Madhya Pradesh High Court
M/S Bcc Finance Ltd Thru. Auth. ... vs The State Of Madhya Pradesh on 1 April, 2016
Author: P.K. Jaiswal
Bench: P.K. Jaiswal
HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE
(D. B.: Mr. P.K. Jaiswal & Mr. J.K. Jain, JJ.)
W.P. No.997/2015
M/s. BCC Finance Ltd.
V/s
State of M.P. & Ors.
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Shri A.S. Garg, learned Senior Counsel with Shri Jitendra
Verma, learned counsel for the petitioner.
Shri Romesh Dave, learned Dy. Govt. Advocate for the
respondents/State.
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ORDER
( 01 / 04 /2016) Per P.K. Jaiswal, J.
The short question of decision relates to the mode of computation of Stamp duty on the instrument of agreement for sale of Sand dated 11.02.2014 executed between the M.P. State Mining Corporation and petitioner, by which the petitioner was entitled to lift and transport the sand from sand mines situated within the region of Maheshwar Group, District Khargone for the period commencing from 01.02.2004 and ending on 31.01.2005.
2. The respondent No.2 impounded the said agreement under Section 33 read with section 48B of the Indian Stamp Act, 1899 and after inquiry the respondent No.2 - Collector of Stamps vide order dated 30.11.2004 held that the agreement falls under the category of lease, an instrument compulsorily registrable under the Indian Registration Act and liable to Stamp duty under the Indian Stamp Act and imposed a duty of Rs.10,62,000/- calculated @ 4% of the consideration paid i.e. @ Rs. 90 per cubic metre, the total quantity of sand to be lifted (2.95 lakh cubic metre) for a period from 1.2.2004 to 31.1.2005, under schedule 1A of Article 33 of the Indian Stamp Act, 1899.
3. The petitioner challenged the aforesaid order of the Collector of Stamps(Annexure-P/4) under Section 47A sub-section 4 of Indian Stamp Act, 1899 before Revenue Commissioner, Indore Division instead of filing a revision under section 56(4) of the Indian Stamp Act, before Revenue Board Cum Chief Controlling Revenue Authority, Gwalior. The said appeal was dismissed by the Commissioner vide order dated 25.01.2006. Against the order dated 25.01.2006, the petitioner filed an appeal under Section 47A(5) of Indian Stamp Act, 1899. The learned Board of Revenue, Gwalior, without going into the merits of the case dismissed the appeal by holding that the appeal filed under section 47A sub-section 4 of Indian Stamp Act, 1899 was under wrong provision, therefore, the order dated 25.01.2006 passed by the Revenue Commissioner Indore Division is declared null and void and the appeal under Section 47A (5) of the Indian Stamp Act, is also not maintainable. The learned Board of Revenue in its order dated 31.12.2010 also observed that the petitioner should take appropriate proceedings against the order of the Collector, Stamps before the Competent Court. Thereafter, the petitioner filed a revision petition under Section 56(4) of the Indian Stamp Act, 1899 before the Board of revenue, which was dismissed on 8.01.2015 on the ground of delay.
4. The respondent No.4 issued a RRC on 31.01.2015 (Annexure-P/9) amounting of Rs.8,62,030/-, which has been impugned in this writ petition mainly on the ground that the petitioner was a contractor of M.P. State Mining Corporation and was permitted to lift fixed quantity of sand and transport it and the rights and possession over the land remains with the Mining Corporation, therefore, the contracts for lifting the sand and transporting it does not fall under the category of Section 17 of the Registration Act, 1908 and Section 107 of Transfer of property Act.
5. Learned Senior Counsel for the petitioner also submitted that as per articles of association of M.P. State Mining Corporation Ltd., the State Mining Corporation acquire mining rights by obtaining leases from Government and, thereafter, they appoint contractors to do mining on their behalf. He also submitted that under Section 105 of the Transfer of Property Act, 1882, the lease can be made only of immovable property and not of movable property, the respondent - Collector of Stamps committed an error in passing the order and issuing RRC on 31.01.2015 and prayed for its quashment.
6. In alternative, it is also submitted by the learned Senior Counsel for the petitioner that the Board of Revenue dismissed the revision on the ground of limitation and, therefore, in all fairness, the order of the Board of Revenue be set aside with a direction to decide a fresh on merits. In respect of condonation of delay in filing appeal, he has drawn our attention to the decision of the Apex Court in the case of Balbir Singh v. Bogh Singh[AIR 1974 SC 650], para 30 of The State of West Bengal v. The Administrator, Howrah Municipality and others etc.[AIR 1972 SC 749], Para 10 & 11 of N. Balakrishnan v. M. Krishnamurthy[(1998) 7 SCC 123] and Para 15 ad 52 of District Registrar and Collector, Hyderabad & anr. v. Canara Bank Etc. [AIR 2005 SC 186] and prayed that the order passed by the Board of Revenue be quashed and the matter be remitted to the Board of Revenue for deciding afresh on merits, in accordance with law.
7. In reply, learned Dy. Govt. Advocate for the respondent/State has drawn our attention to Rule 26 of the M.P. Minor Mineral Rules, 1996 and submitted that registration of the agreement(Annexure-P/3) is must. He has also drawn our attention to Article 33 in Schedule 1A of Stamp Duty which deals with Lease, including an under lease, or sub-lease and any agreement to let or sub-let or any renewal of lease. Article 33 which came into force w.e.f. 6.09.2004 reads as under :-
(a) where by such lease, the rent is fixed and no premium is paid or delivered :-
(i) where the lease purports to be for a term less than one year.
(ii) where the lease purports to be for a term of not less than one year but not exceeding five years.
(iii) where the lease purports to be for a term exceeding five years but not exceeding ten years.
(iv) where the lease purports to be for a term exceeding ten years but not exceeding twenty years.
(v) where the lease purports to be for a term exceeding twenty years but not exceeding thirty years.
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 tha 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 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 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/-.
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.
(P.K. Jaiswal) (J.K. Jain)
Judge Judge
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