Mcd v. Key Point

ORDER This appeal is dismissed in terms of the common judgment of 2nd July 2008 passedin LPA No. 319 of 2007 titled "MunicipalCorporationof Delhi 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 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. INTHEHIGHCOURTOFDELHI:NEW DELHI LPA No. 319 of 2fln7 Reservedon: 19"^May, 2008 Date ofjudgment:July 02, 2008 MUNICIPALCORPORATIONOF DELHI .....Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates . N.K.GUPTA ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates -^4: i VARDI-MANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyandIS-Ir. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates LPA No.319/2007 • KEYPOINT ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates K.K. ENTERPRISES TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka,SeniorAdvocate • Mr. SanjeevSabharwalaiid Mr. AlokSingh,Advocates V, VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates Page2of25 K.K. ENTERPRISES TliroughMr. SanjayGoswamyand Mi-. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No, 380/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates GARIMAAGGRAWAL ThroughMr. SanjayGosv^amyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates VARDHMANPROPERTIES TliroughMr. SanjayGoswamytod Mr. AjayKumar, Advocatesfor the Respondents. Ms. IfamMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates VARDHMANPROPERTIES .....Respondent TliroughMr. SanjayGoswamyand Mr. y^jayKumar, Page3of25 \h. Advocatesforthe Respondents. Ms.IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 383/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates VARDHMANPROPERTIES ThroughMi\ SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IfamMajidand Ms. ZubedaBeguni,Advocates for RespondentGNCTD. A No. 384/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates VARDHMANPROPERTIES TliroughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates HARI SINGHBUILDER&PROMOTRS ThroughMi'. SanjayGoswamyand Mr. AjayKumar, LPA No.319/2007 Page4 of 25 xs-Advocatesforthe Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 386/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Ml". SanjeevSabharwaland Mr. Alok Singh,Advocates ICAMALlaSHORE AGGRAWAL TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 387/2007 MUNICIPALCORPORATIONOF DELffl Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCOI^ORATIONOF DELffl Through: IVIr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates BASANTPROJECTSLTD Through Mr. SanjayGoswamy and Mi-. AjayKumar, Advocates for the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo, 389/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates VARDHMANPROPERTIES ThroughIVIr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPANo. 391/2007 MUNICIPALCOI^ORATIONOF DELm Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml'. Alok Singh,Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 394/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates Page6 of 25 VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mi'. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPALCOr^ORATlONOF DELHI Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabliarwaland Mr. AlokSingh,Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates MANISHAGGRAWy\L ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI .....Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates LPA No.319/2007 Page7 of25 i VARDHMAN PROPERTIES TliroughMr. SaiijayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 401/2007 MUNICIPAL CORPORATIONOF DELI-E Through: Mr.H.S.Phoolka,SeniorAdvocate Mi\ SanjeevSabharwaland Ml-. Alok Singh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOFDELHI Tlirough; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMAN PROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 403/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Jp^ -rps VARDHMANPROPERTIES ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IrafliMajidandMs. ZubedaBegum,Advocates for RespondentGNCTt). LPA No. 405/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. SanjeevSabharvvaland Ml". AlokSingh,Advocates UNITYPROJECTSLIMITED ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. v.,^^^PANo.406/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates KEY POINT TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates LPA No.319/2007 -4^ VARDl-iMANPROPERTIES ThroughMr. SanjayGoswamyand Mi-. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 408/2007 MUNICIPALCORPORATIONOF DELHI Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates M.M. DEVELOPERS TliroughMl". SanjayGoswamyandMr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid andVis. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Ml*. Alok Singh,Advocates VARDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPAL CORPORATION OF DELHI Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates LPA No.319/2007 VARDHMANPROPERTIES ThroughVIi-. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1058/2007 MUNICIPALCORPORATIONOF DELffi Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates VARDHMANPROPERTIES Respondem ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IrainMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates SUNDERCONSTRUCTIONCO. TliroughMr. SanjayGoswamyandMr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and LPA No.319/2007 Mr. AlokSingh,Advocates VARIDHMANPROPERTIES ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELHI Through: Mr.H.S.Phoolka,SeniorAdvocate IVfr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates VARDHMANPROPERTIES TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI through: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharwaland Mr. AlokSingh,Advocates SURYABUILDWELLLIMITED ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid aiidMs. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPA No.319/2007 HON'BLEDR. JUSTICES. MURALIDHAI^

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¶3WhetherReportersoflocalpapersmay be /, allowedto see the judgment? To be referredto the Reporteror not? - Whetherthejudgmentshouldbe reported /< in Digest? JUDGMENT Dn S. Muralidhar. J.

¶1These appeals are directed against the commonjudgmentdated March, 2007 passed by the learned Single Judge of this Couit in Writ Petition(Civil)No. 8161 of2005 and Batch. The writ petitions challengedthe validityofthe noticesissuedby the Collectorof Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demandingtransfer duty as well as deficient stamp duty and penalty equalto tentimesoftlie deficientduty.

¶1The demand for transfer duty was made in respect of the conveyanceofplotsofland in favourofthe appellantswho successfully bid for them in auctions held by the Delhi DevelopmentAuthority ('DDA')/ Municipal Corporation of Delhi ('MCD'). Consequently, perpetuallease deeds were executedand registeredin their favour. The writ petitionershad also paid the appropriatestamp duty,and transfer duty intermsofthe certificateissuedby the CollectorofStampsin each of the cases.

¶3On 29''^ August2004 ageneralorderwas issuedby the Divisional Page 13 of25 ,<v Commissioner,Delhi statingthat the Collectorsof Stamp of different districtshad adoptedvaryingmethodsofcalculationofdutyin respectof perpetualleases which had resultedin the duty being short levied and collected.This conclusionwas reachedon an interpretationofArticle35 of Schedule1(A) to the Stamp Act as applicableto Delhi and Section 147 to the Delhi Municipal Coiporation Act, 1957 ('DMC Act'). Consequently,the impugnednotices were issued in February 2005 to eachofthe appellantscallingupon themto pay the deficientduty as well as the penalty equalingten times of the deficientduty. In respect of Vardliman Properties, for instance, the auction purchaser had paid Rs.12,42,215as stamp duty. This was now recomputedas Rs.13,30,604 being tlie aggregateof Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-worldngthe duty, the total considerationfor the perpetuallease was taken as the aggregate of the premium amount of Rs.1,91,11,000and the annual rent calculatedas.a percentageof the premiumamount.In additiona penaltyof Rs.8,88,389(being ten times of the deficient duty) was also demanded.

¶4Before the learned Single Judge the respondentscontendedthat they were not challenging the re-worldng of the stamp duty since the question of interpretation of 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 transferduty respectivelyas well as the Page 14of 25 dues in the transferduty as demandedin the impugnednotices.

¶5On the questionofpenalty,the learnedSingleJudge came to the conclusionthat in tentis of Section40 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 impositionofany penaltydid not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law.

¶6The next questionbefore the learned Single Judge concernedthe interpretationofthe relevantentry in Section 147 (2) (b) (v) DMC Act. Afterreferringto tlie decisionofthe learnedSingleJudge ofthis Court inNiagaraHotels&Builders(P) Ltd. v. Union ofIndia 65 (1997)DLT 826, the learned Single Judge concluded that the words 'amount' and 'value'in Section147 (2) (b) (v) DMC Act did not referto the premium collectedfor the grantofthe lease.The learnedSingleJudgerejectedthe contentionofthe MCD that the word 'amount'referredto premiumand the word 'value' referredto the rent. Itwas held that they referredto the quantumof the rent for the first fifty years of the lease. Consequently, transferduty would be leviableon one-sixthofthe rent for the first fifty years of the lease. Althoughthe lease referred to only the first thirty years, the learned Single Judge held tliat "the transfer duty has to be computedon the basis of1/6^ ofthe rent payableat presentfor the first Page 15 of25 30 yearperiodbut computedfor the firstfiftyyears".

¶7The petitions were accordinglypartly allowed holding that no penaltycouldbe iinposedin respectofthe transferduty under the DMC Act sincethat was a debatableissue. A directionwas issuedto re-work the transferduty in termsofthejudgmentofthe learnedSingleJudge. It was fiirtherheld that no further stamp duty in additionto the amounts alreadypaidwas payablenor was any penaltychargeable.

¶8Aggrievedby the judgmentofthe learnedSingleJudge,the MCD has filedthepresentappeals.

¶9It is contendedby 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 Section147 (2) (b) (v)DMC Act, ithad to connote the total considerationpayable 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 peipetuallease deed could not have takenplace. Therefore,the word 'rent'wouldincludethe premium paidbytheauctionpurchaserfor obtainingthe lease. In otherwords,the expression 'rent' meant 'rent + premium' and not the rent alone. Referencewas made to the definitionof the word 'premium'in Black's Law Dictionary, Edition (page 1181). Mr. Phoolka then submitted that everyword occurringin Section147 (2) (b) (v)DMC Act had to be LPA No.319/2007 Pagel6of25 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'. Sincethe leasecouldnot have beenexecutedwithoutthe premium beingpaid,tlie legislativeintentwas to levy transferduty onthe amount equal to one-sixthof the entire considerationpayablein respectof the lease which, in any event, has been set forth in the instrument. Mr.Phoolkacontendedthat sincethe annualrent payableis calculatedas a percentageof the premiumpaid, it is a measureof the premiumitself. Consequently,thereitwas logicalto includethe premiumamountas part \ oftherentforthepurposesof computingthetransferduty.

¶10In support of his contentionthat all words in the statutehaveto be given ftill effectMr.Phoolkareferredto the judgmentsofthe Supreme Court inShin-EtsuChemicalCo. 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, AssociatedCement Co. Ltd. v. State of MP (2004) 9 SCC 727 and Indcon Structurals (P) Ltd. v. Commissionerof CentralExcise (2006) 6 see 786..

¶11Mr.SanjayGoswamy,learnedcounselappearingon behalfof the respondents submitted that a taxing statute admits of only strict interpretation.If the intentionofthe legislaturewas to tax the premium \ paid for the obtainingof a perpetuallease, then certainlythe wordingof Page 17 of25 theprovisionshouldexpresslyindicateit. Relianceis placedon Section 105 of the Transfer of Property Act, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. Relying on the judgment of the Supreme Court in Commissionerof Income Tax v. Ptinbari Tea Company Alk 1965 SC 1871, it is submitted that the expression 'premium' and 'rent' have to be separatelyunderstoodand one cannot include the other in the context in which it is used in the deed of perpetuallease in the instantcase. 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 & Haiyana 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 otherwiseprovided in this Act, the Coi-poration shall levy a duty on transfers of immovablepropertysituatedwithin the limits of Delhi in accordancewith the provisionshereafterin this section contained.

(2) The said duty shall be levied-

(a) in the fomi of a surcharge on the duty imposed by the Indian Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Territory of Delhi, on every instrument of the 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 - Descriptionof instrument Amount on which duty should levied

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

(ii) Exchangeof immovable property The valueofthe propertyofthe greate value, as set forth in the instrument.

(iii) Giftofimmovablepropert; The valueofthe property,as set forth the instrument.

(iv) Mortgagewith possession immovable property The amountsecuredby the mortgage; set forth in the instrument.

(v) Lease in perpetuity immovableproperty The amountequalto one-sixthofthe whole amount or value of the rent which would be paid or delivered in respect of the first fifty years of the le; as set forth in the instrument, (emphasis supplied)

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

¶13In Niagara Hotels & Builders (P) Limited a learnedSingleJudge of this Courtheld 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 aggregate both the premium amount as well as the rent. In the impugned order in the instant cases, the learned Single Judge has heldthatthe expression"amount' or 'value' botliqualified"rent and 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 definitionof premium in the Law Lexiconby P. RamanathaAiyar,SecondEditionreads as under: a sum of money paid as coiisi#Mipiifor grantoflease.It represents -capiteliz^ rent which in fact is the differentbe^een the actual rent and the rent'wM<?h'miglit otherwisebe obtainedby thel^sor. OtherLike Sums", "are sums of the agreed rent in of grant, continuance or tenancy" In Black's Law Bicttona^,Sixth Edition, premium is defined as capitalizedrent"paidinlutnpsumatthetimeofleaseis granted."

¶15The question whether the 'rent' payable under the deeds of perpetuallease in the instant cases includes the 'premium' paid will depend on the contextin which the word is used. This distinctionis aclcnowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 ofthe 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'mSection 147 (2) (b) (v)DMC Act has to have a narrow meaning. The question that arose in the said case was "whether the premium collected as a lump sum (although payable in instalments) could also be consideredto be arevenuereceiptin the same mamier as the rent collected"? In the said case a registeredlease deed had been executedby the AssesseeCompanyby whichtwo tea estateswere leased but to a firm. The considerationfor the lease was a combinationof LPAN6.319/2007 Page 20 SI premiumin the sum ofRs.2,25,000ofthe AnnualrentofRs.54,000. The premiumwas to be paid in the following manner: Rs.45,000as lump sum at the time of execution of the lease deed and the balance of Rs.1,18,000in sixteenhalfyearly instalmentsofRs.l1,250 before the 31'' Januaryand 31'^ July of each year. The annual rent of Rs.54,000 was payablein the followingmanner:Rs.1,000 per month to be paid on or beforelast date ofeach 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 treatedthe instalmentof Rs. 11,250paidtowardspremiumas a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioneras well as the Tribunal. The High Court reversed the Tribunalandheldthat the sumof Rs.l 1,250was a capitalreceiptand not a revenue receipt. The Departmentthen appealed the Supreme Court. The Supreme Court refeited to the decisions in Kamakshya Narain Singh V. CommissionerofIncomeTax (1943)11ITR513, Memberfor the Board of Agriculture v. Commissionerof Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner ofIncome Tax AIR 1961 SC 732 to underscore the distinction between the premiumand rent. It pointedout that a one-timepaymentofpremium for the grantofa leasewas knownas 'salami'whichis in the natureofa capital receipt in tlie 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 Page21 of25 betweenapricepaid for atransferofarightto enjoythe propertyand the rent to be paidperiodicallyto the lessor. When the interestofthe lessoris partedwith for aprice, 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 foraier is a capital income and the latter a revenue receipt. There may be circumstanceswhere the parties may camouflage tlie real nature of the transactionby using clever pliraseology. In some cases, the so-called premium is in fact advance rent and in others rent is defeiTedprice. It is notthe form butthe substanceof the transactionthat matters. The nomenclatureused may not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionof the parties." On an analysisofthe relevantclausesin the lease deed, itwas held that the amount paid as premium could not be construedas rent and, such premiumwas a capitalreceiptinthehandsofthe lessor.

¶17InHotelKings v. Sara Farhan Liikmani(2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe pemiittedincreaseinrent can serveas ayardstick for the landlord to increase the rents it did not make such permitted increase"a partofthe rentthoughit may be a considerationfor the grant of lease."

¶18The lease deed in the instant cases a makes reference to the annual rent that wouldbe payablein future. This is not a pre-determinedfigure but is to be workedout as a percentageof the premiumamount. This is set out in the lease deed. For instance in the lease deed dated 1^' LPA No.319/2007 December,2003 in favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads: "NOW THIS INDENTUREWItNESSETH that, in consideration of the amount of Rs. 1,31,04,000/-(RupeesOne CroreThirtyOne lacs and Fourthousandonly) 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 District Centre"

¶19In the later portion of the same paragraphof the lease deed, the annual rent is stated as beingtwo and a halfper cent of Rs.1,31,04,000 and the first annual rent instalmentis to be paid on 15'^ January,2008. The relevantportionreadsasunder: "TO HOLD the premisesunto the lessee in perpetuity from 24''' day of January two thousand and three ^TELDING AND PAYING thereforeyearly rent payable in advance of.Rs. 5/- (Rupees Five only) up to the 23'^'' day ofJanuary 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 covenantsand 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 day ofJanuaryand IS''' day ofJuly in each year at the Reserve Banlc of India, New Delhi."

¶20Areading of the aforementionedportionsof the perpetuallease deed bringsout the distinctionbetween'premium'on tlie 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 "wholeamount or value ofthe rent" occurringin Section 147 (2) (b) (v) DMC Act has to be answered witli reference to the context in which the word is used in the lease deeds in question. A carefulexaminationof the above clausesof the lease deed, leads to the conclusionthat the 'premium' paid for the lease is distinct from the 'rent' payablethereunder,in other words, 'rent' in Section 147 (2) (b)

(v) DMC Act cannotbe saidto includethe premiumpaid for the lease. I 21, It is also not possibleto construethe premium paid as advance rent since the annualrent in is not indicatedas a pre-determinedsum in the lease deed. It is a percentageof the premium paid. The premium amount serves as a yardstick for determiningthe rent payable. It is therefore not possible to interpret the word 'rent' in the lease deeds in the instant cases as including the premium paid.

¶22This Court is inclinedto acceptthe 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 LPA No.319/2007 n /\ V, interpretation.The-principleenunciatedin the decisionsrelied upon by the appellantsthateveiyword in astatutemustbe givenits full meaning is unexceptionable.However, the meaning so given must be in the contextof the statute in general and the provisionin particular.In the contextofthe leasedeeds in questionin the instantcases,the word 'rent' cannotpossiblybe interpretedto includethe premiumpaid for the grant of the lease. As rightlycontendedby the respondents,ifthe legislature intendedto make the premium paid for the lease as includiblefor the purposesof determiningtransferduty then the statuteshould have been expressly worded to reflect that intention.

¶23Accordingly,this Court concurswiththe conclusionarrivedat by the by the learned Single Judge. The appeals are dismissedwith no orders as to costs. July 02, 2008 sb a

S. MURALIDHAR, J. CHIEF JUSTICE

IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder:2"^ July,2008 LPANo. 406/2007 MUNICIPAL CORPORATION OF DELHI Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal & Mr. Alok Singh, Advocates KEY POINT Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MURALIDHAR