Rajasthan High Court - Jaipur
Bhilwara Spinners Ltd., Bhilwara And ... vs Collector (Stamps) Bhilwara And Ors. on 1 April, 1998
Equivalent citations: AIR1998RAJ293, 1999(1)WLC151, 1998(1)WLN631
Author: P.P. Naolekar
Bench: P.P. Naolekar
ORDER P.P. Naolekar, J.
1. M/s. Bhilwara Spinners Ltd. is a public limited company incorporated under the provisions of the Indian Companies Act, 1956 and petitioner No. 2 is the President of the petitioner-Company and is its shareholder. M/s. Rajasthan Spinning and Weaving Mills Ltd. (hereinafter referred to as 'the RSWM') purchased about 56 acres of land situated in village Bhilwara and village Malan, District Bhilwara from private parties under duly registered sale deed for the purpose of setting up industry for spinning/manufacturing cotton yarn etc. For the purpose of conversion of land for industrial purpose, the RSWM surrendered the land to the State of Rajasthan and thereafter applied for allotment of the said land under the provisions of Rajasthan (Industrial Areas Allotment) Rules, 1959. On or about 22-11 -68, the State of Rajasthan executed a formal lease deed conveying the leasehold rights of the said property to RSWM. The said lease was for a period of 99 years with option for renewal for further period of 99 years at the instance of the lessee, The annual rent fixed was Rs. 1680/-. Shortly thereafter the RSWM set up a factory at Bhilwara on the aforesaid plot of land leased in its favour and commenced manufacture of cotton and synthetic yarn. Petitioner No. 1 M/s. Bhilwara Spinners Ltd. was set up as a subsidiary of M/s. Rajasthan Spinning and Weaving Mills Ltd. The unit of RSWM was transferred to petitioner No. 1 after the requisite approvals from the respective authorities. However, as the plot of land allotted to RSWM was leased by the State in favour of RSWM, an application was made to the-State of Rajasthan to transfer the lease in favour of the petitioner-Company.
2. Pursuant to the above application of 14-7-83, the State of Rajasthan through the Department of Industries, issued an order and notification dated 14-7-83 granting permission for grant of lease of land in favour of the petitioner-Company M/s. Bhilwara Spinners Ltd. as lessee, inter1 alia, under Rule 9 of the Rajasthan' Industrial Area Allotment Rules, 1959 subject to certain conditions including the condition that the supplementary lease deed would be executed by the petitioner-Company for the balance period of 72 years.
3. Pursuant to the order of the State of Rajasthan dated 14-7-83, the said land was mutated in the revenue records by the Tehasildar, Bhilwara in favour of the petitioner-Company.
Thereafter on 25-3-88 a supplementary lease deed was executed between the petitioner-Company and the Governor of the State of Rajasthan in the State. The said supplementary lease deed was registered by the Sub-Registrar, Bhilwara (respondent No. 2) on 28-3-88. The supplementary lease deed was executed on condition that the lease is for the balance period of 72 years on rent.
The lessee shall have an option of renewal of the said lease for further period of 99 years after expiry of the present term of lease. The lessee shall be responsible for all the dues payable to the lesser and to other institutions, that the lessee shall not transfer the pan of the plot without the permission of the State Govt. The said plot of land shall be used for industrial use, that the lessee shall pay annual rent of Rs. 1680/- per year of the said plot to the lesser.
4. On 29-3-88, the Sub-Registrar, 'Bhilwara (respondent No. 2) made a reference to the Court of Collector (Stamps-) Bhilwara on the ground that the supplementary lease deed was misclassified or mis described and in fact, it is a fresh lease deed on which stamp duty was payable on the basis of the value of the land being leased which was estimated to be about 79 lacs. Thereafter on 22-4-88, the District Registrar of Bhilwara (respondent No. 3) made further application to the Court of Collector (Stamps) repeating the allegations made by the Sub-Registrar, Bhilwara in the earlier report dated 29-3-88 in so far as the nature of the document was concerned and submitted that the stamp duty be calculated and levied not only on the land but also on the plant and machinery. On the basis of the aforesaid application dated 22-4-88, the Collector (Stamps) registered a Case No. 2/88 and issued an order on 22-' 4-88 directing the Assistant Engineer, District Rural Development Authority of Bhilwara to assess the market value of the land, plant and machinery for the purpose of calculating stamp duty.
5. On 28-4-88, the Collector (Stamps) passed an order holding, prima facie, that the report of the Assistant Engineer, Bhilwara will take a long time and that, prima facie, he was satisfied on the basis of the annual balance-sheet for 1986-87 and report of the District Registrar, which is submitted before him, that a case is made out for issuance of notice and directed to issue a detailed show cause notice. The Collector (Stamps) issued a show cause notice to the petitioner-Company directing the petitioner to show cause why the stamp duty amount of Rs. 2,43,21,965/- on the basis of valuation of the land and plant and machinery amount of Rs, 14,31,17,661/- should not be levied on the petitioner-Company. While the matter was under consideration of levy of stamp duty for supplementary lease deed dated 25-3-88, the Collector (Stamps) had cancelled the supplementary lease deed vide its order dated 30-4-88.
6. Being aggrieved by the action of cancellation of the supplementary lease deed, the petitioner filed a writ petition before the High Court of Rajasthan. The case was registered as S.B. Civil Writ Petition No. 1412/1988, M/s.Bhilwara Spinners Ltd., Gandhi Nagar, Bhilwara v. The State of Rajasthan and others. On 13-1-98, the matter was taken up and the following order was passed by the Court:-
"The learned counsel for the respondents Mr. L. S. Udawat, Additional Advocate General, candidly submits that he does not support the order/ deed of cancellation dated 30-4-1988 and the consequential registration of the deed dated 2-5-1988 of Sub-Registrar, Bhilwara.
Accordingly, it is directed that the order/deed of cancellation dated 30-4-1988 Annex.-K to the petition stands revoked. Consequently, the deed of registration dated 2-5-1988 by Sub-Registrar, Bhilwara also stands revoked. Petition stands disposed of."
By virtue of the order passed by the High Court, the order of cancellation of the supplementary lease deed dated 25-3-88 stand revoked.
7. Being aggrieved by issuance of the show cause notice for levy of stamp duty of Rs. 2,43,21,965/- treating it to be a lease deed and conveyance for transfer of property on the basis of market value of the land, building structure, machinery, the petitioner moved a revision petition' before the Board of Revenue (Chief Controlling Revenue Authority for the State of Rajasthan) Under Section 56 of the Stamp Act, which was admitted and further proceedings were stayed. The revision petition was dismissed on the ground that the revision petition is filed only against the show cause notice. The petitioner-Company should appear before the trial court and contested the case in response to the show cause notice and concluded that no ground is made out to exercise the powers Under Section 56 or for referring the matter to Division Bench of the Board of Revenue or the Division Bench of the High Court Under Section 56 of the Indian Stamp Act. Net result is that the revision petition was dismissed on 26-8-96.
8. A fresh notice was issued to the petitioner on 6-3-97 calling upon the petitioner-Company to show cause on 7-3-97 as to why on the basis of the report/application of the Sub-Registrar, Bhilwara, the stamp duty of Rs. 2.43,21,965/- with penalty thereon, be not recovered from the petitioner. The petitioner appeared in pursuance of the show cause notice and raised certain preliminary objections on 10-3-97. The petitioner also made request for certain documents and inspection of the record. The petitioner-Company has filed further objections. On 11-3-97 made application for inspection of the case record, for production of evidence and for reasonable time for examining witnesses.
9. On 13-3-97, the Collector (Stamps), Bhilwara District, Bhilwara passed an order in Case No. 65/97 that the stamp duty on the supplementary lease deed dated 25-3-88 leviable is Rs. 2,43,21,965/~ with the registration fees of Rs. 1,000/-. The petitioner was held liable for penalty of Rs. 2,43,20,885/-. The petitioner has already paid the stamp duty of Rs. 1080/- and registration fees Rs. 129/- and thus, the difference of stamp duty shall be recovered of Rs. 2,43,20,885/- and registration fees of Rs. 871/-, total Rs. 4,86,42,641/-. Further directions have been issued for taking steps for prosecuting M/s. Bhilwara Spinners Ltd., Bhilwara and M/s. Rajasthan Spinning and Weaving Mills Ltd., Bhilwara for the offence punishable Under Section 64 of the Stamp Duty Act. It is this order of the Collector (Stamps), which is challenged in this writ petition. The levy of stamp duty and penalty is sequel to the finding recorded by the Collector (Stamps) in his order that the nature of any document is decided on the basis of the facts stated therein. Land was allotted on lease for 99 years to M/s, Rajasthan Spinning and Weaving Mills and when the said land was given on lease pucca building was constructed and plant and machinery were installed. The approvals of the transfer of leasehold plant, building and machinery installed thereon have been obtained by the lessee because under these approvals no transfer deed has been executed separately between the lessee and M/s. Bhilwara Spinners Ltd. and only transfer of leasehold land by way of supplementary lease is stated to have been made which is neither a new lease nor falls under the category of supplementary document under Article 25A. Therefore, in this document the transfer of lease of land for the remaining period described in the said document is said to have been made but the transfer of assets made thereupon has not been shown therein. Therefore, along with the land value, plant and machinery erected thereon should also be included in the value for the purpose of stamp duty. Under Section 3 of the Stamp Act and Article 23 of the Second Schedule, there is a provision for stamp duty on the market value of the property prevailing at the time of execution of the document and, in the present case, the property being huge and of special category its valuation is only possible by expert persons. Therefore, there is no justification for not treating the valuation of the assets shown in the annual reports of the Rajasthan Spinning and Weaving Mills for the purpose of levying stamp duty, therefore, this value is totally liable to be accepted. There is no manner of doubt that by the disputed document transfer of land and entire assets situated thereupon has been made in favour of the respondents. From the both footings stated hereinabove, it becomes clear that, in fact, the transfer has taken place between two firms which was within the definition of conveyance. The respondent has not disclosed any foretasted facts for evading the stamp duty in any of the documents nor any document of transfer has been filed. The document registered by the respondent comes under the category of transfer of lease by way of assignment and conveyance and the stamp duty payable thereon, as per Article 23 of the Second Schedule of the Stamp Act, on the valuation of the property transferred which is Rs. 14,31,17,661/-.
10. Counsel for the respondents Mr. K. S. Rathore contended that the principle is well settled that when an alternative efficacious remedy is open, the litigant is required to pursue that remedy and not the special jurisdiction of the High Court to issue a prerogative writ under Art. 226 of the Constitution of India. The petitioner has efficacious remedy of filing revision under Rule 73 of the Rajasthan Stamp Rules, 1973. In reply to the preliminary objection, it is submitted by the counsel for the petitioners that non-exercise of jurisdiction by the High Court wherever there is an alternative remedy provided, is not a rule of thumb and the High Court has discretion to entertain the petition and grant petitioner relief notwithstanding the existence of an alternative remedy and further that an alternative remedy provided under the Act, is not efficacious remedy on account of the amendment brought about in the Rajasthan Stamps Rules, 1955, which provides that no revision application shall be entertained Under Section 56 of the Act or under Rule 73 of the Rajasthan Stamp Rules, 1955 unless it is accompanied by satisfactory proof of the payment of fifty per cent of the recoverable amount. The submission of the learned counsel Mr. S. S. Ray is that the revision petition shall be entertained only after deposit of 50% of the recoverable amount, a condition which is onerous. There is no provision for entertaining a petition under the discretion of the authority, without payment of 50% of recoverable, amount.
11. In Himmatlal Harilal Mehta v. State of Madhya Pradesh, AIR 1954 SC 403, a Constitution Bench of the Apex Court while, appreciating the contention that because a remedy under the impugned Act is available to the assessee, he is disentitled to relief under Art. 226, has said as under (at p. 406 of AIR) :--
"The principle that a Court will not issue a prerogative writ when an adequate alternative remedy was available does not apply where a party has come to the Court with an allegation that his fundamental right had been infringed and sought relief under Art. 226. Moreover, since the remedy provided by the C.P. and Berar Sales Tax Act is of an onerous and burdensome character and before the assessee can. avail of it he has to deposit the whole amount of the tax, such a provision can hardly be described as an adequate alternative remedy.
12. In M.G. Abrol, Addl. Collector of Customs, Bombay v. M/s. Shantilal Chhotelal 'and Co., AIR 1966 SC 197, while considering the argument of the alternative remedy and the condition of deposit of the amount as pre condition, the Court said in para No. 15 as under :- :
"Lastly, it was argued that the High Court should not have exercised its jurisdiction under Art. 226 of the Constitution, as the respondents had an effective remedy by way of appeal to higher Customs Authorities. But the High Court rightly pointed out that the respondents had no effective remedy, for they could not file an appeal without depositing as a condition precedent the large amount of penalty imposed on them. That apart, the existence of an effective remedy does not oust the jurisdiction of the High Court, but it is only one of the circumstances that the Court should take into consideration in exercising its discretionary jurisdiction under Art. 226 of the Constitution.
13. In M/s. Filterco v. Commr. of Sales Tax, Madhya Pradesh, (1986) 2 SCC 103 : (AIR 1986 SC 626) again the Constitution Bench of the Apex Court has disapproved the High Court's decision in dismissing the writ petition in limine on two counts that the appeal provided would be a futile exercise before the appellate authority when the superior officer has already passed a well considered order in exercise of the statutory jurisdiction and further the requirement is of a substantial portion of the tax to be deposited before an appeal or revision can be filed, and held that the High Court ought 10 have considered and pronounced upon the merits of the contentions raised by the parties and the summary dismissal of the writ petition was not just and fair.
14. In Srikant Kashinath Jituri v. Corporation of the City of Belgaum, (1994) 6 SCC 572 : (AIR 1995 SC 288), it is argued by the counsel for the appellants before the Court that inasmuch as the right of second appeal to the District Court is coupled with an onerous condition, viz., deposit of the entire property tax - neither the appellate authority nor any other authority is empowered to relax that condition, either partly or wholly, whatever be the circumstances - the said remedy of appeal cannot be called an adequate or efficacious remedy. This argument was accepted by the Court so far as it relates to petitioner under Art. 226 of the Constitution of India is concerned . when Court says "Such an onerous provision - may be a ground for entertaining a writ petition on the ground that the alternative remedy provided by the statute is not an: adequate or efficacious remedy"- , In the aforesaid authorities of the Apex Court, it has been laid down that when the condition precedent for filing an appeal is, deposit of substantial portion of tax amount, the remedy provided of appeal or revision, cannot be said to be an alternative efficacious remedy, that gives a jurisdiction to the High Court to entertain the writ petition in an appropriate case.
15. The learned counsel for the respondents placed reliance on a decision of the Supreme Court in Titaghur Paper Mills Co. Ltd. v. State of Orissa, AIR 1983 SC 603 in para 11, where the Apex Court has said "It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of." In this case, the appeal under the Sales Tax Act could have been filed subject to the appellant making payment of the admitted amount of tax. As regards the disputed amount of tax, the petitioners have the remedy of applying for stay of recovery to the Commissioner of Sales Tax. The liability to deposit the tax is a condition precedent for filing an appeal is limited to the admitted amount of the tax and not the tax levied and in those circumstances, the condition was not held to be onerous by the Court.
16. In A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani, AIR 1961 SC 1506, it has been held by the Supreme Court as under :-
"The wide proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Art. 226 of the Constitution unless (i) there was a complete lack of jurisdiction in the officer or authority to take the action impugned, or (ii) where the order prejudicial to the writ petitioner has been passed in violation of the principles of natural justice and could, therefore, be treated as void or nonest and that in all other cases, Courts should not entertain petitions under Art. 226, or in any event not to grant any relief to such petitioners cannot be accepted. The two exceptions to the normal rule as to the effect of the existence of an adequate alternative remedy are by no means exhaustive, and even beyond them a discretion vests in the High Court to entertain the petition and grant the petitioner relief notwithstanding the existence of an alternative remedy. The broad lines; of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and in a matter which is thus pre-eminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court."
17. The present writ petition was admitted on 11-4-97. The respondents have entered appearance and filed detailed return. The matter has been heard at length coupled with this the petitioner-Company would be required to deposit 50% of the recoverable amount for entertainment of the revision petition under Section 56 of the Act or under the Rules, Rajasthan Stamp Act, 1955. I do not find it proper, just and fair to dismiss the writ petition on the preliminary objection of the counsel for the respondents of availability of alternative remedy of revision petition.
18. By order dated 13-3-97, the Collector (Stamps) has held that in effect and in law the deed dated 25-3-88 is a deed of transfer of the land with all assets by M/s. Rajasthan Spinning and Weaving Mills Ltd., Bhilwafa in favour of the petitioner M/s. BhilwaraSpinners Ltd., Gandhi Nagar, Bhilwara. In Mohammed Hussain v. District Registrar, AIR 1964 Andh Pra 43, it has been held by the Special Bench that in deciding the proper stamp duty that is chargeable on an instrument presented for registration, the following principles deserve to be taken into consideration ;-
"(1) In revenue cases it is the letter of the law that should be taken into account and it is not the spirit or substance of it that should decide whether a document would fall under one category or another. It is the form adopted by the parties that is relevant and not the substance of the matter.
(2) It is only the instrument that is presented for registration that should be charged with stamp duty. The authorities cannot look into the various documents that are connected with it with a view to judge the nature of the transaction that is covered by this document read in conjunction with several others."
In Himalaya House Co. Ltd. v. Chief Controlling Revenue Authority, AIR 1972 SC 899, it has been held as under :-
"Mere reference to some earlier transactions in a document does not amount to an incorporation in that document, of the terms and conditions relating thereto. Before the terms and conditions of an agreement can be said to have been incorporated into another document,' the same must clearly show that the parties thereto intended to incorporate them."
In Bajaj Hindustan Ltd. v. State of Rajasthan, AIR 1997 Raj 262, the Division Bench of this Court has held that for making a proper evaluation for the purposes of stamp duty, it is necessary to look into what was really sought to be conveyed through the deed and it is only the deed which is to be looked into and no fishing exploration is to be made as to what other articles/items were sought to be conveyed without there being any specific mention of the same in the document.
19. It is submitted by the learned counsel for the petitioners that in accordance with the Stamp Act, the valuation for stamp duty can be made only for the properties covered by such instrument and any property not covered by such instrument cannot be valued. The plant and machinery which were not included in the instrument presented for valuation cannot be subject-matter of any stamp duty. In the light of the principles laid down in the aforesaid decisions, this is clear that it is only the instrument, that is presented for registration, should be charged with, stamp duty. When we look into the document which was charged for the stamp duty, it is clear that it is a document executed between the Governor of the State of Rajasthan and M/s. Bhilwara Spinners Ltd. The document created a leasehold right in favour of M/s. Bhilwara Spinners Ltd. for a period of 72 years with an option of further period of 99 years. The document does not mention in any manner that any plant, machinery or building was transferred by M/s. Rajasthan Spinning and Weaving Mills Ltd. in favour of M/s. Bhilwara Spinners Ltd. The document is purely and simply a deed of lease and thus the Collector (Stamps) clearly committed an error in holding a document to be a document conveying the right, title and . interest in the plant, machinery or building.
20. It is submitted by the counsel for the petitioners that the stamp duty livable on the documents would be under Schedule I; Art. 35(iii) on the basis of the amount of the value of the average annual rent reserved.
On the other hand,1 it is the submission of the counsel for the respondents that the stamp duty shall be payable under Art. 63 of the Rajasthan Stamp Laws Act, 1952 on the consideration equal to the amount of the market value of the property.
In order to appreciate the rival contentions, it would be fruitful to reproduce the relevant provisions of the Stamp Act as adopted under the Rajasthan Stamp Law (Adaptation) Act, 1952. Article 23 of Schedule I incorporates definition of "conveyance" as defined by Section 2(10) of the Act. "Conveyance" has been defined by Section 2(10) which runs as under :-
" "conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule-I."
Schedule I, Art. 35, "lease" including underlease, or sub-lease and any agreement to let or sub-let--
(a) (iii) where the lease purports to be for a term in excessof three years The same duty as on a Conveyance (No. 23) for a consideration equal to the amount or value of the average annual rent reserved.
Article 63.--
Transfer of lease by way of assignment and not by way of under-lease The same duty as on a Conveyance (No. 23) for a consideration equal to the amount of the consideration for the transfer.
By Rajasthan Finance Act, 1997, in column No. 2 of Art. 63, for the expression "The same duty as on a Conveyance (No. 23) for a consideration equal to the amount of the consideration for the transfer", the expression "The same duty as on a Conveyance (No. 23) for a consideration equal to the amount of the market value of the property" was substituted. Thus, the article after the Finance Act, 1997, reads :
"The same duty as on a Conveyance (No. 23) for a consideration equal to the amount of the market value of the property."
As per Section 2(10), the document in question, the supplementary lease deed dated 25-3-88 would not be a conveyance under Art. 23 because Section 2(10) requires that document to be a conveyance, it is not specifically provided for by Schedule I. The document of lease is specifically provided under Schedule I, Art. 35 or Art. 63 of the Stamps Act and, therefore, the document which is a lease deed would not be a conveyance within the meaning of Art. 23 of Schedule 1 of the Stamp Act.
21. The question which would require consideration in this case is whether the supplementary lease is transfer of a lease by way of assignment by M/s. Rajasthan Spinning and Weaving Mills in favour of M/s. Bhilwara Spinners Ltd. to be charged under Article 63 or it is a lease executed by the State Govt. in favour of the petitioner and thus, is liable to be charged for stamp duty under clause a(iii) of Article 35 of Schedule I on the basis of average annual rent reserved.
The facts admitted are that there was a lease executed by the State Govt. on 22-11 -68 in favour of M/s. Rajasthan Spinning and Weaving Mills Ltd. of plots of land measuring 104 bighas 8 biswas i.e. 56 acres situated in the industrial area, Bhilwara. On a request made by M/s. Rajasthan Spinning and Weaving Mills Ltd., the State Govt. passed an order on 14-7-83 and has granted permission of transfer of leasehold rights in the land, under the Rajasthan Industrial Area (Allotment) Rules, 1959 to M/s. Bhilwara Spinners Ltd. for the remaining period on certain terms and conditions. As a consequence of the order, the lease deed was executed on 25-3-83 between M/s. Bhilwara Spinners Ltd. and the Governor of Rajasthan of the land - 56 acres approximately, for a balance period of 72 years on rent with an option to renew the said lease for a further period of 99 years after the expiry of the "present term of lease.
22. The submission of the learned counsel for the petitioners Mr. S. S. Ray is that the lease in favour of M/s. Rajasthan Spinning and Weaving Mills was surrendered in favour of the State of Rajasthan and thereafter, a lease deed was. executed on 25-3-88 by the State of Rajasthan in" favour of M/s. Bhilwara Spinners Ltd. There is nothing to indicate that M/s. Rajasthan Spinning and Weaving Mills has transferred the lease by way of assignment to M/s. Bhilwara Spinners Ltd. to attract the stamp duty on the amount which is equal to a consideration equal to the market value of the property. After the decision rendered in P.M.C. Kunhiraman Nair v. R. Naganatha lyer, AIR 1993 SC 307, there is no manner of doubt that there can be an implied surrender of the lease. It has been held by the Supreme Court (Para 10):
"Under clause (0 of Section 111 of the Transfer of Property Act, 1882, implied surrender is a mode for determination of a lease of immovable property. In English Law, delivery of possession by the tenant to a landlord and his acceptance of possession effects a surrender by operation of law. It is also called implied surrender in contradistinction to express surrender which must be either by deed or in writing."
Under the illustration to clause (f) of Section 111 of the Transfer of Property Act, there would be an implied surrender of the former lease if a lessee accepts from his lesser a new lease of the property leased to take effect during the continuance of the existing lease. The said illustration is however not exhaustive of the cases in which there may be an implied surrender of the lease. Just as under the English Law, there can be an implied surrender under the law of transfer of property in India, if the lesser grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such lessee and further the lessee directs to pay rent to a lesser."
23. In Narotam Lal v. Mohan Lal, AIR 1966 Raj 89, it is laid down by the Rajasthan High Court that the term "surrender by operation of law" or "implied surrender" is an expression used to describe all those cases where the law implies a surrender from the unequivocal conduct of both the parties which is inconsistent with the continuance of the existing lease. Such a surrender is valid under Section 111(f) of the Transfer of Property Act.
24. There would be an implied surrender when the lesser executes a new lease of some property, at the request of the first lessee. In the present case, a supplementary lease deed was executed on 25-3-88 on the request of the original lessee M/s. Rajasthan Spinning and Weaving Mills Ltd. for the petitioner by the Govt. of the State of Rajasthan, after granting necessary permission for such a transaction vide its order dated 14-7-83. The facts and circumstances, clearly indicate that there was an implied surrender by M/s. Rajasthan Spinning and Weaving Mills in favour of the State Govt. and thereafter, the State Govt. - the lesser has entered into a new lease agreement on 25-3-88 with M/s. Bhilwara , Spinners Ltd. The document dated 25-3-198,8 does not in any way indicate that this is a transfer of lease by way of an assignment by M/s. Rajasthan Spinning and Weaving Mills Ltd., Bhilwara in favour of the petitioner, to attract the provisions of Art. 63 of Schedule I of the Rajasthan Stamp Laws Act, 1952 as adopted, to levy a duty on a conveyance for a consideration equal to the amount of consideration for transfer or as on conveyance for a consideration equal to the amount of the market value of the property. It is now well settled that the stamp duty is livable on the instrument presented for registration on the basis of the nature of the instrument executed by the parties. It is true that Section 27 of the Stamp Act requires the parties to a document to set forth in the document fully and truly the consideration, if any, and all other facts and circumstances affecting the chargeability of that document with the duty or the amount of the duty with which it is chargeable. But failure to comply, with the requirement of that section is merely punishable under Section 64. (AIR 1972 SC 899 supra).
In the present case, the transaction in question for the purposes of stamp duty is clearly covered under Art. 35 (a)(iii) of the Rajasthan Stamp Act as adopted, and the duty livable is same as on conveyance on the basis of the amount of value of average annual rent.
25. For the reasons stated above, the Collector (Stamps) was clearly at wrong when he has assessed the stamp duty on the basis of the fact that supplementary lease deed was executed between M/s. Rajasthan Spinning and Weaving Mills Ltd., Bhilwara and M/s. Bhilwara Spinners Ltd. and although the plant, machinery and building are not mentioned in the lease dated 25-3-1988, they were subject-matter, the petitioner is liable to pay stamp duty for transfer of the plant, machinery and building. The order passed by the Collector (Stamps) dated 13-3-1997 levying additional stamp duty and imposing penalty is set aside. The writ petition is allowed. There shall, however, be no order as to costs.