A bid sheet is not an instrument within the meaning of the Indian Stamp Act, 1899, and does not amount to an agreement creating right or liability until it is accepted by the other party.

R. B. MISRA, J. :- These two references under Section 57 of the Indian Stamp Act, 1899 (Act No. II of 1899) have been made by the Board of Revenue, U. P. as the Chief Controlling Revenue Authority. The questions referred in the two references are common and, therefore, both of them are being disposed of by a common judgment.

2. It appears that the Municipal Board, Bisalpur, District Pilibhit, held auction for letting out the right of collection of Tah Bazari for the year 1965-66. The auction was held in the presence of the three members of the Municipal Board. In Stamp Act Reference No. 412 of 1971, Yaqoob Khan offered the highest bid of Rs. 16,500/- and in Stamp Act Reference No. 414 of 1971, Iqrar Khan offered the highest bid of Rs. 15,000/-. Both the bids were for a sum above Rs. 250/-. A bid sheet was prepared, which among others, was signed by Yaqoob Khan and Iqrar Khan. The auctions were closed in their names and they were required to deposit the Zar-i-Chahrum. This was again signed by them as well as by the three members of the Municipal Board, mentioned above. The Board accepted the above bids on a subsequent date.

3. The Inspector of Stamps and Registration, Bareilly, inspected the records of the office of the Municipal Board, Bisalpur, and examined the aforesaid bid sheet. In his opinion, the bid sheet amounted to an agreement to let tolls and was, consequently, chargeable to stamp duty under Article 35 (b), Schedule I-B of the U. P. Stamp (Amendment) Act, 1962. He accordingly, impounded the same and acting as the Collector under Section 40 of the Stamp Act by virtue of the powers conferred upon him by U. P. Government Notification No. C-4135/X-525, dated 20th August, 1928, imposed deficit duty of Rs. 742.50 p. and a penalty of Rs. 100/- on Yaqoob Khan and, likewise, imposed a deficit stamp duty of Rs. 675/- and a penalty of Rs. 50/- on Iqrar Khan.

4. Yaqoob Khan and Iqrar Khan made applications to the Board of Revenue under Section 56 (1) of the Indian Stamp Act for setting aside the imposition of stamp duty by the Inspector of Stamps. During the course of arguments, they prayed that certain questions of law of general importance were involved in the case and they might be referred to this Court under Section 57 of the Indian Stamp Act for decision.

5. The Board of Revenue took the view that the bid sheet under reference is an agreement to let tolls for a premium and falls within the definition of a lease, as given in Section 2 (16) (c) of the Indian Stamp Act and is chargeable to stamp duty under Article 35 (b), Schedule I-B of the U. P. Stamp (Amendment) Act, 1962 and referred the following questions of law for decision to this Court:

1. Whether the bid sheet Annexure I is an agreement to let tolls for a premium of Rs. 16,500/- and is chargeable under Article 35 (b), Schedule I-B of the U. P. Stamp (Amendment) Act, 1962, with a duty of Rs. 742.50 ?

OR

2. Whether the bid sheet was an agreement to let tolls for one year reserving an annual rent of Rs. 16,500/- and was chargeable under Article 35 (a) (1), Schedule I-B of the said Act with a duty of Rs. 371.25 ?

3. In case it is not held to be an agreement to a lease, is the bid sheet a mere licence and is chargeable under Article 5 (c), Schedule I-B of the U. P. Stamp (Amendment) Act, 1962 with a duty of Rs. 2.25 ?

4. In case the bid sheet is not held to be a lease or licence, what would be the nature of the document for purposes of Stamp Act and what duty was payable on it ?"

Article 35 (b), Schedule I-B reads as under:

"35. Lease, including an under-lease or sub-lease and any agreement to let or sublet.

(a)... ... ... ...

(b) where the lease is granted for a fine or premium or for money advanced and where no rent is reserved."

6. From a perusal of this Article, it is clear that the stamp duty will be leviable under this Article if the instrument amounts to a lease.

7. Section 2 (16) of the Indian Stamp Act defines lease. In so far as material for the purpose of this c