% IN THE HIGH COURT OF DELHI AT NEW DELHI LPANo. 1051/2007 Reservedon: 19"^May, 2008 Date of order: July, 2008 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal & Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent 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 ORDER This appeal is dismissed in terms of the common judgment of 2nd July 2008 passed in LPA No. 319 of 2007 titled "MunicipalCorporationof Delhi v. N.K. Gupta" and connected matters. Registryis directedto placeon recorda copy of the judgmentpassedin LPA No. 319 of 2007. CHIEF JUSTICE July02, 2008 S. MURALIDHAR,J. dn Iz- Digitally Signed By:AMULYA 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 \> IN THE HIGH COURT Ot DELHI: NEW DELHI LPA No. 319 of 2007 Reservedon: 19"^ May, 2008 Date ofjudgment:My 02, 2008 MUNICIPAL CORPORATION OF DELHI ..... Appellant Through: Mr,H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus N.K. GUPTA Respondent ThroughMi*. SanjayGosvvamyandMr. AjayKumar, Advocatesforthe Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPOIUTION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml'. Alok Singh, Advocates versus LPA No.319/2007 Page 1 of 25 KEYPOINT Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELIil Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus K.K. ENTERPRISES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELHI y\ppellam Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Ml-. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDPIMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2of25 / r K.K. ENTERPRISES . Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml*. Alok Singh,Advocates versus v. ' * 11 ^ c ' GARIMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No, 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Plioolka,SeniorAdvocate Mi\ Sanjeev Sabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlu'ough: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughVh. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page3of25 Advocates for the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICIPALCORPOR/VTIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Ml". Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus VARt)HMANPROPERTIES Respondent ThroughMl-. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. Ii'ailiMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. PA No. 384/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 385/2007 MUNICIPALCOi^OIUTlONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus FL\RISINGHBUILDER&PROMOTRS Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 386/2007 MUNICIPAL COI^ORATION OF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabhafwaland Mr. Alok Singh,Advocates versus I«CAMALKISHORE AGGIUWAL Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 387/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharvvalaiid Mr. Alok Singh,Advocates versus \ VARDHMANPROPERTIES . Respondent ThroughMi*. SanjayGoswamyand Mi'. AjayKumar, Advocatesforthe Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tiirough: IVIr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabhamal and NIr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGosvvamyand Mi-. Ajay Kumar, LPA No.319/2007 Page 5 of 25 I Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Ml". Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughIVIr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 391/2007 MUNICIPALCOIiPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Ml*. Alok Singh,Advocates versus VARDIiMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singli,Advocates versus LPA No.319/2007 Page 6 of 25 V'v VARDI-IMANproperties Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, ij Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 IVnJNIClPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus MANISHAGGRAWAL .....Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 7 of25 VARDI-IMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. mimi MUNICIPALCORPOIUTION OF DELHI . Appellant tlirough: Mr.H.S.Phoolka,SeniorAdvocate Ml'. Sanjeev Sabharwaland Ml-. Alok Singh,Advocates versus , VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Ml'. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 403/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: 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 ThroughMi*. SanjayGosvvamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharvvaland Ml-. Alok Singh,Advocates versus UNITYPROJECTSLIMITED Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegimi,Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mril.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates versus KEY POINT .....Respondent ThroughMi-. SanjayGosvvamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum,Advocates forRespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates LPA No.319/2007 Page 9 of 25 versus •V 0/ VARDHMAN PROPERTIES Respondent ThroughIVIi-. SanjayGoswamyandMi". Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGKCTD. LPA No. 408/2007 MUNICIPALCOI^OIUTION OF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates ' versus M.M. DEVELOPERS Respondent ThroughlVIl\ SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forR^spondent GNCTD. No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA N0.319/2007 Page 10 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1058/2007 MUKICIPAL CORPORATION OF DELHI Appellant Tlirough; Mi'.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml*. Alok Singh, Advocates versus VARDI4MANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1059/2007 MUI^ICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus SUNDERCONSTRUCTIONCO. Respondent Through Mr. Sanjay Goswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPAL CORPORATIONOF DELIil Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and LPANo.319/2007 Page 11 of 25 A 0/ Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand IVIi'. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELffl Appellant 4 Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARtDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate IVh'. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SURYABUILDWELLLIMITED Respondent Through Mi'. SanjayGoswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLfi THE CHIEF JUSTICE LPA No.319/2007 Pagel2of25 a> 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. S. Muralidhar, J. 1. These appeals are directed against the common judgmentdated 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 deficient duty. 2. 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 temis of the certificateissuedby the Collectorof Stampsin each of the cases. 3. On 29^*^ August2004 a generalorderwas issuedby the Divisional LPANo.319/2007 Page 13 of 25 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 Schedule 1 (A) to the Stamp Act,as applicable to Delhi and Section 147 to the Delhi Municipal Coiporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in February 2005 to each of the appellants calling upon them to pay the deficient duty as well as the penalty equaling ten times of the deficient duty. In respect of Vardlimafi 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 perpetual lease 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 penalty of Rs.8,88,389(being ten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondents contendedthat they were not challengingthe re-worldngof 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 transfer duty respectively as well as the LPANo.319/2007 Page 14 of 25 dues in tiietransferduty as demandedin die impugnednotices. 5. On the questionofpenalty,the learnedSingleJudge came to the conclusionthat in teniis 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 questionofimpositionof any 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 learnedSingle Judge concernedthe interpretationof the relevantentry in Section 147 (2) (b) (v) DMC Act. After referringto the decisionof the learnedSingle Judge of this Court mNiagaraHotels&Builders(P) Ltd. v. Union ofIndia 65 (1997)DLT 826, the learned Single Judge concluded that the v/ords 'amount' and 'value'in Section147 (2) (b)(v) DMC Act did not referto the premium collectedfor the grantofthe lease.The [earnedSingleJudgerejectedthe contentionofthe MCD that the word 'amount'referredto premiumand the word 'value' referredto the rent. It was held that they referredtothe quantum of the rent for the first fifty years of the lease. Consequently, transferduty would be leviableon one-sixthof the rent for the first fifty years of the lease. Althoughthe lease referredto 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 LPANo.319/2007 Page 15 of25 30 year period but computed for the first fifty years". 7. The petitions were accordinglypartly 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 thetransferduty in termsofthejudgmentofthe learnedSingleJudge. It was fiirtherheld that no further stamp duty in additionto the amounts alreadypaidwas payablenorwas any penaltychargeable. 8. Aggrievedby thejudgmentofthe learnedSingleJudge,the MCD has filed the presentappeals. 9. It is contended by Mr. U.S. Phoolka, the learned senior counsel appearingfor the MCD that in the sense and in the contextin 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 peipetuallease deed could not have takenplace. Therefore,the word 'rent' would includethe premium paid by the auction purchaser for 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 LPANo.319/2007 Page 16 of 25 given full effect to keeping in view the context in which the word occurs. Therefore the disjunctive 'or' had to be read as a conjunctive 'and'. Since the lease could not have been executed without the premium being paid, the legislative intent was to levy transfer duty on the amount equal to one-sixth of the entire,considerationpayable in respect of the lease which, in any event, has been set forth in the instiiiment. Mr.Phoolka contended that since the annual rent payable is calculated as a percentage of the premium paid, it is a measure of the premiumitself. Consequently,there it was logicalto includethe premiumamountas part of the rent for the purposes of computing the transfer duty. 10. In support of his contentionthat all words in the statutehave to be given full effect Mr.Phoolkareferredto the judgmentsof the Supreme Court in Shin-Etsu ChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, Manohar Lai v/ Vinesh Anand (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 CentralExcise (2006) 6 see 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 taxthe premium paid for the obtainingof a perpetuallease, then certainlythe wordingof LPANo.319/2007 Pagel7of25 the provisionshouldexpresslyindicateit. Relianceis placedon Section 105 of the Transferof PropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. 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 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. 12. In order to appreciatethe respective contentions,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 otherwiseprovidedin this Act, the Coiporation shall levy a duty on transfersof inmiovablepropertysituatedwithin the limitsof Delhi in accordancewith the provisionshereafterin this section contained. (2) The saidduty shallbe 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 Territory of Delhi, on every instrument of the description specified below, and (b) at such rate as may be detennined by the Corporation not exceedingfive per cent, on the amount specifiedbelovv' against such 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 value of the property of the greate value, as set forth in the instrument. (iii) Gift of immovablepropert; The value of the property,as setforth the instrument. (iv) Mortgage with possession immovable property The amount secured by the mortgage ; set forth in the instmment. (v) Lease in perpetuity immovable property The amount equal to one-sixthof tlie whole amount or value of the rent which would be paid or dehvered in respectof the first fiftyyears ofthe 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." 13. In Niagara Hotels Builders (P) Limited a learned Single Judge 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 aggregate both the premium amount as well as the rent. In the impugned order in the instant cases, the learned Single Judge has held that the expression "amount' or 'value' both qualified "rent and rent alone" and, therefore, the rent,(and not the premium) could alone form the basis for calculatingthe transfer duty. 14. Dependingon the context, the word 'premium' can have both a broad as well as a narrow meaning. The definition of premium in the Law Lexiconby P. RamanathaAiyar,SecondEditionreads asunder: LPANo.319/2007 Page 19 of 25 a sum of money paid as considerationfor grantof lease. It represents "capitalizeid rent which in fact is the differefiGe between the actual rent and the rent'wM^h ffl otherwisebe obtainedby thel^soi?i other Like Sums", "are sums paid Itt ifXeess of the agreed rent in cofisidjac^yion of grant, continuance or rene\yal:6fthetenancy" In Black's Law Dictionary, Sixth Edition, premium is defined as capitalizedrent"paidin lumpsum at thetimeofleaseis granted." 15. The 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 ^clcnowledgedin 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 manneras the rent collected"? In the 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 Page20 of 25 • ' 'i premiumin the sum of Rs.2,25,000of tlie annual rent of Rs.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 instalments of Rs.11,250 before the 31®' January and 3V^ 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 before last date of each month, thus, making in all Rs.12,000per year and the balance of 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. 11,250 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 Tribunaland held that the sum of Rs.l 1,250was a capitalreceiptandnot a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. CommissionerofIncome Tax (1943)11ITR 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 premiumand rent. It pointedout that a one-timepaymentof premium for the grantofa leasewas hiown as 'salami' which is inthe 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 betweena pricepaid for a transferof a rightto enjoythe propertyand the rent to be paid periodicallyto the lessor. When the interestof the lessoris partedwith 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 fonner is a capital income and the latter a revenue receipt. There may be circumstanceswhere the parties may camouflage tlie 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 deferredprice. It is not the form but the substance of the transactionthatmatters. The nomenclatureused may not be decisive or conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionof the parties." On an analysisof the relevantclausesin the lease deed, it was held that the amount paid as premium could not be construedas rent and, such premiumwas a capitalreceiptinthe hands of the lessor. 17. In Hotel Kings v. Sara Farhan Lukmani (2007) 1 SCC202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe permittedincreasein rentcan sei-veas ayardstick for the landlord to increase the rents it did not make such permitted increase"apartofthe rentthoughitmay be aconsiderationfor the grant of lease." 18. The lease deed in the instant cases a makes reference to the aimual rent that wouldbe payablein future. This is not a pre-determinedfigure but is to be worked out as a percentageof the premium amount. This is set out in the lease deed. For instance in the lease deed dated T' LPANo.319/2007 Page 22of 25 / December, 2003 in favour of IVI/s N.K. Gupta, the fourth paragraph of the preamble reads: "NOW THIS INDENTURE WITNESSETH that, in consideration of the amount of Rs. 1,31,04,000/-(Rupees One Crore Thirty One lacs and Four thousand only) paid towards premium before the execution of these presents (the receipt where of the Lessor hereby acl'cnowledges) 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" 19. In the later portion of the same paragraphof the lease deed, the amiual rent is stated as 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 relevantportionreadsasunder: ^ "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