IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder:2"''July, 2008 LPA No. 391/2007 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. Registryis directedto place on record a copy of the judgment passed in LPA No. 319 of 2007. CHIEF JUSTICE July 02, 2008 S. MURALIDHAR, J. dn Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified IN THE HIGH COURT Of DELHI: NEW DELHI LPA No. 319 of 2007 Reservedon: 19"^May, 2008 Date ofjudgment:July 02, 2008 MUNICIPALCORPORATIONOF DELHI ..... Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate IVIr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus N.K.GUPTA .....Respondent ThroughMr. SanjayGosvvamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDim\N PROPERTIES Respondent ThroughMi'. SanjayGosv/amyand ]S4r. AjayKumar, Advocatesfor the Respondents., Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ivh". Alok Singh, Advocates versus LPA N0.319/2007 Page 1 of 25 KEY POINT Respondent ThroughMr. SanjayGoswamyand Mi-. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELIil Appellant Tiirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tiirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates ' • versus VAREjHMANPROPERTIES Respondent TiiroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tiirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2of25 ,a. N,. , 'f. r fStiiiiM'kil ILK,ENTERPRISES Respondent TlirougliMr. SanjayGoswamyand Mi-. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus GARIMAAGGRyWAL Respondent TliroughMr. SanjayGoswamyand Mr. Aja>'Kumar, Advocatesfor theRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD, LPA No, 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml*. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Ml-. Sanjeev Sabharwal and Mr.Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page 3of25 Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMi\ SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. PA No. 384/2007 MUNICIPALCORPOMTIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabhanvaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mf. Alok Singh, Advocates versus HARI SINGHBUILDER&PROMOTRS Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 Advocatesfor theRespondents.. Ms. IramMajidandMs. ZubedaBegum,Advocates fof RespondentGNCTt). LPA No. 386/2007 MmiCIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus ICAMALKISHOREAGGIUWAL Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 387/2007 MUNICIPALCORPORATIONOF DELffi Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMi*. SanjayGoswamyand Mr. Ajay Kumar, ~ Advocatesforthe Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOP DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus BASANTPROJECTSLTD Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, LPA No.319/2007 Page 5 of 25 t- ^ . • 5 I Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELHI .....Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. A No. 391/2007 MUNICIPALCORPORATIONOF DELm Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IrartiMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page 6of25 M.: S'T .,f A\ VARDHMANPROPERTIES. Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 395/2007 MUNICIPALCORPOMTIONOF DELHI . Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mi-. AlokSingh,Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus V-.. MANISHAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singli,Advocates versus •LPA No.319/2007 Page7 of 25 n \P VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentCnCTD. LPA No. 401/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Ml-. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 403/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page 8 of 25 versus VARDHMANPROPERTIES Respondent ThroughMl*. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharvvaland Ml*. Alok Singh,Advocates versus UNITYPROJECTSLIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singli,Advocates LPA No.319/2007 Page 9of25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTt). LPA No. 408/2007 municipal CORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus M.M. DEVELOPERS Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1057/2007 MUMCIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates LPA No.319/2007 Page 10 of25 versus VARDHMANPROPERTIES Respondent ThroughMi*. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1058/2007 MUNICIPALCORPORATIONOFDELHI Appellant Tlirough; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml*. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Tlirough; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUNDER CONSTRUCTION CO. Respondent Through Mr. SanjayGoswamy and Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and LPA No.319/2007 Page 11 of 25 Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi-. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaiand Mr. Alok Singh,Advocates versus VARDHMANproperties Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaiand Mr. Alok Singh,Advocates versus SURYABUILDWELLLIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPANo.319/2007 Page 12 of25 4 V 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 Dn 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 challengedthe validityof the noticesissuedby the Collectorof Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demandingtransfer duty as well as deficient stamp duty and penalty equalto ten times of the deficientduty. 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 August 2004 a general order was issued by the Divisional LPANo.319/2007 Page 13 of 25 Commissioner,Delhi stating that the Collectorsof Stamp of difterent districtshad adoptedvaryingmethodsofcalculationofduty in respectof perpetualleases which had resultedin the duty being short levied and collected.This conclusionwas reachedon an interpretationofArticle35 ofSchedule1(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 Februaiy 2005 to each ofthe appellantscallinguponthem to pay the deficientduty as well as the penalty equaling ten times of the deficientduty. In respect of Vardliman Properties, for instance, the auction purchaser had paid Rs.12,42,215as stamp duty. This was now recomputedas Rs.13,30,604 being the aggregateof Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-worldng the duty, the total considerationfor the perpetuallease was taken as the aggregateof the premium amount of Rs.1,91,11,000and the annual rent calculatedas a percentageof the premiumamount.In additiona penaltyof Rs.8,88,389(being ten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondentscontendedthat they were not challengingthe re-worlcingof 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 regard to the stamp duty and transfer duty respectively as well as the LPANo.319/2007 Page 14 of 25 /] duesin thetransferdutyas demandedin the impugnednotices. 5. On the questionofpenalty,the learnedSingleJudge came to the conclusionthat in terms of Section40 of the Stamp Act, tlie power to impose a penalty was consequential upon the Collector of Stamps impoundingan instrument.Sinceno instrumenthad yet been impounded by the Collector,the questionofimpositionofany penaltydid not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law. 6. The next questionbeforethe learnedSingle Judge concernedthe interpretationofthe relevantentry in Section 147 (2) (b) (v) DMC Act. After referringto tlie decisionofthe learnedSingleJudge ofthis Court in NiagaraHotels&Builders(P) Ltd. v. Union ofIndia65 (1997)DLT 826, the learned Single Judge concluded that the words 'amount' and 'value'in Section147 (2) (b)(v) DMC Act did not referto the premium collectedfor the grantofthe lease.The learnedSingleJudge rejectedthe contentionof the MCD that the word 'amount'referredto premiumand ' theword 'value' referredto therent. It was held thatthey referredto the 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. Althouglithe 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 LPA No.319/2007 Page 15 of 25 30 yearperiodbut computedfor the firstfiftyyears". 7. The petitions were accordinglypartly allowed holding that no penaltycould be imposedin respectofthe transferduty underthe DMC Act since that was a debatableissue. A directionwas issuedto re-work the transferduty in termsofthejudgmentofthe learnedSingleJudge. It was furtherheld that no further stamp duty in additionto the amounts alreadypaidwas payablenor was any penaltychargeable. 8. Aggrievedby thejudgmentofthe learnedSingleJudge,the MCD has filedthepresentappeals. 9. It is contendedby 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 inSection147 (2) (b) (v)DMC Act, ithad to connote the total considerationpayable 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 paidbytheauctionpurchaserfor 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). Mr. Phoolka then submitted that every word occurringin Section147 (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. Thereforethe disjunctive'or' had to be read as &conjunctive 'and'.Sincethe leasecouldnot have beenexecutedwithoutthe premium beingpaid,the legislativeintentwas to levy transferduty on the amount equal to one-sixthofthe entire considerationpayablein respectof the lease which, in any event, has been set forth in the instrument. Mr.Phoolkacontendedthat sincethe annual rent payableis calculatedas a percentageofthe premiumpaid, it is a measureofthe premiumitself. Consequently,thereitwas logicalto includethe premiumamountas part • ofthe rentfor the purposesofcomputingthe transferduty. 10. In supportofhis contentionthat all words in the statutehave to be given full effectMr.Phoolkareferredto the judgmemsofthe Supreme Court in Shin-EtsuChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 # see 234, MdnoharLai v/ VineshAnand(2001) 5SCC 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 Structurals (P) Ltd. v. Commissionerof CentralExcise (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 thepremium paid for the obtainingof a perpetuallease,then certainlythe wordingof LPANo.319/2007 Pagel7of25 Wj the provisionshouldexpresslyindicateit. Relianceis placedon Section 105 ofthe TransferofPropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. 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' have to be separatelyunderstoodand one cannot include the other in the context in which it is used in the deed ofperpetuallease in the instantcase. The word 'rent' can only refer to the actual rent indicated in the lease deed and not the premium. Reference is also made to the decisions in Govind Ram v. Rajphul Singh AIR 1973, Punjab & Ilaiyana 94 and S. VenkataramanSwami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In orderto appreciatethe respectivecontentions,a referencemay be made firstto Section147 (2) (b)(v) oftheDMC Actwhichreads: "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 immovablepropertysituatedwithin the limitsof Delhi in accordancewith the provisionshereafterin this section contained. (2) The said duty shall be levied - (a) in the fomi 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 Teiritory of Delhi, on every instrument of the description specified below, and (b) at such rate as may be deterinined by the Corporation not exceedingfive per cent, on the amount specifiedbelow againstsuch instmments - LPANo.319/2007 Page 18 of25 Description of instrument Amount on which duty should levied (i) Sale of irnmovableproperty The amount or value of consideration for the sale, as set forth in instrument. (ii) Exchange of immovable property Thevalue ofthe propertyofthe greate value, as set forth in the instrument. (iii)Giftof immovablepropert; Thevalueof the property,as setforth the instrument. (iv) Mortgage with possession immovable property The amountsecuredby the mortgage: set forth in the instrument. (v) Lease in perpetuity immovable property The amount equal to one-sixth of 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 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 andrent 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 definition of premium in the Law Lexiconby P. RamanathaAiyar,SecondEditionreads asunder: LPANo.319/2007 Page 19 of 25 ^Premmmmm^a sum of money paid as considerationfor grantoflease.It represents "capitalized rent which in fact is the dilfeEencebetween the actual rent and the rent:#|fl;ch^mi^totherwisebe obtainedby the lessor. other Like Sums'\ "are sums paid^ ift «>ccess of the agreed rent in consideration of grant, continuance or renewalofthetenancy" In Black's Law Dicfioiiatj.,Sixth Edition, premium is defined as capitalizedrent"paidin lumpsumattiietimeofleaseis granted." 15. The question whether the 'rent' payable under the deeds of perpetuallease in the instant cases includes the 'premium' paid will depend on the contextin which the word is used. This distinctionis acknowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 ofthe 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 anarrow meaning. The question that arose in the said case was "whether the premium collected as a lump sum (although payable in instalments) could also be consideredto be arevenuereceiptin the same mamieras the rent collected"? In the said case aregisteredlease deed had been executedby the AssesseeCompanyby whichtwo tea estateswere leased out to a firm. The considerationfor the lease was a combinationof LPANo.319/2007 premiumin the sum ofRs.2,25,000ofthe annualrentofRs.54,000. The premiumwas to be paid in the followingmanner: Rs.45,000 as lump sum at the time of execution of the lease deed and the balance of Rs.1,18,000 in sixteenhalf yearly instalmentsof Rs.l1,250 before the 3r' Januaiy and 31^' 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 beforelast date ofeachmonth,thus, makingin 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 treatedthe instalmentof Rs. 11,250paid towardspremiumas a revenue receipt. This assessment was upheld by the Appellant Assistant Commissioneras well as the Tribunal. The High Court reversed the Tribunalandheldthat the sum of Rs.11,250was a capitalreceiptand not a revenue receipt. The Departmentthen appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain - Singh V. CommissionerofIncome Tax (1943)IIITR 513, Memberfor the Board of Agriculture v. Commissioner of Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. CommissionerofIncome 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 Idiown 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 betweenapricepaid for atransferofarightto enjoythe propertyand the rentto be paidperiodicallyto the lessor. When the interestofthe lessoris partedwith for aprice, the price paid is premium or salami. But the periodical payments made for the continuous enjoyment of the benefits under the lease are in the nature of rent. The former is &capital income and the latter a revenue receipt. There may be circumstanceswhere the parties may camouflage tlie 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 deferredprice. It is not the fonti but the substanceofthe transactionthatmatters. The nomenclatureusedmay not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionof theparties." On an analysisofthe relevantclausesin the lease deed, it was held that the amount paid as premiumcould not be construedas rent and, such premiumwas a capitalreceiptinthe handsofthe lessor. 17. In HotelKings v. Sara FarhanLukmani(2007) 1 SCC202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe permittedincreasein rentcan 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 amiual rent that wouldbe payablein future. This is not a-pre-determinedfigure but is to be workedout as a percentageof the premiumamount. This is set out in the lease deed. For instance in the lease deed dated 1^' LPANo.319/2007 Page 22 of 25 December,2003 in favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads: "NOW THIS INDENTUREWITNESSETH that, in considerationof the ainount 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 acloiowledges) 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 ofthe same paragraphofthe lease deed, the annual rent is statedas being two and a halfper cent ofRs.1,31,04,000 and the first annual rent instalmentis to be paid on January,2008. The relevantportionreadsas under: "TO HOLD the premisesimto 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 of January two thousand and Eight and thereafter at the rate of two and a half per cent of the premium (the sums already paid and such other sum or sums hereafter to be paid towards premium under the covenants and conditions hereinafter contained) or such other enhancedrent as may hereafterbe assessed under the covenants and conditions hereinafter contained clear of all deductions by equal half yearly payments on the 15"" day ofJanuaiyand 15^^ day ofJuly in each year at the Reserve Banlc of Inda, New Delhi." LPA No.319/2007 Page 23 of25 oM 20. Areading of the 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 ofthe rent" occurringin Section V 147 (2) (b) (v) DMC Act has to be answered with reference to the context in which the word is used in the lease deeds in question. A 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 possible to constme the premium paid as advance rent since the annual rent in is not indicatedas a pre-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 intei-pretthe word 'rent' in the lease deeds in theinstantcasesasincludingthe premiumpaid. 22. This Court is inclinedto accept the contentionof the respondent that since what is soughtto