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2012 DIGILAW 2611 (ALL)

SURENDRA SINGH v. STATE OF U. P.

2012-11-06

RAN VIJAI SINGH

body2012
JUDGMENT Hon’ble Ran Vijai Singh, J.—Through this writ petition, the petitioner has prayed for issuing a writ of certiorari, quashing the order dated 30.9.2004 passed by the Assistant Commissioner (Stamp), Budaun in case No. 70/2004-05 (State v. Surendra Singh) and order dated 19.8.2005 passed by Additional Commissioner (Judicial), Bareilly Division, Bareilly in appeal No. 14/2004 (Surendra Singh v. State). 2. vide order dated 30.9.2004, the Assistant Commissioner (Stamps) has directed to pay Rs. 5,000/- towards stamp duty with Rs. 2,500/- penalty with one and half percent simple interest till the date of the deposit, whereas by the subsequent order dated 19.8.2005, the appeal filed by the petitioner has been dismissed. 3. Heard Sri Ramendra Asthana, learned counsel for the petitioner and Sri Sanjay Goswami, learned Additional Chief Standing Counsel for the State - respondents. 4. Sri Asthana has vehemently contended that the paper brought on record as annexure 1 to the counter-affidavit will not fall under the definition of ‘instrument’, therefore, no stamp duty could be charged. He has further argued that even if it is assumed that it is an instrument, that will fall under the definition of ‘licence’ not lease, as has been held by the respondent. The third argument of Sri Asthana is that utmost the stamp duty could be charged under Article 5(C) of Schedule l-B, treating it to be an agreement. In support of his submissions, he has placed reliance upon number of decisions, but heavy reliance has been placed on paragraphs 8 and 9 of C.M. Beena and another v. P.N. Ramachandra Rao, (2004) 3 SCC 595 and judgment of this Court in M.G. Contractors and another v. Commissioner, Jhansi Division, Jhansi, 2003 (52) ALR 215. Particular attention has been drawn towards paragraph 5 of the judgment. 5. Refuting the submissions of learned counsel for the petitioner, Sri Goswami has invited attention of this Court towards sub-sections (14) and (16) of Section 2 of the Indian Stamp Act, 1899 (hereinafter referred to as, ‘the Act’) the definition of ‘instrument’ and ‘lease’ under the Act. Particular attention has been drawn towards paragraph 5 of the judgment. 5. Refuting the submissions of learned counsel for the petitioner, Sri Goswami has invited attention of this Court towards sub-sections (14) and (16) of Section 2 of the Indian Stamp Act, 1899 (hereinafter referred to as, ‘the Act’) the definition of ‘instrument’ and ‘lease’ under the Act. In his submissions, the annexure 1 to the counter-affidavit will fall under the definition of the instrument and in view of sub-section (16) of Section 2 of the Act, the instrument in question will fall under the definition of the lease and the chargeability shall be made under Article 35 (b) of Schedule I-B. In support of his submissions, he has placed reliance upon the Full Bench judgment of this Court in Jagdish Lala and another v. Collector, Budaun and others, AIR 1979 All 307 . 6. The facts, giving rise to this case, are that it appears, for collection of Tehbazari, an application was filed by the petitioner before Nagar Palika Parishad, Budaun, requesting therein to permit the petitioner to collect Tehbazari with effect from 1.12.2003 to 31.12.2003 on payment of Rs. 1550/- per day. vide order dated 1.12.2003, the petitioner was permitted to collect Tehbazari, subject to deposit of Rs. 1600/- per day, which was to be deposited within one month. 7. It appears, the Assistant Inspector General, Registration, Budaun during the inspection of the Office of Nagar Palika Parishad on 26.2.2004, found the paper permitting the petitioner to collect the Tehbazari and has impounded the instrument under Section 33 of the Act on 28.2.2004, indicating the deficiency of Rs. 5,000/- of stamp duty. Pursuant thereto, a show-cause notice was issued to the petitioner, but no reply was given by the petitioner. Consequently, the case was decided ex parte on 7.6.2004. The petitioner, herein, has filed an application to recall the order on 26.7.2004, which was allowed and opportunity was given to the petitioner to file his reply. Pursuant thereto, the petitioner, herein, has filed his reply on 18.9.2004, copy of which has been brought on record as annexure 1 to the writ petition. In the reply, it is stated that there was no agreement in between the parties, therefore, no stamp duty could be charged under Article 35 (b) of Schedule IB of the Act. Pursuant thereto, the petitioner, herein, has filed his reply on 18.9.2004, copy of which has been brought on record as annexure 1 to the writ petition. In the reply, it is stated that there was no agreement in between the parties, therefore, no stamp duty could be charged under Article 35 (b) of Schedule IB of the Act. In paragraph 9 of the reply, it is stated that daily collection of Tehbazari is exempted from payment of stamp duty. The Assistant Commissioner (Stamps), after considering the petitioner’s reply has found that the instrument, on which basis the petitioner has started collection, will fall in the definition of lease, as defined under sub-section (16) of Section 2 of the Act and stamps duty be chargeable according to Article 35 (b) of Schedule IB of the Act. Taking note of that, the Assistant Commissioner (Stamps) assessed the deficiency of stamp duty of Rs. 5,000/- and also imposed penalty of Rs. 2500/-. He has further directed to charge one and half percent simple interest till the date of deposit of the amount ordered by him, i.e., Rs. 7,550/- (5,000+2500). 8. Aggrieved by that order, the petitioner herein has filed appeal under Section 56A of the Act before the Commissioner/CCRA, Bareilly Division, Bareilly. The Commissioner also took the same view and dismissed the appeal of the petitioner. 9. For appreciating this controversy, it would be useful to go through the definitions of Instrument and Lease as defined under the Act, which are reproduced, herein, under: “Sub-section (14) of Section 2 ‘Instrument’: ‘Instrument’ includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. Sub-section (16) of Section 2: ‘Lease”: ‘Lease’ means a lease of immovable property and includes also - (a) a patta; (b) a kabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy or pay or deliver rent for immovable property; (c) any instrument by which tolls of any description are let; (d) any writing on an application for lease intended to signify that the application is granted; (e) any instrument by which mining lease is granted in respect of minor minerals as defined in Clause (e) of Section 3 of the Mines and Minerals (Regulation and Development) Act, 1957.” 10. It would further be useful to go through with few sections of the Act, which are also reproduced hereinunder: “Section 3. Instruments chargeable with duty: Subject to provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor, respectively, that is to say - ... ... ... (aa) every instrument mentioned in Schedule I-A or I-B, which, not having been previously executed by any person, was executed in Uttar Pradesh: (i) in the case of instruments mentioned in Schedule I-A, on or after the date on which the U.P. Stamp (Amendment) Act, 1948 came into force, and (ii) in the case of instruments mentioned in Schedule I-B, on or after the date on which the U.P. Stamp (Amendment) Act, 1952 comes into force. Section 6. Instruments coming within several descriptions of Schedule I, I-A or I-B.—Subject to the provisions of the last preceding section, an instrument so framed as to come within two or more descriptions in Schedule I, Schedule I-A or Schedule I-B shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties.” 11. From the bare perusal of sub-section (14) of Section 2, it would transpire that the ‘Instrument’ includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. 12. From the bare perusal of sub-section (14) of Section 2, it would transpire that the ‘Instrument’ includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. 12. Here, from the perusal of annexure 1 to the counter-affidavit, it is apparent that a right has been created for collecting Tehbazari on certain rate, therefore, the submission of learned counsel for the petitioner, that the document annexure 1 to the counter-affidavit will not fall in the ambit of instrument, appears to be misconceived, as the language used in the definition clause is very wide and the document in question will fall under the definition of the instrument, as it is on the certain terms the petitioner has offered to collect Tehbazari and the same has been accepted with certain enhancement, therefore, the right of collection of Tehbazari has been conferred upon the petitioner, which, according to the petitioner, has been acted upon, therefore, it cannot be said that the document in question will not fall under the definition of an instrument. 13. Learned counsel for the petitioner has contended that even if it is instrument, this will not fall under the definition of the lease and it will fall under the definition of licence. 14. As has been noticed, the lease has been defined under sub-section (16) of Section 2 of the Act, but licence has not been defined under the Act. It has been defined under Section 52 of the Indian Easements Act, 1882, which reads as under: “52. “License” defined: Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.” 15. The Apex Court in C.M. Beena and another v. P.N. Ramachandra Rao, 2004 (3) SCC 595 , has explained the meaning of ‘lease’ and ‘licence’ and their difference. For appreciation, the extract from the relevant paras of the aforesaid decision is reproduced hereinunder: “8. The Apex Court in C.M. Beena and another v. P.N. Ramachandra Rao, 2004 (3) SCC 595 , has explained the meaning of ‘lease’ and ‘licence’ and their difference. For appreciation, the extract from the relevant paras of the aforesaid decision is reproduced hereinunder: “8. ........Generally speaking the difference between a ‘lease’ and ‘licence’ is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances. Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premisee for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful. 9. A few principles are well-settled. User of the terms like ‘lease or ‘licence’, ‘lessor’, ‘rent’ or ‘licence fee’ are not by themselves decisive of the nature of the right created by the document. An effort should be made to find out whether the deed confers a right to possess exclusively coupled with transfer of a right to enjoy the property or what has been parted with is merely a right to use the property while the possession is retained by the owner. The conduct of the parties before and after the creation of relationship is of relevance for finding out their intention.” In Hill & Redman: Law of Landlord and Tenant (17th Edn. Vol. 1), it has been further clarified as under: “.........If the effect of the instrument is to give the holder the exclusive right of occupation of the land, though subject to certain reservations, or to a restriction of the purposes for which it may be used, it is prima facie a lease; if the contract is merely for the use of the property in a certain way and on certain terms, while it remains in the possession and under the control of the owner, it is a licence.” 16. So far as the Stamp Act is concerned, the chargeability has been prescribed for different description of an instrument in the schedule and from the perusal of Article 38 and Article 38-A of Schedule I-B of the Act, it transpires that here the chargeability is prescribed only with respect to the holder of licence in between debtor and his creditor and the licence granted under the Arms Act, but that is not the case here. There are no chargeability with regard to the other licences. The next submission of Sri Asthana is that the instrument will fall under the definition of the agreement and the stamp duty can be charged under Article 5(C) of Schedule I-B of the Act. 17. With respect to Article 5, it has been submitted by Sri Goswami that if the chargeability has been provided under the schedule with respect to several kind of instruments, then that has to be charged in that particular head and when there is no chargeability given under the Act, for that, the stamp duty is to be paid Rs. 100/- in view of Article 5 (c) of the Act. The attention has also been drawn towards Section 6 of the Act, which provides that when an instrument comes under several descriptions of Schedule I, Schedule I-A or Schedule I-B of the Act and the duty chargeable, thereunder, are different, it will be chargeable only with the highest of such duties. 18. Reverting back to the definition of ‘lease’, it is to be ascertained as to whether the instrument in question will fall under the definition of ‘lease’ or not. Clauses (c) and (d) of sub-section (16) of Section 2 of the Act provides that any instrument by which tolls of any description are let and any writing on an application for lease intended to signify that the application is granted, will fall under the definition of ‘lease’. 19. However, so far as the chargeability on an instrument under the Act is concerned, it is settled that real and true meaning of the ‘instrument’ is to be ascertained in order to determine as to whether any stamp duty is chargeable on an instrument; that the description of it given in the instrument by the parties is immaterial, even though they might have believed that its effect and operation was to create a security mentioned in the Act (Limmer Asphalt Co. v. Inland Revenue, Madras Refineries v. Board of Revenue, AIR 1977 SC 500 ). In CCRA v. M.F. Corporation, AIR 1979 Mad 282 , it has been held that the intention of the parties is to be gathered from a fair and reasonable reading of the entire instrument, which ought to be the basis to find out if an instrument is chargeable as a mortgage or not and the title or the use of expressions does not generally serve as a guide for interpretation of the deed. It is the real meaning of the transaction which is to be gathered. In Chandrakant v. Kartik Charan, 1903 (5) Bom LR 103, it has been held that the Court is not to be guided by the apparent tenor of the document. It is the real nature of the transaction, which will determine the duty. But the recitals of the instrument should not be lost sight of merely because the parties gave a particular description of its nature. In Kothuri Venkata Subbarao and others v. District Registrar of Assurances, Guntur, AIR 1986 AP 42 , the Court has held that neither the nomenclature nor the language is decisive in determining the amount of stamp duty on an instrument. What is decisive is the actual nature of the transaction. In Upendra Nath v. Anand Chandra, ILR 1951 Cal 665, the Court held that the express meaning given to a term in the Stamp Act cannot be controlled by the meaning given to it in some other Act. 20. Here in this case, since I have held that the instrument in question is covered under the definition of lease, therefore, in view of the Special Bench decision of this Court in Jagdish Lal’s case (supra), the stamp duty is to be paid under Article 35 (b) of Schedule I-B of the Act. 21. Sri Asthana has further contended that there was no auction, therefore, in view of Full Bench decision of this Court in the case of Jagdish Lala (supra), this will not be treated as agreement to let and will not fall under the definition of ‘lease’. 21. Sri Asthana has further contended that there was no auction, therefore, in view of Full Bench decision of this Court in the case of Jagdish Lala (supra), this will not be treated as agreement to let and will not fall under the definition of ‘lease’. In support of his submissions, he has placed reliance upon the judgment of this Court in the case of M.G. Contractors (supra), where following observation has been made by the Hon’ble Single Judge: “....In taking this view, what weighed with the Special Bench was the consideration that the offer made immediately after the conclusion of the auction by the contractors was signed by the Constrictor as well as the competent authority authorised in this regard and thus it amounted to acceptance and in this view of the matter, the agreement became complete and as such was chargeable to stamp duty as an agreement to let, under Article 35(b) of Schedule I-B of the Stamp Act. The Special Bench read that “even if a document purports to create or transfer a right, the same would attract the provisions of the Stamp Act.” 22. Taking note of the aforesaid observation, Sri Asthana has again submitted that in the case of Jagdish Lala (supra), after offering of the bid through auction, the same was accepted, therefore, this has weighed in the mind of the Full Bench and the law has been laid down that since through auction the bid was offered and accepted, therefore, the agreement became complete and as such, was chargeable to stamp duty as an agreement to let under Article 35 (b) of Schedule I-B of the Act. 23. I have considered the submissions of learned counsel for the parties and considering the facts and circumstances of this case, I am of the view that for the purposes of chargeability of the stamp duty, it is immaterial as to whether the agreement to let has arrived at by way of auction or by way of simple offer and acceptance. It is also immaterial that the offer was made for less amount and it was accepted for the higher amount, particularly in the circumstances, when the offer and acceptance has been acted upon without any resistance. The offer was made by the petitioner to collect Tehbazari at the rate of Rs. It is also immaterial that the offer was made for less amount and it was accepted for the higher amount, particularly in the circumstances, when the offer and acceptance has been acted upon without any resistance. The offer was made by the petitioner to collect Tehbazari at the rate of Rs. 1550/- per day, which was accepted by the Nagar Palika Parishad at the rate of Rs. 1600/- per day and the same was acted upon without any resistance. Here the offer and its acceptance for collecting Tehbazari would determine the nature of the transaction for the purposes of payment of stamp duty. The acceptance of the offer of an individual may render the agreement to let arbitrary under general law, but that will not affect the chargeability under the Stamp Act. Reference may be given to the case of Upendra Nath (supra), wherein it has been held that express meaning given to a term in the Stamp Act cannot be controlled by the meaning given to it in some other Act, therefore, the instrument in question would fall under the definition of lease as defined under sub-section (16) of Section 2 of the Act. 24. Learned counsel for the petitioner has further contended that this is a licence and not lease, therefore, the chargeability cannot be made under Article 35 (b) of Schedule I-B of the Act. 25. 24. Learned counsel for the petitioner has further contended that this is a licence and not lease, therefore, the chargeability cannot be made under Article 35 (b) of Schedule I-B of the Act. 25. As I have noticed in the Schedule attached to the Act, only two kinds of licences are chargeable, i.e., licence between the debtor and creditor and Arms licence and there is no chargeability for other licences, therefore, I am of the opinion that as the instrument in question falls under the definition of ‘lease’, therefore, in view of Section 6 of the Act, even if argument of Sri Asthana is accepted that this will fall under the definition of ‘agreement’ or licence, it would be chargeable under Article 35 (b) of Schedule I-B of the Act, as the chargeability will not be covered in this case as contained in Article 5(a) and 5(b) and it would only fall under Article 5 (C) of Schedule I-B of the Act, which is less than the chargeability given under Article 35(b) of Schedule I-B of the Act, therefore, the stamp authorities have rightly held that the instrument in question was deficient of stamp duty and the duty was chargeable under Article 35 (b) of Schedule I-B of the Act. 26. In view of the foregoing discussions, no infirmity can be attached with the impugned orders dated 30.9.2004 passed by the Assistant Commissioner (Stamp), Budaun in case No. 70/2004-05 (State v. Surendra Singh) and 19.8.2005 passed by Additional Commissioner (Judicial), Bareilly Division, Bareilly in appeal No. 14/2004 (Surendra Singh v. State). 27. However, the penalty imposed by the stamp authorities is hereby waived. In case the petitioner deposits the required amount within a period of six weeks from the date of receipt of certified copy of the order of this Court, before the Assistant Commissioner (Stamps), the petitioner need not to pay interest as directed by the stamp authorities. 28. With the aforesaid observation/direction, the writ petition is disposed of.