t 4 IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder: 2"'* July, 2008 LPA No. 376/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal& Mr. Alok Singh,Advocates versus K.K. ENTERPRISES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. 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 judgmentof 2nd July 2008 passedin LPA No. 319 of 2007 titled "MunicipalCorporationofDelhi v. N.K. Gupta" and connected matters. Registryis directedto place on recorda copy ofthe judgmentpassedin LPA No. 319 of 2007. CHIEF JUSTICE July02, 2008 S. MURALIDHAR,J. dn 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 OF 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, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus N;K. GUPTA Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. With LPA No. 373/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal.and Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPAL CORPORATION OF DELHI Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and ]VIi-. Alok Singh, Advocates versus LPANo.319/2007 Page 1of25 \!\y KEYPOINT Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. PA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate ]VIr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates versus K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. IVIs. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPOIIATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates V, versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 2of25 K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus GARIMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF 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. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VAl^DHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page3of25 \ Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICIPAL CORPORATIONOF DELffl Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mi*. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 384/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyandMi-. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 385/2007 MUNICIPALCOI^OIUTIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus HARI SINGHBUILDER&PROMOTRS Respondent ThroughMr. SanjayGoswamyand Mi-. Ajay Kumar, LPANo.319/2007 Page4 of25 Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 386/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. PhoOlka,Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus ICAMALKISHOREAGGRAWAL .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. iVIs. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 387/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent • Thi'oughMr. SanjayGoswamyand Mi'. Ajay Kumar, LPA No.319/2007 Page 5 of25 Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. ' LPA No. 389/2007 MUNICIPALCORPOMTIONOF DELffl Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mi-. Sanjeev Sabharvvaland Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPANo. 394/2007 MUNICIPALCORPORATIONOF DELI-H Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007- Page 6 of 25 Vor \<^ VARDMMANPROPERTIES. .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mi\ Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent Through Mi*. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 396/2007 MUNICIPALCORPOlUTIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus MANISHAGGRAWAL Respondent ThroughIVk. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. 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 VARDHMAN PROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA iNo. 401/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and IVIr. Atok Singh,Advocates versus VARDI-IMANPROPERTIES .....Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA NOo 403/2007 MUNICIPALCORPORATIONOF DELIil , Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates LPANo.319/2007 Page8of25 versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Smgh, Advocates versus UNITYPROJECTSLIMITED Respondent Through Mr. Sanjay Goswamy and IVIr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCOl^ORyVnONOF DELffl Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page9of25 versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. Iram MajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 408/2007 MUNICIPAL CORPORATION OF DELHI Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus M.M. DEVELOPERS Respondent ThrbughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and IVIr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughNlr. SanjayGoswamyandMr. AjayKumar, Advocatesforthe Respondents. Ms. Iram Majid and IVIs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPALCOI^^ORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page 10of 25 versus VARDPiMANPROPERTIES .. ...Respondent Through Mr. Sanjay Gbswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 1058/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Tlirough: Mi'.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mi-. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCOI^ORATION OF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and, Mr. Alok Singh, Advocates versus SUNDERCONSTRUCTIONCO. Respondent Through Mi-. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal arid LPA No.319/2007 Page 11 of 25 Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Vh-. Alok Singh, Advocates versus SURYABUILDWELL LIMITED Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPA No.319/2007 Page 12 of 25 HON'BLE DR. JUSTICE S. MUMLIDHAR 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 Vi ;:. in Digest? JUDGMENT Dr. S. Muralidhan 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 challenged the validity of the notices issued by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demanding transfer duty as well as deficient stamp duty and penalty equal to ten times of the deficient duty. 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 terms 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 districtshad adoptedvaryingmethodsofcalculationofduty in respectof ^ IP perpetualleases which had resulted in the duty being short levied and collected.This conclusionwas reached on an interpretationof Article35 of Schedule1 (A) to the Stamp Act as applicableto Delhi and Section 147 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in February 2005 to each of the appellantscallinguponthemto paythe deficientduty aswell as the penalty equaling ten times of the deficient duty. Ift respect of Vardhman Properties, for instance, the auction purchaser had paid Rs.12,42,215 as stamp duty. This was now recomputed as Rs.13,30,604 being the aggregate of Rs.10,79,772 as stamp duty and Rs.2,00,832 as transfer duty. In re-working the duty, the total consideration for the perpetual lease was taken as the aggregate of the premium amount of Rs.1,91,11,000 and the annual rent calculated as a percentage of the premium amount. In addition a penalty of Rs.8,88,389 (being ten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondents contended that they were not challenging the re-working of the stamp duty since the question of intei-pretationof 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 v/ith regard to the stamp duty and transfer duty respectively as well as the LPANo.319/2007 Page 14 of 25 dues in the transfer duty as demanded in the impugned notices. ,/l^ 5. On the question of penalty, the learned Single Judge came to the conclusion that iri ternis of Section 40 of the Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impoundingan instrument.Since no instrumenthad yet been impounded by the Collector,the questionof impositionof 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 questionbefore the learned Single Judge concernedthe interpretation of the relevant entry in Section 147 (2) (b) (v) DMC Act. After referring to the decision of the learned Single Judge of this Court \n Niagara Hotels & Builders (P) Ltd. v. Union ofIndia 65 (1997)DLT 826, the learned Single Judge concluded that the words 'amount' and 'value' in Section 147 (2) (b) (v) DMC Act did not refer to the premium collectedfor the grantofthe lease.The learnedSingleJudgerejectedthe contentionof the MCD that the word 'amount' referredto premiumand the word 'value' refen-edto the rent. It was held that they refeiTedto the quantum of the rent for the first fifty years of the lease. Consequently, transferduty wouldbe 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 that "the transfer duty has to be computedon the basis of 1/6^*^ ofthe rent payableat presentfor the first LPANo.319/2007 Page 15 of 25 30 year period but computedforthe first fifty years". 7. The petitions were accordinglypartly allowed holding that no penalty could be imposedin respectof the transfer duty under the DMC Act since that was a debatable issue. A direction was issued to re-work thetransferduty intermsof the judgmentof the learnedSingleJudge. It was further held that no further stamp duty in addition to the amounts alreadypaidwas payablenorwas any penaltychargeable. 8. Aggrievedby thejudgmentof the 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 used in 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 perpetual lease deed could not have takenplace. Therefore,the word 'rent' wouldincludethe premium paid by 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 Dictionary,6^'' Edition (page 1181). Mr. Phoolka then submitted that every word occurringin Section 147 (2) (b) (v) DMC Act had to be LPA No.319/2007 Page 16 of25 given full effect to keeping in view the context in which the word- occurs. Therefore the disjunctive 'of' had to be read as a conjunctive 'and'. Since the lease could not have been executed without the premium beingpaid,the legislativeintentwasto levytransferduty 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 instrument. Mr.Phoolka contended that since the annual rent payable is calculated as a percentageofthe premiurnpaid, it is a measureofthe premiumitself Consequently,there it was logicalto includethe premiumamountas part of the rent for the purposes of computingthe transfer duty. 10. In supportof his contentionthat all words in the statutehave to be given full effect Mr.Phoolka referred to the judgrtients of the Supreme Court in Shin-Etsu ChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, Mdnohar Lai v/ Vinesh Anand (2001) 5 SCC 407, Noorie Manure Mill v. Commissioner Trade Tax (2007) 10 SCC 478, Associated Cement Co. Ltd. v. State of MP (2004) 9 SCC 727 and Indcoh 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 Page 17 of25 the provisionshouldexpresslyindicateit. 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 Commissioner of 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 perpetual lease in the instant case. The word 'rent' can only refer to the actual rent indicated in the lease deed and not the premium. Reference is also made to the decisions in Govind Ram v. Rajphiil Singh AIR 1973, Punjab & Haiyana 94 and S. Venkataraman Swami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In order to appreciate the respective contentions, a reference may 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 otherwise provided in this Act, the Corporation shall levy a duty on transfers of immovable property situated within the limits of Delhi in accordancewith the provisions hereafter in this section contained. (2) The said duty shall be levied- (a) in the form of a surcharge on the duty imposed by the hidian 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 belov/ against such instmments - LPANo.319/2007 Pagel8of25 %p Description of instrument Amount on which duty should levied (i) Sale of immovable property The amount or value of consideration for the sale, as set forth in instrument., (ii) Exchangeof immovable property The value of the propertyof the greats value, as set forth in the instrument. (iii) Gift of immovableproperty The value of the property,as set forth the instrument. (iv) Mortgage with possession immovable property The amount secured by the mortgage ; set forth in the instrument. (v) Lease in peipetuity immovable property The amount equal to one-sixthof the whole amount or value of the rent which would be paid or deliveredin respectof the first fifty yearsof the le; as set forth in the instrument, (emphasis supplied) (v) Contract for transfer of immovable property Ninety per cent of the value of the consideration for the transfer as set out in the contract." 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 calculating the transfer duty. 14. Depending on the context, the word 'premium' can have both a broad as well as a nan-ow meaning. The definition of premium in the Law Lexicon by P. RamanathaAiyar, SecondEdition reads as under: LPANo.319/2007 Page 19of 25 ''Preniiiiffi a sum of Inofiey paid ^s cohsiderattonforgrantof lease.It represents 'capitalized: ftot which in fact is the difference between the actual rent and the reirf:\\^lich::ani^totherwisebe obtainedby theil^or. "Eri^uni otherLike Sums", "are sums paid; lit: i^ess of the agreed rent in consideration of grant, continuance or renewalofthetenancy" In Black's Liaw Dictiortai^y^ Sixth Edition, premium is defined as capitalizedrent"paidinlumpsum atthetimeofleaseis 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 context4n which the word is used. This distinctionis acknowledgedin the definitionsof the terms 'premium'and 'rent' in Sectiofi 105 of the TP Act as well. 16. The decision of the Supreme Court in Panbari Ted Company supports the contentionof the respondentthat, given the context, the word 'rent' iii 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 a revenuereceiptin 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 Page 20 of 2S : ' premiumin the sum ofRs.2,25,000ofthe annualrentofRs.54,000. The premiumwas to be paid in the followingmanner: Rs.45,000 ^s 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'' January and 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 of each month,thus, makingin all Rs.12,000peryear and the balanceofRs.42,000to be paid on or before 31^' Decemberof each year. In the assessmentyear for 1952-53,the incometax officer treated the instalmentof Rs. 11,250paid towards premiumas a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioneras well as the Tribunal. The High Court reversed the Tribunal and held that the sum of Rs.l 1,250was a capital receipt and not a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. CommissionerofIncomeTax (1943)IIITR 513, Memberfor the Board of Agriculture v. Commissioner of 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 premium and rent. It pointed out that a one-time payment of premium for the grant of a lease was blown 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 LPA No.319/2007 Page 21 of 25 betweena price paid for a transferofa rightto enjoy the propertyand the rent to be paid periodicallyto the lessor. When the interestofthe 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 the real nature of the transactionby using clever phraseology. In some cases, the so-called premium is in fact advance rent and in others rent is deferred price. It is not the form but the substance of the transactionthat matters. The nomenclatureused may not be decisive or conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties." On an analysisofthe relevantclausesin the lease deed, it was held that the amount paid as premium could not be construedas rent and, such premiumwas a capitalreceiptinthehandsof the lessor. 17. In HotelKings v. Sara Farhan Lukmani(2007) 1 SCC202, the SupremeCourtemphasizedthe importanceofa contextualinterpretation and heldthatwhilethe permittedincreasein rent can serveas ayardstick for the landlord to increase the rents it did not make such permitted increase"apartofthe rentthoughit may be a considerationfor the grant of lease." 18. The lease deed in the instant cases a makes reference to the annual rent that would be payablein future. This is not a pre-determinedfigure but is to be worked out as a percentage of the premium amount. This is set out in the lease deed. For instance in the lease deed dated 1^' LPANo.319/2007 Page 22 of 25 December, 2003 in favour