Allahabad High Court
Manish Jain vs State Of U.P. & Others on 25 April, 2011
Bench: Pankaj Mithal
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 33
Case :- WRIT - C No. - 73366 of 2010
Petitioner :- Manish Jain
Respondent :- State Of U.P. & Others
Petitioner Counsel :- Randhir Jain, Ashish Jaiswal
Respondent Counsel :- C.S.C.
Hon'ble Pankaj Mithal,J.
Heard Sri Ashish Jaiswal and Sri Randhir Jain, learned counsel appearing for the petitioner and Sri Nimai Das, learned Standing Counsel who appears for the respondents.
Challenge in this writ petition is to the order dated 11.2.2010 passed by the Additional Collector (Finance and Revenue), Ghaziabad and the appellate order dated 11.8.2010 passed by the Additional Commissioner Stamps affirming the same.
The instrument in question is an unregistered rent agreement dated 18.9.2004 by which the property C-4, Sector XVI. Vasundhara, Ghaziabad having an area of 176 sq. meter was leased out in favour of the petitioner at a rent of Rs.3000/- per month for a period of 11 months from 10.9.2006 to 10.8.2007.
The aforesaid instrument was subjected to scrutiny under Section 33 of the Indian Stamp Act. The authorities by the impugned order treated the said agreement to be an agreement for lease in perpetuity, as it contains a renewal clause and determined deficiency in stamp duty of Rs.1,32,500/-. A penalty of Rs.50,000/- has also been imposed.
Learned Standing Counsel was granted time on 20.12.2010 to examine the matter to assist the Court. Thereafter, on 22.12.2010 Standing Counsel was granted a month's time to file counter affidavit and again on 31.3.2011 further time of three weeks and no more was allowed to the Standing Counsel for filing counter affidavit. Till date no counter affidavit has been filed.
Learned Standing Counsel submits that as the question involved is purely legal in nature, he is ready to argue the matter without counter affidavit.
Counsel for the parties agree for final disposal of the writ petition at the admission stage.
The submission of learned counsel for the petitioner is that the rent agreement is for a specific period of 11 months and, therefore, the authorities cannot treat it to be a lease in perpetuity.
Learned Standing Counsel has submitted that the aforesaid rent agreement is covered by the definition of the 'instrument' as contained in Section 2(14) of the Indian Stamp Act 1899 which includes a document purporting to record rights and liabilities of the parties in future. He further submits that Article 35 of Schedule 1-B of the Act, which is the charging Section in relation to a lease covers not only the lease but also an agreement to let or sub-let and in this view of the matter the rent agreement in question is a lease for a period of 11 months and an agreement to let for another period as per renewal clause.
Learned Standing Counsel fairly admits that as the agreement to let is for a further period of 11 months only in the absence of specific period of renewal provided the renewal can only be for the same period only and therefore the lease cannot be treated to be a lease in perpetuity.
In an old case of Lewis Vs. Stephenson (1898) 67 LJQB 296(B) a lease for a term of three years with the words "with the option of renewal" came up for consideration and it was held that the option for renewal meant "the renewing of the old lease for the same period and on the same terms".
The aforesaid decision was followed with approval by the Division Bench in the case of Varkey Yohannan Vs. Narayanan Vasudevan Chakkiyar AIR 1955 Travancore 161 and it was laid down that where there is a covenant for renewal, if the option does not state the terms of renewal, the new lease will be for the same period and on the same terms as the original lease, except for the covenant for renewal itself and of the lease rent which may be liable for increase.
A Division Bench of the Calcutta High Court in Secretary of State Vs. Digambar Nanda AIR 1919 Cal. 620 also laid down that the clause in the lease deed which embodied in essence a covenant for renewal entitled the lessee for a fresh lease on the same terms as before, except as to the amount of rent and the covenant for renewal.
In view of above, the only question which requires to be examined is as to whether the authorities are entitle to charge stamp duty on the aforesaid rent agreement by treating it to be a lease deed for a period of 11 months or for the proposed renewed period also.
In the case of Ashish Kumar Vs. The Deputy Commissioner (Stamp) and others 2010(7) ADJ 55 it has been held that where a lease deed is only for a limited period of 29 years 6 months it shall remain valid for the period specified therein irrespective of the renewal clause until and unless it is renewed.
In the instant case the rent agreement is only for a period of 11 months with the condition of renewal for a further period. The said renewal clause of the rent agreement is very relevant. It reads as under:
"2. The rent shall be valid for a period 11 months effect from 10.9.2006 to 10.8.2007 and the same can be renewed for a further period only with the express written consent of the lessor."
In view of above condition the renewal of the lease is subject to express written consent of the lessor. Therefore, unless the aforesaid condition is fulfilled by giving a written consent by the lessor the lease cannot be renewed. In other words, the renewal of the lease is not automatic. Thus, the rights allegedly created or sought to be transferred by the rent agreement in future by virtue of the renewal clause is dependent upon the written consent of the lessor which may or may not be given.
There is no material to indicate that the lase has been renewed or the lease has continued on the expiry of the initial period of lease.
In view of above the lease cannot be treated to be renewed for another term. Accordingly, I am of the view that the aforesaid rent agreement does not create any right or liability in respect of the property in question for future without the express written consent of the lessor. In the absence of such a written consent the lease cannot be recognised for more than 11 months.
Accordingly, the impugned orders cannot be sustained in law for the following two reasons:
(1)The authorities were not justified in treating the lease to be in perpetuity; and
(2)in treating it to be renewed lease for another term as the renewal is subject to a specific condition which has not been fulfilled.
In the above facts and circumstances, the writ petition deserves to be allowed.
The impugned orders dated 11.2.2010 passed by the Additional Collector (Finance and Revenue), Ghaziabad and dated 11.8.2010 affirming the same in appeal by the Additional Commissioner Stamps are hereby quashed with the liberty to the authorities to proceed and recover the stamp duty on the instrument in question i.e. the rent agreement by treating it to be a lease for a period of 11 months only. Let a writ of certiorari be issued accordingly.
It is further directed that as the petitioner has deposited the entire amount pursuant to the impugned order, as mentioned in paragraph 9 of the writ petition, he would be entitle to refund of the same after adjusting the actual amount of deficient stamp duty if any, payable on the rent agreement in question. The excess amount shall be returned to the petitioner within one month from the date of submitting the certified copy of this order failing which the petitioner would be entitle to interest at the rate of 8% per annum in view of 2011(3) ADJ 670 Hari Chand Vs. State of U.P.and others.
The writ petition is allowed as above with no order as to costs.
Order Date :- 25.4.2011
brizesh
