The stamp duty or the dead rent is to be charged on the basis of the amount of royalty to be paid, and the proviso to section 26 of the Act of 1899 applicable to the mining lease is required to be read separately from the main section dealing with imposition of stamp duty.

ORDER VISHAL MISHRA, J. : – The present petition has been filed challenging the validity of the Circular No. F-19-192/92/12/2 dated 15-3-1993 issued by the Department of Mineral Resources, Government of Madhya Pradesh, Bhopal (M. P.), whereby the procedure has been laid down for computation of the stamp duty exigible, inter alia, for execution of a fresh deed of mining lease prescribed in Form “K” under Rule 31 of the Mineral Concession Rules, 1960.

2. It is the case of the petitioners that the petitioner No. 1/Company which is registered under the Companies Act, 1956 owns a Cement Industrial Undertaking in the name and style as M/s Satna Cement Works, Tehsil Raghuraj Nagar, District Satna in the State of Madhya Pradesh. Petitioner No. 2 is the shareholder of the petitioner No. 1 carrying on business through the agency of the petitioner No. 1. The cement units are registered under the Factories Act, 1948 for using limestone as a major raw material for manufacture of cement. Looking to the requirement of mineral for production of cement, the petitioner No. 1 applied for grant of lease of limestone under the relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as “the MMDR Act”) for an area of 56.27 Hectare in Village Birhauli, Tehsil Raghuraj Nagar, District Satna (M. P.). On 11-2-2004, a fresh lease was granted to the petitioner No. 1 in pursuance to the execution of an agreement and registration of mining lease in Form “K” vide letter dated 2-7-2004 (Annexure P/2). He was directed to pay, inter alia, a stamp duty of Rs. 4,32,00,000/- (Rupees Four Crores Thirty Two Lakhs) by considering the anticipated amount of royalty payable at the rate of Rs. 40/-per ton likely to be paid per annum in future by the prospective lessee.

3. It is argued that the demand which has been raised by the respondent department is on the higher side and is contrary to the relevant provisions, as the lease and the rent are two different concepts. It is argued that the lease defined under section 105 of the Transfer of Property Act, 1882 being a transfer of right to enjoy such property is made for a certain time, expressed, implied or in perpetuity on 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.

4. It is argued that section 9 of the MMDR Act provides royalty in respect of mining lease and section 9-A of the MMDR Act provides dead rent to be paid by the lessee. It is submitted that the ‘royalty’ is charged on any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral and the dead rent in terms of section 9-A of the MMDR Act is the amount payable to the State Government every year at such rate as may be specified by for the time being in the Third Schedule, for all the areas included in the instrument of lease. A proviso has been added that the holder of such mining lease becomes liable under section 9 of the MMDR Act to pay royalty for any mineral removed or consumed by him or by his agent.

5. It is argued that the dead rent is being charged in anticipation of the mineral which is to be extracted and is being charged on the basis of royalty, which is not permissible. The cogent reading of all the relevant provisions of the aforesaid statute, section 9-A and Third Schedule under the MMDR Act, Clause 2 Part-V of the mining lease deed in the statutory Form “K”, Article 35 of Schedule 1-A of Indian Stamp Act, 1899 (herein after referred as “the Act of 1899”) or Article 33 of Schedule 1-A of the Act of 1899, requires execution and registration of the instant lease in Form “K” on payment of stamp duty on the basis of the annual rent for value of demised land und