1. Contract for collection of tolls and parking fees — Dispute over stamp duty classification as a lease under the Indian Stamp Act, 1899. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 )
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2017 Supreme(SC) 1160
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, NAVIN SINHA, JJ.
Nasiruddin & Anr. Etc. – Appellant(s)
VERSUS
The State of Uttar Pradesh through Secretary – Respondent(s)
CIVIL APPEAL No.3695 OF 2009 WITH CIVIL APPEAL No.3714 OF 2009 CIVIL APPEAL No.3709 OF 2009 CIVIL APPEAL No.3705 OF 2009 CIVIL APPEAL No.3699 OF 2009 CIVIL APPEAL No.3711 OF 2009 CIVIL APPEAL No.3702 OF 2009
Decided On : 06-12-2017
IMPORTANT POINT
The contract to collect tolls, “Tehbazari”, and parking fees is an instrument of lease executed between parties. Stamp duty is payable as per rates prescribed in Article 35 of Schedule I.
Headnote:Indian Stamp Act, 1899 – Sections 2(12), 2(14), 2(16) and Article 35 of Schedule I – Instant contract meant to collect tolls (fees) called “Tehbazari” – By such contract Corporation had let their right to the appellants to collect the fees from a class of persons and for carrying on particular activity in the city – Such contract is “Lease” for the purpose of payment of stamp duty – Thus the contract is an instrument of lease executed between parties to collect tolls, “Tehbazari”, and parking fees – Stamp duty is payable as per rates prescribed in Article 35 of Schedule I. (Para 16, 18, 21, 22, 27)
(1995) 2 UPLBEC 1789; AIR 1987 Allahabad 348 – Cited with approval
(2009) 10 SCC 455 – Distinguished
Facts of the case:
In March 2004, the Corporation issued an advertisement inviting bids from public at large for letting out the right of collection of (1) realization of Tehbazari Fee from squatters, vendors, kiosks and (2) for collecting parking fees.
The appellants participated in the public auction held by the Corporation. Their bids were finally accepted.
The execution of contract led to the disputes among the appellants, Corporation and the Collector of Stamps, namely, what is the true nature of the contract and how much stamp duty is payable by the appellants on the contract under the Indian Stamp Act, 1899.
The Collector of Stamps requested the appellants to pay stamp duty @ Rs.70/- per thousand on the contract amount treating the contract as Lease.
The appellants filed writ petitions which were dismissed.
Finding of the Court:
The contract is an instrument of lease executed between parties to collect tolls, “Tehbazari”, and parking fees. Stamp duty is payable as per rates prescribed in Article 35 of Schedule I.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether the contract for collecting tolls and parking fees constitutes a lease attracting higher stamp duty or a license attracting lower stamp duty. (Para 8 , 9 , 10 , 23 )
3. The definition of lease under the Stamp Act is extensive and specifically includes instruments by which tolls of any description are let. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 24 , 25 , 26 )
4. An instrument for the right to collect tolls, levies, or fees is a lease under Section 2(16)(c) of the Indian Stamp Act, 1899. (Para 18 , 21 , 27 )
5. Appeals dismissed; contract held to be a lease chargeable to stamp duty under Article 35 of Schedule I of the Stamp Act. (Para 27 , 28 )
6. Does the definition of Lease under the Indian Stamp Act, 1899, differ from the Transfer of Property Act?
Yes. The Stamp Act's definition is more extensive, specifically including categories such as instruments by which tolls of any description are let, which are not included in Section 105 of the Transfer of Property Act. (Para 17 , 18 )
7. Does a contract to collect fees from vendors and parking charges constitute a lease for stamp duty purposes?
Yes. Such contracts are regarded as instruments by which tolls of any description are let, falling under the extensive definition of Lease in Section 2(16)(c) of the Stamp Act. (Para 16 , 21 , 26 )
8. How should the term includes be interpreted in a statutory definition clause?
When a word is defined to include certain items, the definition is prima facie extensive rather than restrictive or exhaustive, allowing for a wider interpretation of the term. (Para 19 , 20 )
9. Is a contract for the right to collect tolls distinguishable from a license to occupy shops?
Yes. While letting out shops may be characterized as a license depending on the agreement, the right to collect tolls specifically attracts the character of a lease under Section 2(16)(c) of the Stamp Act. (Para 24 , 25 , 26 )
JUDGMENT
Abhay Manohar Sapre, J.
1) These appeals are filed against the judgment and order dated 22.05.2006 passed by the High Court of Judicature at Allahabad in Civil Misc. Writ Petition Nos. 9661/2005, 21327/2006, 13249/2003, 12958/2004, 26755/2004, 31238/2005, 44533/2005, 31058/2003, 22817/2006, 12957/2004 and 44532/2005 whereby the High Court dismissed the writ petitions filed by the appellants herein.
2) In order to appreciate the short issue arising in this bunch of appeals, it is necessary to set out few relevant facts hereinbelow.
3) Respondent No.3 is a “Nagar Nigam Meerut” also called “Municipal Corporation Meerut” in the State of U.P. (hereinafter referred to as “the Corporation”). The Corporation is constituted and governed by the provisions of the Uttar Pradesh Municipal Corporation Act, 1959 (for short “the Act”). Its area of operation is in the city of Meerut.
4) In exercise of powers conferred by Section 541 (41) of the Act, the Corporation has framed Bye-laws for implementing the provisions of the Act and for regulating various activities meant essentially for the benefit of the residents/public of Meerut city. Clause 41 of the Bye-laws empowers the Corporation to fix any fees for grant of any license, sanction or permission to person(s) by and under the Act.
5) In March 2004, the Corporation issued an advertisement inviting bids from public at large for letting out the right of collection of (1) realization of Tehbazari Fee from squatters, vendors, kiosks and (2) for collecting parking fees.
6) So far as the connecting appeals are concerned, they pertain to other cities of U.P. but relate to the same aforementioned activities. The appellants participated in the public auction held by the Corporation. Their bids were finally accepted.
7) The Corporation accordingly informed to the appellants individually about acceptance of their bids and entered into a formal contract with each appellant to enable them to carry out the work of collection of what is called as “Tehbazari” and “Parking Fees” in terms of the contract. One such contract is (Annexure P-10). The period of contract was up to 31.03.2005.
8) The execution of contract led to the disputes among the appellants, Corporation and the Collector of Stamps, namely, what is the true nature of the contract and how much stamp duty is payable by the appellants on the contract under the Indian Stamp Act, 1899 (for short “the Stamp Act”).
9) The Corporation, vide their letter (Annexure P-8), requested the appellants to deposit the requisite stamp duty payable under the Stamp Act whereas the Collector of Stamps requested the appellants to pay stamp duty @ Rs.70/- per thousand on the contract amount treating the contract as Lease.
10) The appellants felt aggrieved of the demand raised by the Collector of Stamps and filed writ petitions in the Allahabad High Court. The Allahabad High Court placing reliance on its previous decisions in Munindra Nath Upadhaya vs. State of U.P. & Ors. (W.P. No.4978 of 1994) (1995) 2 UPLBEC 1789 and Mohammad Ali vs. Board of Revenue, U.P. (AIR 1987 Allahabad 348) upheld the demands raised by the Collector of Stamps and finding no fault therein dismissed the writ petitions which has given rise to filing of these appeals by special leave by the unsuccessful writ petitioners in this Court.
11) Having heard the learned counsel for the parties and on perusal of the record of the case, we find no merit in these appeals. In our opinion, the conclusion arrived at by the High Court in the case of Mohammad Ali vs. Board of Revenue, U.P. (supra) is just and proper calling for no interference for the reasons given by us hereinbelow.
12) Sections 2(12), 2(14), 2(16) and Article 35 of Schedule I to the Stamp Act are relevant for deciding the question arising in the case. They read as under:
“2(12) “Executed” and “execution”, used with reference to instruments, mean “signed” and “signature”.
2(14) “Instrument” includes every document by which any right or liab
