IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon: 19^^May, 2008 Dateoforder:2"''July,2008 LPA No. 1058/2007 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 I This appeal is dismissed in terms of the common judgmentof 2nd July 2008 passed in LPA No. 319 of2007 titled "MunicipalCorporationofDelhi v. N.K. Gupta" and connectedmatters. Registryis directedto place on recorda copy ofthe judgmentpassedin LPA No. 319 of 2007. CHIEF JUSTICE July02, 2008 S. MURALIDHAR,J. dn If 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 Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus N.K. GUPTA .....Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. JiA Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. With LPA No. 373/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHiVIANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mi". Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 374/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 1of25 KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharvvaland Mr. Alok Singh, Advocates versus K.K. ENTERPRISES .....Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesforthe Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 377/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2 of25 K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus GARIMAAGGRAWAL Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml". Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 382/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabhai-waland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page 3 of25 Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCtD. LPAiNo. 383/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: IVIr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 384/2007 MUNICIPALCORPORATIONOF DELHI y\ppellant Through: Mr.H.S;Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCOm^OllATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus HARI SINGHBUILDER&PROMOTRS Respondent Thi'oughMr. SanjayGoswamyand Mr. Ajay Kumar, LPANo.319/2007 Page4of25 Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 386/2007 MUNICIPALCORPORATIONOP DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mi-. Alok Singh, Advocates versus ICAMALlaSHOREAGGIUWAL Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 387/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPANo. 388/2007 MUNICIPALCOI^ORATION OF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal ^id Mr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar,' LPANo.319/2007 Page 5 of25 Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELFII Appellant Through: Mi-.FI.S.Phoolka, Senior Advocate Ml". Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent Through Mr. Sanjay Goswaniy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 391/2007 MUNICIPALCOl^ORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DFXHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page6 of 25 VARDHMAN PROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irarh Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 395/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Vlr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent Tlirough Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram iVIajidand Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 396/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus MANISH AGGRAWAL Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 400/2007 MUNICIPAL CORPOR^mON OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LMNo.319/2007 Page 7 of 25 XX VARDHMAN PROPERTIES Respondent Tlirough Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 401/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDliMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 403/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page8of25 rp versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPANo. 405/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus UNITYPROJECTSLIMTED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Vis. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPOR^VTIONOF DELHI Appellant Through: VIr.H.S.Phoolka,SeniorAdvocate Ml". Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus KEYPOINT Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPAL CORPORATION OF DELPn ...., Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates LPA No.319/2007 Page 9 of 25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 408/2007 MUNICIPALCORPORATIONOFDELHI ..... Appellant Through: VIr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus M.M. DEVELOPERS .... .Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the ResiDondents. Ms, Irani Majid and Ms. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 1051/2007 MUNICIPAL COI^ORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and 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 RespondentGNCTD. LPA No. 1057/2007 MUMCIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 Page 10 of 25 versus VARDHMAN PROPERTIES Respondent Through Mr. Sanjay Goswamy and Mi-. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. No. 1058/2007 MUNICIPALCORPOIUTION OFDELHI Appellant Tlii*ough: Mi\H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES .... .Respondent TliroughMr. SanjayGoswamyandMi'. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUNDER CONSTRUCTIONCO. Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid andMs. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 1060/2007 MUNICIPAL CORPORATION OF 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 ThroughMr. SanjayGosvvamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPANo. 1061/2007 MUNICIPALCORPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharvvaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IraniMajidandMs. ZubedaBegum,Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPORATIONOFDELHI Appellant Through: Mi'.H.S.Phoolka, Senior Advocate Mi". Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SURYA BUILDWELL LIMITED Respondent ThroughMr. SanjayGosvvamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLE THE CHIEF JUSTICE LPA No.319/2007 Page 12 of 25 HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be /{y allowed to see the judgraent? ^ , 2. To be referred to the Reporter Or not? 3. Whether the judgment should be reported .u, in Digest? JUDGMENT Dr. S. Muralidhar, J. 1. These appeals are directed against the common judgment dated 13"^ March, 2007 passed by the learned Single Judge of this Court in Writ Petition (Civil) No. 8161 of 2005 and Batch. The writ petitions 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 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 appropriate stamp duty and transfer duty in terms of the certificate issued by the Collector of Stamps in each of the cases. 3. On 29'^^ August2004 a generalorderwas issuedby the Divisional LPA No.319/2007 Page 13 of 25 Commissioner, Delhi stating that the Collectors of Stamp ,of different districtshad adopted varying methodsof calculationof duty in respectof perpetual leases which had resulted in the duty being short levied and collected. This conclusion was reached on an interpretation of Article 35 of Schedule 1 (A) to the Stamp Act as applicable to Delhi and Section 147 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in February 2005 to eachofthe appellantscallinguponthem to pay the deficientduty as well as the penalty equaling ten times of the deficient duty. In respect of Vardhman Properties, for instance, the auction purchaser had paid Rs.12,42,215as stamp duty. This was now recomputedas Rs.13,30,604 being the aggregate of Rs.10,79,772 as stamp duty and Rs.2,00,832 as transfer duty. In re-workingthe duty, the total considerationfor the perpetuallease was taken as the aggregateof the premium amount of Rs.1,91,11,000 and the annual rent calculated as a percentage of the premiumamount. In additiona penaltyof Rs.8,88,389(beingten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondents contended that they were not challengingthe re-workingof the stamp duty since the questionof interpretationof Ailicle 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 transferduty respectivelyas well as the LPANo.319/2007 Page 14of 25 dues in the transfer duty as demandedin the impugnednotices. 5. On the question of penalty, the learned Single Judge came to the conclusionthat in terms of Section 40 of the Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impoundingan instrument.Sinceno instmmenthad yet been impounded by the Collector,the questionof impositionof any penalty did not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law. 6. The next question before the learned Single Judge concerned the interpretation of the relevant entry in Section 147 (2) (b) (v) DMC Act. After referring to the decision of the learned Single Judge of this Court Niagara Hotels &Builders (P) Ltd. v. Union ofIndia 65 (1997)DLt 826, the learned Single Judge concluded that the words 'amount' and 'value' in Section 147 (2) (b) (v) DMC Act did not refer to the premium collected for the grant of the lease. The learned Single Judge rejected the contention of the MCD that the word 'amount' referred to 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, transferduty wouldbe leviableon one-sixthofthe rent for the first fifty years of the lease. Althoughthe lease referredto only the first thirty years, the learned Single Judge held that "the transfer duty has to be computedon the basis of1/6^''ofthe rent payableat presentfor the first LPA No.319/2007 Page 15 of 25 30 year periodbut computedforthe first fifty years". 7. The petitions were accordingly partly allowed holding that no penaltycouldbe imposedin respectofthe transferduty underthe DMC Act since that was a debatable issue. A direction was issued to re-work the transfer duty in terms of the judgment of the learned SingleJudge. It was further held that no further stamp duty in addition to the amounts alreadypaidwaspayablenorwas any penaltychargeable. 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 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 executionof the perpetuallease deed could not have takenplace. Therefore,the word 'rent' would includethe premium paidby the auctionpurchaserfor obtainingthe lease. In otherwords,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 Dictionaiy,6^^ Edition (page 1181). Mi-. Phoolkathen submitted that everyword occurringin Section147 (2) (b) (v)DMC Act had to be LPA No.319/2007 Page 16 of25 given fill! effect to keeping in view tlie context in wliich the word occurs. Therefore the disjunctive 'or' had to be read as a conjunctive 'and'. Since the lease could not have been executed without the premium being paid, the legislative intent was to levy transfer duty on the amount equal to one-sixth of the entire consideration payable in respect of the lease which, in any event, has been set forth in the instrument. Mr.Phoolka contended that since the annual rent payable is calculated as ^ percentage of the premium paid, it is a measure of the premium itself. Consequently, there it was logical to include the premium amount as part of the rent for the purposes of computing the transfer duty. 10. In support of his contention that all words in the statute have to be given fiill effect Mr.Phoolka referred to the judgments of the Supreme Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd. (2005) 7 see 234, Manohar Lai v/ Vinesh Anand (2001) 5 SCC 407, Noorie Manure Mill v. Commissioner Trade Tax (2007) 10 SCC 478, Associated Cement Co. Ltd. v. State of MP (2004) 9 SCC 727 and Indcon Structiirals (P) Ltd. v. Commissioner of Central Excise (2006) 6 SCC 786.. 11. Mr.Sanjay Goswamy, learned counsel appearing on behalf of the respondents submitted that a taxing statute admits of only strict interpretation. If the intentionof the legislaturewas to tax the premium paid for the obtainingof a peipetuallease,then certainlythe wordingof LPANo.319/2007 Page 17 of 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 judgment of 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 cannot 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 Mso made to the decisions in Govind Ram v. Rajphiil Singh AIR 1973, Punjab & Haryana 94 and S. Venkataraman Swami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In orderto appreciatethe respectivecontentions,a referencemay 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 otherwiseprovidedin this Act, the Corporation shall levy a duty on transfersof immovablepropertysituatedwithin the limits of Delhi in accordancewith the provisionshereafterin this section contained. (2) The said duty shall be levied- (a) in the fonn 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 Territoiy of Delhi, on eveiy instrument of the description specified below, and (b) at such rate as may be determined by the Corporation not exceeding five per cent, on the amount specified below against such instmments - LPANo.319/2007 Page 18 of 25 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 property of the greate value, as set forth in the instmment. (iii) Gift of immovableproperty The value of the property,as set forth the instrument. (iv) Mortgage with possession immovable property The amount secured by the mortgage ; set forth in the instrument. (v) Lease in perpetuity immovable property The amount equal to one-sixthof the whole amount or value of the rent which would be paid or delivered in respect of the first fifty years of the lei 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 and 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 definition of premium in the Law LexiconbyP.RamanathaAiyar,SecondEditionreads as under: LPANo.319/2007 Page 19 of 25 I means a sum of money paid as considerationforgrantof lease.It represents "capitialized rent which in fact is the difference,between the actual rent and the fierit'whichmi^t otherwisebe obtainedby the lessor. '"PremiumOr other Like Sums", "are sums paid in excess of the agreed rent in consideration of grant, continuance or renewalofthe tenancy" In Black's Law Dictionary^ Sixth Edition, premium is defined as capitalizedrent"paidinlumpsum at thetuneofleaseis 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 adolowledgedin the definitionsof the terms 'premium' and 'rent' in Section 105 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 a revenuereceiptin the same mamieras 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 Page20 of25 y 3 premiumin the sum of Rs.2,25,000of the annualrent 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.1,18,000 in sixteen half yearly instalments of Rs.l 1,250 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 1,250 was a capital receipt and not a revenue receipt. The Departmentthen appealed the Supreme Court. The Supreme Court refeiTed to the decisions in Kamakshya Narain Singh V. CommissionerofIncome Tax (1943)IIITR 513, Memberfor the Board of Agriculture v= Commissionerof Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner ofIncome Tax AIR 1961 SC 732 to underscore the distinction between the premiumand rent. It pointedout that a one-timepaymentof premium for the grantofa leasewas laiownas 'salami'whichis in the natureofa capital receipt in the hands of the lessor. The Supreme Court then referred to Section 105 TP Act and observed as under: "The section, therefore, brings out the distinction LPANo.31^/2007 Page 21 of25 V between a price paid for a transfer of a right to enjoy the property and the rent to be paid periodically to the lessor. When the interest of the lessor is parted with for a price, the price paid is preniiuni 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 the real nature of the transaction by using clever phraseology. In some cases, the so-called premium is in fact advance rent and in others rent is defeired price. It is not the form but the substance of the transaction that matters. The nomenclature used may not be decisive or conclusive but it helps the Court, having regard to the Other circumstances, to ascertain the intention of the parties." On an analysisof the relevantclausesin the lease deed, it was held that the amount paid as premium could not be construed as rent and, such premiumwas a capital receipt in the hands of the lessor. 17. In Hotel Kings v. Sara Farhan Lukmani (2007) 1 SCC 202, the Supreme Court emphasized the importance of ^ contextual interpretation and held that