Case: Prasad Technology Park Pvt. Ltd Vs. Sub Registrar

First and Second Respondents, on the other hand, would submit that having regard to the fact that the nature of business of the company was also altered inasmuch as whereas by the earlier instrument the demise of the premises was made only for the purpose of manufacture of readymade garments and leather garments, the lessee now has been permitted to establish a software park; the instrument in question must be held to be one of lease. Our attention, in this behalf, has been drawn to clauses 2(n) and 2(q) of the original deed of lease, which are as under: 2(n) To use the demised premises only for the purpose of Manufacture of Ready Made Garments or Leather Garments factory/industry and not to use the demised premises or any part thereof for any other purpose nor for the purposes of any factory which may be obnoxious, or offensive by reason of emission of odour, liquid `effluvia, dust, smoke, gas, noise vibrations or fire hazards. 2(q) The Lessee shall not alienate the demised premises or any part thereof or the building, that may be constructed thereon during the period of lease. The Lessee may mortgage the right, title and interest in the demised premises in favour the Government of Karnataka or the Central Government or Corporate bodies like Life Insurance Corporation of India, Karnataka State Industrial Investment and Development Corporation, Karnataka State Financial Corporation, Industrial Finance Corporation of India, Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Unit Trust of India, Trustees of Debentures Stock of Banks to secure moneys advanced by such Government or bodies for the erection of building, plant and machinery. However, the Lessee shall obtain the No Objection Certificate from the Lessor in writing for creation of second and subsequent charges. 9. Change of the name of a company can be allowed by the Registrar of the Companies in terms of Section 21 of the Companies Act. Once such a name is permitted to be changed, a certificate is issued in terms of Section 23 thereof. 10. The Appellant indisputably was permitted by the Third Respondent herein to establish a software park. The execution of supplementary agreement, it has categorically been stated, became necessary consequent upon the change in the name of the company. By reason of such supplementary agreement although it was permitted to establish a software park but by reason thereof no fresh transaction was entered into. We have noticed hereinbefore that in terms of the aforementioned agreement dated 05.03.1999, the land in question was demised for a period of eleven years with effect from 25.06.1997 on payment of premium fixed thereunder as also on yearly lease rent stipulated thereby. 11. The said lease indisputably was governed by Section 105 of the Transfer of Property Act. By reason of the supplementary agreement, a restrictive covenant has been amended in terms whereof the Appellant herein was permitted to carry on the business of a Technology Park instead of manufacture of readymade garments/leather garments. Only because the name of the company was changed, the same would not mean that a fresh transaction took place. Having regard to the change in the name of the company, the Appellants name was sought to be substituted in the original agreement. The period of the lease, the quantum of the premium paid and other terms and conditions remained unaltered except the restriction contained in clause 2(q) of the said deed, was removed. By reason of mere change of user from carrying on one business to another, it is trite, a fresh transaction does not take place. The terms conditions of the lease can be changed by mutual consent. Unless the essential ingredients thereof as contained in Section 105 of the Transfer of Property Act are not altered, it cannot be said that the parties to the contract entered into a fresh transaction. The Third Respondent merely reserved unto itself a right of reentry on expiry of the said period of eleven years. It could in terms of the covenant of the lease also extend the period of tenancy or terminate the same. Unless the lease itself came to an end, the third respondent did not have any right to re-convey the property. By reason of mere change in the name of the company Prasad Garments Pvt. Ltd. the erstwhile lessee also cannot be held to have transferred its leasehold interest in favour of the Appellant herein. Section 2(i)(j) of the Act, defines instrument, to mean: 2(l)(j) Instrument includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; 12. Execution of an instrument which would attract payment of stamp duty in terms of Article 5(d) of the Act must involve transfer of the property or otherwise a right or liability may inter alia be created, transferred etc., as envisaged in Section 3 thereof. Once it is held that the supplementary agreement is neither a deed of lease nor a deed of sale within the meaning of Section 105 or Section 54 of the Transfer of Property Act, as the case may be, Article 5(d) of the schedule to the Act will have no application. If Article 5(d) has no application, indisputably the residuary clause contained in Article 5(f)(i) would have. The Appellant admittedly paid the stamp duty in terms thereof. 13. It is now well settled that for the purpose of levy of stamp duty, the real and true meaning of the instrument must be ascertained. [See The Madras Refineries Ltd. vs. The Chief Controlling Revenue Authority, Board of Revenue, Madras (1977)2 SCC 308] . 14. The High Court held that the supplementary lease agreement cannot be said to be an instrument whereunder the Appellant-Company claims certain leasehold from the Board; but having did so, the High Court was not correct in holding that it is liable to pay the stamp duty.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. The Appellant indisputably was permitted by the Third Respondent herein to establish a software park. The execution of supplementary agreement, it has categorically been stated, became necessary consequent upon the change in the name of the company. By reason of such supplementary agreement although it was permitted to establish a software park but by reason thereof no fresh transaction was entered into. We have noticed hereinbefore that in terms of the aforementioned agreement dated 05.03.1999, the land in question was demised for a period of eleven years with effect from 25.06.1997 on payment of premium fixed thereunder as also on yearly lease rent stipulated thereby11. The said lease indisputably was governed by Section 105 of the Transfer of Property Act. By reason of the supplementary agreement, a restrictive covenant has been amended in terms whereof the Appellant herein was permitted to carry on the business of a Technology Park instead of manufacture of readymade garments/leather garments. Only because the name of the company was changed, the same would not mean that a fresh transaction took place. Having regard to the change in the name of the company, the Appellants name was sought to be substituted in the original agreement. The period of the lease, the quantum of the premium paid and other terms and conditions remained unaltered except the restriction contained in clause 2(q) of the said deed, was removed. By reason of mere change of user from carrying on one business to another, it is trite, a fresh transaction does not take place. The terms conditions of the lease can be changed by mutual consent. Unless the essential ingredients thereof as contained in Section 105 of the Transfer of Property Act are not altered, it cannot be said that the parties to the contract entered into a fresh transaction. The Third Respondent merely reserved unto itself a right of reentry on expiry of the said period of eleven years. It could in terms of the covenant of the lease also extend the period of tenancy or terminate the same. Unless the lease itself came to an end, the third respondent did not have any right to re-convey the property. By reason of mere change in the name of the company Prasad Garments Pvt. Ltd. the erstwhile lessee also cannot be held to have transferred its leasehold interest in favour of the Appellant herein12. Execution of an instrument which would attract payment of stamp duty in terms of Article 5(d) of the Act must involve transfer of the property or otherwise a right or liability may inter alia be created, transferred etc., as envisaged in Section 3 thereof. Once it is held that the supplementary agreement is neither a deed of lease nor a deed of sale within the meaning of Section 105 or Section 54 of the Transfer of Property Act, as the case may be, Article 5(d) of the schedule to the Act will have no application. If Article 5(d) has no application, indisputably the residuary clause contained in Article 5(f)(i) would have. The Appellant admittedly paid the stamp duty in terms thereof13. It is now well settled that for the purpose of levy of stamp duty, the real and true meaning of the instrument must be ascertained.14. The High Court held that the supplementary lease agreement cannot be said to be an instrument whereunder the Appellant-Company claims certain leasehold from the Board; but having did so, the High Court was not correct in holding that it is liable to pay the stamp duty