Deewan Singh Fartyal vs Municipal Board, Nainital & another

SUDHANSHU DHULIA, J. (ORAL)

Petitioner was awarded a contract for providing parking facilities at Flats in District Nainital. He has been asked by the Municipal Board, Nainital to

deposit the stamp duty @ 2 per cent of the contract amount so that the lease can be executed. The petitioner has not complied with this. According to

the petitioner, the stamp duty is not liable to be paid by him in terms of Article 5 of Schedule I-A of the Indian Stamp Act, 1899 as the nature of

agreement is such that he is liable to pay stamp duty of Rs.100/- (Rupees One Hundred) only.

Learned Counsel for respondent no. 1 Sri Ajay Singh Bisht would argue that the instrument in question is in the nature of a “lease†and the

lease has been defined under Section 2 (16) of the Indian Stamp Act, 1899. Section 2 (16) of the Indian Stamp Act reads as under:-

“2. Definitions.- In this Act, unless there is something repugnant in the subject or context,-

(16) “Leaseâ€​.- “Leaseâ€​ means a lease of immovable property, and also-

(a) a patta;

(b) a kabuliya or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy or pay or deliver rent for immovable property;

(c) any instrument by which tolls of any description are let;

(d) any writing on an application for lease intended to signify that the application is granted;

(e) any instrument by which mining lease is granted in respect of minor minerals as defined in clause (e) of Section 3 of the Mines and Minerals

(Regulation and Development) Act, 1957.â€​

The aforesaid definition of lease would show that inter alia it also includes “any instrument by which tolls of any description are let.†The

Municipal Board, Nainital has management and control on the parking lot which has been given on lease to the petitioner and the rights given to the

petitioner are akin to that of Municipal Board inasmuch as the petitioner takes fee for providing the parking facility to the vehicles which are parked

inside the said parking area.

In a similar controversy in the case of Nasiruddin and Another V. State of Uttar Pradesh in Civil Appeal No.3695 of 2009 and other connected

matters, the Hon’ble Apex Court has also defined the similar nature of instrument as a lease. The relevant paragraphs of the said judgment read

as under:-

“16. In our considered opinion, reading of the contract in question would show that it was meant to collect tolls (fees) called “Tehbazari†in

local parlance from squatters, venders, kiosks etc. and was for collecting parking fees. Such contract, in our view, is regarded as an instrument by

which tolls of any description are let. In other words, by awarding such contract to the appellants, the Corporation had let their right to the appellants

to collect the fees from a class of persons and for carrying on particular activity in the city.

Â

The expression “Lease†under the Stamp Act has a wider meaning as compared to its original meaning contained in Section 105 of the

Transfer of Property Act (for short “the T.P. Actâ€). If “Lease†under Section 2(16) of the Stamp Act includes therein four specified

categories of documents set out in sub-clauses (a) to (d), we do not find any such inclusion in Section 105 of the Transfer of Property Act. It is for

this reason, we are of the view that the definition of “Lease†for the purpose of the Stamp Act is extensive in nature. It is also clear from the use

of the expression “and includes alsoâ€​ in Section 2 (16) of the Stamp Act.â€​

Thereafter, the Hon’ble Apex Court has observed as follows:-

“22. In our opinion, the contract in question also satisfied the definition of the expression “Instrument†as defined in Section 2(14) of the Stamp

Act because it created a right and liability and lastly, it also satisfied the definition of expression “executed†and “execution"" as defined in

Section 2 (12) of the Stamp Act because it contained the signature of contracting parties.

Learned counsel for the appellants, however, placed reliance on the decision of this Court in New Bus-Stand Shop Owners Association vs.

Corporaton of Kozhikode & Anr. 2009 (10) SCC 455 and contended that in the light of the law laid down in the case of New Bus-stand Shop Owners

Association (supra), the contract in question has characteristics of a “license†but not of a “lease†and, therefore, the contract would attract a

stamp duty payable on a License Deed under the Stamp Act.

In our view, the law laid down in the case of New Bus-stand Shop Owners Association (supra) is not applicable to the case at hand and is

distinguishable on facts.

In the case of New Bus-stand Shop Owners Association (supra), the Corporation of Kozhikode had let out their shops to several persons and

executed agreement in their favour. The question, however, arose as to the true nature of the agreement, whether it is a “license agreement†or a

“lease agreementâ€. Their Lordships on construction of the terms of agreement held that the agreement was a license and accordingly chargeable

to stamp duty as “Licenseâ€​ under the Kerala Stamp Act.

Such is not the case here. The case at hand relates to the right to collect the tolls let by the Corporation to the person concerned. It squarely

attracts Section 2(16)(c) of the Stamp Act and partakes the character of a “Leaseâ€​.

In the light of foregoing discussion, we are of the considered opinion that the contract in question is a “Lease†as defined in Section 2(16)(c)

of the Stamp Act and is accordingly chargeable to payment of stamp duty as per the rates prescribed in Article 35 of Schedule I of the Stamp Act as

“Leaseâ€. The conclusion arrived at by the Single Judge in Mohammad Ali vs. Board of Revenue, U.P. (supra) is, therefore, correct which we

support with our reasoning given supra.â€​

In view of the above settled position, the relief as sought by the petitioner cannot be granted by this Court. The petitioner will have to pay the

required stamp duty.

The writ petition has no merit and the same is hereby dismissed.