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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.3695 OF 2009
Nasiruddin & Anr. Etc. ….Appellant(s)
VERSUS
The State of Uttar Pradesh
through Secretary ….Respondent(s)
WITH
CIVIL APPEAL No.3714 OF 2009
CIVIL APPEAL No.3709 OF 2009
CIVIL APPEAL No.3705 OF 2009
CIVIL APPEAL No.3699 OF 2009
CIVIL APPEAL No.3711 OF 2009
CIVIL APPEAL No.3702 OF 2009
J U D G M E N T
Abhay Manohar Sapre, J.
1) These appeals are filed against the judgment
and order dated 22.05.2006 passed by the High
Court of Judicature at Allahabad in Civil Misc. Writ
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Petition Nos. 9661/2005, 21327/2006,
13249/2003, 12958/2004, 26755/2004,
31238/2005, 44533/2005, 31058/2003,
22817/2006, 12957/2004 and 44532/2005
whereby the High Court dismissed the writ petitions
filed by the appellants herein.
2) In order to appreciate the short issue arising in
this bunch of appeals, it is necessary to set out few
relevant facts hereinbelow.
3) Respondent No.3 is a “Nagar Nigam Meerut”
also called “Municipal Corporation Meerut” in the
State of U.P. (hereinafter referred to as “the
Corporation”). The Corporation is constituted and
governed by the provisions of the Uttar Pradesh
Municipal Corporation Act, 1959 (for short “the
Act”). Its area of operation is in the city of Meerut.
4) In exercise of powers conferred by Section 541
(41) of the Act, the Corporation has framed Bye-laws
for implementing the provisions of the Act and for
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regulating various activities meant essentially for
the benefit of the residents/public of Meerut city.
Clause 41 of the Bye-laws empowers the
Corporation to fix any fees for grant of any license,
sanction or permission to person(s) by and under
the Act.
5) In March 2004, the Corporation issued an
advertisement inviting bids from public at large for
letting out the right of collection of (1) realization of
Tehbazari Fee from squatters, vendors, kiosks and
(2) for collecting parking fees.
6) So far as the connecting appeals are
concerned, they pertain to other cities of U.P. but
relate to the same aforementioned activities. The
appellants participated in the public auction held by
the Corporation. Their bids were finally accepted.
7) The Corporation accordingly informed to the
appellants individually about acceptance of their
bids and entered into a formal contract with each
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appellant to enable them to carry out the work of
collection of what is called as “Tehbazari” and
“Parking Fees” in terms of the contract. One such
contract is (Annexure P-10). The period of contract
was up to 31.03.2005.
8) The execution of contract led to the disputes
among the appellants, Corporation and the
Collector of Stamps, namely, what is the true nature
of the contract and how much stamp duty is
payable by the appellants on the contract under the
Indian Stamp Act, 1899 (for short “the Stamp Act”).
9) The Corporation, vide their letter (Annexure
P-8), requested the appellants to deposit the
requisite stamp duty payable under the Stamp Act
whereas the Collector of Stamps requested the
appellants to pay stamp duty @ Rs.70/- per
thousand on the contract amount treating the
contract as Lease.
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10) The appellants felt aggrieved of the demand
raised by the Collector of Stamps and filed writ
petitions in the Allahabad High Court. The
Allahabad High Court placing reliance on its
previous decisions in Munindra Nath Upadhaya
vs. State of U.P. & Ors. (W.P. No.4978 of 1994)
(1995) 2 UPLBEC 1789 and Mohammad Ali vs.
Board of Revenue, U.P. (AIR 1987 Allahabad 348)
upheld the demands raised by the Collector of
Stamps and finding no fault therein dismissed the
writ petitions which has given rise to filing of these
appeals by special leave by the unsuccessful writ
petitioners in this Court.
11) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in these appeals. In our opinion, the
conclusion arrived at by the High Court in the case
of Mohammad Ali vs. Board of Revenue, U.P.
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(supra) is just and proper calling for no interference
for the reasons given by us hereinbelow.
12) Sections 2(12), 2(14), 2(16) and Article 35 of
Schedule I to the Stamp Act are relevant for
deciding the question arising in the case. They read
as under:
“2(12) “Executed” and “execution”, used with
reference to instruments, mean “signed” and
“signature”.
2(14) “Instrument” includes every document
by which any right or liability is, or purports
to be, created, transferred, limited, extended,
extinguished or recorded.
2(16) “Lease” means a lease of immovable
property, and includes also –
(a) a patta;
(b) a Kabuliyat 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 a
lease intended to signify that the application
is granted;
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Article 35 of Schedule 1.
Description of
Instrument
Proper Stamp-duty
LEASE, including an
under-lease or sub-lease
and any agreement to let
or sub-let
(a) where by such lease
the rent is fixed and no
premium is paid or
delivered—
(i) where the
lease purports
to be for a
term of less
than one year;
(ii) where the
lease purports
to be for a
term of not
less than one
year but not
more than
three years;
(iii) where the
lease purports
to be for a
term in excess
of three years;
(iv) where the
lease does not
purport to be
for any
definite term;
The same duty as a
Bond (No.15) for the
whole amount payable
or deliverable under
such lease.
The same duty as Bond
(No. 15) for the
amount or value of the
average annual rent
reserved.
The same duty as a
Conveyance (No. 23)
for a consideration
equal to the amount or
value of the average
annual rent reserved.
The same duty as a
Conveyance (No.23)
for a consideration
equal to the amount or
value of the average
annual rent which
would be paid or
delivered for the first
ten years if the lease
continued so long.
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(v) where the
lease purports
to be in
perpetuity.
(b) where the lease is
granted for a fine or
premium or for money
advanced and where
no rent is reserved.
(c) where the lease is
granted for a fine or
premium or for money
advanced in addition to
rent reserved.
Exemptions
(a) Lease, executed in
The same duty as a
Conveyance (No. 23)
for a consideration
equal to one-fifth of
the whole amount of
rents which would be
paid or delivered in
respect of the first fifty
years of the lease.
The same duty as a
Conveyance (No. 23)
for a consideration
equal to the amount or
value of such fine or
premium or advance
as set forth in the
lease.
The same duty as a
Conveyance (No. 23)
for a consideration
equal to the amount or
value of such fine or
premium or advance
as set forth in the
lease, in addition to
the duty which would
have been payable on
such lease if no fine or
premium or advance
had been paid or
delivered:
Provided that, in any
case when an
agreement to lease is
stamped with the ad
valorem stamp
required for a lease,
and a lease in
pursuance of such
agreement is
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the case of a cultivator
and for the purposes of
cultivation (including a
lease of trees for the
production of food or
drink) without the
payment or delivery of
any fine or premium,
when a definite term is
expressed and such
term does not exceed
one year, or when the
average annual rent
reserved does not
exceed one hundred
rupees.
subsequently
executed, the duty on
such lease shall not
exceed eight annas.
13) The expression “Lease” defined in Section
2(16) clause (c) shows that it also includes therein
“any instrument by which tolls of any description are
let”.
14) Similarly the expression “executed” and
“execution” with reference to any instrument, as
defined in Section 2(12) of the Stamp Act, means
“signed” and “signature”.
15) Likewise the expression “Instrument” defined
in Section 2(14) shows that it includes therein every
document by which any right or liability is, or
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purports to be created, transferred, limited,
extended, extinguished or recorded.
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.
17) The expression “Lease” under the Stamp Act
has a wider meaning as compared to its original
meaning contained in Section 105 of Transfer of
Property Act (for short “the T.P. Act”). If “Lease”
under Section 2(16) of the Stamp Act includes
therein four specified category of documents set out
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in 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 Stamp Act is
extensive in nature. It is also clear from the use of
the expression “and includes also” in Section 2 (16)
of the Stamp Act.
18) So by fiction, “any instrument by which tolls of
any description are let” is considered as “Lease” for
the purpose of payment of stamp duty under the
Stamp Act.
19) Justice G.P. Singh, the learned author in his
book “Principles of Statutory Interpretation” in
13th edition - at pages 179 and 180 has dealt with
this subject under the heading “Definition sections
or interpretation clause”. In its sub-heading (a)
“Restrictive and extensive definition”, the author
has explained as to where the words “mean”,
“include”, “includes”, and “means and includes” are
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used in any definition clause in the Act then how
such definition should be interpreted. The following
passage is apposite to quote.
“(a) Restrictive and extensive definitions
The Legislature has power to define a word
even artificially. So the definition of a word
in the definition section may either be
restrictive of its ordinary meaning or it may
be extensive of the same. When a word is
defined to ‘mean’ such and such, the
definition is prima facie restrictive and
exhaustive; whereas, where the word defined
is declared to ‘include’ such and such, the
definition is prima facie extensive. When by
an amending Act, the word ‘includes’ was
substituted for the word ‘means’ in a
definition section, it was held that the
intention was to make it more extensive.
Further, a definition may be in the form of
‘means and includes’, where again the
definition is exhaustive, on the other hand, if
a word is defined ‘to apply to and include’,
the definition is understood as extensive.
These meanings of the expressions ‘means’,
‘includes’ and ‘means and includes’ have
been reiterated in Delhi Development
Authority vs. Bhola Nath Sharma, (2011) 2
SCC 54. The use of word ‘any’ e.g. any
building also connotes extension for ‘any’ is a
word of very wide meaning and prima facie
the use of it excludes limitation.”
20) In our opinion, the aforesaid rule of
interpretation applies while interpreting the
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definition of Lease under Section 2(16) of the Stamp
Act.
21) As mentioned above, the Corporation in these
cases awarded the contract to the appellants to
recover the tolls (fees) from squatters, vendors,
kiosks etc. and for parking the vehicles in specified
places. The contract was, therefore, for recovery of
tolls and created rights and liabilities in favour of
contracting parties qua each other. It cannot be
disputed that the expression “tolls of any
description” in clause (c) would include all kinds of
levy, charges, fees etc. which the Corporation is
entitled to charge under its Bye-laws (41). A fortiori,
the fees in question would also fall under Section
2(16)(c) of the Stamp Act.
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
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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.
23) 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.
24) 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.
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25) 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 agreement”. Their Lordships on construction
of the terms of agreement held that the agreement
was a license and accordingly chargeable to stamp
duty as “License” under the Kerala Stamp Act.
26) 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 “Lease”.
27) 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
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of stamp duty as per the rates prescribed in Article
35 of Schedule I of the Stamp Act as “Lease”. 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.
28) In view of foregoing discussion, the appeals are
found to be devoid of any merit. They are
accordingly dismissed.
…...……..................................J.
[ABHAY MANOHAR SAPRE]
………...................................J.
[NAVIN SINHA]
New Delhi;
December 06, 2017
