The Bombay High Court has ruled that mere transfer of the stamp duty amount to a bank account without generation of the requisite challan does not constitute payment of stamp duty or registration charges by the allottee. The Court held that allottee’s six-month silence after termination notice, and subsequent withdrawal of the amount meant for stamp duty showed absence of genuine intent, and accordingly, the promoter is justified in terminating the allotment where the allottee fails to actually pay stamp duty despite Section 13 RERA framework, repeated notices and clear expressions of financial inability to arrange funds.
The High Court emphasised that Maha RERA and the Appellate Tribunal erred in mechanically invoking Section 13 of RERA to direct execution of the Agreement for Sale without examining whether the allottee had fulfilled his part of the obligation. The Court also said that a fresh allotment letter issued to a subsequent allottee creates an independent contractual relationship, and payments made by an earlier allottee who has taken a refund cannot be claimed by the new allottee against the promoter.
A Single Judge Bench of Justice Sandeep V. Marne observed that the allottee’s claim of having paid stamp duty and registration charges was not borne out by the record. Although the allottee forwarded payment receipts by email dated 9 July 2019, the bank account extracts placed on record showed that the amount of Rs. 4.65 lakhs were merely transferred to a Punjab National Bank account but was never credited to the Stamp Authority or Registration Authority. The allottee’s own letter dated 18 January 2020 to the bank contained a clear admission that the challan was never generated and that the e-payment receipt was not issued, upon which the bank reversed the amount back to the allottee’s account.
The Court noted that the promoter had issued as many as five notices dated 3 May 2019, 28 May 2019, 24 June 2019, 2 July 2019 and 9 July 2019 calling upon the allottee to pay stamp duty and execute the Agreement for Sale, while the allottee’s only substantive response was the email dated 30 June 2019 expressing inability to arrange funds for stamp duty. After receipt of the termination notice dated 30 July 2019, the allottee maintained stoic silence for about six months and only thereafter approached the bank for refund of the amount meant for stamp duty, which he appropriated for his own use without making any further attempt to pay stamp duty. The Court remarked that this conduct indicated absence of genuine interest in getting the agreement registered, and that the allottee may have been hoarding the flat with the intention of trading the allotment letter.
The Court further observed that the allottee’s claim of having paid Rs. 28.75 lakhs to the promoter stood demolished by his own email dated 30 June 2019, in which he stated that he had to pay approximately Rs. 33 lakhs out of the agreed consideration of Rs. 48.75 lakhs. The allotment letter dated 11 July 2013 did not reflect any adjustment of the consideration paid by the Kharatmols, and the Kharatmols had in fact sought and obtained refund of their booking amount from the promoter.
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Briefly, the dispute arises out of a failed flat booking transaction between JP Builders and Developers (the promoter) and Santosh Amarsingh Sandhu (the allottee) in respect of a residential project at Plot No. 1, Sector 19, Airoli, Navi Mumbai. CIDCO had originally leased the land to Airoli Cooperative Housing Society Ltd., which entered into a Development Agreement dated 27 April 2004 with the promoter for construction of Wings C and D. After the building received its Occupation Certificate in 2007, additional FSI was allotted to the society for consumption on Plot No. 1 in lieu of maintaining a garden on Plot No. 11B (which was affected by a High Tension Electricity Transmission Line). The society filed a petition in 2009 seeking higher FSI, during whose pendency the promoter commenced bookings in 2009-10 for a proposed 30-storey building.
The original allottees, Mr. and Mrs. Kharatmol, booked Flat No. A-502 for a total consideration of Rs. 48.75 lakhs and paid Rs. 12.30 lakhs, upon which a Letter of Allotment was issued on 28 May 2011. Since construction of Building A could not commence due to the pendency of the writ petition, the Kharatmols lost interest and a private arrangement was made with the allottee (Santosh Sandhu) for transfer of the booking. The promoter issued a fresh allotment letter dated 11 July 2013 in favour of the allottee, who paid Rs. 12.30 lakhs to the promoter. The writ was finally decided on 13 January 2016, and after a Supplementary Agreement with CIDCO dated 7 April 2017, a revised Commencement Certificate dated 26 April 2019 was issued for a scaled-down building of ground plus 19 floors with 93 residential units. Since the originally planned Flat A-502 could not be constructed, the allottee chose Flat No. 1208 on the 12th floor and was called upon to pay stamp duty and registration charges.
The allottee expressed inability to pay stamp duty due to financial crunch and requested the promoter to either wait for three months or bear the stamp duty against disbursal of his home loan. The promoter refused and ultimately terminated the transaction by notice dated 30 July 2019, refunding Rs. 11.07 lakhs after deducting Rs. 1.23 lakhs towards earnest money. The allottee filed a complaint before Maha RERA in November 2019. By interim order dated 6 March 2020, Maha RERA directed the promoter to execute a registered Agreement for Sale, and by final order dated 8 October 2020, made the interim order absolute. Both parties appealed to the Appellate Tribunal, which dismissed the promoter’s appeal and partly allowed the allottee’s appeal, directing the promoter to pay interest on Rs. 12.30 lakhs at SBI MCLR + 2% w.e.f. 12 July 2016 till possession, with adjustment against balance consideration.
