IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon; 19^^May, 2008 Date oforder:2"^^ July,2008 LPA No. 385/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwal& Mr. AlokSingh,Advocates versus HARI SINGH BUILDER & PROMOTRS Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. IramMajidandMs.ZubedaBegum,Advocatesfor Respondent GNCTD. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MURALIDHAR ORDER ^ This appeal is dismissedin terms of the common judgmentof 2nd July 2008 passed in 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 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 1* . vu V m THE HIGH COURT OF DELHI: NEW DELHI LPA No. 319 of 2007 Reservedon: May, 2008 Date ofjudgment;July 02, 2008 MUNICIPALCORPORATIONOF DELHI ..... Appellant through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus N.K. GUPTA Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus V VARDHMANPROPERTIES Respondent Through Mr. SanjayGoswamy and IN-lr. Ajay Kumar, 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 Mr. Alok Singh, Advocates versus LPANo.319/2007 Page! of25 KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus K.K. ENTERPRISES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELHI .....Appellam Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates v., versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi-. Ajay Kumar, AdvocatesfortheRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2of25 K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mi*. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabharwaland Mi\ Alok Singh,Advocates versus GARJMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Vis. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDI-IMANPROPERTIES Respondent TliroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus VARDLMANPROPERTIES Respondent Tlu-oughMr. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page3of25 Advocates for the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mf. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. — LPA No. 384/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates forRespondentGNCTD. .PA No. 385/2007 MUI^ICIPALCOi^OlUTlONOF DELHI Appellant Through: Mi".H.S.Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus FL\RISINGHBUILDER&PROMOTRS Respondent ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 386/2007 MmiCIPAL CORPORATIONOF DELffl Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Vlr. Alok Singh,Advocates versus ICAMALlaSHORE AGGRAWAL Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 387/2007 MUNICIPAL CORPORATION OF DELffl Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPAL CORPORATIONOF DELffl Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, LPA No.319/2007 Page 5 of 25 4 I Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Ml". Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theiRespondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDI-IMANPROPERTIES .,. ..Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPOR/VTIONOF DELffl Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page6 of 25 ^ A VARDI-iMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor theRespondents. Ms. Irani Majid andVis. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland IVh-. Alok Singh, Advocates versus MANISHAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. Irani Majid andMs. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 7 of 25 nP' VAUDHMANPROPEI^TIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 401/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml-. SanjeevSabharwaland Ml-. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 403/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates LPA No.319/2007 Page 8 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. 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 Mr. AlokSingh,Advocates versus UNITYPROJECTSLIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus ICEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates LPA No.319/2007 Page 9 of25 versus VARDHkANPROPERTIES Respondent ThroughiVIr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTt). LPA No. 408/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus M.M. DEVELOPERS Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates LPA No.319/2007 Page 10 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1058/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharv^aland Mr. AlokSingh,Advocates versus VARDI4MANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus SUNDERCONSTRUCTIONCO. Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and LPA No.319/2007 Page 11 of 25 Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi-. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1061/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. AND LPANo. 1285/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SURYABUILDWELLLIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BL^: THE CHIEF JUSTICE LPANo.319/2007 Page 12 of 25 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 Dr. S. Muralidliar, 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 notices issued by the Collectorof Stamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demanding transfer duty as well as deficient stamp duty and penalty equalto ten times of tlie 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 tenns 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 Collectorsof Stamp of different districtshad adoptedvaryingmethodsofcalculationofduty in respectof perpetualleases which had resultedin the duty being short levied and collected.This conclusionwas reachedon aninterpretationofArticle35 of Schedule1 (A) to the Stamp Act as applicableto Delhi and Section 147 to tlie Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in Februaiy 2005 to eachof the appellantscallingupon them to pay the deficientduty as well as the penalty equaling ten times of the deficient duty. 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-working the duty, the total consideration for the perpetual lease was taken as the aggregateof the premium amount of Rs.1,91,11,000atid 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-worldngof the stamp duty since the questionof interpretationof Article 35 of Schedule 1(A) of the Stamp Act was debatable. Their challenge was, therefore, confined to the penalty imposed under the Stamp Act as well as the DMC Act with regard to the stamp duty and transfer duty respectivelyas well as the LPA No.319/2007 PageI4of25 dues in the transferdutyas demandedin die impugnednotices. 5. On the questionof penalty,the learnedSingle 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 impositionof any penalty did not arise. To the extent, therefore, that the impugned notices sought to levy penalty,they wereheldto be unsustainablein law. 6. The next question before the learned Single Judge concernedthe interpretationof the relevant entry in Section 147 (2) (b) (v) DMC Act. After referring to tlie decision of the learned Single Judge of this Court \i\Niagara Hotels & Builders (P) Ltd. v. Union ofIndia 65 (1997)DLT 826, the learned Single Judge concluded that the words 'amount' and 'value' in Section147 (2) (b) (v) DMC Act didnotreferto the premium collectedfor the grantof the lease.The learned SingleJudgerejectedthe 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 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 computedforthe first fiftyyears". 7. The petitions were accordingly partly allowed holding that no penaltycould be imposedin respectof the transferduty underthe DMC Act since that was a debatable issue. A direction was issued to re-work the transfer duty in terms of the judgment of the learned Single Judge. It was further held that no further stamp duty in addition to the amounts already paid was payable nor'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 appearingfor the MCD that in the sense and in the contextin which the word 'rent' is used in Section147 (2) (b) (v) DMC Act, it had to 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 execution of the perpetual lease deed could not have takenplace. Therefore,the word 'rent' would includethe premium paid by the auction purchaser for obtaining the lease. In other words, 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 everyword occurringin Section147 (2) (b) (v) DMC Act had to be LPANo.319/2007 Page 16 of 25 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 beingpaid,the legislativeintentwas to levy transferduty on the amount equal to one-sixthof the entire considerationpayablein 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 calculatedas a percentageof the premiumpaid, it is a measureof the premiumitself Consequently,there it was logicalto includethe premiumamountas part of the rent for the purposesof computingthe transfer duty. 10. In support of his contentionthat all words in the statutehaveto be given full effect Mr.Phoolkareferredto the judgmentsof the Supreme Court in Shin-Etsu Chemical Co. Ltd. v. Alcsh Optifibre Ltd. (2005) 7 SCC 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 Structurals (P) Ltd. v. Commissioner of Central Excise (2006) 6 see 786... 11. Mr.Sanjay Goswamy, learned counsel appearingon behalf of the respondents submitted that a taxing statute admits of only strict inteipretation. If the intentionof the legislaturewas to tax the premium paid for the obtainingof a perpetuallease, then certainlythe wordingof LPA No.319/2007 Page 17 of25 the provisionshouldexpresslyindicateit. Relianceis placedon Section 105 of the Transferof PropertyAct, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. Relying on the judgmentof the Supreme Court in Commissionerof Income Tax v. Panbari Tea Company AlA 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 SinghAIR 1973, Punjab &Haiyana 94 ond S. VenkataramanSwami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In order to appreciate the respective contentions, a reference may be madefirstto Section147 (2) (b) (v) of the DMGAct whichreads: "147. Duty on transfer of property and method of assessment thereto,- (1) Save as otherwiseprovided in this Act, the Coiporation shall levy a duty on transfers of immovable property situated within the limits of Delhi in accordancewith the provisionshereafterin this section contained. (2)Thesaidduty shallbelevied- (a) in the fomi of a surchargeon the duty imposedby the Indian 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 exceedingfive per cent, on the amount specifiedbelow againstsuch instmments - LPANo.319/2007 Page 18 of25 \ • J 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) Exchange of immovable property The value of the propertyof the greate value, as set forth,in the instrument. (iii) Giftof immovablepropert; The value of the property,as set forth the instrument. (iv) Mortgage with possession inimovable property The amount secured by the mortgage ; set forth in the instrument. (v) Lease in perpetuity immovableproperty The amountequalto one-sixthofthe whole amount or value of the rent which would be paid or deliveredin respect of the first fiftyyears 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 learnedSingleJudge 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 tlie 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. JlamanathaAiyar,SecondEditionreadsas under: LPANo.319/2007 Page 19 of 25 ^^PremnMSM^sa sum of money paid as conside|at|onfor grantoflease.Itrepresents capteli^li; rent which in fact is the ditoence between the actual rent and the rent which'ini^itotherwisebe obtainedby thel^OE* "PfimiumOrotherLike Sums'\ "are sums paid^ ifi eiccess of the agreed rent in consideration: of grant, continuance or renewalofthetenancy" In Black's Law Sixth Edition, premium is defined as capitalizedrent"paidinlumpsum at thetimeofleaseis 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 contextin which the word is used. This distinctionis aclcnowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 oftheTP Actaswell. 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 a nairow •meaning. The question that arose in the said case was "whetherthe premium collected as a lump sum (althoughpayable in instalments) could also be consideredto be arevenuereceiptin the same maimeras 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 Page20of- It p premium in the sum of Rs.2,25,000 of the annual rent of Rs.54,000. The premium was to be paid in the following manner: Rs.45,000 as lump sum at the time of execution of the lease deed and the balance of Rs.1,18,000in sixteen half yearly instalmentsof Rs.11,250 before the 31®' January 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 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 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)11ITR 513, Memberfor the Board of Agriculture v. Commissioner of Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner of Income Tax Alk 1961 SC 732 to underscore the distinction between the premiumand rent. It pointedout that a one-timepaymentof premium for the grant of a lease was known as 'salami' which is in the natureof 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 LPANo.319/2007 Page21 of 25 f betweena pricepaid for a transferof a rightto enjoythe propertyand the rentto be paidperiodicallyto the lessor. When the interestof the 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 fomier is a capital income and the latter a revenue receipt. There may be circumstanceswhere the parties may camouflage tlie real nature of the transactionby using clever pliraseology. In some cases, the so-called premium is in fact advance rent and in others rent is deferredprice. It is not the form but the substanceof the transactionthat matters. The nomenclatureused may not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intentionof the parties." V\ 9 On an analysisof the relevantclausesin the lease deed, it was held that the amount paid as premium could not be construedas rent and, such premiumwas a capitalreceiptinthe hands of the lessor. 17. In Hotel Kings v. Sara Farhan Lukmani (2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceofa contextualinteipretation and heldthatwhilethe permittedincreaseinrent can serveas ayardstick for the landlord to increase the rents it did not make such permitted increase"apartofthe rentthoughitmay be a considerationfor the grant of lease." 18. The lease deed in the instant cases a makes reference to the annual rentthat wouldbe payablein future. This is not a pre-detenninedfigure 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^' LPA No.319/2007 Page 22of25 f December,2003 ifi favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads: "NOW TlilS INDENTURE WITNESSBTH that, in consideration of the amount of Rs. 1,31,04,000/-(RupeesOneCroreThirtyOne lacs and Four thousand only) paid towards premium before the execution of these presents (the receipt where of the Lessor hereby aclcnowledges) and of the rent hereinafter reserved and of the covenants on the part of the lessee hereinafter contained, the Lessor doth hereby demise unto the Lessee, all that plot of land being the Cofiimercial Plot Nc. 09 Block No. X in the lay out plan of New Friends Colony District Centre" 19. In the later portion of the same paragraph of the lease deed, the annual rent is stated as being two and a half per cent of Rs.1,31,04,000 and the first amiual rent instalmentis to be paid on 15'^ January,2008. The relevantportionreads as under: "TO HOLD the premisesunto the lessee in perpetuity 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 enhanced rent as may hereafter be assessed under the covenants and conditions hereinafter contained clear of all deductions by equal half yearly payments on the IS"' day ofJanuaiyand IS''^ day ofJuly in each year at the Reserve Banlc of India, New Delhi." LPA No.319/2007 Page 23 of25 N 20. A reading of the aforementionedportions of the perpetuallease deed brings out the distinctionbetween'premium' on the one hand and