IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^*^May, 2008 %nd Date of order: 2^ July, 2008 LPA No. 407/2007 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 "Municipal Corporation of Delhi v. N.K. Gupta'* and connected matters. Registry is directed to place on record a copy of the judgment passed in LPA No. 319 of 2007. CHIEF JUSTICE July 02, 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 LPANo. 319 of 2007 Reservedon: 19"^May, 2008 Date of judgment; July 02, 2008 MUNICIPALCOllPOIlATIONOF DELHI ..... Appellant Through: Mr.H.S. PhoOlka,Senior Advocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh,Advocates versus N.K. GUPTA .....Respondent TiiroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates W forRespondentGNCTt). With LPANo. 373/2007 MUNICIPALCORPOMTION OFDELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mi\ Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus "^1'' • VARDHIVIANPROPERTIES Respondent TiiroughMr. SanjayGoswamyand Mr. AjayKumar, y^dvocatesfor 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 Sabharvvaland Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 1 of 25 KBY point Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Ll^A No. 376/2007 lUlMCIPALCOl^OMTIdNOF DELHI .....Appellant f hrbugh: Mr.H.S.Phoolka,SeniorAdvocate Mf-. SanjeevSabhal'waliind Mr. Alok Singh,Advocates ^ ' versus f K.K. ENTERPRISES .....Respondent tliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. Mffi MajidandMs. ZubedaBegum,Advocates for Respondent GNCTI). LPA No. 377/2007 MUNICIPALCorporation of delpii Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mf. AlokSingh,Advocates ^^ versus VARDMVIANPROPERTIES Respondent ThroughMr. SanjayGoswamy^nd Mf. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTE). LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2 of25 \ -I K.K. ENlERPRlSES Respondent ThroughMr. SanjayGoswamyand Vli*. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPANo. 380/2007 MUMCIPALCORPOIIATIONOF DELHI Appellant Through: Mi'.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus GARlMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 381/2007 MUNICIPALCOi^ORAtlONOF DELI-il Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mi-. Sanjeev Sabharwal aiid Mr. AlokSingh,Advocates versus VARDMiVlANPROPERTIES Respondent ThroughMr. SanjayGoswamyand IVIr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDITMAl^PROPERTIES .....Respondent throughMr. SanjayGoswamyand ^h-. AjayKumar, LPA No.319/2007 Page3of25 Advocates for the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICII>ALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and iVlr. AlokSingh,Advocates versus VARDHMANPROPfiMlfi^ Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidandMs. 2ubedaBegum,Advocates for RespondentOnCTD. L^A No. 384/2007 Municipal coipORAtiONof delm Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mf. SanjeevSabharwaland Nir. Alok Singh,Advocates versus VARDriMANproperties Respondent ThroughMl-. SahjayGoswamyandMr. Ajay Kumar, AdvocatesfOr the Respondents. Ms. IrafnMajidand Ms,. ZubedaBegum,Advocates for RespondentGNCTI). LPA No. 385/2007 MLfNlCiPALCORPOl^VtlONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabhai-waland Mr. AlokSingh,Advocates versus I-IARISINGHBUILDER&PROMOTRS Resp6ndent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, LPANo.319/2007 Page4 of25 Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 386/2007 MUNlClPi\L COI^ORATION OF DELffl Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus KAMALKISHOREAGGRAWAL Respondent ^ ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates forRespondentGNCTD. LPANoo 387/2007 MUNICIPALCORPO^TION OF DELHI Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and iVIr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majid andVis. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Ml'. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus BASANTPROJECTSLTD Respondent Through Mr. Sanjay Goswamy and Mi-. Ajay Kumar, LPANo.319/2007 Page5of25 Advocates f6r the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTt). LPA No. 389/2007 MUNICIPAL CORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml'. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANproperties ... ..Respondent Through Mr. Sanjay Goswaniy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPANOo 391/2007 MUNICIPALCOIIPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate iVir. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANproperties Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 394/2007 MUNICIPALCOI^OMTION OF DELHI Appellant Tlircugh: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 -Page 6 of 25 ' J V- VARBHiVlANPROPERTIES. Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 395/2007 lUmiCIPAL CORPORATIONOF DELffl Appellant Through: Mi-.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Shigh, Advocates versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPALCOI^ORATION OF DELHI Appellant Through: Mi-.H.S.Phoolka, Senior Advocate Ml*. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus MANISHAGGlUWAL Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGnCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELffl Appellant Thi'ough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus LPA No.319/2007 Page 7 of 25 VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPAlVo. 401/2007 MUNICIPALCORPOlUVTlONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Ml'. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDFIMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Ml*. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. IrailiMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 403/2007 MUNICIPALCORPORATIONOF 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 sv versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates for RespondentGNCtD. LPA No. 405/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka, Senior Advocate iVh-. SanjeevSabharwaland iVlr. Alok Singh,Advocates versus UNITYPROJECTSLiMlTfit) Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LM No. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus ICEYPOINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. 407/2007 MUNICIPALcorporation OF DELHI Appellant Tlu'ough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates LPA No.319/2007 Page9of25 versus VARDHK/IANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 408/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate 4 Mr. SanjeevSabharwaland Ml-. Alok Singh, Advocates versus M.M. DEVELOPERS Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irain Majid andMs. ZubedaBegum, Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VAI^HMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Ml*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates LPA No.319/2007 Page 10 of25 O/ versus VARDHMANPROPERTIES ... ..Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1058/2007 MUNICIPALCORPORATIONOFDELHI Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland - Mr. Alok Singh,Advocates , versus VARDHMANPROPERTIES Respondent ThroughVli'. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate ivir. SanjeevSabharwaland Mr. Alok Singh, Advocates versus SUNDERCONSTRUCTIONCO. Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1060/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mi.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and LPANo.319/2007 Page 11 of 25 Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Gosvvamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate ]VIi\ Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocates for the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUllYABUILDWELL LIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPANo.319/2007 Page 12 of 25 A HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be //5 allowed to see the judgment? 2- To be referred to the Reporter ornot? 3. Wliether the judgment should be reported '/(.$ in Digest? JUDGMENT Dr. S. 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 challenged the validity of the notices issued by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stalnp 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 coiiveyanceofplotsof landin favourofthe appellantswho successfully bid for them in auctions held by the Delhi DevelopmentAuthority ('DDA')/ Municipal Corporation of Delhi ('MCD'). Consequently, perpetual lease deeds were executed and registered in their favour. The writ petitionershad also paid the appropriatestamp duty and transfer duty intermsofthe certificateissuedby the CollectorofStampsin each of the cases. 3. On 29'*^ August2004 ageneralorderwas issuedby the Divisional LPA>Jo.319/2007 Page 13 of25 n Commissioner, Delhi stating that the Collectors of Stamp of different districtshad adoptedvarying methodsof calculationof duty in respectof perpetual leases which had resulted in the duty being short levied and collected. This conclusion was reached on an interpretation of Article 35 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 pay the deficientduty as well as the penalty equaling ten times of the deficient duty. In 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 aggregate of Rs.10,79,772as 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 Sihgle Judge the respondentscontendedthat they were not challenging the re-working of the stamp duty since the questionof intefpretationof 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. 5. On the question of penalty, the learned Single Judge came to the conclusion that in terms of Section 40 of the Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impounding an instrument. Since no instrument had yet been impounded by the Collector, the question of imposition of any penalty did 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 question before the learned Single Judge concerned the 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 in 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 collected for the grant of the lease. The learned Single Judge rejected the contentionof the MCD that the word 'amount' referredto premiumand the word 'value' referred to the rent. It was held that they referred to the quantum of the rent for the first fifty years of the lease. Consequently, transfer duty would be leviable on one-sixth of 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 l^'"^ ofthe rent payableat presentfor the first LPANo.319/2007 Pagel5of25 C\ 30 year period but computedforthe first fifty years". 7. The petitions were accordingly partly allowed holding that no penaltycouldbe imposedin respectofthe transferduty underthe DMC Act since that was a debatable issue. A direction was issued to re-work the transferduty in terms of thejudgmentof the learnedSingleJudge. It was further held that no further stamp duty in addition to the amounts already paid was payablenor was any penalty chargeable. 8. Aggrievedby the judgmentof 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 Section 147 (2) (b) (v) DMC Act, it had to comiote 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 takenplace. Therefore,the word 'rent' would includethe 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 occurring in 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 '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 consideration payable in respect of the lease which, in any event, has been set forth in the instrument. Mr.Phoolkacontendedthat sincethe annualrent payableis calculatedas a percentage of the premium paid, it is a measure of the premium itself Consequently, there it was logical to include the premium amount as part of the rent for the purposes of computingthe transfer duty. 10. In support of his contention that all words in the statute have to be given full effect Mr.PhoolkarefeiTedto the judgments of the Supreme Court in Shin-Etsii Chemical Co. Ltd. v. Aksh OptijibreLtd. (2005) 7 see 234, Manohar 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 Indcon Structiirals(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 Page 17 of25 nf the provision should expresslyindicate it. Reliance is placed on 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 separately understood and 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. Rajpluil 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: "147o Duty oil 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 immovableproperty situatedwithin the limits of Delhi in accordancewith the provisionshereafterin this section contained. (2) The said duty shall be levied - (a) in the form of a surcharge on the duty imposed by the Indian Stamp y\ct, 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 exceedingfive per cent, on the amount specifiedbelow againstsuch instruments - LPA No.319/2007 Page 18 of25 (V Description of instrument Amount on which duty should levied (i) Sale of immovableproperty The amount or value of consideration for the sale, as set forth in instrument. (ii) Exchangeof immovable property The value of the property of the greats value, as set forth in the instrument. (iii) Gift of immovableproperty The valueof 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 perpetuity immovable property The amountequalto one-sixthof the whole amount or value of the rent which would be paid or deliveredin respectofthe firstfifty yearsofthe 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. InNiagaraHotels&Builders(P) Limiteda learnedSingleJudge of this Courtheldthat the word 'or' in Section147 (2) (b) (v) DMC Act could not be read in a manner so as to enable MCD to levy the transfer duty on an aggregateboth the premiumamount 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. Dependingon the context,the word 'premium' can have both a broad as well as a narrow meaning. The definitionof premium in the Law Lexiconby P. RamanathaAiyar,SecondEditionreads as under: LPANo.319/2007 Page 19 of 25 ''Premium ineaiis a sum of money paid as conside^fa:ti6nfor grant of lease. It represents ' capitalized rent which iii fact is the di^'erehoebetween the actual rent and the refit which miglit otherwise be obtained by theiesspr. '^Pr-einiumOr other Like Sums", "are sums paid ifi excess of the agreed rent ih coiisideratiofi of grant, continuance or renewal ofthe tenancy" In Black's Law Dictioidary,Sixth Edition, premium is defined as capitalizedrent"paidinlump sum atthetime ofleaseisgranted." 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 acloiowledgedin the definitionsof the terms 'premium' and 'rent' in Section 105 of the TP Act as well. 16. The decision of the Supreme Court in Patibari 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 questioh that arose in the said case was "whether the --V 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 AssesseeCompafiyby whichtwo tea estateswere leased out to a firm. The considerationfor the lease was a combinationof LPANo.319/2007 Page20 of25 premiumin the sum ofRs.2,25,000ofthe annualrentofRs.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 sixteenhalf yearly instalmentsof Rs.11,250 before the 31'' January and 31'^ July of each year. The annual rent ofRs.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 balanceof Rs.42,000to be paid on or before 31^' Decemberof each year. In the assessmentyear 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 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. Commissionerof 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-timepaymentofpremium for the grantofa leasewas Imownas 'salami'whichis in the 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 between a price paid for a transfer of a right to enjoy the property and the rent to be paid periodically to the lessor. When the interest of the lessor is parted with 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 former is a capital income and the latter a revenue receipt. There may be circumstances where the parties may camouflage the real nature of the transaction by 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 fomi but the substance of the transaction that matters. The nomenclature used may not be decisive or conclusive but it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties." On an analysis of the relevant clauses in the lease deed, it was held that the amount paid as premium could not be construed as rent and, such premium was a capital receipt in the hands of the lessor. 17. In Hotel Kings v. Sara Farhan Lukmani (2007) 1 SCC 202, the SupremeCourt emphasizedthe importanceof a contextualinterpretation and held that while the permitted increase in rent can serve as a yardstick for the landlord to increase the rents it did not make such permitted increase "a part of the rent though it may be a consideration for the grant of lease." 18. The lease deed in the instant cases a makes reference to the annual rent that would be payable in future. This is not a pre-determined figure 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^^ LPA No.319/2007 Page 22 of 25 cyp December, 2003 in favour of M/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 acloiowledges) and of the rent hereinafter reserved