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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.3695 OF 2009

Nasiruddin & Anr. Etc. ….Appellant(s)

VERSUS

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

WITH

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

J U D G M E N T

Abhay Manohar Sapre, J.

1) These appeals are filed against the judgment

and  order  dated  22.05.2006  passed  by  the  High

Court of Judicature at Allahabad in Civil Misc. Writ

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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

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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

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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.

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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.

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(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 “signature”.

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;

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Article 35 of Schedule 1.

Description  of Instrument

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 delivered—

(i) where  the lease purports to  be  for  a term  of  less than one year;

(ii) where  the lease purports to  be  for  a term  of  not less  than  one year  but  not more  than three years;

(iii) where  the lease purports to  be  for  a term in excess of three years;

(iv) where  the lease does not purport  to  be for  any definite term;

The  same  duty  as  a Bond  (No.15)  for  the whole amount payable or  deliverable  under such lease.

The same duty as Bond (No.  15)  for  the amount or value of the average  annual  rent reserved.

The  same  duty  as  a Conveyance  (No.  23) for  a  consideration equal to the amount or value  of  the  average annual rent reserved.

The  same  duty  as  a Conveyance  (No.23) for  a  consideration equal to the amount or value  of  the  average annual  rent  which would  be  paid  or delivered  for  the  first ten  years  if  the  lease continued so long.

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(v) where  the lease purports to  be  in perpetuity.

(b)  where  the lease is granted  for  a  fine  or premium or for money advanced  and  where no rent is reserved.

(c)  where  the  lease  is granted  for  a  fine  or premium or for money advanced in addition to rent reserved.

Exemptions (a)  Lease,  executed  in

The  same  duty  as  a Conveyance  (No.  23) for  a  consideration 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.

The  same  duty  as  a Conveyance  (No.  23) for  a  consideration equal to the amount or value  of  such  fine  or premium  or  advance as  set  forth  in  the lease.

The  same  duty  as  a Conveyance  (No.  23) 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 delivered:  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 pursuance  of  such agreement  is

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the case of a cultivator and for the purposes of cultivation (including a lease  of  trees  for  the 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 rupees.

subsequently executed,  the  duty  on such  lease  shall  not exceed eight annas.

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

let”.   

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

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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

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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

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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

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

Act.

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

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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

Act.

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.

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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

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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.     

                             …...……..................................J. [ABHAY MANOHAR SAPRE]

 ………...................................J.   [NAVIN SINHA]

New Delhi; December 06, 2017