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2012 DIGILAW 42 (BOM)

Sandeep Vasant Bane v. The State of Maharashtra

2012-01-09

G.S.GODBOLE

body2012
Judgment :- P.C. 1. Rule. Rule made returnable forthwith and heard by consent of the parties. Learned AGP waives service on behalf of the Respondents. 2. The controversy involved is very narrow. The premises in question were earlier occupied by one Sadashiv Sheshappa Amin, who was a tenant and had filed R.A. Declaratory Suit. On 11th December, 2009, he surrendered the tenancy rights. On 12th December, 2009, the landlords Mrs. Urmila L. Pittie and Mr. Arvind L. Pittie inducted the Petitioners as tenants in respect of the premises, bearing premises no.28, admeasuring approximately 250 square feet (carpet area) at Raja Bahadur Mansions situated at Cadastral Survey No. 190(part) of Fort Division, New Survey No. 9439 (part) at Hamam Street, Fort, Mumbai. 3. The stamp duty of Rs. 100/- was affixed to the Tenancy Agreement and an Application for adjudication was made. Thereupon the Collector of Stamps, Mumbai issued a demand notice, demanding a stamp duty of Rs. 1,35,130/- along with penalty of Rs. 8,108/- by claiming that the Instrument was chargeable with stamp duty for lease under Article 36 of the Schedule to the Bombay Stamp Act, 1958. The Petitioners contended that Article 5 (g-d) was applicable and hence, according to the Petitioners a stamp duty of Rs. 50,000/- only was payable. 4. By order dated 26th April, 2011 the Collector of Stamps, Mumbai held that Article 36 was applicable and Article 5 (g-d) was not applicable. However, the Collector of Stamps gave a discount of only 50% even though the Petitioners had claimed discount of 70% as building was more than 250 years old. Consequently, the Collector directed payment of sum of Rs. 1,12,575/-as deficit stamp duty with penalty of Rs. 4505. Aggrieved by this order, the Petitioners had filed Appeal No. GSO/32-B/02/11 before the Additional Controller of Stamps, Mumbai and that authority had passed the impugned order dated 3rd September, 2011 and the Appeal has been dismissed. 5. Learned Advocate for the Petitioners submitted that since earlier tenant had surrendered the tenancy and since immediately on the next date a new tenancy was created the transaction was in fact covered by Article 5 (g-d) since it was the transaction of transfer of tenancy. He, therefore, submitted that Article 36 had no application to the facts of this case. 6. Learned AGP supported the impugned order. 7 Article 5 (g-d) to the extent relevant reads thus: 5. He, therefore, submitted that Article 36 had no application to the facts of this case. 6. Learned AGP supported the impugned order. 7 Article 5 (g-d) to the extent relevant reads thus: 5. AGREEMENT OR ITS RECORDS OR MEMORANDUM OF AN AGREEMENT --- (g-d) if relating to transfer of tenancy of immoveable property, for every square metre of the area of the tenanted property the right of tenancy in which is the subject matter of transfer and situated within the limits of -- (i) the Municipal Corporation of Greater Bombay --- 8. If the Petitioners, Landlords and the earlier Tenant who had surrendered tenancy had entered in to one composite instrument whereby the tenancy had been transferred in favour of the Petitioners then certainly the instrument would be one covered by the Article 5(g-d). However, in this case such a composite tripartite agreement has not been executed. 9. Agreement of surrendering the tenancy and the agreement of creation of tenancy are two different and distinct documents arising out of the two different and distinct transactions. It is, therefore, not possible to accept the submission of the learned Advocate for the Petitioners that a composite transaction of transfer of tenancy had taken place. 10. In view of this, it is not possible to accept the first contention of the Advocate for the Petitioners that the Collector of Stamps and the Additional Controller were not justified in holding that Article 36 would cover the transaction in question. 11. However, the second contention of the learned Advocate for the Petitioners has a substance. He has brought to my notice that even the Agreement of Tenancy specifically mentions that the building in which the premises in question are situated is 250 years old. He has drawn my attention to the relevant extract of the Ready Reckoner which provides for different rates of depreciation for old buildings and provides that if the building is more than 60 years old only 30% of the market value is charged, meaning thereby that 70% discount over the market value for new property has to be given. Prima facie, the Petitioners are justified in contending that the Collector has committed error in giving the discount of 50% only. I, therefore, uphold the second submission of the Petitioners that they were entitled to get a discount, depending on the age of the building. 12. Prima facie, the Petitioners are justified in contending that the Collector has committed error in giving the discount of 50% only. I, therefore, uphold the second submission of the Petitioners that they were entitled to get a discount, depending on the age of the building. 12. The Petitioners are, therefore, directed to produce relevant documentary evidence before the Collector of Stamps, Mumbai to show that the building -Raja Bahadur Mansion is more than 60 years old. Once such evidence is produced, the Collector shall give 70% discount to the Petitioners, meaning thereby he shall charge the stamp duty under Article 36 only on 30% of the market value for a new property according to the Ready Reckoner. This exercise shall be completed within the period of six weeks from today. 13. The Petitioners shall produce the relevant documentary evidence within a period of 2 weeks before the Collector of Stamps, Mumbai. Based on the said evidence if the Petitioners produce the evidence that the Building is more than 60 years old, the Collector of Stamps shall pass a fresh order calculating the requisite duty. 14. All this exercise shall be completed within a period of six weeks from today. 15. Rule is made absolute in the aforesaid terms. All the parties including the Collector of Stamps to act on an authenticated copy of this order, issued by the Registry.