IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY NINTH DAY OF JULY TWO THOUSAND AND TEN PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.36092 of 1998 Between: Kesoram Cement, Basanthnagar ..... PETITIONER AND Govt. of Andhra Pradesh, rep.by its Revenue Secretary, Secretariat Building, Hyderabad and 4 others .....RESPONDENTS The Court made the following: THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.36092 of 1998 O R D E R: The petitioner Kesoram Cement questions the proceedings No.52/24644/98 dated 03.12.1998 of the 3rd respondent Assistant Inspector General of Registration and Stamps, A.P. Hyderabad. It is evident from the aforesaid proceedings that the petitioner presented a draft lease deed for opinion under Sec.31 and the said draft lease deed was examined in the light of the provisions of the Indian Stamp Act 1899 and also the judgment relied on by the petitioner in W.P.5572/1977 dated 20.07.1981 in the case of A.C.C.Ltd v Govt.of A.P.[1] and opined that the document is a mining lease and the mining leases are chargeable to duty under Article-31 of Schedule I-A to the Indian Stamp Act 1899 r/w.Sec.26 thereof. But the learned single Judge of this Court while deciding the aforesaid case, discussed about the definition of ‘Lease’ under Sec.2(16) of the Stamp Act and Sec.105 of T.P.Act and the chargeability under Article-31 of Schedule I-A of the Stamp Act. The provisions of Sec.26 of the Stamp Act have not been brought to the notice of this Court and hence the provisions of Sec.26 were not considered. As per the recitals of the draft lease deed, the dead rent per year was Rs.64,845/- and the anticipated royalty per year was Rs.40,50,000/- As the anticipated royalty being higher than the dead rent, it should be taken into account along with surface rent of Rs.1,276/- and security deposit of Rs.3,000/- for assessing the stamp duty, and accordingly, the 3rd respondent declared that the deed in question is a mining lease chargeable to stamp duty of Rs.4,05,300/- under Article-31 of Schedule I-A of the Indian Stamp Act r/w.Sec.26 thereof. 2. A learned single Judge of this Court following the judgment in the case of A.C.C.Ltd.(1 supra) allowed the writ petition by order dated 28.01.2004 holding that it is not open for the respondents to charge stamp duty on the anticipated royalty. Aggrieved by the same, the Government filed W.A.655/2004 stating that the learned counsel for the writ petitioner has not brought to the notice of the learned single Judge about the later judgment of this Court in the case of S.B.C.& M.Industries vs. Govt.of A.P.[2] wherein the learned single Judge after considering the earlier judgment of this Court in the case of A.C.C.Ltd. (1 supra) held that the earlier judgment was admittedly without considering Sec.26 of the Stamp Act and accordingly, upheld the similar stamp duty as assessed by the authorities. 3. In view of the aforesaid later judgment in S.B.C.& M.Industries (2 supra), the Division Bench of this Court allowed the writ appeal and remitted the matter to the learned single Judge directing the writ petitioner to deposit a sum of Rs.2 lakhs before the authorities out of the assessed stamp duty of Rs.4,05,300/-. That is how the matter came up again for hearing. 4. Admittedly the petitioner applied for renewal of mining lease for an area of 890.20 acres in the year 1986 and it was renewed by the State o f Andhra Pradesh for 20 years. The mining lease was granted for extraction of limestone which is required for manufacture of cement. According to the petitioner, the mining lease was initially granted in 1966 which expired in 1986. For renewal of the lease, the petitioner drafted a lease deed under Rule-31 of the Mineral Concession Rules 1960 and in the draft lease the petitioner itself described as the lessee and the lessee applied for renewal of lease to the State Government and after narrating various aspects, in Part-IX under Clause-9 of the draft lease deed it was noted that for the purpose of stamp duty, the anticipated royalty for the demised land is Rs.40,50,000/- per year. 5. Admittedly, the draft lease deed in question is a mining lease. Mining leases are chargeable to stamp duty under Article-31 of Schedule I-A of the Indian Stamp Act 1899. According to the petitioner, Sec.26 of the Stamp Act is not applicable. But according to the Government, the mining leases are chargeable to stamp duty under Article-31 of Schedule- I-A of the Indian Stamp Act, 1899 r/w.Sec.26 thereof. The petitioner itself admitted in the writ petition that the deed in question is a mining lease, whereas in para-7 of the affidavit it is stated that though it is called as Mining Lease, it is actually a licence, granted to extract the limestone, as such, the provisions of Sec.26 have no application. It is further stated that Sec.26 proviso has no application as the actual royalty is not determined and therefore, the royalty cannot be estimated for the purpose of stamp duty. 6. ‘Lease’ is defined under Sec.2(16) of the Indian Stamp Act 1899 as under: Sec.2(16): “Lease”: “Lease” means a lease of immovable property, and includes also: (a) a patta; (b) a kabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy or pay or deliver rent for immovable property; (c) any instrument by which tolls of any description are let; and (d) any writing on an application for a lease intended to signify that the application is granted; 7. If it is a licence according to the petitioner, the stamp duty is leveable under Article-33 of Schedule I-A. Under Article-31(iii) whereas a lease purports to be for a term exceeding five years but not exceeding for 10 years, five percent for a market value equal to the amount or value of one and half times of the average annual rent reserved. Under Article- 31(v) of Schedule-I-A whereas lease purports to be for a term exceeding twenty years, but not exceeding thirty years, five percent for a market value equal to the amount or value of five times of the average annual rent reserved. 8. The question that arises for consideration in this writ petition is whether the draft lease presented by the petitioner is a lease or licence? 9. The said question itself was answered against the petitioner in the case of A.C.C.Ltd. (1 supra) itself. The said case also relates to grant of mining lease for quarrying limestone and the clauses of the similar draft lease deed was considered and it was held that the said lease deed is a lease within the meaning of Clause-16 of Sec.2 of the Indian Stamp Act and liable to stamp duty and the stamp duty has to be calculated with reference to Article-31(a)(iv) of Schedule I-A of the Act. Admittedly, the effect of Sec.26 of the Act was not brought to the notice of the Court in the aforesaid case and the same was not considered. But whereas in the later case i.e. in the case of S.B.C.& M.Industries (2 supra) it was argued that the provisos to sec.26 have no application and the effect of the proviso to Sec.26 was considered and held that where the value of the subject matter is indeterminate and such a subject matter is in respect of a lease granted by or on behalf of the Government, then such amount or the valuation would be taken by the Collector having regard to all the circumstances of the case and the Collector has to estimate the amount which is likely to be payable (obviously in future) by way of royalty or a share to the Government, and the whole of such royalty or share which shall be claimable under such lease shall be valuation for the purpose of stamp duty. Sec.26 of the Stamp Act reads as follows: Sec.26: Stamp where value of subject matter is indeterminate:- Where the amount or value of the subject matter of any instrument chargeable with ad valorem duty, cannot be, or (in the case of any instrument executed before the commencement of this Act) could not have been ascertained at the date of its execution, or first execution, nothing shall be claimable under such instrument more than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date of such execution, have been sufficient: Provided that, in the case of the lease of a mine in which royalty or a share of the produce is received as the rent or part of the rent, it shall be sufficient to have estimated such royalties or the value of such share, for purpose of stamp duty. (a) When the lease has been granted by or on behalf of the Government, at such amount or value as the Collector may, having regard to all the circumstances of the case, have estimated as likely to be payable by way of royalty or share to the Government under the lease,or (b) When the lease has been granted by any other person, at twenty thousand rupees a year; and the whole amount of such royalty or share, whatever it may be, shall be claimable under such lease; Provided also that, where proceedings have been taken in respect of an instrument under Section 31 or 41, the amount certified by the Collector shall be deemed to be the stamp actually used at the date of execution. 10. Admittedly, in the instant case, the lease is for a period of 20 years, under proviso to Sec.26, value of the royalty was estimated for the purpose of stamp duty. Under Clause-(a) to Sec.26 the Collector is entitled to estimate the amount likely to be payable by way of royalty or share to the Government under the lease for the purpose of levying the stamp duty. Therefore, it cannot be said that Sec.26 proviso (a) is not applicable to the case of the petitioner. For the purpose of payment of stamp duty, the case of the petitioner squarely falls under Sec.26 r/w.Article-31 of Schedule-I-A. Therefore, I am of the opinion that the impugned order is inconformity with Sec.26 r/w.Article-31 of Schedule I-A of the Indian Stamp Act and also inconformity with the order of the learned single Judge of this Court in the case of S.B.C.& M.Industries (2 supra). 11. In view of the above, I do not see any merits in the writ petition and the same is accordingly dismissed. No order as to costs. ___________________ V.ESWARAIAH,J Dated: 29.07.2010 Dsr [1] AIR 1981 Andhra Pradesh 320 [2] 1988(2) ALT 271