IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Date oforder: 2"^^ July,2008 LPA No. 373/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal & Mr. Alok Singh, Advocates Versus VARDHMAN PROPERTIES Respondent ! I Through: Mr. Sanjay Goswamy and Mr. Ajay Kumar, J Advocatesfor 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 ^nd l2^ This appealis dismissedin termsofthecommonjudgmentof 2" July 2008 passed in LPA No. 319 of 2007 titled "Municipal Corporation of Delhi v. N.K. Gupta" and other connected matters. Registryis directedto place on recorda copy ofthe judgmentpassedin LPA No. 319 of 2007. CHIEF JUSTICE July02,2008 S. MUKALIDHAR,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 IN THE HIGH COURTOF DELHI:NEW DELHI LPA No. 319 of 2007 Reservedon: 19"'May, 2008 Dateofjudgment:My 02,200t - municipalCORPOIUTIONof DELHI Z....Appellant Through: IVIr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus N.K. GUPTA T> , .....Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. ii ^LPA No. 373/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml". Sanjeev Sabharv/al and Mr. Alok Singh,Advocates kX.' versus VARDI-iMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 374/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 1of25 I<:EYPOINT , . Respondent rhroughMr. SanjayGoswamyand Mr. AjayKurnar Advocatesfor the Respondents. Ms. IiamMajidand Ms. ZubedaBegum,Advocates tor RespondentGNCTD. LPA No. 376/2007 municipalcorporationof DELHI ,., Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus K.K. ENTERPRISES p . Respondent UiroughMr. SanjayGoswamyand Mr. AjayKumar Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELPH Appellant Througli: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates 1 versus VARDHMANPROPERTIES Respondent Tlu'oughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 IVIUNICIPALCOl^POl^TIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh,Advocates versus LPA No.319/2007 Page2 of25 Iv.K. ENTERPRISES versus ThroughMr. SanjayGoswamyandMr. AjayKmriaf• Advocatesfor the Respondents. ' Ms. IramMajidand Ms. ZubedaBegum Advocates for RespondentGNCTD. ^^^ivocates LPA No. 380/2007 MUMCIPALCOiy'ORATIONOF DELHI Ann.ll , uTst- SeniorAdvocL Ml. SanjeevSabharwaland Ml. Alok Singh,Advocates versus GARIMAAGGRy\WAL ThoughMr. SanjayGoswamyand Mr. AjayKumar Advocatesfor theRespondents ' Ms. IramMajidandMs. ZubedaBegum Advocates torRespondentGNCTD. Advocates LPA No. 381/2007 MbWCIPALCORPOIUTIONOF DELHI Ann.ll . ^irough: Mr.H.S.Phoolka,SeniorAdvoL Ml. SanjeevSabharwaland Mr. Alok Smgh,Advocates VARDPIMANPROPERTIES d T o . Respondent -IjoughMr. SanjayGoswamyand Mr. AjayKumar Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates tor RespondentGNCTD. LPA No. 382/2007 municipalCORI^OIUTIONof DELHI Appellant riuough: Mi-.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus YARDHMANPROPERTIES ' Respondent ' lliroughMr. SanjayGoswamyand Mr. AjayKumar, LPA No.319/2007 p , Page 3 of25 Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 municipalcorporation of DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml". Alok Singh,Advocates • versus VARDHMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 384/2007 municipalCORPOI^TIONof DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharwal and ' Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES- • Respondent TliroughMl-. SanjayGoswamyand Mi". Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCORPORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus HARI SINGHBUILDER&PROMOTRS Respondent ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page 4 of25 <?• Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 386/2007 municipalcorporation of DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharvvaland Mr. Alok Smgh,Advocates versus ICAMALKISHOREAGGRAWAL Respondent ThroughMi-. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. iyis.IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 387/2007 MUNICIPALCOI^ORATIONOF DELm .....Appellailt" - Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharvvaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent IhroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate NIr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGoswamyand Mi-. AjayKumar, LPA No.319/2007 Page 5 of25 Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates fqiJlespondentGNCTD..^. LPA No. 389/2007 MUNICIPALCORPOIWIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate -• - Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPOl^TIONOF DELI-n Appellant riirough: Mr.H.S.Phoolka,Seniory\dvocate Mi« Sanjeey Sabharwal and Mr. Alok Singh, Advocates versus VAI^ITMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DELIil Appellant Through; Mr.H.S. Phoolka, Senior Advocate Ml". Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 6 of 25 VARDHMANPROPERTIES ^ Respondent ThroughMr. SanjayGosvvamyand Mi". Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 395/2007 municipalcorporation of DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDI-IMANPROPERTIES Respondent ThrougliMr. SanjayGoswamyand Mr: AjayKumar,' Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus MANISHAGGR/VWAL ^ R,3p„„dent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, A^dvocatesfor.theRespoirdents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus LPA No.319/2007 Page 7 of25 YARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 401/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Tlii'ough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml". Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, y\dvocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD.' LPA No. 402/2007 MUNICIPALCorporation of delhi Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Tlu'oughMr. SanjayGoswaniyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 403/2007 MUNICIPALC0RP0R/^.TI0NOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mi". SanjeevSabharvvaland Mr. Alok Singh, Advocates -LPANo.319/2007 Page8of25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates fgr Respondent ONCTD. • LPA No. 405/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlu-ough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland Ml-, Alok Singh, Advocates versus UNITYPROJECTSLIMITED Respondent ThrougliMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegimi,Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant Through: M1-.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates it u' versus KEY POINT ^ Respondent ThroughMr. SanjayGoswamyand Mi\ AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELFH Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates LPANo.319/2007 Page9of25 0>- rp. versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 408/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Through; Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates • • -versus . , M.M. DEVELOPERS Respondent TliroughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the R.espondents. ' Ms. IramMajidandMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1051/2007 MUI'^ICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMi*. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOFDELffl Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. SanjeevSabharwaland ' Ml-. Alok Singh, Advocates LPA No.319/2007 Page 10of 25 '23' versus VAI^HMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No, 1058/2007 MUNICIPALCOI^ORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoollca,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AI6kSingh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfortlie Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUNDERCONSTllUCTIONCO. Respondent lliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 1060/2007 1VIUNICIPALCORPORATIONOF DELIil y\ppellant llirough: Mr.H.S.Phoolka,SeniorAdvocate Ml*. Sanjeev Sabharwal and LPANo,319/2007 Page 11 of25 Ml". Alok Singh,Advocates versus VARDHMANPROPERIIES Respondent ThroughMr. SanjayGoswamyand Mr. 7\.jayKumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 1061/2007 MUNICIPALCOl^ORATIONOF DBLPII Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and. Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent iliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatestorthe Respondents. Ms. IrainMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SURYABUILDWELLLIMITED .....Respondent Tlii-oughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. Corani; HON'BLE THE CHIEF JUSTICE LPANo.319/2007 Page 12 of25 HON'BLEDR. JUSTICES. MURALIDHAR 1. Reportersof localpapersinaybe •. allowed to see the judgment? 2. To be referred to the Reporter ornot? 3. Whetherthejudgmentshouldbe reported h in Digest? JUDGMENT Dr. S. Muralidliar. J. 1. These appeals are directed against the common judgmentdated 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 validityofthe noticesissued by the CollectorofStamps under-Sqction 40 of the Indian Stamp Act, 1899 ('Stamp Act') demanding transfer duty as well as deficientstamp duty and penalty equalto ten times ofthe deficientduty. 1- The demand for transfer duty, was made in respect of the conveyanceofplotsofland in favourofthe appellantswho successfully bid foi 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 in terms ofthe certificateissuedby the CollectorofStampsin each of the cases. ^ • ' 3. On 29"' August2004ageneralorderwas issuedby the Divisional LPANo.319/2007 • • pagei3of25 m Commissioner,Delhi statingthat the Collectorsof Stamp of different districtshad adoptedvaryingmethodsofcalculationofduty in respectof perpetualleases which had resultedin the duty being short levied and collected.This conclusionwas reachedon an interpretationofArticle,3.5. of Schedule1(A) to the Stamp Act as applicableto Delhi and Section 147 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently,the impugnednotices were issued in February 2005 to eachofthe appellantscallinguponthem to pay the deficientduty as well as-thepenalty equaling ten times of the deficiem duty, hi respect of Vardhman Properties, for instance, the auction purchaser had paid Rs,12,42,215as stamp duty. This was now recomputedas Rs.13,30,604 being the aggregateof Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-workingthe duty, the total considerationfor the perpetual lease was taken as the aggregateof the premium amount of Rs.1,91,11,000and the annual rent calculatedas apercentageof the premiumamount.In additionapenaltyof Rs.8,88,389(beingten times ofthe deficientduty) was also demanded. 4. Befoie the learned Single Judge the respondentscontendedthat they were not challengingthe re-worldngof the stamp duty since the questionof 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 legard to the stamp duty and transferduty respectivelyas well as the LPANo.319/2007 Page 14 of25 'Tfc) dues in,thetransferduty as demandedin the impugned notices. 5. On the questionofpenalty,the leai'nedSingleJudge came to tiie conclusionthat in terms of Section40 of the Stamp Act/thepower to impose a penalty was consequentialupon the Collector of Stamps impoundingan instrument.Sinceno instrumenthad yet been impounded by the Collector,the questionofimpositionofany penaltydid not arise, lo the extent, therefore, that the impugned notices sought to levy' penalty,they were heldto be unsustainablein law. 6. The next questionbeforethe learnedSingleJudge concernedthe interpretationofthe relevantentry in Section147 (2) (b) (v) DMC Act. Afterreferringto the decisionofthe learnedSingleJudge ofthis Court inNiagaraHotels<S; Builders(P) Ltd. v. UnionofIndia65 (1997)DLT 826, the learned Single Judge concludedthat the words 'amount' and value in Section147 (2) (b)(v) DMC Act did not referto the premium collectedfor the grantot the lease.The learnedSingleJudgerejectedthe contentionofthe MCD that the word 'amount'referredto premiumand the word 'value'referredto the rent. It was heldthatthey refeiTedto the quantumof the rent for the first fifty years of the lease. Consequently, transferduty wouldbe leviableon one-sixthofthe rent for the first fifty years of the lease. Althoughthe lease referredto 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 Page 15 of25 30yearperiodbut computedfor tlie firstfiftyyears". 7. The petitions were accordinglypartly allowed holding that no penaltycould be imposedin respectofthe transferduty underthe DMC Act sincethat was a deba.tableissue. Adirectionwas issuedto re-work the transferduty in termsofthejudgmentofthe learnedSingleJudge. It was further held that no further stamp duty in additionto the amounts alieadypaidwas payablenor was any penaltychargeable. • 8. Aggrievedby thejudgmentofthe learnedSingleJudge,the MCD has filedthe presentappeals. 9. It is contendedby Mr. H.S. Phoolka,the learned senior counsel appealingfoi the MCD that in the sense and in the contextin which the word 'renf is used in Section147 (2) (b)(v) DMC Act, it had to connote the total considerationpayable under the lease deed. His submission was that unless the total considerationas shown on the lease deed was paid by the lessee, the executionofthe peipetuallease deed could not have takenplace. Therefore,the word 'rent'would includethe premium paidby the auctionpurchaserfor 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 Dictionaiy,6"^ Edition (page 1181). Vh*. Phoolka then submitted that everyword occurringin Section147 (2) (b) (v)DMC Act had to be LPANo.319/2007 Pagel6of25 given full effect to keeping in view the context in which the word occuis. Thereforethe disjunctive'or' had to be read as a conjunctive and .Sincethe leasecouldnot have beenexecutedwithoutthe premium beingpaid,the legislativeintentwas to levy transferduty on the amount equal to one-sixthof the entire considerationpayablein respect'ofthe lease which, in any event, has been set forth in the instrument. Mi.Phoolkacontendedthat sincethe annualrent payableis calculatedas apercentageofthe premiumpaid, it is ameasureofthe premiumitself Consequently,thereit was logicalto includethe premiumamountas part ofthe lentfor the purposesofcomputingthe transferduty. 10. In supportofhis contentionthat all words in the statutehave to be given full effectMr.PhoolkarefeiTedto the judgmentsof the Supreme Court in Shin-EtsihChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, ManoharLai v/ VineshAnand (2001) 5SCC 407, Noorie Manure Mill v. Commissioner Trade Tax (2007) 10 SCC 478, AssociatedCement Co. Ltd. v. State ofMP (2004) 9 SCC 727 and IndconStructiirals(P) Ltd. v. CommissionerofCentralExcise (2006) 6 SCC 786.. 11. Mr.SanjayGoswamy, learnedcounsel appearingon behalfof the respondents submitted that a taxing statute admits of only strict inteipretation.Ifthe intentionofthe legislaturewas to tax the premium paid for the obtainingofapeipetuallease, then certainlythe wordingof LPANo.319/2007 p--^gg ]7of25 op the provisionshouldexpresslyindicateit. Relianceis placedon Section 105 ofthe Transferof PropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separatelydefined. Relying on the judgmentof the Supreme Court in CommissionerofIncome Tax v. Panbari Tea Company AIR 1965 SC 1871, it is submitted that the expression'premium''and'rent'-haveto be separatelyunderstoodand one camiotincludethe otherin the contextinwhichit is used in the deed of pei-petuallease 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 Govincl Ram v. Rajphiil SinghAIR 1972, Punjab &Haryana94 and S. VenkataramanSwami V. S,Abdul WahabAIR1969Madras473. 12. In orderto appreciatethe respectivecontentions,areferencemay be madefirstto 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 hmits ofDelhi'inaccordancewith the provisionshereafterin this section contained. (2) The said duty shallbe levied- (a) in the form of asurchargeon the duty imposedby the Indian Stainp Act, 1899 (2 of 1899) as in force for the time being in the Union remtory of Delhi, on every instrumentof tlie description specified below, and (b) at such rate as may be determined by the Corporation not exceedingfive per cent, on the amount specifiedbelow againstsuch instruments - LPANo.319/2007 d 10 .nc Page 18 of 25 Description of instrument Amount on which duty slioiikl levied (i) Sale of immovableproperty The amount or value of consideration for the sale, as set forth in instrument. (ii) Exchange of immovable .property The valueofthe propertyofthe greate value, as set forth in the instmment. (iii) Giftofimmovablepropert; The valueoftheproperty,as setforth the instrument. (iv) Mortgage with possession immovableproperty The amountsecuredby the mortgagei set forth in the instrument. (v) Lease in perpetuity immovableproperty The amountequalto one-sixthof the 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." 13. In NiagaraHotels &. Builders(P) LimitedaleariiedSingleJudge ofthis Courtheldthat the word 'or' in Section 147 (2) (b) (v)DMC Act could not be read in a mannerso as to enable MCD to levy the transfer duty on an aggregateboth the premiumamount as well as the rent., hi 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 basisfor calculatingthe transferduty. 14. Dependingoii the context,the word 'premium' can have both a broad as well as a narrow meaning. The defmitionof premium in the Law Lexiconby P. RamanathaAiyar,SecondEditionreads as under: LPANo.319/2007 Page 19 of 25 :• 'x' 'W '^'1 1: •" •liii fSiS "P/'eff»i^^;means'a sum of money paid as considerationfor grantoflease.It represents "capitalized rent which in fact is the difference between the actual rent and the rent which inight otherwisebe obtainedby the lessor. 'TrerniumOr other Like Sums", "are sums paid in excess of the agreed rent in consideration of grant, continuance or renewalofthe tenancy" In Black's Law Dictionar}-, Sixth Edition, premium is defined as capitalizedrent"paidin-lumpsum at thetimeofleaseis granted." 15. Ihe question whether the 'rent' payable-underthe deeds of perpetual lease 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 Section 105 of the TP Act as well. 16. The decision of tile Supreme Court in Panbari Tea Company supports the contentionof the respondentthat, given tlie context, the word 'rent' in Section 147 (2) (b) (v) DMC Act has to have a narrow nieaning. 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 manner as the rent collected"? In the said case a registeredlease deed had been executedby the AssesseeCompanyby whichtwo tea estateswere leased out to. a ilrm. The considerationfor the lease was a combinationof LPANo.319/2007 Page 20 of25 i */ premiumin tlie sum ofRs'.2;25,000oftlie 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 sixteen half yearly instalmentsof Rs.11,250 before the 31®' Januaiyand 31'' July of each year. The amiual 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, hi the assessmentyear for 1952-53,the income tax officer treatedthe instahnentofRs. 11,250paid towardspremiumas a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioneras well as the Tribunal. The High Court reversed the Tribunaland heldthatthe sum ofRs.l1,250was acapitalreceiptand not a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. CommissionerofIncomeTax (1943)11ITR513, Memberfor the Board ofAgriculturev. Commissionerof Income Tax (1957) 32 ITIi 169 and ChintamaniSaranNath Sah v. CommissionerofIncome Tax AIR 1961 SC 732 to underscore the distinction between .the premiumand rent. It pointedout that a one-timepaymentof premium, tor the grant of a lease was laiown 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 obsei^ved as under: "The section, therefore, brings out the distinction LPANo.319/2007 Page21of25 betweenapricepaid for atransferof arightto enjoy the propertyand the rentto be paidperiodicallyto tlie lessor. When the interestofthe lessoris partedwith for aprice, the price paid is premium or salami. But the periodical payments made tor 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 circumstanceswhere the parties may camouflage the 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 defenedprice. It is not the fomi but the substanceofthe transactionthat matters. The nomenclatureused may not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionoftheparties." On an analysisofthe relevantclausesin the..leasedeed, it was held that the amount paid as premiumcould not be construedas rent and, such iDremiumwas a capitalreceiptin the handsofthe lessor. 17. In HotelKings v. SaraFarhanLukmani(2007)1SCC202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe permittedincreasein rentcan sei-veas ayardstick tor the landlordto increase the rents it did not make such permitted increase apaitofthe rentthoughit may be aconsiderationfor the grant of lease." instantcasesa makesreferenceto the annual rent that wouldbe payablein future. This is not apre-determinedfigure but is to be workedout as apercentageofthe premiumamount.Thrs'ls set out in the lease deed. For instance in the lease""deed dated"r'' LPANo.319/2007 22 of25 December,2003 in favour of M/s N.K. Gupta, tlie fourth paragraphof the preamble reads: "NOW THIS INDENTURE WIl-NESSETH 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 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" 19. In the later portion of the same paragraphof the lease deed, the annual rent is statedas being two and ahalfper cent of Rs.1,31,04,000 and the first annual rent instalmentis to be paid on 15"' January,2008. The relevantportionreads asunder: "TO HOLD the premisesunto the lessee in peipetuity from 24"^ day of January two thousand and three YIELDING AND PAYING thereforeyearly rent payable in advanceof 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 premiumunder the covenantsand conditions hereinafter contained) or such other enhancedrent as may hereafterbe assessed under the covenants and conditions hereinaftercontainedclear of all deductions by equal half yearly payments on the 15"' day ofJanuaiyand 15"' day ofJuly ineach year at the Reserve Bank of India, New Delhi." t LPA No.319/2007 Page 23 of 25 20. A reading of tiie 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" occurringin Section ^^47 (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 carefulexaminationofthe above clausesofthe 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. 21. It is also not possibleto constmethe premium paid as advance the annualrent in is not indicatedas apre-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 thereforenot possibleto interpretthe word 'rent' in the lease deedsin the instantcases as includingthe premiumpaid. 22. This Court is inclinedto acceptthe contentionof the respondent that since what is soughtto be collectedis atransferduty, v/hich is an nivoluntary exaction of revenue, the statute admits of a strict LPANo.319/2007 Page24of25 L interpretation.The-principleenunciatedin the decisionsreliedupon by the appellantsthateveryword in astatutemustbe givenits full meaning is unexceptionable.However, the meaning so given must be in the context ot the statute in general and the provisionin particular.In the contextofthe leasedeeds in questionin the instantcases,the word 'rent' camiotpossiblybe 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 purposesofdeterminingtransferduty then the statuteshouldhave been expresslywordedto"reflectthatintention. 23. Accordingly,this Courtconcurswith the conclusionarrivedat-by the by the learned Single Judge. The appeals are