned order; whether the refund application was filed within the limitation period prescribed under Section 48.
Law Points
- Stamp duty refund
- development agreement
- cancellation deed
- possession
- licence
- Section 47 Maharashtra Stamp Act
- proviso to Section 48(1)
- interpretation of clauses
Case Details
2026 LawText (BOM) (08) 82
Writ Petition No.7566 of 2016
Mr. S.M. Gorwadkar, Mr. Mankirat Singh, Mr. Varun Thanawala, Ms. Sonam S. Lande for the petitioner; Mrs. Mamta S. Srivastava, AGP for respondent Nos.1 to 3
Sai Innovation, a partnership firm through Partner Shankar Pandurang Jagtap
1. Joint District Registrar and Collector of Stamps, Pune City, Pune; 2. Inspector General of Registration and Chief Controller of Stamps, Pune Division Pune; 4. The State of Maharashtra, through Secretary, Revenue & Forest Department, Mantralaya, Mumbai
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging orders refusing refund of stamp duty
Remedy Sought
Petitioner sought quashing of order dated 6 December 2014 passed by Respondent No.1 and order dated 11 August 2014 passed by Respondent No.2; direction to allow refund application dated 7 April 2014 for Rs.70,12,500; interest at 2% per month from 7 April 2014 till payment
Filing Reason
Authorities refused refund of stamp duty on cancelled Development Agreement on ground that application was not covered by proviso to Section 48(1) of Maharashtra Stamp Act, 1958
Previous Decisions
Respondent No.2 by letter dated 11 August 2014 did not recommend refund; Respondent No.1 by order dated 6 December 2014 in Case No.118 of 2014 rejected the refund application
Issues
Whether the Development Agreement falls within the meaning of 'conveyance' under the proviso to Section 48(1) of the Maharashtra Stamp Act, 1958
Whether the petitioner is entitled to refund of stamp duty under Section 47 of the Maharashtra Stamp Act, 1958 when the Development Agreement was cancelled before development commenced
Whether the Development Agreement transferred legal or exclusive possession to the developer or only granted a licence for development
Whether the respondent authorities can raise new grounds in their affidavit that were not part of the impugned order
Whether the refund application was filed within the limitation period prescribed under Section 48 of the Maharashtra Stamp Act, 1958
Submissions/Arguments
Petitioner argued that the only ground in the impugned order was that the Development Agreement is not a 'conveyance' under proviso to Section 48(1), and the new ground of possession transfer raised in affidavit cannot be introduced later
Petitioner argued that Clause 11 of the Development Agreement granted only a licence for development and Clause 13 must be read with Clause 11, so no legal possession was transferred
Petitioner argued that the proposed development never commenced, no third-party rights were created, and the agreement was cancelled before any development, making it ineffective under Section 47
Petitioner relied on Ravindra C. Khirsara v. State and Darshana Anand Damle v. Deputy Commissioner of Income Tax for interpretation of possession in development agreements
Petitioner relied on Mohinder Singh Gill v. Chief Election Commr. to argue that an order cannot be supported by fresh reasons through affidavit
Respondent argued that the petitioner has not complied with the first part of the proviso to sub-section (1) of Section 48 because possession of property was not given within time, leading to cancellation
Respondent argued that the refund application was required to be filed within six months from the date of Development Agreement, i.e. by 14 October 2013, and was filed late
Judgment Excerpts
the said Application for refund was not covered by the proviso to Section 48 (i) of the Bombay Stamp Act, 1958.
What was given was not possession in the legal sense, but only permission or licence to enter upon the property for development and sale.
The intended transaction failed, the Agreement was cancelled, and the Petitioners continued to remain in factual as well as juridical possession of the property.
Procedural History
Development Agreement executed on 15 April 2013 and registered in office of Sub-Registrar, Haveli No.V, Serial No.3237 of 2013; stamp duty of Rs.70,12,500 paid. Cancellation Deed executed on 18 February 2014 and registered on 24 February 2014 at Serial No.1455/1/61 of 2014. Refund application filed on 7 April 2014. Respondent No.2 by letter dated 11 August 2014 did not recommend refund; proceedings forwarded to Respondent No.1 and registered as Case No.118 of 2014. Respondent No.1 by order dated 6 December 2014 rejected refund application. Writ petition filed in 2016 challenging orders dated 11 August 2014 and 6 December 2014. Reserved on 18 August 2026 and pronounced on 20 August 2026.
Acts & Sections
- Maharashtra Stamp Act, 1958: Section 47, Section 48(1), Article 25 of Schedule I, Article 5 of Schedule I
