Back
2012 Supreme(All) 2390
ALLAHABAD HIGH COURT (LUCKNOW BENCH)
SATISH CHANDRA, J.
Pantaloon Retail (India) Ltd
Vs.
The Chief Controlling Revenue Authority/Board of Revenue U.P.
Civil Misc. Writ Petition No. 3862 of 2012
Decided On : 12/09/2012
The central legal point established in the judgment is the distinction between lease and licence, emphasizing the intention of the parties and the interpretation of fiscal statutes.
Headnote:
Indian Stamps Act - Distinction between lease and licence - Section 33/47-A, Section 56(1) A - The court discussed the intention of the parties, principles for construction of contractual terms, and interpretation of fiscal statutes. It highlighted key legal provisions such as Section 107 of the Transfer of Property Act, Section 2(16) of Indian Stamp Act, and Section 52 of Easement Act. The court emphasized the distinction between lease and licence, revocation of licence, and the legal position on exclusive possession and profits of the land.
Fact of the Case:
The petitioner challenged orders demanding stamp duty and penalty for an instrument (MOU) treated as a lease deed instead of a deed of licence.
Finding of the Court:
The court analyzed the intention of the parties, distinction between lease and licence, and the legal position on exclusive possession and profits of the land. It partially allowed the writ petition, reducing the penalty to 100%.
Issues: Distinction between lease and licence, interpretation of fiscal statutes, and imposition of penalty.
Ratio Decidendi: The court emphasized the intention of the parties, principles for construction of contractual terms, and interpretation of fiscal statutes. It highlighted the distinction between lease and licence, revocation of licence, and the legal position on exclusive possession and profits of the land.
Final Decision: The writ petition was partly allowed, and the penalty was reduced to 100%.
By this writ petition, the petitioner has assailed the orders dated 29-06-2011 passed by the Additional District Magistrate (Finance & Revenue), Lucknow in Case No. 264/Stamp/2008 under Section 33/47-A of the Indian Stamps Act as well as the order dated 28-05-2012 passed by Chief Controller Revenue Authorities under Section 56(1) A of the Indian Stamps Act in Appeal No. 64 of 2011-12.
2. The facts in narrow compass are that the petitioner and M/s. Sahara India Commercial Corporation Ltd., had executed an instrument on 15-07-2005 known as Memorandum of understanding (MOU), where both the parties agreed that the petitioner will have a space about 9455.30 sq.ft. (Super area) in a commercial complex known as Saharaganj, Hazratganj, Lucknow on licence basis initially, for a period of three years and the said period shall also be renewable and the same has already been renewed for a total period of 9 years.
3. The petitioner has paid stamp duty of Rs. 100/- on the said instrument (MOU), by considering it as a deed of licence, but the stamp authorities considered the said instrument as a lease deed and demanded stamp duty of Rs. 33,93,500/-. The penalty was also imposed to the tune of Rs. 67,87,000/- @ 200%-. Thus, the total liability of Rs. 1,01,80,500/- was saddled upon the petitioner along with interest at the rate of 1.5% per month on the deficient amount, from the date of execution of deed till the payment. Being aggrieved, the petitioner has filed the present writ petition.
4. With this backdrop, Sri Abhishek Kumar, learned counsel for the petitioner submits that the instrument is nothing, but is a deed of licence and the same cannot be treated as a lease agreement. He also submits that the question regarding the distinction between the lease and licence is a vexed one and does not have any mathematical solution and it is the intention of the parties. For this purpose, he relied on the ratio laid down in the case of Delta International Ltd. v. Shyam Sundar Ganeriwala, reported in AIR 1999 SC 2607, where it was observed that :
To find out whether the document creates lease or licence real test is to find out the intention of the parties, keeping in mind that in cases where exclusive possession is given, the line between lease and licence is very thin.
5. Learned counsel further submits that the lease or licence is a matter of contract between the parties. Section 107 of the Transfer of Property Act provides that lease of immovable property may be made either by registered instrument or by oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the lessor. This contract between the parties is to be interpreted or construed on the well laid principles for construction of contractual terms viz. for the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intendment one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do.
6. Learned counsel also submits that in the instant case the intention of the parties is to create the licence, and not the lease. The same can be observed by examining the deed minutely and critically.
7. Regarding the interpretation of the fiscal statutes, he also alleges that taxing statutes will have to be interpreted strictly. For this purpose, he relied on the ratio laid down in the following cases:
1. The Board of Revenue Uttar Pradesh v. Rai Sahab Siddha Nath Mehrotra, reported in AIR 1965 Supreme Court, Page 1092, Paragraph 8;
2. A. V. Fernandez v. The State of Kerala, reported in AIR 1957 Supreme Court, page 657 Para 29;
3. The Central India Spinning and Weaving and Manufacturing Company Ltd. v. The Municipal Committee, Wardha, reported in AIR 1958 Supreme Court,
