4 t IN THE HIGH COURT OF DELHI AT NEW DELHI Reservedon; 19^^May, 2008 Dateoforder:2"^ July, 2008 LPA No. 1061/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal & Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE DR. JUSTICE S. MURALIDHAR ORDER This appeal is dismissed in terms of the common judgment of 2nd July 2008 passedin LPA No. 319 of 2007 titled "MunicipalCorporationof Delhi 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 .....V IN THE HIGH COURT OF DELHI: NEW DELHI LPAlVo.319 of 2007 Reservedon: 19^'^May, 2008 Date of judgment: July 02, 2008 MUNICIPAL CORPORATION OF DELm ..... Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus , N.K.GUPTA .....Respondent ThroughMi". SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. With LPA No. 373/2007 MUNICIPALCORPOIUTIONOF DELHI Appellam Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDI-iMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand]S4r. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, y\dvocates for RespondentGNCTD. LPA No. 374/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates versus LPA No.319/2007 Page 1 of 25 ^ i , KEY POINT Respondent ThroughMr. SanjayGoswamyand Mi-. AjayKumar, AdvocatesfortheRespondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 376/2007 UmiClVAL COIIPORATIONOF DELffi Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Ml*. SanjeevSabharwaland Mr. Alok Singh,Advocates versus K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELffi Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates V, versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELffi Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2of25 K-K-enterprises TliroughMr. SanjayGoswamyand Mi*. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 380/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Plioolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh,Advocates versus GARIMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 381/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDPIMANPROPERTIES ResiDondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 382/2007 MUNICIPALCOI^ORATIONOF DELHI Appellant riirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus VARDLDv/IANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. y\jayKumar, LPANo.319/2007 Page3of25 --^7 AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 383/2007 MUNICIPALCORPOMTIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VAI^HMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IfamMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 384/2007 MUNICIPALCOI^OIUTIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 385/2007 MUNICIPALCOI^OIUTIONOF DELHI Appellant Through: Mi'.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LL\RISINGHBUILDER&PROMOTRS Respondent ThroughMi". SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page4of25 •\fe Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 386/2007 MUNICIPAL COI^ORAtlON OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharv/aland iVIr. Alok Singh, Advocates versus KAMAL KISHOREAGGRAWAL Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPA No. 387/2007 MUNICIPALCORPORATIONOFDELffl Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMi*. SanjayGoswamyandMi*. Ajay Kumar, AdvocatesfortheRespondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and IVIr. Alok Singh, Advocates versus BASANTPROJECTSLTD Respondent Through Mr. SanjayGoswamyand Mi'. Ajay Kumar, LPANo.319/2007 Page5 of 25 Advocatesfor the Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANOo 389/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland . Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor theRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml'. Alok Singh,Advocates versus VARDHMANPROPERTIES . Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No, 394/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tln'ough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 6of25 VARDI4MANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 395/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDI-IMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr.Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 396/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh, Advocates versus MANISHAGGRAWAL Respondent ThroughMi*. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 400/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mi\ Alok Singh, Advocates versus LPA No.319/2007 Page 7 of 25 VARDHMANproperties Respondent TliroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocatesforthe Respondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo. 401/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml*. Alok Singh,Advocates versus VARDPIMANPROPERTIES Respondent ThroughMi-. SanjayGoswamyand Mr. AjayKumar, AdvocatesfortheRespondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 402/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough; Mr.H.S.Phoolka, SeniorAdvocate Ml-. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IraniMajidand Ms. 2ubedaBegum,Advocates forRespondentGNCTD. LPA No. 403/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and, Mr. Alok Singh, Advocates LPA No.319/2007 Page 8 of 25 versus VAm!)HMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 405/2007 MUNICIPALCORPORATIONOP DELHI Appellant , . Tlirough; Mr.H.S.Phoolka, SeniorAdvocate Mr. SanjeevSabharvvaland Mf. Alok Singh,Advocates versus UNITYPROJECTSLIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and / Mr. Alok Singh,Advocates 1 versus ICEYPOINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. IramMajid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates LPA No.319/2007 Page 9 of 25 © a\ versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 408/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml'. Sanjeev Sabharvvaland Ml-. Alok Singh,Advocates versus M.M. DEVELOPERS Respondent TliroughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesforthe Respondents. Ms. IramMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1051/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml'. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent Thi-oughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates LPA No.319/2007 Pagel0of25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGosvvamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. Irani Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1058/2007 MUNICIPALCOI^ORATIONOF DELm Appellant Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1059/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh,Advocates versus SUI^DERCONSTRUCTIONCO. Respondent ThroughMr. SanjayGosvvamyandMr. Ajay Kumar, AdvocatesfortheRespondents. Ms. IraniMajidand Ms. ZubedaBegum,Advocates forRespondentGNCTD. LPA No. 1060/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and LPANo.319/2007 Page 11 of 25 2> Mr. Alok Singh, Advocates versus VAm-iMAN PROPERTIES Respondent Through Mr. SanjayGoswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. .PA No. 1061/2007 MUNICIPALCOilPORATIONOF DELHI Appellant 4 Tlirough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARt)HMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. AND LPANo. 1285/2007 MUlNflCIPALCORPORATIONOF DELIil Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus SURYABUILDWELL LIMITED Respondent ThroughMr. SanjayGoswamyand Ml*. Ajay Kumar, 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. MUIULIDHAR 1. Whether Reporters oflocalpapers may be \ allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whetherthejudgmentshouldbe reported in Digest? JUDGMENT Dr. S. Muralidhar. J. 1. These appeals are directed against the commonjudgmentdated 13^ March, 2007 passed by the learned Single Judge of this Couit in Writ Petition(Civil) No. 8161 of 2005 and Batch. The writ petitions challengedthe validityofthe notices issuedby the CollectorofStamps 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 conveyanceofplotsofland in favourofthe appellantswho successiiiliy bid for them in auctions held by the Delhi DevelopmentAuthority ('DDA')/ Municipal Corporation of Delhi ('MCD'). Consequently, perpetuallease deeds were executedand registeredin their favour. The writ petitionershad also paid the appropriatestamp duty and transfer duty in termsofthe certificateissuedby the CollectorofStampsin each of the cases. 3. On 29"^ August2004 ageneralorderwas issuedby the Divisional LPANo.319/2007 Page 13 of25 5-^ Commissioner,Delhi stating that the Collectorsof Stamp of different districtshad adoptedvaryingmethodsofcalculationofduty in respectof perpetualleases which had resulted in the duty being short levied and collected.This conclusionwas reachedon an interpretationofArticle35 of Schedule1 (A) to the Stamp Act as applicableto Delhi and Section H7 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently,the impugned notices were issued in February 2005 to each ofthe appellantscallinguponthemto 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 aggregateof Rs.10,79,772as stamp duty and Rs.2,00,832as transfer duty. In re-working the duty, the total considerationfor the perpetuallease was taken as the aggregate of the premium amount of Rs.1,91,11,000and the annual rent calculatedas a percentageof the premiumamount. In additiona penaltyof Rs.8,88,389(being ten times of the deficient duty) was also demanded. 4. Before the learned Single Judge the respondentscontendedthat they were not challengingthe re-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 transfer duty respectivelyas well as the LPANo.319/2007 Page 14 of25 dues in the transferduty as demandedin the impugnednotices. 5. On the questionof penalty,the learnedSingleJudge came to the conclusionthat in terms ofSection 40 ofthe Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impoundingan instrument.Sinceno instrumenthad yet been impounded by the Collector,the questionofimpositionofany penaltydid not arise. To the extent, therefore, that the impugned notices sought to levy penalty, they were held to be unsustainable in law. 6. The next questionbeforethe learned Single Judge concernedthe interpretationof the relevantentry in Section 147 (2) (b) (v)DMC Act. After referringto tlie decisionofthe learnedSingleJudge ofthis Court in NiagaraHotels&Builders(P) Ltd. v. Union ofIndia65 (1997)DLT 826, the learned Single Judge concluded that the words 'amount' and 'value'in Section147 (2) (b) (v) DMC Act did not referto the premium collectedfor the grantofthe lease.The learnedSingleJudgerejectedthe contentionofthe MCD that the word 'amount'refen-edto premiumand theword 'value' referredto the rent. It was held that they refeiiedtothe quantumof the rent for the first fifty years of the lease. Consequently, transferduty would be leviableon one-sixthofthe rent for the first fifty years of the lease. Although the lease referredto only the first thirty years, the learned Single Judge held tliat "the transfer duty has to be computedon the basis of 1/6*^ ofthe rent payableat presentfor the first LPANo.319/2007 Page 15 of25 30yearperiodbutcomputedfor thefirstfifty years". 7. The petitions were accordinglypartly allowed holding that no penaltycouldbe imposedin respectofthe transferduty underthe DMC Act since that was a debatable issue. A direction was issued to re-work thetransferduty intermsofthejudgmentof the learnedSingleJudge. It was further held that no further stamp duty in additionto the amounts alreadypaid was payablenorwas 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 peipetual lease deed could not have takenplace. Therefore,theword 'rent' would includethe premium paid by the auction purchaser for obtainingthe lease. In other v/ords,the expression 'rent' meant 'rent + premium' and not the rent alone. Referencewas made to the definitionof the word 'premium' in Black's Law Dictionaiy,6''^ Edition (page 1181). Mr. Phoolka then submitted that every word occurring in Section 147 (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. Thereforethe disjunctive'or' had to be read as a conjunctive 'and'.Sincethe leasecouldnot have beenexecutedwithoutthe premium beingpaid, the legislativeintentwas to le\7 transferduty on the amount equal to one-sixthofthe entire considerationpayable in respect of the lease which, in any event, has been set forth in the instrument. Mr.Phoolkacontendedthat sincethe annualrent payableis calculatedas a percentageofthe premiumpaid, it is a measureofthe premiumitself. Consequently,thereit was logicalto includethe premiumamountas part ofthe rentfor the purposesofcomputingthe transferduty. 10. In support of his contentionthat all words in the statutehaveto be given tlill effect iMr.Phoolkareferredto the judgmentsof the Supreme Court in Shin-EtsuChemicalCo. Ltd. v. Aksh OptifibreLtd. (2005) 7 see 234, ManoharLai 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. Commissionerof CentralExcise (2006) 6 see 786.. 11. Mr.SanjayGoswamy,learnedcounsel appearingon behalfof the respondents submitted that a taxing statute admits of only strict interpretation.If the intentionof the legislaturewas to tax thepremium paid for the obtainingof a peipetuallease,then certainlythe wordingof LPANo.319/2007 Pagel7of25 the provision should expressly indicate it. Reliance is placed on Section 105 of the Transfer of Property Act, 1882 ('TP Act') where the words 'premium' and 'rent' have been separately defined. Relying on the judgment of the Supreme Court in Commissioner of Income Tax v. Panbari Tea Company AIR 1965 SC 1871, it is submitted that the expression 'premium' and 'rent' have to be separately understood and one cannot include the other in the context in which it is used in the deed of perpetual lease in the instant case. 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. Rajphiil Singh AIR 1973, Punjab & Haiyana 94 and S. Venkataraman Swami V. S. Abdul Wahab AIR 1969 Madras 473. 12. In order to appreciatethe respectivecontentions,a referencemay be madefirstto Section147 (2) (b) (v) of the DMC Act whichreads: "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 limitsof Delhi in accordancewith the provisionshereafterin this section contained. (2) The said duty shallbe levied- (a) in the fomi of a surchargeon the duty imposed by the Indian Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Territory of Delhi, on eveiy instrument of the description specified below, and (b) at such rate as may be detennined by the Corporation not exceedingfive per cent, on the amount specifiedbelov,' againstsuch instruments - LPA No.319/2007 Page 18 of25 y 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 propertyofthe greate yalue, as set forth in the instrument. (iii) Gift of immovablepropert; 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-sixth of the whole amount or value of the rent which would be paid or delivered in respect of the first fifty years of the le; as set forth in the instrument, (emphasis supplied) (v) Contract for transfer of immovableproperty 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. Depending on the context,the word 'premium' can have both a broad as well as a narrow meanmg. The definition of premium in the Law Lexicon by P. RamanathaAiyar,SecondEdition reads as under: LPANo.319/2007 Page 19 of 25 "Prew/ij^?ifi(ieatisa sum of money paid as considpratiofifor grantoflease.It represents "capitalized rent wliich in fact is the differencebetween the actual rent and the rent wliichmight otherwisebe obtainedby the lessor. other Like Sums", "are sums paid ifli exGess of the agreed rent in considejatioii of grant, continuance or renewal6fthetenancy" In Black's Law DictionaFy, 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 context in which the word is used. This distinctionis aclcnowledgedin the definitionsof the terms 'premium' and 'rent' in Section105 oftheTPActaswell. 16. The decision of the Supreme Court in Panbari Tea Company supports the contentionof the respondentthat, given the context, the word 'rent'mSection 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 20 of2> e premiumin the sum of Rs.2,25,000of the annual rentof 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.11,250 before the 31®^ Januaiy and 31^^ July of each year. The annual rent of Rs.54,000 was payable in the following mamier: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 assessment year for 1952-53, the income tax officer treated the instalment of Rs. 11,250 paid 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 appealed the Supreme Court. The Supreme Court referred to the decisions in Kamakshya Narain Singh V. CommissionerofIncome Tax (1943)IIITR 513, Memberfor the Board of Agriculture v. Commissioner of Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissionerof Income Tax AIR 1961 SC 732 to underscore the distinction between the premium and rent. It pointed out that a one-time payment of premium for the grant of a lease was Idiownas 'salami' which is in the nature of a capital receipt in the hands of the lessor. The Supreme Court then referred to Section 105 TP Act and observed as under: "The section, therefore, brings out the distinction LPANo.319/2007 • Page 21 of 25 betweena pricepaid for a transferof a right to enjoy the propertyand the rent to bepaid periodicallyto the lessor. When the interestof the lessor is 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 fomier is a capital income and the latter a revenue receipt. There may be circumstanceswhere the parties may camouflage the 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 but the substance of the transaction that matters. The nomenclature used mav not be decisiveor conclusivebut it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties." On an analysisofthe relevantclausesin the lease deed, it was held that the amount paid as premium could not be construedas rent and, such premiumwasa capitalreceiptinthehandsof the lessor. 17. InHotelKings v. Sara Farhan Lukmani(2007) 1 SCC 202, the SupremeCourtemphasizedthe importanceofacontextualinterpretation and heldthatwhilethe peraiittedincreasein rent can serve as ayardstick for the landlord to increase the rents it did not make such permitted increase"apartofthe rentthoughit may be aconsiderationfor the grant of lease." 18. The lease deed in the instant cases a makes reference to the annual rent that wouldbe payablein fiiture.This is not a pre-determinedfigure but is to be workedout as a percentageof the premiumamouni;.This is set out in the lease deed. For instance in the lease deed dated 1^' LPANo.319/2007 Page22of25 December,2003 in favour of M/s N.K. Gupta, the fourth paragraphof the preamble reads: "NOW THIS INDENTURE WITNESSETH that, in consideration of the amount of Rs. 1,31,04,000/-(RupeesOne CroreThirty One 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 beingtwo and a half per cent of Rs.1,31,04,000 and the first annual rent instalmentis to be paid on 15^'^ Januaiy,2008. Therelevantportionreads as under: "TO HOLD the premisesunto the lessee in perpetuity from day of January two thousand and three ilELDlNG AND PAYING thereforeyearly rent payable in advance of.Rs. 5/- (Rupees Five 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 enhancedrent 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 ofJanuaryand 15^*^ day ofJuly in each year at the Reserve Banlc of India, New Delhi." LPANo.319/2007 Page23 of25 \ 20. A reading of the aforementionedportions of the perpetual lease deed brings out the distinctionbetween 'premium' on the one hand and 'rent' on the other. The word 'premium' carries more than one definition; it has to be understood in the context in which it is used in a lease deed. The question whetherthe word 'premium' is also subsumed in the words "whole amount or value of the rent" occurringin 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