i I IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^*^May, 2008 ^nd Date of order: 2"'* July, 2008 LPA No. 401/2007 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 Gosv^amyand 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 judgmentof 2nd July 2008 passedin LPA No. 319 of 2007 titled "MunicipalCorporationof Delhi v. N.K. Gupta" and connected matters. Registryis directedto place on recorda copy of thejudgmentpassedin 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 IN THE HIGH COURTOF DELHI: NEWDELHI LPA No. 319 of 2007 Reservedon: 19'*'May,2008 Date ofjudgment:July 02,2008 MUNICIPALCORPORATIONOF DELm .....Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus ^ ,^. N.K.GUPTA Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentOWCtt). With LPA No. 373/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland ^ Mr. AlokSingh,Advocates versus - I VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 374/2007 municipal corporation of DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus LPANo.319/2007 Page1of25 /A KEYPOINT Respondent ThroughMr. SanjayGoswamyand Ml*. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespohdefitGNCTD. LPA No. 377/2007 MUNICIPALCOI^ORATIONOF DELHI ..... Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespofideflts. Ms. IraitiMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough; Mr.H.S.Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2 of25 J V, JKP' K.K. ENTERPRISES Respondent TliroughMr. SanjayGoswamyand Ml-, AjayKumar, Advocatesfor the Respondents, Ms, IrafliMajidandMs, ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S,Phoolka,SeniorAdvocate Mr, SanjeevSabharwaland Ml-. Alok Singh,Advocates versus GARIMAAGGRAWAL Respondent ThroughMr, SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms, Iram Majidand Ms, ZubedaBegum,Advocates for RespondentGlSfCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H,S,Phoolka,SeniorAdvocate Mr, SanjeevSabharwaland Mr, Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMl-, SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms, IraniMajidand Ms, ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr,H.S,Phoolka,SeniorAdvocate Mr, SanjeevSabharwaland Mr, AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page3of25 \, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates fbr RespondentCjNCTD. LPANo, 383/2007 MUNICIPALCORPORATIONOF DELm Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Ifam MajidandMs. ZubedaBegum,Advocates forRespondentONCTD. No. 384/2007 MUNICIPALCOflPOlUTlONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi\ Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 385/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus HARI SINGHBUILDER&PROMOTRS Respondent ThroughMi\ SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 AdvocatesfortheRespondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 386/2007 MtMCIPALCORPOMtlONOF DELHI Appellant Ijirough: Mr.H.S.Phoolka,SeniorAdvocate SanjeevSabharv^aland Vlr. Alok Singh,Advocates versus ICAMALlaSHOREAGGRAWAL .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 387/2007 MUNICIPALcorporation OP DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMi-. SanjayGoswamyand Mr. AjayKumar, LPANo.319/2007 Page5 of25 Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraiiiMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPORATIONOF DELffi Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml*. AlokSingh,Advocates versus VARDHMANPROPERTIES Respondent TluoughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 394/2007 MUNICIPALcorporation OF DELffl Appellant Tlirough: Mr.H.S.Phoolka, SemorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 6 of 25 VARDHMANproperties . .....Respondent ThroughMr. SanjayGoswamyand Mi". Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phooika,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AloicSingh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough; Mr.H.S.Phooika,SeniorAdvocate Ml'. SanjeevSabharwaland VIr. Alok Singh,Advocates versus MANISHAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesforthe Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phooika,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007 Page 7 of 25 -9^ VARDHMAN PROPERTIES Respondent TliroughMr. SaiijayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates forRespondefrt-GNCTD. LPANo. 401/2007 MUNICIPALCORPORATIONOFDELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. SanjayGoswamy and Mr. AjayKumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 403/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page 8 of 25 W versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IrainMajidandMs. ZubedaBegum,Advocates for RespondentCjNCTD. LPANo. 405/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharvvaland Mr. AlokSingh,Advocates versus UNITYPROJECTSLIMITED Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate . Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates LPANo.319/2007 Page9 of25 % versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IrafflMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo, 408/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus M.M. DEVELOPERS Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.PhooUca,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates LPA No.319/2007 Page 10 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1058/2007 MIMCIPAL CORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharv^aland Ml*. Alok Smgh, Advocates versus VARDIiMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough; Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus SUNDERCONSTRUCTIONCO. Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1060/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland LPA No.319/2007 Page 11 of 25 iVv "p Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. Sanjay Goswamy and Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 MUNICIPALCORPORATIONOF DELffi Appellant ^ Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus v-'.V-- VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus SURYABUILDWELLLIMITED Respondent Through Mi*. Sanjay Goswamy and Ml*. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid andMs. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPA No.319/2007 Page 12of 25 HON'BLE m. 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. Muralidhar, J. 1. These appeals are directed against the common judgment dated 13* March, 2007 passed by the learned Single Judge ofthis Couit 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') demanding transfer duty as well as deficient stamp duty and penalty equal to ten times of the deficient duty. 2. The demand for transfer duty was made in respect of the conveyanceof plots of land in favourof 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 appropriatestamp duty and transfer duty intennsofthe certificateissuedby the Collectorof Stampsin each of the cases. 3. On 29* August2004 ageneralorderwas issuedby the Divisional LPANo.319/2007 Page 13 of25 rfo Commissioner,Delhi statingthat the Collectorsof Stamp of different 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 impugned notices were issued in Februaiy 2005 to eachofthe appellantscallinguponthemto pay the deficientduty as well as the penalty equalingten times of the deficientduty. 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 aggregateof Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-worldngthe 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 j 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 respectively as well as the LPANo.319/2007 Page 14 of25 4^ duesin the transferdutyas demandedin the impugnednotices. 5. On the questionofpenalty,the learnedSingleJudge canieto the conclusionthat in terms of Section40 ofthe Stamp Act, the power to impose a penalty was consequentialupon 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 learnedSingleJudge concernedthe interpretationofthe relevantentry in Section 147 (2) (b) (v)DMC Act. After referringto tlie decisionofthe learnedSingleJudge ofthis Court in NiagaraHotels&Builders(P) Ltd. v. UnionofIndia65 (1997)DLT 826, the learned Single Judge concludedthat the words 'amount' and 'value'in Section147 (2) (b) (v) DMC Act did not referto the premium collectedfor the grantofthe lease.The [earnedSingleJudgerejectedthe contentionof the MCD that the word 'amount'referredto premiumand theword 'value' referredto therent. It was heldthatthey referredto the quantumof the rent for the first fifty years of the lease. Consequently, transferduty wouldbe leviableon one-sixthof tlie 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 of1/6^ ofthe rent payableat presentfor the first LPANo.319/2007 Pagel5of25 30 year period but computed for the first fifty years". 7. The petitions were accordingly partly allowed holding that no penalty could be imposed in respect of the transfer duty under the 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. Aggrieved by tlie judgment of the learned Single Judge, 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 Section 147 (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 peipetual lease deed could not havetaken place. 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. Reference was made to the definition of the word 'premium' in Black's Law Dictionary,6''^ Edition (page 1181). IVIr. Phoolka then submitted that everyword occurringin Section147 (2) (b) (v) DMC Acthad 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 instamient. Mr.Phoolkacontendedthat since the annualrent 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 w^ords in the statutehave to be given full effect Mr.Phoolka referred to the judgments of the Supreme Court in Shin-Etsii Chemical Co. Ltd. v. Alish OptifibreLtd. (2005) 7 SCC 234, Manohar Lai v/ VineshAnand (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.SanjayGoswamy,learnedcounsel appearingon behalfof the respondents submitted that a taxing statute admits of only strict interpretation. If the intention of the legislature was to tax the premium paid for the obtainingof a perpetuallease, then certainlythe wordingof LPANo.319/2007 Page 17of 25 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 AIR 1965 SC 1871, it is submitted that the expression'premium' and 'rent' have to be separatelyunderstoodand one caimot include the other in the context in which it is used in the deed of perpetuallease 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. Rajpliul SinghAIR 1973, Punjab & Haiyana 94 and S. VenkataramanSwami V. S. Abdul Wahab AIR 1969 Madras 473. !D 12. In order to appreciate the respective contentions, a reference may be made first to Section 147 (2) (b) (v) of the DMC Act which reads: "147. Duty on transfer of property and method of assessment thereto.- (1) Save as otherwise provided in this Act, the Corporation shall levy a duty on transfers of immovable property situated within the limits of Delhi in accordancewith the provisionshereafter in this section contained. (2) The said duty shall be levied- (a) in the fomi of a surcharge on the duty imposed by the hidian Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Territoiy of Delhi, on every instrument of the description specifiedbelow, and (b) at such rate as may be detemiined by the Corporation not exceeding five per cent, on the amount specified below against such instruments - LPANo.319/2007 Page 18 of 25 Description of instrument Amount on wliicli 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 propertyof the greats value, as set forth in the instrument. (iii) Giftof immovablepropert; Thevalueoftheproperty,assetforth the instrument. (iv) Mortgage with possession immovable property The amount secured by the mortgage : set forth in the instrument. (v) Lease in perpetuity immovableproperty The amountequalto one-sixthof the whole amount or value of the rent which would be paid or deliveredin respectofthe firstfifty years ofthe le; as set forth m 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) Limiteda 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 aggregateboth the premiumamountas 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 ''Premmmmm^ a sum of money paid as consideMtiofiforgrantof lease.It represents ' capitalized! rent which in fact is the diiferenee between the actual rent and the finight otherwisebe obtainedby the lessor. "En^thium©r other Like Sums", "are sums pal# jfi eJceess of the agreed rent in cofiSiideratioft of grant, continuance or renewal the tenancy" In Black's Law fiictionai^i,Sixth Edition, premium is defined as capitalizedrent"paidin lumpsum 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 context in which the word is used. This distinctionis Acknowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 of the 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 a narrow meaning. The question that arose in the said case was "whether the premium collected as a lump sum (although payable in instalments) could also be consideredto be arevenuereceiptin the same manneras the rent collected"? In the said case a registeredlease deed had been executedby the AssesseeCompanyby whichtwo tea estateswere leased out to a firm. The considerationfor the lease was a combinationof LPANo.319/2007• Page20of25: -aQ7 premiumin the sumof Rs.2,25,000of the annualrentof 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.1,18,000 in sixteen half yearly instalments of Rs.l 1,250 before the 3,l®Manuaryand 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 balanceofRs.42,000to be paid on or beforeST' 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 Higli Court reversed the Tribunal and held that the sum of Rs.l 1,250was a capitalreceipt and not a revenue receipt. The Departmentthen appealed the Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. CommissionerofIncomeTax (1943)IIITR 513, Memberfor the Board of Agriculture v. Commissioner of Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner of Income Tax MR 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 Icliownas '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 Page 21 of 25 betweena pricepaid for a transferof a rightto enjoythe propertyand the rent to be paidperiodicallyto the lessor. When the interestof the lessoris 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 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 defeiTedprice. It is not the form butthe substanceofthe transaction that matters. The nomenclature used may not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties." On an analysisof the relevantclausesin 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 Liikmani (2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceof a contextualinterpretation and held that while the perinittedincreasein rent can serve as a \'ardstick 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 rent that would be 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 of25 December,2003 in favour of M/s N.K. Gupta, the fourth paragraphof the preamblereads: "NOW THIS INDENTURE WITNESSETH that, ifi considerationof the amount of Rs. 1,31,04,000/-(RupeesOne CroreThirtyOne 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 Commercial Plot No. 09 Block No. X in the lay out plan of New Friends Colony District Centre" 19. In the later portion of the same paragraphof 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 annual rent instalmentis to be paid on 15^'^ Januaiy,2008. The relevaiitportionreads as under: "TO HOLD the premises unto the lessee in perpetuity from 24'^ day of January two tliousand and three ^ELDING AND PAYING thereforeyearly rent payable in advance of.Rs. 5/- (Rupees ^ive only) up to the 23'^'' day ofJanuary 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 enliancedrent as may hereafter be 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 Inia, New Dellii." LPANo.319/2007 page 23 of25 20. A reading of the aforementionedportions of the perpetuallease deed brings out the distinction between 'premium' on the one hand and 'rent' on the other. The word 'premium' carries more than one definition; it has to be understood in the context in which it is used in a lease deed. The question whether the word 'premium' is also subsumed in the words "whole amount or value of the rent" occurring in Section 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.