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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6086 OF 2013. (Arising out of SLP(C) No. 3749 of 2012)

State of U.P. now Uttarakhand  and another  ...Appellants

Versus

Vinit Traders and Investment Ltd.  and another ...Respondents

O R D E R

Leave granted.

Whether the sale deed executed by Aditya Mills Ltd. in  

favour of respondent No.1 could be treated as lease deed for  

the purpose of stamp duty is the question, which arises for  

consideration  in  this  appeal  filed  against  order  dated  

4.7.2011 passed by the learned Single Judge of the Uttarakhand  

High Court in Writ Petition No.1987/2001.

For the sake of reference, the relevant portions of the  

sale deed are reproduced below:

“This  Indenture  made  this  3rd  day  of  May  One  Thousand Nine hundred Ninety Five between Aditya  Mills  limited  a  Company  incorporated  under  the  Companies Act, 1956 having its Registered Office  at Madanganj Kishangarh (Rajasthan) through their  duly constituted attorney Sri Kishan Singh Kothari  S/o Sri Tej Raj Kothari, R/o Old Kotwali Road,  Kishangarh, Distt. Ajmer (Rajasthan) hereinafter  

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called the VENDOR (which expression shall unless  excluded by or repugnant to the context, be deemed  to include his heirs, executors, administrators,  representatives, etc.) of the ONE PART AND Vinit  Traders & Investment Ltd. a Company incorporated  under  the  Companies  Act,  1956,  having  its  registered office at 135, Canning Street, Clive  Row  Entrance,  Calcutta,  hereinafter  called  the  VENDEE (which expression shall unless excluded by  or repugnant to the context be deemed to include  their  heir,  executors,  administrators,  representative,  liquidators and  assigns) of  the  OTHER PART.

WHEREAS the VENDOR has represented that he is the  absolute owner of law premises known as "MANAK"  (Adhikari  Lodge)  being  Bunglow  No.60  (Sixty),  situated  at  Nehru  Road  within  the  limits  of  Ranikhet Cantonment, Distt. Almora, Uttar Pradesh,  more particularly described in Schedule I hereto.

AND WHEREAS the VENDOR has also represented that  the  said  premises  is  built  on  land  (more  particularly described in Schedule II hereto) held  on lease for 99 years expiring on 9.3.2021 by the  VENDOR under the President of India by virtue of a  lease deed in Form "D" of the Cantonment Code,  1912.

AND WHREAS the VENDOR has also represented that  the said premises and the said lease hold rights  were purchased/acquired by the VENDOR from Shri  Sita  Ram  Mehra  son  of  Shri  Bhagat  Ram  Mehra,  resident of B-317, New Friends Colony, New Delhi- 110014 vide sale deed, dated 29.9.1978 registered  at Book No.I (One) Volume 333, on pages 147 (One  hundred forty seven) to 170 (One hundred seventy)  at Serial No.768 in the office of Sub-Registrar,  Ranikhet,  District  Almora,  Uttar  Pradesh  on  29.9.1978.

AND WHEREAS the VENDOR has also represented that  the  said  purchase/acquisition  has  been  duly  entered in the records of the Cantonment authority  by  mutating  the  said  land  in  the  name  of  the  VENDOR who has been and is paying the ground rent  and house tax to the authorities concerned.

AND WHEREAS the VENDOR has agreed to sell and the  VENDEE, acting on the aforesaid representations,  have agreed to purchase the said property and the  lease-hold rights in the said land as an absolute  estate  at  or  for  the  price  of  Rs.2,85,000/-  (Rupees Two Lacs eighty five thousand) only.”

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At the time of registration, the value of the land and  

building  was  shown  as  Rs.2,85,000/-  and  stamp  duty  of  

Rs.35,625/- was paid. Sub-Registrar, Almora did not agree with  

the valuation of the property, i.e., the land and building by  

respondent No.1 and its vendor and made a reference to the  

Collector under Section 47A(2) of the Indian Stamp Act, 1899,  

as applicable to the State of Uttarakhand, (for short, ‘the  

Act’).  The  latter  got  conducted  an  inquiry  through  the  

Tahsildar, who submitted valuation report dated 23.5.1995 with  

the finding that value of the property was Rs.47,25,200/-.

After  considering  the  report  of  the  Tahsildar,  the  

Collector  issued  show  cause  notice  to  respondent  No.1  for  

recovery of the deficit stamp duty. Respondent No.1 contested  

the notice by asserting that its vendor was a lessee of the  

Government of India and the property was rightly valued at  

Rs.2,85,000/- for the purpose of stamp duty. The Collector did  

not accept the plea of respondent No.1 and passed order dated  

16.1.1997, the relevant portions of which are extracted below:

“The statement of the vendee that he purchased  only building is not correct because according to  provisions of the Stamp Act, the stamp duty is  payable on the basis of contents mentioned in the  deed. In the deed the vendor sold 66 nalis land  and  building.  The  value  of  the  building  was  assessed Tehsildar was Rs.4,00,000/-. Annual rent  of  the  building  was  assessed  as  Rs.2,214/-.  According  to  the  multiplier  given  in  Rule  341  (111)  of  Stamp  Rules  the  value  come  to  Rs.55,350/-. On the other hand the Sub-Registrar,  Ranikhet  said  the  rent  of  building  taken  for  office of the City Municipal Officer, Ranikhet as  Rs.l125/- as decided by Naib-Tehsildar, Ranikhet.  The meaning of this incident is that in Ranikhet  

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value  of  old  building  is  also  increasing  and  annual income of buildings is also increasing. In  deciding  value  of  buildings  their  usefulness  cannot be ignored. On this basis if monthly rent  of the entire banglow be taken as Rs.2000/- and  rent  of  each  other  room  (four  rooms)  be  taken  Rs.l00/- per month then also the value of property  comes  to  Rs.2400/-  x  12  x  25  =  Rs.7,20,000/-.  Therefore, the valuation of the property seems to  be  appropriate  on  the  basis  of  this  incident.  Accordingly the value of building is decide as  Rs.7,20,000/-.

The value of 66 nali land transferred in the deed  comes to Rs.39,60,000/- at the present rate of  Rs.60,000/-  per  nali.  The  same  value  was  also  assessed by the Tehsildar. Therefore, the value of  the  66  nalis  transferred  land  is  decided  as  Rs.39,60,000/-. The Tehsildar Ranikhet also told  48 fruit giving piece and 131 building trees in  the land and assessed their value as Rs.45,200/-.  Therefore, the value of property entire comes to  Rs.7,20,000/-  +  39,60,000/-  +  45,200/-  total  Rs.47,25,200/-.  On  which  stamp  duty  of  Rs.5,90,687.50  is  payable.  The  vendee  paid  Rs.35,625/-  and  the  deficiency  is  of  Rs.5.55,062.50.   Therefore,  recovery  of  stamp  deficit  of  Rs.5,55,062.50  be  assured  from  the  vendee within one month.”

The revision filed by respondent No.1 was dismissed by  

the Chief Controlling Authority vide order dated 7.3.2000.  

Respondent No.1 challenged the orders of the Collector  

and  the  Chief  Controlling  Authority  in  Writ  Petition  

No.1987/2001. The learned Single Judge accepted the contention  

of  respondent  No.1  that  the  provisions  of  Article  63  of  

Schedule IB of the Act are attracted in the case and the  

Collector  committed  an  error  by  ordering  recovery  of  

Rs.5,55,062.50 as deficient stamp duty.  

We  have  heard  learned  counsel  for  the  parties  and  

carefully perused the record.  A reading of sale deed dated  

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3.5.1995  leaves  no  room  for  doubt  that  the  vendor  had  

transferred its ownership over the property constructed on the  

land specified in Schedule-II to the deed, which was held by  

the vendor on 99 years lease.  The sale deed further shows  

that the vendor had purchased/acquired the premises and the  

leasehold rights from Shri Sita Ram Mehra, son of Shri Bhagat  

Ram Mehra, resident of B-317, New Friends Colony, New Delhi  

vide  deed  dated  29.9.1978.   Unfortunately,  neither  the  

Collector and the Chief Controlling Authority nor the learned  

Single Judge called upon respondent No.1 to produce deed dated  

29.9.1978 and decided the issue relating to the stamp duty  

without having the benefit of going through the contents of  

deed  dated  29.9.1978,  which  would  have  helped  them  to  

determine true nature of the transaction between Aditya Mills  

Ltd. and respondent No.1.  

In our considered view, the Collector could have decided  

whether deed dated 3.5.1995 was a lease deed simpliciter or  

sale  deed  for  the  purpose  of  stamp  duty  only  after  going  

through the contents of deed dated 29.9.1978 but he did not  

bother to undertake that exercise. The learned Single Judge  

also committed the same mistake and straightaway recorded a  

finding  that  it  was  a  lease  deed.  He  should  have  first  

examined the terms and conditions incorporated in deed dated  

29.9.1978, referred to the judgments in Byramjee Jeejeebhoy  

(P) Ltd. v. State of Maharashtra AIR 1965 SC 590 and Residents  

Welfare Association, Noida v. State of Uttar Pradesh (2009) 14  

SCC 716 and then decided whether the Collector was right in  

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demanding additional stamp duty from respondent No.1.

We  may  have  finally  decided  the  controversy  but  are  

unable to do so because neither party has placed on record  

copy  of  deed  dated  29.9.1978  and  without  examining  that  

document, it is not possible for us to record a firm finding  

about the nature and character of deed dated 3.5.1995.  In  

this scenario, the only appropriate course is to remit the  

case to the Collector for fresh determination of the issue  

relating to valuation of the building and the land purchased  

by respondent No.1. Ordered accordingly.

The  appeal  is  disposed  of  with  a  direction  that  the  

Collector  shall  call  upon  respondent  No.1  to  produce  deed  

dated 29.9.1978, to which reference has been made in the deed  

executed in its favour by Aditya Mills Ltd. and then decide  

whether it is a lease deed simpliciter or a sale deed for the  

purpose of stamp duty.

While disposing of the appeal, we consider it necessary  

to make it clear that if the Collector comes to the conclusion  

that  the  deed  executed  by  Aditya  Mills  Ltd.  in  favour  of  

respondent No.1 is a lease deed then the latter shall have to  

surrender the land to the Government of India on 9.3.2021,  

i.e., the date on which term of the lease would expire.

.........................J. (G.S. SINGHVI)

.........................J.

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(V. GOPALA GOWDA) New Delhi; July 26, 2013.

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