A document styled as a lease-cum-sale agreement, which does not create present demise and the terms disclose that the allottee took the house on hire purchase basis and till the title is transferred he has to pay what was described in the deed as rent, is not a lease but only an agreement to hire.

( 1 ) THE Commissioner of Survey, Settlements and Land Records, Hyderabad in his capacity as Chief Controlling Authority made this reference under S. 57 (1), Stamp Act, 11 of 1899. The reference is in the following terms. Whether the document in question styled as lease-cum-sale agreement is chargeable with stamp duty under Art. 31 (a) (iv) and Art. 31 (c) of Sch. 1-A, Stamp Act, or the document has to be classified as an agreement chargeable with stamp duty of Rs. 5/- as contended by the petitioner.

( 2 ) THE facts leading to the reference are simple. The document D/-27-7-1974 was executed by the petitioner in connection with the allotment of a house by the Andhra Pradesh Housing Board under hire purchase system. During the course of the audit of the office of the Andhra Pradesh Housing Board, the document in question was noticed and the same was reported to the Inspector General and the said Officer in his order D/-22-10-1979 treating the document as one chargeable with stamp duty under Arts. 31 (a) (iv) and 31 (c) of Schedule 1-A, Stamp Act, 2 of 1899, directed that the deficit stamp duty of Rs. 495/- and a penalty of Rs. 50/- shall be paid. Against the said order the revision petition was filed before the referring authority and the referring authority considering the question as one of importance made the reference accordingly as above stated.

( 3 ) THE two articles relevant for the question are Arts. 5 and 35 of Sch. I (Central Act) corresponding to Arts. 6 and 31 (a) (iv) and31 (c) of Sch. 1-A of the State Act. The sole question for determination is whether the instrument in question is an agreement (hire-purchase agreement) or a lease. It is necessary to refer to the definition of instrument and also lease given in S. 2 (14) and (16) which are in the following terms :-"s. 2 (14 ). "instrument" includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. " "s. 2 (16 ). "lease" means a lease of immoveable property and includes also. (a) a patta; (b) a kabuliyat or other undertaking in writing, not being a counter-part of lease, to cultivate, occupy or pay or deliver rent for immoveable property; (c) any instrument by which tolls of any description are let; (d) any writing on an application for a lease intended to signify that the application is granted. "

( 4 ) SECTION 3 is the charging section and it is clear that the levy of the duty is on the instrument but not on the transaction. However in order to determine the nature of instrument the Court has to look into the nature of the transaction covered by the instrument.

( 5 ) IT is seen that S. 2 (16) without defining the lease merely says that a lease is a lease plus something else. But however under the definition it must be immoveable property. The lease of moveable property is not governed by the Act. It is necessary to look to the definition of lease under S. 105, T. P. Act, which is in the following terms :"a lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. "the transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent. "section 107, T. P. Act gives the mode of creating a lease. A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument, and the deed must be signed by both lessor and the lessee. No doubt S. 2 (7), Registration Act, 16 of 1908, which is a cognate provision while defining lease includes in its fold agreement to lea

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