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Allahabad High Court · body

2010 DIGILAW 1588 (ALL)

MOHAN LAL SAREEN v. STATE OF U. P.

2010-05-14

PANKAJ MITHAL

body2010
JUDGMENT Hon’ble Pankaj Mithal, J.—Heard Sri Sandeep Agrawal, learned counsel for the petitioner and learned Standing Counsel for the respondents. The pleadings of the parties have also been perused. 2. Under challenge in the present writ petition are the orders dated 22.9.2006 passed by the Additional Collector (Finance & Revenue) and the appellate order thereof dated 1.10.2008 passed by the Commissioner, Meerut division Meerut. 3. Petitioner entered into a lease dated 1.11.2003 for a period of less than 11 months commencing from 1.11.2003 till 31st March, 2004 at a monthly rent of Rs. 35,000/-. The aforesaid lease had a renewal clause permitting renewal for a period of another five years. The said lease deed was executed on a stamp paper of Rs. 100/- and it was not registered. The Assistant Commissioner (Stamp) while scrutinizing certain files of the excise department came across the aforesaid lease deed and referred the matter vide his report dated 3.1.2006 for determining the deficiency in stamp duty. On the aforesaid report Stamp Case No. 331/05-06 under Section 33 of the Indian Stamp Act(hereinafter referred to as the ‘Act’) was registered. 4. The Additional Collector (Finance & Revenue) vide order dated 22.9.2006 held that as the petitioner continued in possession even after 11 months in pursuance of the lease deed in view of the renewal clause the lease is for a period of five years and as such chargeable to stamp duty under Article 35-(a)(ii) of schedule 1-B of the Act which provides for levy of stamp duty same as a conveyance (No. 23 clause (a), for a consideration equal to three times the amount or value of the average annual rent reserved). Accordingly, the deficiency in stamp duty of Rs. 2,06,950/- was determined and a penalty of Rs. 20,700/- was imposed. The aforesaid deficiency alongwith 1.5% interest per annum from the date of lease deed till its actual payment was also directed to be paid. The petitioner’s appeal under Section 56 of the Stamp Act to the Commissioner, Meerut division Meerut was also dismissed upholding the order of the Additional Collector (Finance & Revenue). 5. Two arguments have been advanced by Sri Sandeep Agrawal, learned counsel for the petitioner in support of the petition. First, the registration of a lease deed for a period of less than 11 months is not mandatory and therefore, the instrument is not chargeable to stamp duty. 5. Two arguments have been advanced by Sri Sandeep Agrawal, learned counsel for the petitioner in support of the petition. First, the registration of a lease deed for a period of less than 11 months is not mandatory and therefore, the instrument is not chargeable to stamp duty. The argument has been noted just to be rejected for the simple reason that chargeability of an instrument to stamp duty is altogether distinct and different from registration which is required under the Registration Act. No doubt the lease deed for a period upto 11 months is not compulsorily required to be registered under Section 17 of the Registration Act but nonetheless a lease as defined under Section 2(16) of the Act is chargeable to stamp duty in view of Section 2(6) and 3 of the Act which provides that where any such lease deed in respect of a immovable property is executed it would be amenable to stamp duty as provided in Schedule 1-B of the Act. There is no dispute that the lease deeds are otherwise chargeable to stamp duty on execution and therefore petitioner cannot escape the liability of payment of stamp duty on the aforesaid lease deed on the ground that it is not registered. 6. Next submission of Sri Agrawal, learned counsel for the petitioner, is that the original lease was only for a period of 11 months and merely because it provided for a renewal clause, the authorities below erred in treating it to be a lease for a period of five years and in demanding stamp duty according to Article 35 (a)(ii) of Schedule 1-B of the Act. The aforesaid argument also has no substance in view of the findings which have been returned by the authorities below that the petitioner pursuant to the original lease, had remained in possession as tenant in the extended period of the lease even though there may not be any formal agreement renewing the lease. It is settled legal position that a lessee occupying possession of a property pursuant to a lease if continues in possession even after the expiry of the term of the lease, he would continue to exercise the rights in the same manner by holding over. It is settled legal position that a lessee occupying possession of a property pursuant to a lease if continues in possession even after the expiry of the term of the lease, he would continue to exercise the rights in the same manner by holding over. The petitioner having remained in possession as lessee over the property for a period of five years, the authorities below committed no error of law in treating the lease to be for a period of five years and directing the stamp duty on the said lease to be paid in accordance with the provisions of Article 35(a) (ii) of Schedule 1-B of the Act. 7. In view of the facts and circumstances of the case, I find no error or illegality resulting in miscarriage of justice to the petition. The writ petition as such is devoid of merit and dismissed. ————