ORDER

1. The only narrow question in this appeal is whether in respect of an agreement of lease dated 13.6.1994 executed by the respondents in favour of the appellants, stamp duty under Article 36 of the Bombay Stamp Act, 1958 is payable. Article 36 deals with "lease including an under-lease or sub-lease and any agreement to let or sub-let or any renewal of lease". Explanation III of Article 36 which was in force at the material time, makes it clear that "an agreement of lease shall not be chargeable as a lease unless there is an immediate and present demise".

2. In the present case, the document is on the face of it an agreement to create a lease in future. It is, however, submitted by the respondents that in substance the document itself creates a lease. The document demises immediately and presents an interest in the land in favour of the appellants. If we examine the agreement under clause 1 of the agreement of lease, there is a clear provision that during the period of three years from the date of possession, the licensees (as the appellants are described), shall have a licence and authority only to enter upon the land for the purpose of erecting a building or buildings for the