IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder;2"^ July, 2008 LPA No. 387/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal& Mr. Alok Singh,Advocates versus VARDHMAN PROPERTIES Respondent 51^ ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocatesfor Respondent GNCTD. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MURALIDHAR ORDER This appeal is dismissed in terms of the common judgmentof 2nd July 2008 passed in LPA No. 319 of 2007 titled "MunicipalCorporationofDelhi v. N.K. Gupta" and connectedmatters. 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. Signature Not Verified 9 % IN THE HIGH COURTOF DELHI:NEW DELHI LPANo.319 of 2007 Reservedon: 19"^ May, 2008 Date ofjudgment:July 02, 2008 MUNICIPALCORPORATIONOF DELHI .....Appellant Tlirough: iVli-.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus A . N.K. GUPTA Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates ^ versus VARDI-MANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 374/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPA N0.319/2007 Page 1of25 KEY POINT Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. Irani Majid and Ms. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELffi Appellant Tlirough; Mr.H.S.Phoolka,SeniorAdvocate ]VIr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus K.K. ENTERPRISES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates V, versus VARt)HMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELffi Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mi\ Alok Singh, Advocates versus LPANo.319/2007 Page2of25 K.K. ENTERPRISES TliroughMr. SanjayGoswamyand Mi*. AjayKumar, Advocatesfor the Respondents, Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml'. Alok Singh,Advocates versus GARIMAAGGR^\WAL _ Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTE). LPA No, 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Resi^ondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. . Ms. Iram Majidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELI-II Appellant riirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page3of25 Vp Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 383/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMi*. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IfamMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. ^^PA No. 384/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMl*. SanjayGoswamyand Mi-. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 385/2007 MUMCIPALCOi^OlUTlONOF DELHI Appellant Tlirough: Mi-.H.S.Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus HAm SINGHBUILDER&PROMOTRS Respondent ThroughMi'. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 386/2007 MUNICIPALCOIiPORATlONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus ICAMALlaSHOREAGGRAWAL Respondent TliroughMr. SanjayGosvs^amyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. ^--''1jS^No^87/2007 MUNICIPALCORPORATIONOF DELH Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMi*. Sanjay Goswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate VIi*. Sanjeev Sabharwal and IVIr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, LPA No.319/2007 Page 5 of 25 Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 389/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml'. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 391/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus . VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 394/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 6 of 25 VARDI-lMANPROPERTmS Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi-. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTC). LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml'. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus MANISHAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. Irani Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeey Sabharwal and Ml'. Alok Singh, Advocates versus LPA No.319/2007 Page 7 of 25 7^ VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 401/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mi-.H.S.Phoolka, SeniorAdvocate Ml-. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi-. AjayKumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 403/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page 8 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharvvaland Ml'. AlokSingh,Advocates versus UNITYPROJECTSLIMITED Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates LPANo.319/2007 Page9of25 OT versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesforthe Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 408/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus M.M. DEVELOPERS Respondent TliroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPAL CORPORATION OP DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates LPA No.319/2007 - Page 10 of 25 versus VARDFUMANproperties Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTI). LPA No. 1058/2007 MUNICIPALCORPORATIONOF DELffi Appellant Tlirough: Mi-.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus SUNDERCONSTRUCTIONCO. Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and LPANo.319/2007 Page 11 of 25 Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi-. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELHI Appellant ^4 Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus 5'Ui. VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwal^nd Mr. Alok Singh, Advocates versus SURYABUILDWELL LIMITED Respondent ThroughIVIr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. Corani: HON'BLfi THE CHIEF JUSTICE LPA No.319/2007 Page 12of 25 HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be •. allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported //, in Digest? JUDGMENT Dr. So Muralidhar. J. 1. These 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 challengedthe validityof the notices issued by the Collectorof 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 tlie deficientduty. 1. The demand for transfer duty was made in respect of the conveyanceof plots of land in favour of the appellantswho 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 certificateissuedby the Collectorof Stamps in each Of the cases. 3. On 29^ August2004 a generalorderwas issuedby the Divisional LPANo.319/2007 Page 13 of 25 7^ Commissioner,Delhi stating that the Collectorsof Stamp of different districtshad adoptedvaryingmethodsofcalculationofduty in 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 Corporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in February 2005 to each ofthe appellantscallingupon them to pay the deficientduty as well as the penalty equaling ten times of the deficient duty. 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 the aggregate of Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-worldng the duty, the total consideration for the perpetuallease was taken as the aggregateof the premium amount of Rs.1,91,11,000and the annual rent calculatedas a percentage of the premiumamount. In additiona penaltyof Rs.8,88,389(being ten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondentscontendedthat they were not challengingthe re-worldngof the stamp duty since the question of interpretationof 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 LPANo.319/2007 Page 14 of 25 "r^ duesin the transferduty as defnandedin the impugnednotices. I 5. On the questionofpenalty,the learnedSingleJudge came to the conclusionthat in terms 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 questionofimpositionofany penaltydid not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law. 6. The next questionbeforethe learnedSingleJudge concernedthe interpretationof the relevantentry in Section 147 (2) (b) (v) DMC Act. \ Afterreferringto the decisionof the learnedSingleJudge of this Court mNiagara Hotels&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 I collectedfor thegrantofthe lease.The [earnedSingleJudgerejectedthe contentionof the MCD that the word 'amount'referredto premiumand the word 'value' refeiredto the rent. It was held that theyreferredto the quantum of the rent for the first fifty years of the lease. Consequently, transfer duty would be leviableon one-sixthof 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 tliat "the transfer duty has to be computedon the basis of 1/6^.ofthe rent payableat presentfor the first LPA No.319/2007 Page 15 of 25 V 30 yearperiodbutcomputedfor tlie firstfiftyyears". 7. Tlie petitions were accordinglypartly allowed holding that no penaltycould be imposedin respectofthe transferduty underthe DMC Act since that was a debatable issue. A direction was issued to re-work the transferduty in termsofthejudgmentofthe learnedSingleJudge. It was ftirtherheld that no further stamp duty in additionto the amounts alreadypaidwas payablenorwas any penaltychargeable. 8. Aggrievedby tliejudgmentofthe learnedSingleJudge,the MCD has filed the present appeals. 9. It 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 usedin Section147 (2) (b) (v)DMC Act, it hadto 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 peipetual lease deed could not have talcenplace. Therefore,the word 'rent' would includethe premium paid by the auctionpurchaserfor obtainingthe lease. In otherv/ords,the expression 'rent' meant 'rent + premium' and not the rent alone. Referencewas made to the definitionof the word 'premium'in Black's Lav/ Dictionaiy,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 Page 16 of 25 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 been executedwithoutthe premium beingpaid,the legislativeintentwas to levy transferduty on the amount equal to one-sixthof the entire considerationpayable in respect of the lease which, in any event, has been set forth in the instrimient. Mr.Phoolkacontendedthat sincethe annualrent payableis calculatedas a percentageof the premiumpaid, it is a measureof the premiumitself Consequently,thereit was logicalto includethe premiumamountas part of the rent for the purposesof computingthe transferduty. 10. hi support of his contention that all words in the statute have to be given full effectMr.Phoolkareferredto the judgmentsof the Supreme Court in Shin-EtsuChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, Manohar Lai v/ VineshAnand (2001) 5 SCC407, 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.. 11. Mr.SanjayGoswamy,learnedcounsel appearingon behalfof the respondents submitted that a taxing statute admits of only strict interpretation. If the intentionof the legislaturewas to tax the premium paid for the obtainingof a perpetuallease, then certainlythe wordingof LPANo.319/2007 Pagel7of25 the provisionshouldexpresslyindicateit. Relianceis placedon Section 105 ofthe TransferofPropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separatelydefined. Relying on the judgmentof the Supreme Court in Commissionerof Income Tax v. Panbari Tea Company AIR 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 ofperpetuallease 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 <£ Haryana 94 and S. VenkataramanSwami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In orderto appreciatethe respectivecontentions,a referencemay bemade firstto Section147 (2) (b) (v) ofthe DMC Act whichreads: "147. Duty on transfer of property and method of assessment thereto,-(1) Save as otherwiseprovidedin this Act, the Corporation shall levy a duty on transfersof immovablepropertysituatedwithin the limitsofDelhi in accordancewith the provisionshereafterin this section contaiiied. (2)The saidduty shallbelevied-- (a) in the fomi of a surchargeon the duty imposedby the Indian Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Territory of Delhi, on every instrumentof the description specified below, and (b) at such rate as may be detennined by the Corporation not exceedingfive per cent, on the amount specifiedbelow againstsuch instruments - LPANo.319/2007 Page 18 of25 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) Exchange of immovable property The valueofthepropertyofthe greats value, as set forth in the instrument. (iii) Gift of immovablepropert; The value of the property,as set forth the instrument. (iv) Mortgagewith possession immovable property The amount secured by the mortgage ; set forth in the instrument. (v) Lease in perpetuity immovable property Theamountequalto one-sixthof the whole amount or vahie 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 inmiovable property Ninety per cent of the value of the consideration for the transfer as set out in the contract." 13. In Niagara Hotels & Builders (P) Limited a learned SingleJudge 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' bothqualified"rentand rent alone" and, therefore,the rent,(and not the premium)could alone form the basis for calculating the transfer duty. 14. Depending on 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. Ramanatha Aiyar, Second Edition reads as under: LPANo.319/2007 Page 19 of 25 a sum of money paid as considerato for grantoflease.Itrepresents "capitalized rent which in fact is the difference between the actual rent and the rent wMdi miglit otherwisebe obtainedby the lessor. other Like Sums", "are sums pai# itt excess of the agreed rent in CGnslieia^on of grant, continuance or renewal^>lthetenancy" In Black's Law Dictionai^, Sixth Edition, premium is defined as capitalizedrent"paidinlumpsum at thetuneofleaseis granted." 15. The question whether the 'rent' payable under the deeds of perpetual lease in the mstant cases includes the 'premium' paid will depend on the context in which the word is used. This distinctionis aclcnowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 of the TP Act as well. 16. The 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 "whether the premium collected as a lump sum (although payable in instalments) could also be consideredto be arevenuereceiptin the same mamieras the rent collected"? In tlie said case a registeredlease deed had been executedby the AssesseeCompanyby whichtwo tea estateswere leased out to a firm. The considerationfor the lease was a combinationof LPANo.319/2007 Page 20 of 25 i •V. -\J- premiumin the sum ofRs.2,25,000ofthe annualrent ofRs.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.1,18,000in sixteenhalfyearly instalmentsof Rs.11,250 before the 31'' Januaryand 31'^ July ofeach 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 assessment year for 1952-53,the income tax officer treated the instalment of Rs. 11,250paid towards premium as a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioner as well as the Tribunal. The Higli Court reversed the Tribunalandheld that the sumof Rs.l 1,250was a capitalreceiptand not a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. Commissioner ofIncome Tax (1943) IIITR 513, Memberfor the Board of Agriculture v. Commissioner of 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 premium and rent. It pointed out that a one-time payment of premium for the grant of a lease was hiown as 'salami' which is in the nature of a 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 Page 21 of 25 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 fonner 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 defen-edprice. It is notthe fomi butthe substanceofthe transactionthat matters. The nomenclatureused may not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionof theparties." On an analysisofthe relevantclausesin the lease deed, it was held that the amount paid as premiumcould not be construedas rent and, such premiumwas a capitalreceiptinthehandsofthe lessor. 17. In HotelKings v. Sara FarhanLukmani(2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe permittedincreasein rentcan serve as ayardstick for the landlord to increase the rents it did not make such permitted increase"apartofthe rentthoughitmay be a considerationfor the grant of lease." 18. The lease deed in the instant cases a makes reference to the amiual rent that would be payablein foture. 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^' LPANo.319/2007 Page22of25 December,2003 ifi favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads: "NOW THIS INDENTURE WITNESSETH that, in consideration of the amount of Rs. 1,31,04,000/-(RupeesOne CroreThirtyOne lacs and Four thousandonly) paid towards premium before the execution of these presents (the receipt where of the Lessor hereby aclaiowledges) 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 Conuiiercial Plot No. 09 Block No. X in the lay out plan of New Friends Colony District Centre" 19. In the later portion of the same paragraphof the lease deed, the annual rent is statedas being two and a half per cent of Rs.1,31,04,000 and the first annual rent instalmentis to be paid on 15"' January, 2008. The relevantportionreads as under: "TO HOLD the premisesunto the lessee in peipetuity from 24"^ day of January two thousand and three YIELDING 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 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 ofJanuaryand 15^ day of July in each year at the Reserve Banlc of India, New Delhi." LPANo.319/2007 Page 23 of25 20. A reading of the aforementionedportions of the perpetual lease 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,