M/S Bhagwan Through Bhagwan vs The State Of Madhya Pradesh on 24 January, 2020

[Cites 11, Cited by 0]

Madhya Pradesh High Court

M/S Bhagwan Through Bhagwan vs The State Of Madhya Pradesh on 24 January, 2020

Learned counsel for the parties have drawn attention of this Court towards the Division Bench order dated 18.09.2019 passed in W. P. 7987/2019 (M/s Sanwariya Enterprises vs. State of MP). The order passed by the Division Bench of this Court reads as under:-

The petitioner before this Court has filed this present writ petition being aggrieved by the order dated 14/2/2019 passed by the Collector of Stamps dated 16/6/2017.

The contention of the petitioner is that the applications were invited for grant of mining lease in the year 2009 and an agreement was executed between the petitioner and the M. P. Mining Corporation on a Stamp Paper of Rs.100/-. The contention of the petitioner is that the Collector of Stamps has issued a notice to the petitioner and thereafter passed a final order imposing Stamp Duty and penalty to the tune of Rs.6,10,210/-. The contention of the petitioner is that as the agreement was executed on a Rs.100/- stamp paper, he is not required to pay any stamp duty and the impugned order be quashed.

A similar controversy has already been decided by this Court in the case of M/s. BCC Finance Ltd., Vs. State 2 THE HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W. A. No.1235 of 2019 (M/s Bhagwan vs. State of MP & another) of MP and ors., (W.P.No. 997/2015, decided on 1/4/2016). Paragraph 8 to paragraph 21 of the aforesaid judgment reads as under:

8. The definition of "lease" defined under Section 2 (16) of The Indian Stamp Act, 1899 and Section 2 (7) of the Registration Act reads as under:-

Clause 2(16) of the Indian Stamp Act :

Clause (16) Lease - General-. The definition was, "lease includes every instrument ( not being a counterpart) by which one person lets or agrees to let, or takes or agrees to take, immovable property, to or from another." The definition in the Act of 1879 was the same as in the Act.

The definition in the Act is not self-sufficient. It says that lease is a lease of immovable property and includes something else which would not strictly be styled a lease. By this definition, the legislature proceeded on the assumption that the ordinary significance in law of the word being well known, it required no further definition. The real intention of the legislature was to extend the definition for the purpose of stamp duty to instruments embodying transactions which could not otherwise be called leases. The word signifies in law the transfer by one (the landlord) to another (the tenant) of an interest in immovable property, the interest transferred being the right to exclusive enjoyment. In order to decide whether a document is a lease or not, the definition of 'lease' in the Transfer of Property Act should be taken, though instruments which may not amount to leases under the Transfer of Property Act may come within the extended definition in this Act. The word 'Lease' within the meaning of Stamp Act has much wider and more comprehensive meaning than the definition given in section 105 of the Transfer of Property Act. Even if a transaction does not amount to a lease under Section 105 of the Transfer of Property Act, it may nonetheless 3 THE HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W. A. No.1235 of 2019 (M/s Bhagwan vs. State of MP & another) be a lease for the purposes of the Stamp Act.

Definition of "Lease" under Section 2(7) of the Registration Act:

2(7) - 'lease' includes a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease;

9. Learned counsel for the respondent has drawn our attention to the nature of lease which has been awarded by sub-letting the quarry lease and submitted that the same comes within the definition of the aforesaid Section and the Collector of Stamps has rightly passed the order directing the petitioner to pay stamp duty @ 4% of the anticipated value of Royalty which comes to Rs.2,65,50,000.00/-, is just and proper.

10. The registration of the aforesaid document is must as per provisions of the Indian Registration Act and prays for dismissal of the writ petition.

11. We have heard the arguments of the learned counsel for the parties and perused the record.

12. From the agreement(Annexure-P/3), it is not in dispute that the quarry lease for lifting of quarry sand was granted by the State Government in favour of the M.P. State Mining Corporation. The M.P. State Mining Corporation sub-letted the aforesaid lease to the petitioner @ Rs. 90 per metric cubic metre and directed the petitioner to lift 2,95,000 cubic metre sand for the period from 1.2.2004 to 31.1.2005.

13. The question is whether the right to lift and transport the sand granted in favour of the petitioner by the M.P State Mining Corporation was in the nature of lease or license and an instrument compulsorily registered under the Registration Act liable to pay stamp duty under the Indian Stamp Act.

14. Learned Senior Counsel for the petitioner contended that it is neither an instrument compulsorily registered under Section 17 of the Registration Act nor 4 THE HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W. A. No.1235 of 2019 (M/s Bhagwan vs. State of MP & another) liable for stamp duty under the Indian Stamp Act. We do not agree with the submission of the learned Senior Counsel for the petitioner.

15. Under Section 17 of the Registration Act read with Section 2 (16) of the Indian Stamp Act 'lease' means a lease of immovable property and includes also a patta; a kabuliyat or other undertaking in writing, not being a counter-part of a lease, to cultivate, occupy, or pay or deliver rent for, immovable property, etc. Right to extract sand by lifting and transporting it from quarry is profit a prendre and benefit to arise out of land is an immovable property for the purpose of stamp duty. It would, therefore, be clear that since it is a right given to the petitioner to quarry sand on the basis of permit and condition of agreement(Annexure-P/3) executed, it is a profit a prendre attached to or benefit to arise out of land. Therefore, it is an instrument for the purpose of stamp duty. Since the duration of lease is one year(from 1.2.2004 to 31.1.2005), it is compulsorily registrable instrument by operation of Section 17 of the Registration Act.

16. As per Clause 5 of the agreement(Annexure-P/3), in case, if amount of royalty is enhanced by the State Government, or rate of commercial tax is enhanced then the petitioner - contractor has to pay royalty at the rate of enhanced rate. Similarly, as per Clause 6, the petitioner has to pay total amount of contract in monthly installment. The document or agreement has been executed on Rs.100/- non-judicial stamp. The said document agreement for sale of sand falls under the definition of lease and under Section 17 of the Registration Act, registration is must. As per Schedule 1-A Article 33 of the Indian Stamp Act, the petitioner is liable to pay stamp duty @ 4% of the total value of the royalty fixed by the M.P. State Mining Corporation which comes to Rs.10,62,000/-.

THE HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W. A. No.1235 of 2019 (M/s Bhagwan vs. State of MP & another)

17. It would be useful to refer to the definition of "lease" in Section 2 (16) of the Stamp Act wherein an inclusive definition is given stating that it means a lease of immovable property. The expression "lease" used in the Stamp Act has, therefore, to be understood as defined in section 105 of the Transfer of Property Act in Chapter V relating to leases of immovable property. The definition of "lease"in Section 105 of the Transfer of Property Act shows that it is a transfer of a right to enjoy such property in consideration of a price paid and that the consideration given by the lessee to the lessor under the lease, called by whatever name, is the "rent". It is, therefore, obvious that the royalty payable under the mining lease by the lessee to the lessor is the "rent" or at least a part of the rent payable under the mining / quarry lease.

18. "Sand" is "minor mineral" within the meaning of Section 3 (e) of the Mines and Minerals (Regulation and Development) Act, 1957.

19. In view of the language of the agreement (Annexure-P/3), we are of the view that the M.P. State Mining Corporation sub-letted their right to carry out their mining to the petitioner.

20. Under these circumstances, we are of the considered view that it is a lease and being of the value of Rs.100/- and upwards, it is compulsorily registrable under Section 17 of the Registration Act and liable to pay the stamp duty @ 4% as per schedule 1-A Article 33 of the Indian Stamp Act.

21. For these reasons, the writ petition filed by the petitioner has no merit and is accordingly dismissed, but without any order as to costs.

This Court does not find any reason to take a different view than the view already taken by the Division Bench earlier in similar matter. In the aforesaid case also a quarry lease for lifting sand was 6 THE HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W. A. No.1235 of 2019 (M/s Bhagwan vs. State of MP & another) granted in favour of the petitioner therein and an agreement was executed on a 100 rupees stamp paper and in similar circumstances, this Court has arrived at a conclusion that the document in question as it relates to a lease and being of the value of Rs.100 and onwards, is compulsorily registrable u/S. 17 of the Registration Act making the petitioner therein liable to pay stamp duty @ 4% keeping in view the Schedule 1- A and Article 33 of the Indian Stamp Act. Resultantly, the Writ Petition filed by the petitioner, in the light of the aforesaid judgment, deserves to be dismissed.

In view of the aforesaid, as the matter stands concluded, the present writ appeal stands dismissed.

       (S. C. Sharma)                     (Shailendra Shukla)
          Judge                                 Judge
  gp


Digitally signed by Geeta
Pramod
Date: 2020.01.24 17:53:38
+05'30'

Unlock Advanced Research with PRISMAI

Madhya Pradesh High Court