Judgment :-

Ganguly, J.

1. Leave granted.

2. The subject matter of challenge in this proceeding is the judgment and order dated 21.02.2006 whereby the learned Judges of the Division Bench held that the controversy in this case is covered by the Division Bench judgment of Kerala High Court in O.P. No.18225 of 1997, P.A. Kuruvila and others Vs. State of Kerala decided on 15.12.1999 and also by another decision of the High Court in Abdulrahiman Vs. Tirur Municipality 2001 (2) KLT 716. In the judgment of the learned Single Judge of the High Court dated 8.7.2004, from which appeal was taken to Division Bench, the learned Single Judge also dismissed the writ petition by referring to certain judgments. In paragraph 5 of the judgment of the learned Single Judge it was held that looking at the nature of the arrangement between the parties it has to be held that it is a lease despite a different nomenclature being given to it.

3. However, before this Court the matter has been argued at length. After hearing learned counsel for the parties the controversy between the parties appears to be that the appellant is an Association of New Bus Stand Shop Owners and they are occupying various shops and offices in the Municipality Bus Stand Building which is owned by the Corporation of Kozhikode in the State of Kerala (hereinafter referred to as "the Corporation").

4. The case of the appellant-Association is that for the use of the shops which were constructed by the first respondent, licences were issued to the appellant-Association in terms of Section 215 of the Kerala Municipalities Act, 1994 (hereinafter called "the said Act"). Pursuant to such licences issued by the said Corporation, licence agreements have been entered into with individual shop owners.

5. By referring to the provision of Section 215 of the said Act and also the terms of the licence agreements, the learned counsel for the appellant submitted that they were all the time paying licence fee in accordance with the relevant statutory provisions at the time of renewal of the licences. Suddenly, the State of Kerala insisted that the said licences should be treated as lease and at the time of renewal of the same, stamp duty which is payable on lease has to be given.

6. In the counter affidavit which has been filed in this proceeding on behalf of the Municipal Authority, the following stand has been taken in paragraphs 4 and 5 of the said counter affidavit. The same are set out below:-

"4. I beg to submit that the Government of Kerala vide letter No. 12980/E2/91/T.C. dated 04.07.1991 stipulates that while issuing shop rooms in shopping complexes owned by Local Self Government Institutions, an agreement is to be executed in stamp appear worth 2.5% of the total value of annual license fee which was subsequently enhanced to 5% through an amendment to the Kerala Stamp Act through the Kerala Finance Bill, 1996 which came into force w.e.f. 20.07.1996. I further beg to submit that almost all licensees, including those in the I.G. Road Bus Stand Shopping Complex complied with the direction and submitted revised rent accordingly.

5. It is submitted that this respondent which comes under the Local Self Government Department of the State Government is bound to comply with the direction of the State Government. I further beg to submit that an enhancement to the tune of 20% on licence fee is being effected while renewing agreement, which is accepted by the licensees as well."

7. The State of Kerala also filed an affidavit wherein the stand is that in the New Bus Stand Building at Indira Gandhi Road, Kozhikode the said Corporation for commercial purposes let out rooms which were offered and allotted to the bidders in a public auction. An amendment was introduced in the Kerala Stamp Act which came into effect from 29.07.1996. In the light of the said amendment, the Secretary of the said Corporation directed the occupants of the rooms to execute agreements on stamp papers worth 5% of the annual licenc