In a significant legal case, the Supreme Court of India addressed the issue of stamp duty refund involving The New Red Bank Tea Company Private Ltd. The case revolved around the refund of stamp duty paid on a deed of conveyance that was later cancelled. This judgement sheds light on the complexities of stamp duty regulations and their implications in property transactions.
Facts
- The appellant proceeded to pay the full consideration of the suit property in question.
- Deed of conveyance was executed on which the required stamp duty of Rs. 1,85,000/- was paid.
- Decree for specific performance in Suit No. 240 of 1990 was challenged in Civil Appeal No. 3569 of 1991 by The New Red Bank Tea Company Private Ltd.
- Application was filed by the respondent for impounding the agreement to sell dated 15 January, 1990 under Section 35 of the Indian Stamp Act, 1899.
- Appellant paid full stamp duty of Rs. 1,85,000/- on the deed of conveyance dated 3 August, 1991.
- Appellant was entitled to claim a refund of the stamp duty paid on the deed of conveyance due to the specific performance decree being set aside.
- Defendant failed to fulfill obligations under the agreement to sell by not executing and registering the deed of conveyance within the specified time.
- Balance consideration amount was paid by the appellant, and the conveyance deed was executed in favor of the appellant.
- Appellant filed the suit for specific performance before the High Court against the respondent-defendant.
- Division Bench of the High Court directed the suit Court to impound the document dated 15 January, 1990 and assess stamp duty, penalty, and other charges.
- During the pendency of the appeal, both parties entered into a compromise which led to a consent decree by the Division Bench of the High Court on 2 August, 1991.
- The original agreement was considered as a fresh agreement due to the verbal compromise.
- The decree of specific performance granted in Suit No. 240 of 1990 dated 2 August, 1991 overlooked the earlier Suit No. 8 of 1984 pending in the High Court of Calcutta.
- Both suits should have been tried together, and therefore the decree of specific performance in Suit No. 240 of 1990 was set aside.
- The High Court was directed to dispose of both suits promptly.
- As a result, the deed of conveyance executed based on the decree of specific performance was also cancelled.
- The Single Judge of the High Court on 14 February, 2017, noted that the appellant had paid stamp duty of Rs. 1,85,000 on the cancelled deed of conveyance and could claim a refund for it.
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Arguments
- Appellant paid stamp duty of Rs. 1,85,000 on the deed of conveyance which was later cancelled.
- Appellant is entitled to seek a refund of the stamp duty paid.
- The High Court impounded the unstamped agreement to sell dated 15 January, 1990, during the pendency of the suit.
- The matter was directed by the Court to consolidate both suits for hearing on merits.
- Appellant’s claim has been pending in court for almost 29 years.
- The Division Bench of the High Court supported the impounding of the unstamped document.
- The recovery of stamp duty is separate from the issue of the unstamped agreement to sell.
- The High Court did not commit any error in impounding the document according to the respondent’s counsel.
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Analysis
- The case involves the right of specific performance of an agreement to sell dated 15 January, 1990.
- The Court will base its decision on the evidence to be presented by both parties in the suit.
- The determination of the right of specific performance will be a key aspect of the Court’s analysis in this case.
- Title and possession could not have been decided without impleading M/s. The New Red Bank Tea Company Private Ltd. as a defendant to the suit.
- The respondent company played a crucial role in the case as a defendant.
- It was necessary for all relevant parties to be involved in the legal proceedings to ensure a fair decision regarding title and possession.
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Decision
- The consent decree dated 2 August, 1991 was set aside, leading to the cancellation of the deed of conveyance dated 3 August, 1991.
- M/s. the New Red Bank Tea Company Private Ltd. was impleaded as a defendant in suit no. 240 of 1990, which was clubbed with another suit under the directions of the Court.
- The parties had obtained a consent decree for specific performance dated 2 August, 1991, after which the deed of conveyance was executed on 3 August, 1991.
- The stamp duty of Rs. 1,85,000/- was paid by the appellant, and no objection was raised by the respondent regarding the agreement to sell or the decree dated 2 August, 1991.
- The third party, M/s. the New Red Bank Tea Company Private Ltd., challenged the decree dated 2 August, 1991, leading to its setting aside by the Court.
- The appellant is entitled to a refund of Rs. 1,85,000/- for the stamp duty paid, as affirmed by the Court.
- The respondent cannot question the refund as they had consented to the decree passed by the Court on 2 August, 1991.
- The Division Bench set aside the order of the Single Judge, which was one possible view in the circumstances of the case.
- The appeals were allowed, the judgment of the Division Bench dated 13 April, 2017 was quashed and set aside.
- The Court allowed the civil appeal and set aside the consent decree dated 2 August, 1991, highlighting that the specific performance suit should have been tried together with another suit for a fair determination.
- No costs were awarded in this matter.
Case Title: M/S TERAI TEA COMPANY LIMITED Vs. KUMKUM MITTAL
Case Number: C.A. No.-008198-008199 / 2019
