Mcd v. Manish Aggrawal

ORDER This appeal is dismissed in terms of the common judgmentof 2nd July 2008 passed in LPA No. 319 of2007 titled "MunicipalCorporationofDelhi v. N.K. Gupta" and connected matters. Registryis directedto place on recorda copy ofthe judgmentpassedin LPA No. 319 of 2007. CHIEF JUSTICE July02, 2008 S. MURALIDHAR,J. dn 2^ Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. . <" IN THE HIGH COURT OF DELHI: NEW DELHI LPANo.319 of 2007 Reservedon: 19"^ May, 2008 Dateofjudgment;July 02, 2008 MUNICIPAL CORPORATIONOF DELHI ..... Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwa^mid Mr. Alok Singh, Advocat^ N.K. GUPTA .•••.Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. With LPA No. 373/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMAN PROPERTIES Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates v\ ICEYPOINT ThroughMr. SanjayGoswamyand Ml*. AjayKumar, Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates ' K.K. ENTERPRISES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 377/2007 IVIUNICIPALCOl^ORATlONOF DELffl , Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES ThroughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. ZubedaBegum, Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCOI^OIIATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates Page 2of25 K.K. ENTERPRISES Through Mr. Sanjay Goswamy and Mi*. Ajay Kumar, Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates GARIMAAGGRAWAL ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 381/2007 MUNICIPALCOIIPORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates VARDFIMANPROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, LPANo.319/2007 Page3of25 Ms. IramMajidandMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 383/2007 MUNICIPALCORPOR^mONOF DELffl through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland Ml-. Alok Singh, Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyandMr. AjayKumar, Ms. Iram Majid andMs. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 384/2007 MUNICIPALCORPORATIONOF DELffl Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh,Advocates VARDHMANPROPERTIES .^...Respondent TliroughMr. SanjayGoswamyand IVIr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCORPORATIONOF DELffl Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharvval and Mr. Alok Singh, Advocates HARI SINGHBUILDER&PROMOTRS ThroughMi-. SanjayGoswamyand Mi-. Ajay Kumar, LPANo.319/2007 Page4 of25 Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 386/2007 MUNICIPAL CORPORATIONOF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Mi*. Sanjeev Sabharwal and Mr. Alok Singh, Advocates ICAMALICISHOREAGGRAWAL TliroughMr. SanjayGoswamyand Mr. AjayKumar, ^ Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 387/2007 MUNICIPAL CORPOIUTION OF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPAL CORPORATIONOF DELHI Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates BASANT PROJECTS LTD Thi'oughMr. Sanjay Goswamy and Mi'. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANoo 389/2007 MUNICIPALCORPORATIONOF DELffl Through: Mr.H.S.Phoolka,SeniorAdvocate Ml\ Sanjeev Sabharwal and Ml-. Alok Singh, Advocates VARDliMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTt). LPA No. 391/2007 Municipal coi^oiution of delhi Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabhamal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES . through Ml-. SanjayGoswamyand Mr. Ajay Kumar, Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPAL COI^ORATION OF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates MANISH AGGRAWAL Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 400/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 401/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mi\ Sanjeev Sabharwal and Mr. Alok Singh, Advocates VAJtoHMAN PROPERTIES Tlirough Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 403/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate IVIr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates a> VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyandMi'. Ajay Kumar, Ms. Iram Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPAL CORPOIIATION OF DELHI Through: Mr.H.S. Phoolka, Senior Advocate iVIr. SanjeevSabharvvaland Mr. Alok Singh, Advocates UNITY PROJECTS LIMITED Through Mr. Sanjay Goswamy and IVIr. Ajay Kumar, IVIs. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPAL CORPORATION OF DELHI ..... Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates I«CEYPOINT . Through Mr. Sanjay Goswamy and IVLr. Ajay Kumar, Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Ml'. Sanjeev Sabharwal and Mr. Alok Singh,Advocates ay VARDHMANPROPERTIES thi-oughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 408/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates M.M. DEVELOPERS ThroughIVIt*. SanjayGoswamyandMi-. Ajay Kumar, Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCOI^ORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begurti,Advocates for Respondent GNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ivh". Alok Singh, Advocates Page 10of 25 V' VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 1058/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Suigh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPOIIATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Ml*. Sanjeev Sabharwal and Mr. Alok Singh, Advocates SUNDERCONSTRUCTIONCO. Through Mi\ Sanjay Goswamy and Mr. Ajay Kumar, iVIs. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPALCOI^ORATION OFDELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Pagellof25 Mr. Alok Singh, Advocates VARDHMANPROPERTIES Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 1061/2007 MUNICIPALCORPOMTIONOF DELHI Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates VARDLIMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates SURYABUILDWELLLIMITED TliroughMr. SanjayGoswamyand Mr. AjayKumar, Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. Coram: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MUllALIDHAR

¶1Whether Reporters of local papers may be allowed to see the judgment?

¶2To be referred to the Reporter or not? -

¶3Whether the judgment should be reported "fa in Digest? JUDGMENT Dr. S. Muralidhar., J.

¶1These appeals are directed against the common judgment dated 13'*^ March, 2007 passed by the learned Single Judge of this Court in Writ Petition (Civil) No. 8161 of 2005 and Batch. The writ petitions challenged the validity of the notices issued by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demanding transfer duty as well as deficient stamp duty and penalty equal to ten times of the deficient duty.

¶2The demand for transfer duty was made in respect of the conveyance of plots of land in favour of the appellants who successfully bid for them in auctions held by the Delhi Development Authority ('DDA')/ Municipal Corporation of Delhi ('MCD'). Consequently, perpetual lease deeds were executed and registered in their favour. The writ petitioners had also paid the appropriate stamp duty and transfer duty in terms of the certificate issued by the Collector of Stamps in each of the cases.

¶3On 29^'^ August2004 a generalorderwas issuedby the Divisional Commissioner, Delhi stating that the Collectors of Stamp of different districts had adopted varying methods of calculation of duty in respect of perpetual leases which had resulted in the duty being short levied and collected.This conclusionwas reachedon an interpretationof Article35 of Schedule1 (A) to the Stamp Act as applicableto Delhi and Section 147 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently, the impugned notices were issued in Februaiy 2005 to each of the appellantscalling upon them to pay the deficientduty as well as the penalty equaling ten times of the deficient duty. In respect of Vardhnian Properties, for instance, the auction purchaser had paid Rs.12,42,215as stamp duty. This was now recomputed as Rs.13,30,604 being the aggregate of Rs.10,79,772 as stamp duty and Rs.2,00,832 as transfer duty. In re-working the duty, the total consideration for the peipetual lease was taken as the aggregate of the premium amount of Rs.1,91,11,000and the annual rent calculatedas a percentageof the premium amount. In addition a penalty of Rs.8,88,389(being ten times of the deficient duty) was also demanded.

¶4Before the learned Single Judge the respondents contended that they were not challengingthe re-working of the stamp duty since the question of inteipretationof Article 35 of Schedule 1(A) of the Stamp Act was debatable. Their challenge was, therefore, confined to the penalty imposed under the Stamp Act as well as the DMC Act with regard to the stamp duty and transfer duty respectively as well as the Page 14of 25 dues in the transfer duty as demanded in the impugned notices.

¶5On the question of penalty, the learned Single Judge came to the conclusion that in terms of Section 40 of the Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impoundingan instrument.Sinceno instrumenthad yet been impounded by the Collector,the questionof impositionof any penalty did not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law.

¶6The next question before the learned Single Judge concerned the interpretation of the relevant entry in Section 147 (2) (b) (v) DMC Act. After referring to the decision of the learned Single Judge of this Court in Niagara Hotels & Builders (P) Ltd. v. Union ofIndia 65 (1997) DLT 826, the learned Single Judge concluded that the words 'amount' and 'value' in Section 147 (2) (b) (v) DMC Act did not refer to the premium collectedfor the grantofthe lease.The learnedSingleJudgerejectedthe contentionof the MCD that the word 'amount' referredto premiumand the word 'value' referred to the rent. It was held that they referred to the quantum of the rent for the first fifty years of the lease. Consequently, transfer duty would be leviable on one-sixth of the rent for the first fifty years of the lease. Although the lease referred to only the first thirty years, the learned Single Judge held that "the transfer duty has to be computedon the basis of 1/6"^ ofthe rent payableat presentfor the first LPANo.319/2007 30 year period but computed for the first fifty years".

¶7Tlie petitions were accordingly partly allowed holding that no penalty could be imposed in respect of the transfer duty under the DMC Act since that was a debatable issue. A direction was issued to re-work the transfer duty in terms of the judgment of the learned Single Judge, It was flirther held that no further stamp duty in addition to the amounts already paid was payable nor was any penalty chargeable.

¶8Aggrieved by the judgment of the learned Single Judge, the MCD has filed the present appeals.

¶9It is contended by Mr. H.S. Phoolka, the learned senior counsel appearing for the MCD that in the sense and in the context in which the word 'rent' is used in Section 147 (2) (b) (v) DMC Act, it had to connote the total consideration payable under the lease deed. His submission was that unless the total consideration as shown on the lease deed was paid by the lessee, the executionof the perpetual lease deed could not have takenplace. Therefore,the word 'rent' would includethe premium paid by the auction purchaser for obtaining the lease. In other words, the expression 'rent' meant 'rent + premium' and not the rent alone. Referencewas made to the definitionof the word 'premium' in Black's Law Dictionary,6'*' Edition (page 1181). Mr. Phoolka then submitted that every word occurring in Section 147 (2) (b) (v) DMC Act had to be LPANo.319/2007 given full effect to keeping in view the context in which the word occurs. Thereforethe disjunctive'or' had to be read as a conjunctive 'and'. Since the lease could not have been executed without the premium beingpaid, the legislativeintentwas to levy transfer duty on the amount equal to one-sixthof the entire considerationpayablein respect of the lease which, in any event, has been set forth in the instrument. Mr.?hoolkacontendedthatsincethe annualrent payableis calculatedas a percentage of the premium paid, it is a measure of the premium itself Consequently, there it was logical to include the premium amount as part of the rent for the purposesof computingthe transferduty.

¶10in supportof his contentionthat all words in the statutehaveto be given full effect Mr.Phoolkareferredto the judgments of the Supreme Court in Shin-Etsu ChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, Manohar Lai v/ VineshAnand (2001) 5 SCC 407, Noorie Manure Mill v. Commissioner Trade Tax (2007) 10 SCC 478, Associated Cement Co. Ltd. v. State of MP (2004) 9 SCC 727 and Indcon Structurals (P) Ltd. v. Commissionerof Central Excise (2006) 6 SCC 786..

¶11Mr.SanjayGoswamy,learnedcounselappearingon behalfof the respondents submitted that a taxing statute admits of only strict interpretation. If the intention of the legislaturewas to tax the premium paid for the obtaining of a perpetual lease, then certainlythe wordingof LPANo.319/2007 Page 17of 25 O the provision should expressly indicate it. Reliance is placed on Section 105 of the transfer of PropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. Relying on the judgment of the Supreme Court in Commissioner of Income Tax v. Panbari Tea Company AIR 1965 SC 1871, it is submitted that the expression 'premium' and 'rent' have to be separately understood and one cannot include the other in the context in which it is used in the deed of perpetual lease in the ilistant case. The word 'rent' can only refer to the actual rent indicated in the lease deed and not the premium. Reference is also made to the decisions in Govind Ram v. Rajphul Singh AIR 1973, Punjab & Haryana 94 and S. Venkataraman Swami V. S. Abdul Wahab AIR 1969 Madras 473.

¶12in order to appreciatethe respectivecontentions,a referencemay be made first to Section 147(2) (b) (v) of the DMC Act which reads: "147. Duty on transfer of property and method of assessment thereto.- (1) Save as othei-wiseprovided in this Act, the Corporation shall levy a duty on transfers of immovableproperty situatedwithin the limits of Delhi in accordancewith the provisions hereafter in this sectioil contained.

(2) The said duty shall be levied -

(a) in the form of a surchargeon the duty imposed by the Indian Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Tenitory of Delhi, on every instrument of th6 description specified below, and

(b) at such rate as may be determined by the Corporation not exceeding five per cent, on the amount specified below against such instruments - LPANo.319/2007 Description of instrument Amount on which duty should levied

(i) Sale of immovable property The amount or value of consideration for the sale, as set forth in instrument.

(ii) Exchangeof immovable property The value of the propertyof the greatt value, as set forth in the instrument.

(iii) Gift of immovableproperty The valueof the property,assetforth the instrument.

(iv) Mortgage with possession immovable property The amount secured by the mortgage ; set forth in the instrument. '

(v) Lease in pei-petuity immovable property The amountequalto one-sixthofthe whole amount or value of the rent which would be paid or delivered in respectof the first fifty yearsof the le; as set forth in the instrument, (emphasis supplied)

(v) Contract for transfer of immovable property Ninety per cent of the value of the consideration for the transfer as set out in the contract."

¶13In Niagara Hotels & Builders (P) Limiteda learnedSingleJudge of this Court held that the word 'or' in Section 147 (2) (b) (v) DMC Act could not be read in a manner so as to enable MCD to levy the transfer duty on an aggregateboth the premiumamount as well as the rent. In the impugned order in the instant cases, the learned Single Judge has heldthatthe expression"amount' or 'value' both qualified"rentand rent alone" and, therefore, the rent,(and not the premium) could alone form the basis for calculating the transfer duty.

¶14Dependingon the context,the word 'premium' can have both a broad as well as a narrow meaning. The definition of premium in the Law Lexicon by P. RamanathaAiyar,SecondEditionreads as under: LPANo.319/2007 ''Premittmflieans a sum of money paid as considerationfor grantof lease.It represents ' capit^ized - rent which in fact is the difference between the Actual rent and the rent which might otherwisebe obtainedby the lessor. ''PremiumOr other Like Sums", "are sums paid in excess of the agreed rent in consideration of grant, continuance or renewal ofthe tenancy" V In Black's Law Dictionary, Sixth Edition, premium is defined as capitalizedrent"paidin lumpsum at thetime ofleaseis granted."

¶15The question whether the 'rent' payable under the deeds of perpetual lease in the instant cases includes the 'premium' paid will depend on the context-in which the word is used. This distinctionis aciaiowledgedin the definitionsof the terms 'premium' and 'rent' in Section 105 of the TP Act as well.

¶16The decision of the Supreme Court in Panbari Tea Company supports the contentionof the respondentthat, given the context, the word 'rent' In Section 147 (2) (b) (v) DMC Act has to have a narrow meaning. The question that arose in the said case was "whetherthe premium collected as a lump sum (although payable in instalments) could also be consideredto be a revenuereceiptin the same manneras the rent collected"? In the said case a registeredlease deed had been executedbythe AssesseeCompanyby whichtwo teaestateswere leased out to a firm. The considerationfor the lease was a combinationof LPANo.319/2007 premiumin the sum ofRs.2,25,000ofthe annualrentofRs.54,000. The premium was to be paid in the following manner; Rs.45,000 as lump sum at the time of execution of the lease deed and the balance of Rs.1,18,000 in sixteen half yearly instalmentsof Rs.l 1,250 before the 31'^ January and 31®' July of each year. The annual rent of Rs.54,000 was payablein the followingmanneriRs.1,000 per month to be paid on or beforelast date of each month,thus, makingin all Rs.12,000per year and the balanceof Rs.42,000to be paid on or before 31®' Decemberof each year. In the assessmentyear for 1952-53,the income tax officer treated the instalment of Rs. 11,250 paid towards premium as a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioner as well as the Tribunal. The High Court reversed the Tribunal and held that the sum of Rs.l 1,250 was a capital receipt and not a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court refeiTed to the decisions in Kamakshya Narain Singh V. CommissionerofIncome Tax (1943)II ITR 513, Memberfor the Board of Agriculture v. Commissionerof Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner of Income Tax AIR 1961 SC 732 to underscore the distinction between the premiumand rent. It pointedout that a one-timepaymentof premium for the grantofa leasewas laiownas 'salami'whichis in the natureofa capital receipt in the hands of the lessor. The Supreme Court then referred to Section 105 TP Act and observed as under: "The section, therefore, brings out the distinction • LPANo.319/2007 Page21of25 between a price paid for a transfer of a right to enjoy the property and the rent to be paid periodically tO the lessor. When the interest of the lessor is parted with for a price, the price paid is premium or salami. But the periodical payments made for the continuous enjoyment of the benefits under the lease are in the nature of rent. The former is a capital income and the latter a revenue receipt. There may be circumstances where the parties may camouflage the real nature of the transaction by using clever pliraseology. In some cases, the so-called premium is in fact advance rent and in others rent is deferred price. It is not the fomi but the substance of the transaction that matters. The nomenclature used may not be decisive or conclusive but it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties." On an analysis of the relevant clauses in the lease deed, it was held that the amount paid as premium could not be construed as rent and, such premium was a capital receipt in the hands of the lessor.

¶17In Hotel Kings Vo Sara Farhan Lukmani (2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceof a contextualinterpretation and held that while the permitted increase in rent can serve as a yardstick for the landlord to increase the rents it did not make such permitted increase "a part of the rent though it may be a consideration for the grant of lease."

¶18The lease deed in the instant cases a makes reference to the amiual rent that would be payable in future. This is not a pre-determinedfigure but is to be worked out as a percentage of the premium amount. This is set out in the lease deed. For instance in the lease deed dated 1^^ LPANo.319/2007 Page22 of 25 December,2003 in favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads; "'NOW THIS INDENTURE WIimsSETH that, in considerationof the amount of Rs. 1,31,04,000/-(RupeesOne CroreThirtyOne iacs and Four thousand only) paid towards premium before the execution of these presents (the receipt where of the Lessor hereby aclcnowledges) and of the rent hereinafter reserved and of the Covenants on the part of the lessee hereinafter contained, the Lessor doth hereby demise ' unto the Lessee, all that plot of land being the Commercial Plot No. 09 Block No. X in the lay out plan of New Friends Colony ^ DistrictCentre"

¶19In the later portion of the same paragraphof the lease deed, the annual rent is stated as beingtwo and a half pei-cent of Rs.1,31,04,000 and the first annual rent instalmentis to be paid on 15^^ January,2008. The relevant portion reads as under: "TO HOLD the premises unto the lessee in perpetuity from 24*^ day of January two thousand and three YIELDING ANt) A PAYING therefore yearly rent payable in advance of.Rs. 5/- (I^upeesFive only) up to the 23'^'' day of January two thousand and Eight and thereafter at the rate of two and a half per cent of the premium (the sums already paid and such other sum or sums hereafter to be paid towards premium under the covenants and conditions hereinafter contained) or such other enhanced rent as may hereafter be assessed under the covenants and conditions hereinafter contained clear of all deductions by equal half yearly payments on the 15'^ day of Januaryand 15^ day of July in each year at the Reserve Banlc of India, New Delhi." LPANo.319/2007 L a,V

¶20A reading of the aforementionedportions of the perpetuallease deed brings out the distinctionbetween'premium'on the one hand and 'rent' on the other. The word 'premium' carries more than one definition';it has to be understoodin the contextin which it is used in a lease deed. The questionwhetherthe word 'premium'is also subsumed in the words "whole amount or value of the rent" occurring in Section 147 (2) (b) (v) DMC Act has to be answered with reference to the context in which the word is used in the lease deeds in question. A careful examination of the above clauses of the lease deed, leads to the conclusion that the 'premium' paid for the lease is distinct from the 'rent' payable thereunder. In other words, 'rent' in Section 147 (2) (b)

(v) DMC Act cannot be said to include the premium paid for the lease.

¶21It is also not possible to construe the premium paid as advance rent since the annual rent in is not indicated as a pre-deteiTninedsum in the lease deed. It is a percentage of the premium paid. The premium amount serves as a yardstick for detennining the rent payable. It is therefore iiot possible to interpret the word 'rent' in the lease deeds in the instant cases as including the premium paid.

¶22This Court is inclinedto accept the contentionof the respondent that since what is sought to be collected is a transfer duty, which is an involuntary exaction of revenue, the statute admits of a strict "A interpretation.The principleenunciatedin the decisionsrelied upon by the appellantsthat everyword in a statutemust be givenits full meaning is unexceptionable.However, the meaning so given must be in the context of the statute in general and the provision in particular.In the contextof the leasedeeds in questionin the instantcases,the word 'rent' caiinotpossiblybe inteipretedto includethe premiumpaid for the grant of the lease. As rightly contended by the respondents, if the legislature intended to make the premium paid for the lease as includible for the purposes of determining transfer duty then the statute should have been expressly worded to reflect that intention.

¶23Accordingly, this Court concurs with the conclusion arrived at by the by the learned Single Judge. The appeals are dismissed with no orders as to costs. July 02, 2008 sb LPANo.319/2007

S. MURALIDHAR, J. CHIEF JUSTICE

IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder:2"'^July,2008 LPANo. 396/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwal& Mr. Alok Singh,Advocates MANISH AGGRAWAL ThroughMr. SanjayGoswamyandMr. AjayKumar, Ms. IramMajidandMs. ZubedaBegum,Advocatesfor Respondent GNCTD. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MURALIDHAR