1972 Supreme(All) 118

Allahbad High Court
S.N.DWIVEDI,A.K.KIRTY,HARISWARUP
Darbari Singh Saini - Appellant
Versus
The Board of Revenue, U.P. at Allahabad - Respondent
Decided On : 04/12/1972

Headnote:

STAMP ACT - AGREEMENT TO LEASE - INTERPRETATION - DISTINCTION BETWEEN LEASE AND AGREEMENT TO LEASE - STAMP DUTY - LEASE DEEDS - ADDITIONAL DUTY.

Fact of the Case:

The Improvement Trust of Ghaziabad entered into an agreement with the applicant to execute lease deeds in respect of certain lands acquired under the Land Acquisition Act. The applicant paid certain amounts as premium, development cost, and rent to the Improvement Trust. The Inspector of Stamps and Registration held that the document was liable to be stamped under Art.35(c) of Schedule I-B of the U.P. Stamp Amendment Act, 1962 with stamp duty of Rs.18,288.75. The applicant filed a revision under S.56(1) of the Act to the Chief Controlling Revenue Authority (the Board of Revenue). The Board of Revenue referred the following questions of law to the court:

Finding of the Court:

1. Whether the document under reference is a lease or an agreement to let immovable property and duty is payable on it under Art.35, Schedule 1-B of the Stamp Act, as amended in its application to U.P. vide U.P. Stamp (Amendment) Act, 1962? 2. If the answer to the above question is in the affirmative, then whether the document would fall under clause (c) of the aforesaid Art.35 and the total amount of Rs.3,78,095.73 (representing Rupees 69,591.21 already paid on account of a premium, Rs.49,136.10 already paid as development charge and Rs.1,59,368.42 promised to be paid as development charges) would be treated as premium and Rs.732.50 as annual rent for calculating the proper stamp duty due thereon and whether additional stamp duty @ Rs.2 as imposed by S.67-H of the U.P. Town Improvement Act, 1919 (U.P. Act VIII of 1919) as amended by Section 5(1) of the U.P. Local Self-Government Laws (Amendment) Act, 1966 (U.P. Act XXIX of 1966), on deeds of transfer of immovable property situated within the limits of Ghaziabad Regulated Area vide U.P. Government Notification No.1102 H/ XXXII-50(24)H/59 dated July 20, 1960, (published in U.P. Gazette Part I page 1107 dated 23-7-1960) will also be payable on the document on the total amount on which stamp duty is payable? 3. If the document under reference is held to be chargeable with duty under Art.35(c) of Schedule 1-B, then whether the subsequent lease deeds, giving possession in respect of portion of land detailed in Schedule B to the document, to be executed by the Improvement Trust in favour of the nominee of party No.II will be chargeable with duty under Article 25(c) Schedule I-B on the amount of premium stated therein and rent reserved thereunder and whether additional duty @ Rs.2 as imposed by Section 67-H of the U.P. Town Improvement Act, 1919 (U.P. Act VIII of 1919) as amended by Section 5(i) of the U.P. Local Self-Government Laws (Amendment) Act, 1966 (U.P. Act XXIX of 1966) on deeds of transfer of immovable property situated within the limits of Ghaziabad vide U.P. Government Notification No.1102 H/XXXVII-50(24)H/50 dated July 20, 1960 will also be payable thereon or whether such documents will be chargeable with duty of Rs.2.25 only under proviso to Art.35 of Schedule I-B? 4. Whether the Inspector of Stamps and Registration, Meerut acting as Collector under Section 40 of the Stamp Act or the Board of Revenue, as the Chief Controlling Revenue Authority, acting under Section 56(i) thereof, are barred on the principle of res judicata and stare decicis from examining the question of proper stamp duty payable on the document for the reason that the Collector, Meerut, had acting under Ss.31/32 of the Act, endorsed certain other documents on which a duty of Rs.2.25 had been paid as properly stamped? 5. If the answer to question No.(i) is in the negative then whether the obligation to pay a sum of Rs.1,59,368.42 contained in clause (3) of the document, having been attested is a bond under S.2(5) (h) of the Stamp Act and is chargeable with duty under Art.15, Schedule I-B of the Act? 6. Whether the document is a simple agreement covered by Art.5(c) of Schedule I-B of the Stamp Act and is, as such, properly stamped?

Issues: 1. Whether the document is a lease or an agreement to let immovable property? 2. Whether the document is chargeable with duty under Art.35(c) of Schedule 1-B of the Stamp Act? 3. Whether the subsequent lease deeds will be chargeable with duty under Article 25(c) Schedule I-B? 4. Whether the Inspector of Stamps and Registration and the Board of Revenue are barred from examining the question of proper stamp duty payable on the document on the principle of res judicata and stare decicis? 5. Whether the obligation to pay a sum of Rs.1,59,368.42 is a bond under S.2(5) (h) of the Stamp Act? 6. Whether the document is a simple agreement covered by Art.5(c) of Schedule I-B of the Stamp Act?

Ratio Decidendi: 1. An agreement to lease is an agreement which binds the parties to give on lease the land, even though it may not possess all the characteristics of a lease and may not effect demise of property. 2. An agreement to lease is chargeable to stamp duty of the same amount as a lease under Art.35 read with the entry about an agreement to lease mentioned in Art.5 of the Schedule. 3. A demise whether in the presenti or in future is not necessary for an agreement to be classed as an "agreement to lease" for being registered as a lease under the Registration Act, but for the purpose of stamp duty it is not necessary that the 'agreement to lease' should by its own force transfer property or effect demise either in presenti or in future. 4. The proviso added by the U.P. Amendment Act of 1962 to Art.35(c) in Schedule I-B of the Stamp Act also makes it clear that the agreement to lease may be something different from the lease itself. 5. An agreement to lease can, therefore, be an agreement which even though binds the parties to execute in future a lease, may not effect the demise by its own force.

Final Decision: 1. The document is an agreement to let immovable property and duty is payable on it under Art.35, Schedule 1-B of the Stamp Act. 2. The document is chargeable with duty under Art.35(c) of Schedule 1-B of the Stamp Act. 3. The subsequent lease deeds will be chargeable with duty under Article 25(c) Schedule I-B. 4. The Inspector of Stamps and Registration and the Board of Revenue are not barred from examining the question of proper stamp duty payable on the document on the principle of res judicata and stare decicis. 5. The obligation to pay a sum of Rs.1,59,368.42 is not a bond under S.2(5) (h) of the Stamp Act. 6. The document is not a simple agreement covered by Art.5(c) of Schedule I-B of the Stamp Act.