Allahabad High Court
M/S. Bilal Ahmad Sherwani And Kishori ... vs State Of Uttar Pradesh And Others on 13 December, 1991
Equivalent citations: AIR1992ALL181, AIR 1992 ALLAHABAD 181, 1992 ALL. L. J. 409, 1992 (2) ALL CJ 782, (1992) 1 ALL WC 339
ORDER Om Prakash, J.
1. Petitioner, a firm, which look a Theka from the Public Works Department for collection of toll tax in respect of the bridge, situate on Pilibhit Bharalpur Marg near Nadrai by-pass in Kasganj, district Etah, seeks quashing of the order dated 8-7-1982 passed by the respondent No. 3 holding that stamp duty under the Indian Stamp Act, 1899 (briefly, 'the Act, 1899') and an increased duty of 2 per cent under Section 39 of the U. P. Urban Planning and Development Act, 1973 (for short, 'the Act, 1973') aggregating to Rs. 1,33,812.50 P is payable on the lease deed, for collecting the toll tax and also seeks quashing of the resultant communication dated 3-8-1982 (Annexure 7 to the writ petition) sent by the Executive Engineer, respondent No. 4, to the petitioner calling upon it to deposit the aforesaid amount of Rs. 1,33,812.50 P by challan towards the stamp duty payable on the lease deed.
2. It is averred that pursuant to the news item dated 25-8-1981 published in Newspaper a public auction for the Theka for collection of toll tax was held on 25-9-1981 and the petitioner's highest hid of Rs. 50.78 lacs was accepted and then the petitioner was asked to deposit a sum of Rs. 2.34 lacs as security, which was furnished by depositing rupees one lac in cash and fixed deposit receipts of Rs. 1.34 lac. The petitioner was then asked by the respondent No. 4, pursuant to the order dated 8-7-1982 (Annexure '5-A' to the petition) passed by the respondent No. 3, to deposit stamp duty to the tune of Rs. 1,33,812.50 P for the purpose of registration of the lease deed. Admittedly, the petitioner carried on Theka for full period, without getting a registered lease executed.
3. The contention of the petitioner is that the Public Works Department (P.W.D) is exempt from stamp duty and lease deed executed on a stamp paper of Rs. 5/- would suffice. The petitioner, therefore, prays that the respondents Nos. 1, 2 and 4 be directed to execute the lease deed in the petitioner's favour without forcing it to deposit Rs. 1,33,812.50 towards the stamp duty.
4. Reilef for quashing the notification dated 14-1-1982 (Annexure 6 to the writ petition) was not pressed and that was expressly given up by the Counsel for the petitioner at the time of hearing.
4A. Counter-affidavit was filed on behalf of the respondents denying the contention of the petitioner. It is averred by the learned Standing Counsel that the agreement for collection of toll tax is a lease within the meaning of Section 2(16)(c) of the Act, 1899, and, therefore, stamp duty at Rs. 86,657.50 is leviable thereon in view of Schedule I-R Art. 35, read with Art. 23 appended to the Act, 1899, and besides that the petitioner is liable to pay 2 per cent increased stamp duty in view of Section 39 of the Act, 1973 amounting to Rs. 20,384/-. It is also urged by him that the petitioner was required to furnish security equal to three months rent for due fulfilment of the contract, which was furnished and that on that amount the petitioner is liable to pay stamp duty under Schedule I/B Art. 35 (c) Explanation (3) to the extent of Rs. 21,675/- and that further on this amount the petitioner is liable to pay increased stamp duty of Rs. 5,096/- under Section 39 of the Act, 1973. Such liability is denied by the petitioner in entirety.
5. Short question for consideration, therefore, is whether the petitioner is liable to pay aforesaid stamp duty, which it was called upon to pay by the respondent No. 4 by letter dated 3-8-1982 (Annexure 7 to the writ petition). It is not disputed by Sri R.K. Jain, learned counsel for the petitioner, that agreement for toll tax is an instrument within the meaning of Section 2(16)(c) of the Act, 1899. If that is so, then the said instrument is a lease as defined by Section 2(16) of the Act, 1899. Stamp duty is leviable on lease and the quantum is prescribed under Schedule I-B Art. 35(iii), read with Art. 23. There is no dispute about the computation of Stamp Duty leviable on the lease deed. We, there fore, hold that the petitioner is liable to pay stamp duty on the lease deed at Rupees 86,657.50 P.
6. The aforesaid stamp duty was further increased by 2 per cent under S. 39(1) of the Act, 1973, and the petitioner was called upon on that account to pay a sum of Rs. 20,384/-. The question is whether the petitioner can be subjected to increased duty under S. 39(1). Stamp duty is payable under the general Act, 1899. The Act, 1973 is a special Act. It is trite that special statute overrides the general statute. The question is whether Section 39(1) contains a special provision for charging increased stamp duty on the facts and circumstances of the case on hand. For this purpose we have to analyse Section 39(1), which states that the duty imposed by the Act, 1899 on any deed of transfer of immovable property, shall in the case of an immovable property situated within a development area, be increased by 2 per cent on the amount or value of the consideration with referenced which the duty is calculated under the Act, 1899. It is manifest from Section 39(1) that increased stamp duty by 2 per cent will be leviable, if there is a transfer of immovable property situated within a development area as defined in Section 2(f) of the Act, 1973. The increased duty by 2 per cent will be leviable over and above the stamp duty, payable on a deed of transfer of immovable property under the general Act, 1899. Section 39(1) can be invoked only when a transfer of immovable property situated within a development area, is made. Transfer of immovable property situated within a development area within the meaning of Section 2(f) of the Act, 1973, is a sine qua non for invoking Section 39(1). In the case on hand, there is no transfer of immovable property, much less transfer of immovable property situated with a development area. Section 2(16) of the Act, 1899 defines 'lease' in the 1st Part meaning as lease of immovable property and in the 2nd Part that gives inclusive definition, which takes within its sweep instrument not relating to transfer of immovable property. As already held, lease for collection of toll tax falls under Section 2(16)(c) of the Act, 1899. Admittedly, there is no transfer of immovable property in this case. The submission of the Standing Counsel is that since on the lease granted to the petitioner by the respondents, stamp duty is payable, the said lease will also attract an increase in stamp duty under Section 39(1). Payment of increased duty is not automatic. Definitional Section 2(1) may be divided into two parts; first giving exhaustive definition and the second relating to incluisive definition. If the levy of increased duty under Section 39(1) were automatic, then Section 39(1) would have alluded to all types of leases envisaged by Section 2(16) of the Act, 1899 but Section 39(1) clearly refers to the duty imposed by the Act, 1899, on any deed of transfer of immovable property, as defined in the 1st part of Section 2(16). Under Section 39(1), duty will be increased by 2 per cent on a transfer of immovable property, situate within a development area, if the duty is imposed under general Act, 1899, on any deed of transfer of immovable property. It means higher stamp duty is leviable on a transfer of immovable property, situate within a development area than the stamp duty leviable under the Act, 1899 on a simpliciter transfer of immovable property. Legislature has made a provision in the special enactment for charging higher duty on a transfer of immovable property situate within a development area to meet out the cost of develop-ment and to augment the resources of the Development Authority set up under the Act, 1973, to ensure systematic and planned development in urban areas. Unless twin requirements, firstly, that there should be a transfer of immovable property attaching stamp duty undr the general Act, 1899, and, secondly, that the immovable property should situate within a development area, are satisfied, S. 39(1) would have no application. Section 39(2) elaborates the Scheme of allocation of the amount, collected from increase in stamp duty. Section 39(1) is couched in a plane and simple language and no external aid is needed for seeing the intendment of it. Taking the semantic view it must be held that Section 39(1) is not, at all, attracted to the facts of the instant case, inasmuch as there was no transfer of immovable properly within the meaning of Section 2(16) of the Act, 1899, which is the first requirement, let alone the transfer of immovable property, situate within a development area forming a second requisite condition of Section 39(1).
7. For the reasons, the submission of the Standing Counsel that as stamp duty is leviable under the Act, 1899, increased duty under Section 39(1) has to be levied, must be rejected. We are, therefore, of the view that the respondent No. 3 took erroneous view in the impugned order (Annexure '5-A' to the writ petition) that increased duty "amounting to Rs. 20.384/ - was chargable under Section 39(1) of the Act, 1973, on the amount of stamp duty, chargeable under Schedule 1-B Art. 35(iii).
8. Then comes the question whether the petitioner is liable to pay duty at Rs. 21,675/-on the earnest money equivalent to three months', rent deposited thereby under Schedule I-B Art. 35(c) Explanation 3. Art.35(c) refers to a lease, which is granted for a fine or premium or for money advanced in addition to the rent reserved (emphasis ours). The question for consideration is whether deposit of amount equivalent to three months' rent by the petitioner represents earnest money/ security or money advanced in addition to rent reserved. In the impugned order dated 8-7- [ 982 (Annexure '5-A' to the writ petition); the respondent No. 3 himself stated that the petitioner deposited the amount equivalent to three months rent for due fulfilment of the contract or for adhering to the terms and conditions thereof. It is mainfest from Annexure '5-A' to the writ petition that the amount equivalent to three months rent represented only the earnest money and not the money advanced in addition to the rent reserved. Besides such earnest money, it is averred by the petitioner that it has paid full Theka money. Lease pertains to Theka money only and the amount paid as earnest money cannot be said to be the money advanced in addition to the rent reserved.
9. Explanation (3) to Art. 35(c) is a deeming provision. It says that the rent paid in advance shall be deemed to be money advanced within the meaning of this Article, tamest money at the most could be adjusted towards the rent in the end, in case the petitioner failed to deposit the rent regularly and, therefore, undr the exception carged out in Explanation (3) to Art. 35(c) also, the earnest money equivalent to three months rent deposited by the petitioner, if assumed to be money advanced within the meaning of Art. 35(c), would be excluded and could not be subjected to stamp duty under Art. 35(c) Explanation (3). Explanation (3) states that rent paid in advance shall be deemed to be money advanced within the meaning of this Article, unless it is specifically provided in the lease that rent paid in advance will be set off towards the last instalment or instalments of rent. The delineated portion points out the exception. If any rent paid in advance is to be adjusted towards the rent in the last instalment, then that could not be said money advance in addition to rent reserved; Respondent No. 3 was, therefore, wrong in asking for the stamp duty at Rs. 21,675/- on the earnest money.
10. Since stamp duty was calculated on the earnest money under Art. 35(c) Explanation (3), the petitioner was further called upon to pay Rs. 5096/- under Section. 39(1). This, amount is not payable by the petitioner for two reasons: firstly, that no stamp duty calculated at Rs.21,675/- on the earnest money is leviable under Schedule I-B Art. 35(c) Explanation (3) and, secondly, that there being no transfer of any immovable property situate within the development area, Section 39(1) of the Act, 1973, cannot be invoked, as aforesaid.
11. Thus, the petitioner is liable to pay stamp duty at Rs. 86, 657.50 P. under Schedule I-B Art. 35(iii), read with Art. 23 and Section 2(16)(c) of the Act, 1899 and it cannot be burdened with any other levy as mentioned in the impugned order, Annexure '5-A' to the petition.
12. In the result, the petition is partly allowed. The impugned order dated 8-7-1982 (Annexure '5-A' to the writ petition) passed by the respondent No. 3 and the impugned letter dated 3rd August, 1982 (Annexure '7' to the writ petition) passed by the respondent No. 4 are quashed, in so far as the petitioner is called upon to pay levy at Rs. 20,384/- under Section 39, Rs. 21,675/- under Schedule I-B Art. 35(c) Explanation (3) and Rs.5096/-again under Section 39 of the Act, 1973. The petitioner will be entitled to refund of earnest money and the fixed deposit receipts deposited thereby with the respondents, unless they are retained by the respondents lawfully. No order as to costs.
13. Petition partly allowed.