Ram Bachan Smarak High School ... vs Additional Commissioner Nyayik ...
2022 Latest Caselaw 21346 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

A. F. R.
 
Court No. - 6
 

 
Case :- WRIT - C No. - 1005704 of 2013
 

 
Petitioner :- Ram Bachan Smarak High School Thr.Its Treasurer S.S.Yadav
 
Respondent :- Additional Commissioner Nyayik Lucknow Division Lko.And Ors.
 
Counsel for Petitioner :- Mahendra Pratap Pandey,Avinash Pandey
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Abdul Moin,J.

1. Heard learned counsel for the petitioner and learned Standing counsel appearing for the State respondents.

2. By means of the present petitioner, the petitioner has prayed for the following reliefs:-

"(I) Issue a writ, order or direction in the nature of certiorari quash the impugned order dated 19.1.2013 passed by Additional Commissioner Nyayik opposite party no.1 in appeal no.242/2010-11 under section 56 (1) of Indian Stamp Act and order dated 11.6.2010 & order dated10.5.2011 passed by opposite party no.3 A.D.M. (East) Lucknow in case no.7010/589/2003 contained in Annexure NO.1, 2 & 5 to this writ petition."

3. The case set forth by the petitioner is that a registered lease-deed was executed on 18.6.2003 a copy of which is Annexure No.3 to the petition. The said lease-deed was for a period of 30 years. Clause 5 of lease-deed provided that Lessee shall have one option for same period and it will be determined on the basis of the mutual consent of the parties by executing a separate lease-deed after expiry of lease period.

4. Proceedings were initiated against the petitioner under Section 47-A of Indian Stamp Act, 1899 contending that less stamp duty had been paid on the said lease-deed and the petitioner was liable to pay additional stamp duty.

5. The petitioner put in appearance before the competent authority and contended that the stamp duty paid by the petitioner was in terms of Schedule I-B-Article 35 (a) (v) of the Act, 1899 which provides that where the lease purports to be for a term exceeding twenty years but not exceeding thirty years then the same duty as a conveyance for a consideration equal six times the amount or value of the average annual rent reserved, shall be payable.

6. The competent authority, vide impugned order dated 11.6.2010 a copy of which is Annexure No.2 to the petition, was of the view that as Clause 5 of the lease-deed also contained a renewal term as such the lease-deed cannot be construed for a period of thirty years rather, would be exceeding the period of thirty years and consequently, the provisions of Schedule-I-B Article 35 (a) (vi) would be applicable that where the lease-deed purports to be for a term exceeding thirty years or in perpetuity then the same duty  as the conveyance No.23 clause (a) for a consideration equal to the market value of the property would be payable. On the basis of the same, the petitioner has been required to pay additional stamp duty along with penalty and interest.

7. Being aggrieved, the petitioner filed application dated 30.4.2011 for recall of the order dated 11.6.2010 passed in Case No.70 of 2010 (State Vs. Ram Charan Smarak High School) under Stamp Act. The said application has been rejected by the year dated 10.5.2011 a copy of which is Annexure No.5 to the petition.

8. Being aggrieved, the petitioner filed an appeal against the orders dated 11.6.2010 and 10.5.2011 but the appellate authority concurred with the view of the prescribed authority and dismissed the appeal, vide order dated 19.1.2013 a copy of which is Annexure No.1 to the petition.

9. The argument of the learned counsel for the petitioner is that when from the lease-deed itself it clearly emerges that the lease-deed was for a period of thirty years but also had a clause for the same period to be determined on the basis of mutual consent of parties but that required executing a separate lease-deed, as such, the lease-deed itself has to be construed for a period of thirty years and not beyond that and thus, the stamp duty as paid on the basis of the Schedule-I-B Article 35 (a) (v) of the Act, 1899, was correctly paid.

10. It is contended that the competent authority has patently erred in law in interpreting clause-5 of the said lease-deed to hold that as Clause-5 of the lease-deed also contains a renewal clause as such, the lease-deed has to be construed as having been executed for a period exceeding thirty years so as to attract the stamp duty payable in terms of Schedule-I-B Article 35 (a) (vi) of the Act, 1899.

11. In this regard, reliance has been placed on the judgment of this Court dated 3.3.2008 passed in Civil Misc. Writ Petition No.43796 of 2005 (Bharat Petroleum Corporation Limited. Vs. Commissioner, Kanpur division Kanpur and others.). Placing reliance on the aforesaid judgment of Bharat Petroleum Corporation Limited (supra), the argument is that this Court in the aforesaid case has held that when a particular period is indicated in the lease-deed and even if the provisions of renewal is there, then ipso facto the lease period could not be construed beyond the period what is indicated in the lease-deed and said renewal clause is to be read separately.

12. It is thus argued that considering the law laid down in the case of Bharat Petroleum Corporation Limited (supra), the orders passed by the competent authority as well as passed by the appellate authority are patently bad in the eyes of law and merit to be set aside.

13. On the order hand, learned standing counsel contents on the basis of the averments contained in the counter affidavit argues that though the lease initially was for the period of thirty years but Clause 5 of the deed also contains the clause that the Lessee shall have one option for the same period to be determined on the basis of mutual consent of parties by executing a separate lease-deed as such the same is to be necessarily construed as a lease-deed exceeding the period of thirty years and as such the authority  has correctly proceeded to direct the petitioner to pay the additional stamp duty considering Schedule-I-B Article 35 (a) (vi) of the Act, 1899 and that Schedule-I-B Article 35 (a) (v) of the Act, 1899 over which the reliance has been placed by the learned counsel for the petitioner, shall not be applicable.

14. Having heard learned counsel for the parties and having perused the record what emerges is that a lease-deed was executed on 18.6.2003. The stamp duty was paid in terms of the Schedule-I-B Article 35 (a) (v) of the Act, 1899. Proceedings were initiated against the petitioner  under the Act, 1899 and the authority by means of the order dated 11.6.2010 has held that as clause-5 of the lease-deed also contains a clause of extension for the same period i.e. exceeding 30 years as such, the stamp duty is to be ascertainable and payable as per Schedule-I-B Article 35 (a) (vi) of the Act, 1899 and consequently, the impugned orders have been passed. The recall application as well as the appeal filed by the petitioner have also been rejected by means of the order dated 10.5.2011 and 19.1.2013.

15. The point for consideration before this Court is that where the lease-deed has been executed for the period of thirty years but the clause in the lease-deed also provides for an option for renewal exceeding certain period as to whether additional period would be construed as the period for which the stamp duty is to be paid or it is for initial period for which the lease-deed has been executed which is to be considered for payment of stamp duty.

16. The said issue has been considered by this Court in the case of Bharat Petroleum Corporation Limited (supra) wherein this Court has held as under:-

"After respective arguments have been advanced, factual position which emerges is to the effect that in the present case lease deed had been executed and the period for which said lease was executed is clearly mentioned therein to be 30 years with effect from 01.10.2001 and the rent was payable by 15th day of every month. Upon expiration or sooner of the said period, lessor was obliged to deliver vacant possession of the plot and remove therefrom all buildings structures and plant and all its other properties therein at its own cost and restore the said land in its original condition and if the lessee was desirous to get the said lease renewed on expiration of its term, then he was obliged to give notice to the lessor in writing prior to the expiration of the term hereby granted and was obliged to pay the rent and taxes duly observed and performed all the terms, covenant, conditions and stipulations and then lessor was obliged to grant them a renewed registered lease deed of the property in question for further period of ten years commencing from the date of expiration. In the present case period of lease has been construed to be 40 years, whereas lease deed which has been referred to in the present case clearly mentions that the period of lease was 30 years and gave right to the lessor to get the lease deed renewed on the same terms and conditions for a further period of ten years. Once 30 years period was clearly mentioned therein and the provision of renewal was there, then ipso facto, lease period could not have been construed to be 40 years as has been sought to be done in the present case, whereas period of lease is fixed and the provision of renewal has been incorporated and the said renewal period was also specified for a period of 10 years.

Division Bench of this Court in the case of Gopal Swaroop Chaturvedi v. State of U.P. and others, 2007 (102) RD 574 has taken the view that renewal of lease is in the nature of grant of fresh lease and further while considering such issue has held that the terms and conditions incorporated in the lease have to be examined as a whole and effect has to be given to each and every term incorporated therein. Renewal of lease has been construed to be nothing but grant of lease for fresh period. Here, in the present case term of lease was 30 years and after expiry of the same lessee could request the lessor for execution of new lease deed by way of renewal. Same could not have been clubbed to be 40 years and thus treating the same to be within the ambit and scope of Article 35 (c) (ii) of Scheduled I-B of the Stamp Act. The view taken by the authority concerned in the present case that lease is for a period of 40 years, as therein arrangement has been made for further period of ten years, is not a correct view, as the lease in question is for a period of 30 years only with the condition that it can be further renewed for a period of 10 years, but it cannot be read as 40 years and the stamp duty cannot be charged accordingly." (emphasis by this Court)

17. A perusal of the judgment passed by this Court in the case of Bharat Petroleum Corporation Limited (supra) would indicate that while passing the said judgment, reliance has been placed on the Division Bench judgment of this Court in the case of Gopal Swaroop Chaturvedi v. State of U.P. and others, 2007 (102) RD 574,wherein it has been held that the renewal of the lease is in the nature of grant of fresh lease and while considering such issue the terms and conditions incorporated in the lease have to be examined as a whole and effect has to be given to each and every term incorporated therein. It was also held that the renewal of the lease has to be construed as nothing but grant of lease for fresh period.

18. Accordingly, keeping in view the judgment of this Court in the case of Bharat Petroleum Corporation Limited (supra) along with the case of Gopal Swaroop Chaturvedi (supra), what emerges is that admittedly, the lease-deed executed by the petitioner, was for the period of thirty years but clause-5 also provided for a renewal for the same period with the mutual consent of parties. However, the mutual consent was required for execution of a separate lease-deed. As such, once the lease-deed itself stipulates that it was executed for a period of thirty years yet also contains a renewal clause as such keeping in view the law laid down by the Division Bench of this Court in the case of Gopal Swaroop Chaturvedi (supra) as well as Bharat Petroleum Corporation Limited (supra), the renewal has to be read separately inasmuch as, the lease-deed was to be examined as a whole and the effect has to be given to each an every term incorporated therein. In the instant case, the term incorporated in the lease-deed, was for a period of thirty years and as such, the stamp duty payable was clearly in terms of the Schedule-I Article 35 (a) (v) of the Act, 1899 and not in terms of the Schedule-I Article 35 (a) (vi) of the Act, 1899 as has been imposed by the competent authority by the impugned order dated 11.6.2010. As the said matter has not been considered in the proper perspective while rejecting the appeal filed by the petitioner by the appellate authority dated 19.1.2013 as such, it is apparent that both the orders impugned order dated 11.6.2010 and 19.1.2013 are legally unsustainable in the eyes of law.

19. Keeping in view the aforesaid discussion, the instant writ petition deserves to be allowed and is allowed. The impugned orders dated 11.6.2010 and 19.1.2013, copy of which are Annexure No.2 and Annexure No.1 to the writ petition are set aside. Consequently, there may not be any occasion for setting aside the order dated 10.5.2011 by which the recall application has been rejected.

Consequences to follow.

Order Date :- 16.12.2022

Rajneesh JR-PS)