Nasiruddin vs The State Of Uttar Pradesh … on 6 December, 2017


                              IN THE SUPREME COURT OF INDIA

                              CIVIL APPELLATE JURISDICTION

                               CIVIL APPEAL No.3695 OF 2009

                         Nasiruddin  Anr. Etc.                 ….Appellant(s)


                         The State of Uttar Pradesh
                         through Secretary                     ….Respondent(s)


                               CIVIL   APPEAL   No.3714   OF   2009
                               CIVIL   APPEAL   No.3709   OF   2009
                               CIVIL   APPEAL   No.3705   OF   2009
                               CIVIL   APPEAL   No.3699   OF   2009
                               CIVIL   APPEAL   No.3711   OF   2009
                               CIVIL   APPEAL   No.3702   OF   2009


Abhay Manohar Sapre, J.

1) These appeals are filed against the judgment

and order dated 22.05.2006 passed by the High
Signature Not Verified

Digitally signed by

Court of Judicature at Allahabad in Civil Misc. Writ
Date: 2017.12.06
16:28:57 IST

Petition Nos. 9661/2005, 21327/2006,

13249/2003, 12958/2004, 26755/2004,

31238/2005, 44533/2005, 31058/2003,

22817/2006, 12957/2004 and 44532/2005

whereby the High Court dismissed the writ petitions

filed by the appellants herein.

2) In order to appreciate the short issue arising in

this bunch of appeals, it is necessary to set out few

relevant facts hereinbelow.

3) Respondent No.3 is a “Nagar Nigam Meerut”

also called “Municipal Corporation Meerut” in the

State of U.P. (hereinafter referred to as “the

Corporation”). The Corporation is constituted and

governed by the provisions of the Uttar Pradesh

Municipal Corporation Act, 1959 (for short “the

Act”). Its area of operation is in the city of Meerut.

4) In exercise of powers conferred by Section 541

(41) of the Act, the Corporation has framed Bye-laws

for implementing the provisions of the Act and for

regulating various activities meant essentially for

the benefit of the residents/public of Meerut city.

Clause 41 of the Bye-laws empowers the

Corporation to fix any fees for grant of any license,

sanction or permission to person(s) by and under

the Act.

5) In March 2004, the Corporation issued an

advertisement inviting bids from public at large for

letting out the right of collection of (1) realization of

Tehbazari Fee from squatters, vendors, kiosks and

(2) for collecting parking fees.

6) So far as the connecting appeals are

concerned, they pertain to other cities of U.P. but

relate to the same aforementioned activities. The

appellants participated in the public auction held by

the Corporation. Their bids were finally accepted.

7) The Corporation accordingly informed to the

appellants individually about acceptance of their

bids and entered into a formal contract with each

appellant to enable them to carry out the work of

collection of what is called as “Tehbazari” and

“Parking Fees” in terms of the contract. One such

contract is (Annexure P-10). The period of contract

was up to 31.03.2005.

8) The execution of contract led to the disputes

among the appellants, Corporation and the

Collector of Stamps, namely, what is the true nature

of the contract and how much stamp duty is

payable by the appellants on the contract under the

Indian Stamp Act, 1899 (for short “the Stamp Act”).

9) The Corporation, vide their letter (Annexure

P-8), requested the appellants to deposit the

requisite stamp duty payable under the Stamp Act

whereas the Collector of Stamps requested the

appellants to pay stamp duty @ Rs.70/- per

thousand on the contract amount treating the

contract as Lease.


10) The appellants felt aggrieved of the demand

raised by the Collector of Stamps and filed writ

petitions in the Allahabad High Court. The

Allahabad High Court placing reliance on its

previous decisions in Munindra Nath Upadhaya

vs. State of U.P. Ors. (W.P. No.4978 of 1994)

(1995) 2 UPLBEC 1789 and Mohammad Ali vs.

Board of Revenue, U.P. (AIR 1987 Allahabad 348)

upheld the demands raised by the Collector of

Stamps and finding no fault therein dismissed the

writ petitions which has given rise to filing of these

appeals by special leave by the unsuccessful writ

petitioners in this Court.

11) Having heard the learned counsel for the

parties and on perusal of the record of the case, we

find no merit in these appeals. In our opinion, the

conclusion arrived at by the High Court in the case

of Mohammad Ali vs. Board of Revenue, U.P.

(supra) is just and proper calling for no interference

for the reasons given by us hereinbelow.

12) Sections 2(12), 2(14), 2(16) and Article 35 of

Schedule I to the Stamp Act are relevant for

deciding the question arising in the case. They read

as under:

“2(12) “Executed” and “execution”, used with
reference to instruments, mean “signed” and

2(14) “Instrument” includes every document
by which any right or liability is, or purports
to be, created, transferred, limited, extended,
extinguished or recorded.

2(16) “Lease” means a lease of immovable
property, and includes also –

(a) a patta;

(b) a Kabuliyat or other undertaking in
writing, not being a counterpart of a lease, to
cultivate, occupy, or pay or deliver rent for,
immovable property;

(c) any instrument by which tolls of any
description are let;

(d) any writing on an application for a
lease intended to signify that the application
is granted;

Article 35 of Schedule 1.

Description            of    Proper Stamp-duty
LEASE,     including  an
under-lease or sub-lease
and any agreement to let
or sub-let

(a) where by such lease
the rent is fixed and no
premium     is   paid or
   (i)     where      the       The same duty as a
           lease purports       Bond (No.15) for the
           to be for a          whole amount payable
           term of less         or deliverable under
           than one year;       such lease.

   (ii)    where      the       The same duty as Bond
           lease purports       (No.   15)   for   the
           to be for a          amount or value of the
           term of not          average annual rent
           less than one        reserved.
           year but not
           more      than
           three years;         The same duty as a
   (iii)   where      the       Conveyance (No. 23)
           lease purports       for  a    consideration
           to be for a          equal to the amount or
           term in excess       value of the average
           of three years;      annual rent reserved.

                                The same duty as a
   (iv)    where       the
                                Conveyance      (No.23)
           lease does not
                                for   a   consideration
           purport to be
                                equal to the amount or
           for         any
                                value of the average
           definite term;
                                annual    rent    which
                                would be paid or
                                delivered for the first
                                ten years if the lease
                                continued so long.

  (v)   where       the    The same duty as a
        lease purports     Conveyance (No. 23)
        to    be      in   for   a   consideration
        perpetuity.        equal to one-fifth of
                           the whole amount of
                           rents which would be
                           paid or delivered in
                           respect of the first fifty
                           years of the lease.
(b) where the lease is
granted for a fine or      The same duty as a
premium or for money       Conveyance (No. 23)
advanced and where         for   a   consideration
no rent is reserved.       equal to the amount or
                           value of such fine or
                           premium or advance
                           as set forth in the
(c) where the lease is     lease.
granted for a fine or
premium or for money       The same duty as a
advanced in addition to    Conveyance (No. 23)
rent reserved.             for   a    consideration
                           equal to the amount or
                           value of such fine or
                           premium or advance
                           as set forth in the
                           lease, in addition to
                           the duty which would
                           have been payable on
                           such lease if no fine or
                           premium or advance
                           had been paid or
                             Provided that, in any
                           case       when       an
                           agreement to lease is
                           stamped with the ad
                           valorem           stamp
                           required for a lease,
                           and     a    lease     in
     Exemptions            pursuance     of    such
(a) Lease, executed in     agreement              is

the case of a cultivator        subsequently
and for the purposes of         executed, the duty on
cultivation (including a        such lease shall not
lease of trees for the          exceed eight annas.
production of food or
drink)    without    the
payment or delivery of
any fine or premium,
when a definite term is
expressed and such
term does not exceed
one year, or when the
average annual rent
reserved     does    not
exceed one hundred

13)     The expression “Lease” defined in Section

2(16) clause (c) shows that it also includes therein

“any instrument by which tolls of any description are


14) Similarly the expression “executed” and

“execution” with reference to any instrument, as

defined in Section 2(12) of the Stamp Act, means

“signed” and “signature”.

15) Likewise the expression “Instrument” defined

in Section 2(14) shows that it includes therein every

document by which any right or liability is, or

purports to be created, transferred, limited,

extended, extinguished or recorded.

16) In our considered opinion, reading of the

contract in question would show that it was meant

to collect tolls (fees) called “Tehbazari” in local

parlance from squatters, venders, kiosks etc. and

was for collecting parking fees. Such contract, in

our view, is regarded as an instrument by which

tolls of any description are let. In other words, by

awarding such contract to the appellants, the

Corporation had let their right to the appellants to

collect the fees from a class of persons and for

carrying on particular activity in the city.

17) The expression “Lease” under the Stamp Act

has a wider meaning as compared to its original

meaning contained in Section 105 of Transfer of

Property Act (for short “the T.P. Act”). If “Lease”

under Section 2(16) of the Stamp Act includes

therein four specified category of documents set out

in clauses (a) to (d), we do not find any such

inclusion in Section 105 of the Transfer of Property

Act. It is for this reason, we are of the view that the

definition of “Lease” for the purpose of Stamp Act is

extensive in nature. It is also clear from the use of

the expression “and includes also” in Section 2 (16)

of the Stamp Act.

18) So by fiction, “any instrument by which tolls of

any description are let” is considered as “Lease” for

the purpose of payment of stamp duty under the

Stamp Act.

19) Justice G.P. Singh, the learned author in his

book “Principles of Statutory Interpretation” in

13th edition – at pages 179 and 180 has dealt with

this subject under the heading “Definition sections

or interpretation clause”. In its sub-heading (a)

“Restrictive and extensive definition”, the author

has explained as to where the words “mean”,

“include”, “includes”, and “means and includes” are

used in any definition clause in the Act then how

such definition should be interpreted. The following

passage is apposite to quote.

“(a) Restrictive and extensive definitions

The Legislature has power to define a word
even artificially. So the definition of a word
in the definition section may either be
restrictive of its ordinary meaning or it may
be extensive of the same. When a word is
defined to ‘mean’ such and such, the
definition is prima facie restrictive and
exhaustive; whereas, where the word defined
is declared to ‘include’ such and such, the
definition is prima facie extensive. When by
an amending Act, the word ‘includes’ was
substituted for the word ‘means’ in a
definition section, it was held that the
intention was to make it more extensive.
Further, a definition may be in the form of
‘means and includes’, where again the
definition is exhaustive, on the other hand, if
a word is defined ‘to apply to and include’,
the definition is understood as extensive.
These meanings of the expressions ‘means’,
‘includes’ and ‘means and includes’ have
been reiterated in Delhi Development
Authority vs. Bhola Nath Sharma
, (2011) 2
SCC 54. The use of word ‘any’ e.g. any
building also connotes extension for ‘any’ is a
word of very wide meaning and prima facie
the use of it excludes limitation.”

20) In our opinion, the aforesaid rule of

interpretation applies while interpreting the

definition of Lease under Section 2(16) of the Stamp


21) As mentioned above, the Corporation in these

cases awarded the contract to the appellants to

recover the tolls (fees) from squatters, vendors,

kiosks etc. and for parking the vehicles in specified

places. The contract was, therefore, for recovery of

tolls and created rights and liabilities in favour of

contracting parties qua each other. It cannot be

disputed that the expression “tolls of any

description” in clause (c) would include all kinds of

levy, charges, fees etc. which the Corporation is

entitled to charge under its Bye-laws (41). A fortiori,

the fees in question would also fall under Section

2(16)(c) of the Stamp Act.

22) In our opinion, the contract in question also

satisfied the definition of the expression

“Instrument” as defined in Section 2(14) of the

Stamp Act because it created a right and liability

and lastly, it also satisfied the definition of

expression “executed” and “execution” as defined in

Section 2 (12) of the Stamp Act because it contained

the signature of contracting parties.

23) Learned counsel for the appellants, however,

placed reliance on the decision of this Court in New

Bus-Stand Shop Owners Association vs.

Corporaton of Kozhikode Anr. [2009 (10) SCC

455] and contended that in the light of the law laid

down in the case of New Bus-stand Shop Owners

Association (supra), the contract in question has

characteristics of a “license” but not of a “lease”

and, therefore, the contract would attract a stamp

duty payable on a License Deed under the Stamp


24) In our view, the law laid down in the case of

New Bus-stand Shop Owners Association (supra)

is not applicable to the case at hand and is

distinguishable on facts.


25) In the case of New Bus-stand Shop Owners

Association (supra), the Corporation of Kozhikode

had let out their shops to several persons and

executed agreement in their favour. The question,

however, arose as to the true nature of the

agreement, whether it is a “license agreement” or a

“lease agreement”. Their Lordships on construction

of the terms of agreement held that the agreement

was a license and accordingly chargeable to stamp

duty as “License” under the Kerala Stamp Act.

26) Such is not the case here. The case at hand

relates to the right to collect the tolls let by the

Corporation to the person concerned. It squarely

attracts Section 2(16)(c) of the Stamp Act and

partakes the character of a “Lease”.

27) In the light of foregoing discussion, we are of

the considered opinion that the contract in question

is a “Lease” as defined in Section 2(16)(c) of the

Stamp Act and is accordingly chargeable to payment

of stamp duty as per the rates prescribed in Article

35 of Schedule I of the Stamp Act as “Lease”. The

conclusion arrived at by the Single Judge in

Mohammad Ali vs. Board of Revenue, U.P. (supra)

is, therefore, correct which we support with our

reasoning given supra.

28) In view of foregoing discussion, the appeals are

found to be devoid of any merit. They are

accordingly dismissed.



New Delhi;

December 06, 2017


Article source: Supreme Court

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