Ajai Narayan Agarwal vs State Of U.P. And Others
2017 Latest Caselaw 2931 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 6 							AFR 
 

 
Case :- WRIT - C No. - 6579 of 2013
 

 
Petitioner :- Ajai Narayan Agarwal
 
Respondent :- State Of U.P. And Others
 
Counsel for Petitioner :- Ram Dular,Anoop Trivedi,D.V. Singh,Pooja Agarwal,Sharad Malviya
 
Counsel for Respondent :- C.S.C.,Pooja Agrawal
 

 
Hon'ble B. Amit Sthalekar,J.

Heard Shri Anoop Trivedi assisted by Ms. Pooja Agarwal for the petitioner and Shri Sanjay Goswami, learned Addl. Chief Standing Counsel assisted by Shri Shashikant Upadhyay, lerned standing counsel for the respondents.

The petitioner in the writ petition is seeking quashing of the order dated 21.9.2012 passed by the Commissioner, Allahabad Division, Ballahabad by which he has remanded the Stamp Case relating to the property in dispute to the Collector, Stamps for reconsideration.

Briefly stated the facts of the case, as stated in the writ petition, are that one Sri Karaly Charan Banerjii took Plot No. 67, George Town, Allahabad on lease on 23.11.1923 for 90 years from the State Government. The lease deed was executed and thereafter he constructed a house on the plot which was numbered as House No. 2(old) 11(New), Malviya Road, Allahabad. Sometime in 1940 this house was sold in an auction and was purchased by Shri Kartar Narain Agarwal. His name was mutated in the revenue records of the Nazul Department. After his death the name of his heirs Sri Om Narain Agarwal and others were mutated in the Nazul record. One Shri Satya Prakash alleging that there was an agreement to sell the house property in question filed suit no. 83 of 1976 against Shri Om Narain Agarwal and others. The suit ended in a compromise on 27.1.1983 and on that basis a compromise decree was drawn. The court then executed the sale deed on 7.11.1984 in favour of Shri Satya Prakash. The said Satya Prakash purchased the House No. 2(old) 11(New) Malviya Road, Allahabad with all the lease hold rights of the land for a sum of Rs.75,000/-. Sometime in 1989 the petitioner alongwith some others filed suit no. 279 of 1989 in the court of Civil Judge (J.D.) against Shri Satya Prakash for sale of the house property in favour of the plaintiffs on the ground that the plaintiff had a right of pre-emption to purchase in terms of the compromise decree passed in Arbitration suit no. 35 of 1943. Here also the parties to the suit entered into a compromise on 17.11.1995 and it was agreed that portion of the house No. 2 (old) 11 (new) will be transferred to Sangam Educational Society on a payment of Rs.1,25,000/- with lease rights. This amount was to be paid by 31.3.1996. The civil court passed a decree in terms of the compromise dated 17.11.1995. The decree holder also deposited the amount of Rs. 1,25,000/- by 31.3.1996 but since the judgement debtor did not execute the sale deed the decree holders filed an execution case No. 43 of 1996. The execution proceedings were finally concluded and the decree executed on 7.8.2001. It is stated that the court determined the stamp duty on the basis of the total sale consideration of Rs. 1,125,000/- and determined the stamp duty at Rs. 12,500/-. It is stated that the draft sale deed was presented before the court with lease hold rights of the land/building. It is also stated that the court vide its order dated 31.5.1999 called upon the decree holders for modification of the draft specifying that only lease hold right of the lessor was being transferred and not the Nazul land because the land itself cannot be transferred. Copy of this order has been filed as Annexure-5 to the writ petition. However, alleging that there was deficiency of stamp duty on the ground that stamp duty was not paid on the sale deed as the land had been sold proceedings under section 33/47-A of the Indian Stamp Act, 1899 (hereinafter referred to as the Act, 1899) were initiated against the petitioner. The Society filed its objections and the A.D.M. (F & R), Allahabad by his order dated 25.5.2017 has held that only the lease rights of the lessor had been transferred and not the ownership of the land and therefore stamp duty was not payable on the market value of the land but considering the deed as an assignment of the lease hold rights of the lessor as per the provisions of Article 35 (4) of the Schedule to the Act, 1899 a demand notice was issued to the Society on 19.4.2003 to pay the amount in respect of the land treating the land to be a lease land which was paid by the Society as demanded and the State Government executed a conversion deed on 3.12.2004.

Aggrieved, the Sate Government filed a Revision no. 11 of 2010 against the order of the A.D. M. dated 25.5.2017. This revision was filed more than 3 (three) years after the order passed by the stamp authority although the limitation provided under section 56 of the Act, 1899 is only 60 days. The revision was allowed by the Commissioner by order dated 21.9.2012 holding that since the ownership right of the Nazul land was transferred to the Society through the sale deed dated 7.8.2001 therefore the deed in question could not have been charged for stamp duty treating it to be a sale and therefore he remanded the matter to the A.D.M. ( F & R) for reconsideration. It is against this order that the present writ petition has been filed.

The submission of Shri Anoop Trivedi, learned counsel for the petitioner is that the executing court in its order has clearly directed that the Sangam Educational Society shall get its name mutated over the property sold to it as well as to get lease of the aforesaid purchased property bifurcated and also to get the purchased property 'free hold' from the State Government. He further submits that in the order of the Commissioner also the Commissioner refers to the deed as a lease deed. He submits that the error in the reasoning of the Commissioner has crept in because he has treated the execution of the deed as a sale deed and directed that the matter be reconsidered by the stamp authority as 'sale' for charging stamp duty. The submission is that the Commissioner has committed a grave error in ignoring the fact that the land in question was through out a lease hold land and even the lease deed executed between the Municipal Corporation and Karalicharan Banerjee also mentions that this deed is a lease deed. This has been accepted by the executing court also while executing the execution case no. 43 of 1996 and irrespective of the fact that at some place in the execution order it has been mentioned that the property in question has been sold, the deed itself will not become a sale deed but it remains an assignment of the lease hold rights in favour of the decree holder. He submits that it is for this reason that the trial court further directed that the Sangam Educational Society shall get its name mutated over the property sold and get the lease bifurcated and thereafter get it 'free hold' from the State Government.

The submission of the learned counsel for the petitioner therefore is that the stamp duty on the document could only be charged treating it to be a lease as provided under Article 35 of the Schedule I B of the Act and that the land in question could never have been treated as having been sold to the decree holder. Reliance has been placed by the learned counsel on the judgment of the Supreme Court reported in (2009) 14 SCC 617 Residents Welfare Association, NOIDA Vs. State of U.P. and others. Particularly paragraphs 28,29,30,31, 32, 33, 35, 36, 38 and 39 are being reproduced herein below:

28. "Lease" has been defined under section 105 of the Transfer of Property Act and also in section 2 sub section (16) of the Indian Stamp Act 1899. According to section 2 sub section (16) of the Indian Stamp Act, "Lease" means a lease of immovable property and includes a Patta, a kabuliyat or any instrument by which tolls of any description are let, any writing on an application for lease intended to signify that the application is granted and finally 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.

"29. From a plain reading of Section 54 and Section 105 of the Transfer of Property Act, there cannot be any doubt in our mind that in case of a lease, there is a partial transfer and the right of reversion remains with the lessor. Whereas in case of a sale, there must be an absolute transfer of ownership and not some rights only as in the case of a lease. Therefore, it is to be considered whether the document in question, which was presented for registration, was a partial transfer and accordingly, it was a lease, or whether it involved any outright sale therein.

30. As noted herein earlier, a lease deed was executed by the lessor in favour of the co- operative societies and its members. It is an admitted position that the lessor namely Noida Authorities had entered into the lease agreement with the co-operative societies and their members, being lessees and the sub-lessees respectively, and the sub-lessees further entered into the agreements with the assignees (members of the appellant association). Such being the position, it is amply clear to us that the document in question presented for registration before the registration officer was, in fact, a lease and the transfer to the members of the association was an assignment of the leasehold rights. It cannot be doubted that the demised land was merely an enjoyment of the land and not transfer of the ownership.

31. In order to appreciate whether a document is a sale or a lease, reference can be made to the case of Byramjee     Jeejeebhoy  (P)   Ltd.   vs   State    of Maharashtra (AIR 1965 SC 590), where this Court   formulated    the    following    principles    for determination of the aforesaid question:
 

 
	    "Such a grant cannot be regarded as a lease, for a lease contemplates any right for a transfer of a right in a consideration  price paid or promised or service or other things of value to be rendered periodically or on specified again to the transferor. The grant does not purport to demise a right of       enjoyment of land. It confers right of  ownership in then land. There is gain no contractual right reserved. It is specifically or by implication to determine the right. The reservation and reversion remained  and remains yearly and runs, years and profits of all lands determine and property in the premise is of nature of a restriction upon the said transfer and does not  restrict the equality of the said. The rent to be demanded was again not stipulated as consideration for the grnat of the right to enjoy the land but expressly in consideration of grnating freedom from liability to pay assessment." 
 
            
 
32. The High Court in the present case decided that the document given for registration contained a
 
composite deed of lease as well as a deed of sale. Therefore, both Article 63 as well as Article 23 of the said Act would apply. We cannot agree with these observations of the Division Bench of the High Court.
 

 
33. As mentioned earlier, the said document consists of a single deed of assignment of lease. The Division Bench construed the transfer of the land as an assignment of lease whereas the transfer of the building appurtenant thereto to be through a deed of sale. It appears to us that the High Court has clearly not interpreted the true essence of the lease deed executed between the lessor and the lessees.
 

 
34. ......................................
 

 

35.The appellant has also brought to our notice that para "g" of the said deed states that the lessee/ sub lessee would only be allowed to make any alterations in the building with the prior permission of the authority and would also be liable if any deviations from the permission obtained is brought to light. Moreover, the concerned lease deed specifically provides for a lease of 99 years of the land along with its appurtenances thereto with the right of reversion. So it is clear from the above-mentioned provision that the land along with its appurtenants would be reversed back to the lessor after the stipulated period. The alleged document is therefore a transfer of the assignment of lease and not an outright sale of its appurtenants.

36. The learned counsel appearing on behalf of the respondent No.4 (being the Noida Authorities) had contended that the lessee or the sub lessee have absolute rights over the buildings constructed by them and hence the lessor has no right over them. Therefore, the lessee or the sub-lessee can transfer such buildings by way of an outright sale and the same cannot be the subject matter of an assignment of lease. We are in a position to accept this submission of the Noida Authorities.

37. ................................

Therefore, the only question which comes to our mind is that if the lessee or the sub lessee has an absolute right over the constructions constructed by him and he can transfer it by an out right sale and not through an assignment of lease.

38. As contended by the Noida Authorities, the lease deed would not have provided for such a clause wherein the Noida authorities have a right over the buildings and the appurtenants on the land in case of any failure of the sub-lessee to remove such constructions at the time of re-entry. Thus the said lease deed specifically provides for a right of reversion to the land and appurtenances thereto including buildings, on the termination or expiry of the lease. It is thus clear that the buildings and all other appurtenants attached to the land become a part of the assigned transfer through lease and not a separate sale.

39. Moreover section 3 of the Transfer of Property Act states that when an immovable property such as land is transferred by way of assignment of lease, all appurtenances thereto attached to the earth such as buildings and fixtures thereto would also stand assigned. Accordingly, on a plain reading of the deed of assignment, we are of the view that the assignees became liable to the lessor, namely Noida on the covenants running with the land. In conclusion, we are, therefore of the view that the deed presented for registration was a deed of assignment."

Shri Sanjay Goswami, learned Addl. Chief Standing Counsel for the respondents, on the other hand, submitted that through out in the instrument reference has been made to the 'sale' of the property and therefore the stamp duty would be chargeable as applicable to the sale and the instrument cannot be treated to be a lease. The submission is that the petitioners also referred to it as 'property sold' and they also never intended that it was a lease for a certain consideration and it was never contemplated by them to be a lease.

Shri Sanjay Goswami further submits that the original lease deed or any other document is at the most evidence and it cannot be referred to for the purposes of deciding as to whether the deed itself is a lease deed or a deed of sale.

In my view the learned counsel for the State is not right considering the facts and circumstances of the case since there is no dispute between the parties that the instrument in question is a lease. The Executing Court also refers to it as a lease and infact directs the Sangam Educational Society to get its name mutated over the property sold to it as well as to get the lease of the aforesaid purchased property bifurcated and also to get the same 'free hold' from the State Government. The Commissioner Allahabad in the impugned order also refers to the instrument as a lease, therefore, there was no doubt in the minds of the authorities that the property had been 'sold' but what was actually transferred was assignment of the lease hold rights of the judgement debtor to the decree holder.

The lease of the Nazul land executed between the Secretary of State and Karaly Charan Banerji in respect of the plot in dispute has been filed as Annexure-2 to the writ petition. The deed clearly provides that

" ...........if the yearly rent hereby reserved or any part thereof shall at anytime be in arrear and unpaid for period of one calendar month next after any of the said days whereon the shall have become due whether the same shall have been lawfully demanded or not or if there shall be any breach or non observance by the lease of any of the herein above contained on his part to be observed and it shall be lawful for the Secretary of State notwithstanding the waiver of any previous cause right of the entry to enter or upon the said demised premises and the dwelling house and out buildings so to be erected as aforesaid or any part thereof in the name of the whole and thereupon the same shall remain to be use of and be vested in the Secretary of State and this demise shall absolutely determine ..........".

This deed infact supports of the findings recorded by the Stamp Authority as well as the executing court and the Commissioner, Allahabad, therefore, and the authorities have accepted that the document in question is a lease. Therefore in my opinion the judgement of the Supreme Court in the case of Residential Welfare Society (supra) applies to the facts of the present case inasmuch as the lessor continued to be the State Government and the lessee under any deed whatsoever can only transfer by way of assignment his lease hold rights of the property in question.

No doubt by the impugned order the Commissioner in appeal has only remanded the matter to the Stamp Authority to reconsider the matter treating the instrument in question to be a sale rather than a lease but for the reasons already noted and the fact that the respondents authorities themselves, have not disputed that the instrument in question is a lease, this was a fit case for interference with the order of the Commissioner as the remission order itself was on the face of it illegal.

For the reasons aforesaid the impugned order dated 21.9.2012 is quashed. The writ petition stands allowed.

Dated: 3.8.2017/o.k.