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The Committee-GFIL v. Libra Buildtech Private Ltd. & Ors.

Interlocutory Application · Neutral citation not assigned (Interlocutory Application Nos. 7-8 & 9-10 of 2015 in SLP (C) Nos. 23886-23887 of 2012)Decided 30 Sept 2015
Interlocutory Application Nos. 7-8 & 9-10 of 2015 in SLP (C) Nos. 23886-23887 of 2012
Justice J. Chelameswar · Justice Abhay Manohar Sapre

Background

Golden Forest India Limited (GFIL) went into liquidation, and the Supreme Court set up a "GFIL Committee" to sell off the company's assets to pay creditors. The applicants won an auction for several properties, paid the full price, bought stamp papers worth Rs. 6.22 crores on the High Court's direction, and had sale deeds executed, but the Committee never handed over possession. The Supreme Court eventually cancelled the whole sale transaction in 2012 and ordered the sale price refunded, but left the applicants to separately pursue the State Government for their stamp-duty money, which the State refused to refund as time-barred.

Decision Breakdown

The Court held that since the underlying sale itself was cancelled by the Court's own 2012 order, through no fault of the applicants, who had done everything required of them, the stamp duty they spent became wasted expenditure "by reason of the orders of the court." Invoking the equitable maxim "actus curiae neminem gravabit" (an act of the court shall prejudice no one) and interpreting Sections 49 and 50 of the Stamp Act to serve justice, the Court held the applicants were entitled to the refund of stamp duty even though the State's limitation-based rejection was technically defensible. The State of Punjab, through the SDM Dera Bassi, was directed to refund the full Rs. 6.22 crores within four weeks.

Lesson Learnt

When a court-approved transaction collapses through no fault of a party who complied in good faith, that party should not be left to absorb collateral costs (like stamp duty) caused by the court's own order: equity can override a technical limitation defence in such circumstances.

Official source (sci.gov.in)View Judgment (PDF)

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