The main legal point established is that the security deposit in the lease deeds is not a premium or fine and is chargeable as a 'Security Bond' under the Karnataka Stamp Act, 1957.

JUDGEMENT

Rajasekhara Murthy, J.

This is a reference under Section 54(1) of the Karnataka Stamp Act, 1957 (Act No. 34 of 1957) (hereinafter referred to as the Act) by the Chief Controlling Revenue Authority. The reference relates to the stamp duty payable on the three lease deeds which have been impounded by the Sub-Registrar, Koppa, when they were presented for registration.

2. The lease deeds were presented by one M. V. Chandrasekhar on 21-4-1980 as the lessor, representing his minor son, M. C. Indumouli. The documents in question are the lease deeds in respect of three portions of coffee estates known as "Chandra Estate" belonging to the minor. All the lease deeds are similar in nature and are executed for the same purpose on stamp paper of Rs. 5/-.

3. The Sub-Registrar, Koppa, impounded the documents and called upon the presenter to pay the deficit stamp duty of Rs. 750/-; Rs. 750/- and Rs. 600/- on the three lease deeds respectively. Being aggrieved by the notice issued by the Sub-Registrar, the presenter filed an appeal before the Chief Controlling Revenue Authority, who has referred the matter for our opinion under Section 54(1) of the Act, on the following questions :

"(a) Whether the "Security Deposit" is 'premium' or 'fine' as per Section 105 of the Transfer of Property Act and whether it is liable to duty under Article 30(c) of the Schedule to the Karnataka Stamp Act, 1957.

(b) If not whether it is a 'Bond' as defined in Section 2(1)(a) of the Karnataka Stamp Act, 1957 and whether liable to stamp duty under Article 12 of the Schedule to the Karnataka Stamp Act, 1957.

(c) If the document does not fall under any of the categories aforesaid, then what is the correct nature of the deed and what stamp duty is payable thereon".

4. We find from the reference papers that the controversy before the Sub-Registrar and before the Appellate Authority was in respect of the stamp duty sought to be levied on the annual rent reserved under each lease deed and the exemption claimed in respect thereof, on the ground that is an agricultural lease and eligible for exemption under the exemption clause in Article 30.

5. The Chief Controlling Revenue Authority has not sought our opinion on this aspect in the reference. However, the learned Government Advocate and the Advocate for the Presenter have advanced arguments on this aspect also before us. But, we do not like to express any opinion on this question, since there is no reference on this point.

6. Let us now examine one sample lease deed for the purpose of offering our opinion on the questions referred to above. The lease deed is executed at Bangalore on 1st January 1980 between M, V. Chandrasekhar as father and natural guardian of his minor son in favour of Mrs. M. C. Swarnalakshmi his wife, in her capacity as the trustee of the Manjunatheswara Trust under which she claims that she is authorised to take estate on lease. The lease is for one year. The yearly rent reserved is Rs. 25,000/-. (Lease Deed in CRC No. 4 of 1981). The object of the lease as is set-out in Clause (2) of the document is :

"(a) To harvest and market the Coffee Crops as well as any other crops whether plantation crops, commercial crops, agricultural crops, or otherwise and to retain the sale proceeds thereof for the Lessee's benefit and also to otherwise deal with the harvested crop in such manner as the Lessee may deem fit, and to do so to the Lessee's advantage and benefit and to the exclusion of any benefit therefrom to the Lessor, Provided, however, the Lessee shall not cut any trees or remove any plants to the detriment of the Demised Coffee Estate without the consent of the Lessor;

(b) To erect, construct and maintain such engines, machinery, buildings, structures, cottages and other things necessary for the purpose of maintaining, running and improving the Demised Coffee Estate or otherwise in the interest and to t