Committee-Gfil vs Libra Buildtech P.Ltd..

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 …….Petitioner(s)

VERSUS

Libra Buildtech Private Ltd. & Ors. ……Applicant(s)/ Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

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 Signature Not Verified Digitally signed by Deepak Mansukhani Date: 2015.09.30 22:13:09 IST Reason:

direction by this Court to State of Punjab and S.D.M. Dera

1 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

2 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., Rs.25.45 crores with

the GFIL Committee on 06.12.2006

7. By order dated 14.05.2007, this Court directed the GFIL

3 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

4 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.

5

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

6 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

7 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

8 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’

9 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

10 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 (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:-

11

“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 Committee-GFIL 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

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.

12

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 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

13 cancelled by this Court on 26.09.2012 in the light of the principle

contained in Section 65 of 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 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)

14

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 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

15 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 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

16 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.

17

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.

18

ITEM NO.1A COURT NO.6 SECTION XIV

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

I.A. Nos. 7-8 and 9-10 of 2015 in Petition(s) for Special Leave to Appeal(C) No(s). 23886-23887/2012

COMMITTEE-GFIL Petitioner(s)

VERSUS

LIBRA BUILDTECH P.LTD.& ORS. Respondent(s)

Date : 30/09/2015 These applications were called on for pronouncement of judgment today.

For Petitioner(s) Mr. Harpawn Kumar Arora, Adv.

Mr. C. L. Sahu,Adv.

For Respondent(s) Mr. Sanchar Anand, Adv. Mr. Apoorv Singhal, Adv. Mr. Devendra Singh,Adv.

M/s. Ap & J Chambers,Adv.

Mrs. Anil Katiyar,Adv.

Ms. Manali Singhal, Adv. Mr. Deepak Kumar Rawat, Adv. Mr. Abhijat P. Medh,Adv.

Hon'ble Mr. Justice Abhay Manohar Sapre pronounced the judgment of the Bench comprising of Hon'ble Mr. Justice J. Chelameswar and His Lordship.

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.

19 -2-

I.A. Nos. 9 and 10 filed by the applicants deserve to be allowed and are accordingly allowed in terms of the signed reportable judgment.

(DEEPAK MANSUKHANI) (INDU BALA KAPUR) COURT MASTER COURT MASTER

(Signed reportable judgment is placed on the file)

20