The present petition has been filed challenging the validity of the

Circular

No.F-19-192/92/12/2

dated

15.03.1993

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

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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

11.02.2004, 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 02.07.2004 (Annexure P/2). He was directed to pay,

inter alia, a stamp duty of Rs.4,32,00,000/- (Rupees Four Crores Thirty

Two Lacs) 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 9A 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

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and the dead rent in terms of Section 9A 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 9A 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 1A of Indian Stamp Act, 1899 (herein

after referred as “the Act of 1899”) or Article 33 of Schedule 1A 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 under the lease by considering only