ORDER R.S. Shukla The dispute in this case relates to the assessment of deficit stamp duty and the penalty imposed by the Collector of Stamps in regard to a lease executed in favour of the applicant. The point for decision is whether the lease was made for a period of 10 years or for a period of 5 years. The relevant paras, of the lease-deed read as follows: (1)...the Lessee shall pay to the Lessor a sum of Rs. 750 per month for the first five years and thereafter shall pay a sum of Rs. 900 per month for the second five years. The rent shall be payable monthly and in the first week of the following month. (2) That after expiry of first five years, the Lessee shall have a right to renew the said lease for a period of second five years at his option provided the Lessee expresses in writing his willingness to do so to the Lessor at least three months prior to the determination (sic) of the first five years of the commencement of lease. The learned Collector held that the lease was executed for a period of 10 years and found that the Stamp Duty was short by Rs. 255-8-0. He imposed a penalty to the tune of 9 times of the short duty and the total amount thus recoverable from the applicant came to Rs. 2,550. The order of the learned Collector is very brief and does not disclose the reasons for arriving at the conclusion that the lease was for a period of 10 years and not for 5 years, as alleged, nor has he recorded any reasons for imposing almost the maximum penalty under the law. In his report on the grounds of revision, however, the Collector has tried to elaborate his arguments but they are not at all convincing. He has observed that "simply reserving a right to the lessee to exercise his option to renew it after first five years does not alter the nature when the rent for full period of ten years in two parts has expressly been stipulated and entered in para, one of the instrument". With regard to the quantum of penalty the relevant observations of the report are to the effect that "the applicants are big merchants and it could not be said that they had inadvertently under stamped the instrument". With regard to the quantum of penalty the relevant observations of the report are to the effect that "the applicants are big merchants and it could not be said that they had inadvertently under stamped the instrument". He has justified the penalty by the modest statement that "in the present case, penalty ordered was only nine times the amount of the deficit portion," as against the maximum of 10 times that can be imposed under the law. A reading of the portions of the lease-deed cited above, makes it very clear that although the terms for the second five years were settled in para. 1 of the lease no actual lease for that period came into existence on the date of execution of the deed in question. The Dy. Registrar's report on record shows that an attempt was made by him to cover the alleged lease for the second five years within the meaning of the words "any agreement to let or to sub-let" occurring in Article 35, Schedule I-A of the Stamp Manual. But this view cannot be supported because an agreement is complete only when for an offer there is a corresponding acceptance. Para. 2 of the lease-deed would operate as an offer only on the part of the Lessor and till such time as the Lessee expresses in writing his willingness to renew the lease, the acceptance on the part of the lessee would riot be complete. Thus para. 2 cannot be interpreted as an agreement in law since the offer remained subject to the acceptance of the lessee. The document read as a whole, therefore, indicates that the intention of the lessor and the lessee was to continue the lease only for five years. I, therefore, hold that the view taken by the learned Collector is not correct and the lease in question was executed only for five years. With regard to the question of penalty it is true that the Collector has wide discretion extending up to 10 times of the deficit stamp duty. While imposing a heavy penalty, such as 9 times of the short duty, it was necessary that the Collector should have recorded his reasons for going to the extreme length. That the applicant is a big merchant is certainly no ground to impose a heavy penalty. There is no suggestion that the applicant tried to practice a fraud. While imposing a heavy penalty, such as 9 times of the short duty, it was necessary that the Collector should have recorded his reasons for going to the extreme length. That the applicant is a big merchant is certainly no ground to impose a heavy penalty. There is no suggestion that the applicant tried to practice a fraud. It would be too much to say that the applicant could not have made a genuine mistake and that he had deliberately not paid what he should have done under the law. The order of the Collector, as it is, is too harsh and without adequate supporting reasons. In the exercise of my powers under Section 56(1) of the Indian Stamp Act, I would, therefore, set aside the order of the Collector and direct that the lease in question should be treated as one for five years only and a penalty of five times of the short stamp should be deemed sufficient for the purpose of this case. The application is allowed accordingly. Application allowed.