MUNICIPAL CORPORATION OF DELHI v. GARIMAAGGRAWAL

Order

2"^^ July, 2008 LPA No. 380/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal & Mr. Alok Singh, Advocates versus GARIMAAGGRAWAL .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 0 passed in LPA No. 319 of 2007 titled ^'MunicipalCorporationof Delhi v. N.K. Gupta" and connected matters. Registry is directed to place on record a copy of the judgment passed in LPA No. 319 of 2007. July 02, 2008 dn Signature Not Verified Digitally Signed By:AMULYA 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.

CHIEF JUSTICE S. MURALIDHAR, J. IN THE HIGH COURTOF DELHI: NEW DELHI \7 LPANo.319 of 2007 Reservedon: 19^*^ May, 2008 Date of judgment;July 02, 2008 MUNICIPAL CORI'ORATION OF DELHI ..... Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates , r- N.K. GUPTA versus Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, y\dvocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. With LPA Noe 373/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate ]VIr. 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. LPA No. 374/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 Page 1 of 25 KEY POINT Respondent

ThroughMl'. SanjayGoswamyand Mi*. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 376/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 377/2007 MUNICIPALCORPORATIONOF DELffl Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates v.,^ versus VARDHMANPROPERTIES Respondent ThroughMl-. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Irani Majid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 378/2007 MUNICIPALCORPORATIONOF DELHI .....Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPANo.319/2007 Page 2of25 K.K. ENTERPRISES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. PA No. 380/2007 MUNICIPALCOl^PORATlONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml*. Alok Singh, Advocates versus GARIMAAGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 381/2007 MUNICIPALCORPOIUTIONOF DELHI ..... Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mi*. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus v.. VARDFIMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 382/2007 MUNICIPALCORPOIUTIONOF DELHI Appellant Thi-ough: Mr.H.S. Phoolka, Senior Advocate Ml". Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus VARDI-IMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, LPA No.319/2007 Advocatesfor the Respondents. Ms. Iram Majid and Ms. ZubedaBegum, Advocates for Respondent GNCTD. LPA No. 383/2007 MUNICIPALCOIIPORATIONOF DELHI ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. ZubedaBegum, Advocates for RespondentGNCTD. LPA No. 384/2007 MUNICIPALCOI^OIUTIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majidand Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 385/2007 MUI^CIPALCOI^ORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus HARI SINGHBUILDER& PROMOTRS Respondent TliroughMr. SanjayGoswamyand Mi\ Ajay Kumar, LPA No.319/2007 Page 4 of25 Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA Noe 386/2007 MUNICIPAL COI^ORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus ICAMALKISHORE AGGRAWAL .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 387/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mi*. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 388/2007 MUNICIPALCORPOIUTIONOF DELIil Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus BASANT PROJECTS LTD .....Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, LPA No.319/2007 Page5of25 Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 389/2007 MUNICIPALCORPORATIONOF DELffl ..... Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mi'. Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 391/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Ml'. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VAtoHMANPROPERTIES Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 394/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 VARDHVIAN PROPERTIES. Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 395/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and IVh-. 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. LPA No. 396/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml-. Alok Singh, Advocates versus MANISH AGGRAWAL Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 400/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus LPA No.319/2007 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 CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES .....Respondent TliroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPA No. 402/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through; Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates , versus VARDHMANPROPERTIES Respondent TliroughMr. 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 MUNICIPALCORPOIUTION OF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates LPA No.319/2007 cj^ 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. 405/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Smgh, Advocates versus UNITY PROJECTSLIMITED Respondent Thi'bughMr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 406/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and K/Ir. Alok Singh, Advocates S'. versus KEY POINT Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. Zubeda Begum,Advocates for Respondent GNCTD. LPA No. 407/2007 MUNICIPALCORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates LPANo.319/2007 r\/ versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPANo. 408/2007 MUNICIPALCOI^OIUTION OF DELHI Appellant Through; Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus M.M. DEVELOPERS Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 1051/2007 MUNICIPALCOl^ORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Ml-. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IraiiiMajid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPA No. 1057/2007 MUNICIPALCORPORATIONOF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates LPA No.319/2007 Page 10 of25 versus VAl^HMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo. 1058/2007 MUNICIPAL CORPOIUTION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Ml". Sanjeev Sabharwal and JVIr. Alok Smgh, Advocates versus VARDHMAN PROPERTIES .... .Respondent TiiroughMl'. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum,Advocates for RespondentGNCTD. LPA No. 1059/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUNDER CONSTRUCTIONCO. Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, ' Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPA No. 1060/2007 MUNICIPAL COI^ORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and LPA No.319/2007 vK AJ Mr. Alok Singh, Advocates versus VARDHIVIANPIlOPERtlES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for RespondentGNCTD. LPA No. 1061/2007 .4 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh,Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocatesfor the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. AND LPA No. 1285/2007 MUNICIPALCORPOMTION OF DELHI^ Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml". Alok Singh, Advocates versus SURYA BUILDWELL LIMITED Respondent ThroughMr. SanjayGoswamyand Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLE THE CfflEF JUSTICE LPA No.319/2007 HON'BLE DR. JUSTICE S. MUIULIDHAR

2. 3. Whether Reporters of local papers may be allowed to see the judgment? to be referred to the Reporter or not? Whether the judgment should be reported in Digest? • '' /^s 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 challenged the validity of the notices issued by the Collector of 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 favour of the appellantswho successfully bid for them in auctions held by the Delhi Development Authority ('DDA')/ Municipal Coi^oration 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 certificateissuedby the Collectorof Stamps in each of the cases.

3. On 29* August 2004 a general order was issued by the Divisional LPANo.319/2007 Commissioner,Delhi stating that the Collectors of Stamp of different districtshad adoptedvaryingmethodsof calculationof duty in respectof perpetual leases which had resulted in the duty being short levied and collected.This conclusionwas reachedon an interpretationof Article35 of Schedule 1 (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 February 2005 to each of the appellants calling upon them to pay the deficient duty 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.12,42,215 as stamp duty. This was now recomputed as 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-worldng the duty, the total consideration for the perpetual lease was taken as the aggregate of the premium amount of Rs.1,91,11,000 and the annual rent calculated as a percentage of the premium amount. In addition a penalty of 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 challenging the re-working of the stamp duty since the question of intei-pretationof 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 dues in the transfer duty as demanded in the impugned notices.

5. On the question of penalty, the learned Single Judge came to the conclusion that in terms of Section 40 of the Stamp Act, the power to impose a penalty was consequential upon the Collector of Stamps impounding an instrument. Since no instrument had yet been impounded by the Collector, the question of imposition of 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 questionbefore the learned Single Judge concernedthe interpretation of the relevant entry in Section 147 (2) (b) (v) DMC Act. After referringto the decisionof the learned Single Judge of this Court in Niagara Hotels Builders (P) Ltd. v. Union ofIndia 65 (1997) DLf 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 collectedfor the grant of the lease. The learnedSingleJudge rejectedthe contentionof the MCD that the word 'amount' refeiTedto premiumand the word 'value' referredto the rent. It was held that they refeiTedto the quantum of the rent for the first fifty years of the lease. Consequently, transferduty would be leviableon one-sixthof the rent for the first fifty years of the lease. Although the lease referred to only the first thirty years, the learned Single Judge held that "the transfer duty has to be computedon the basis of 1/6^'^ ofthe rent payableat presentfor the first LPANo.319/2007 , 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 siiice that was a debatable issue. A direction was issued to re-work the transferduty in terms of the judgmentof the learnedSingleJudge. It was teher held that no further stamp duty in additionto the amounts already paid was payable nor was any penalty chargeable.

8. Aggrieved by the 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 appearing for the MCD that in the sense and in the context in 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 perpetual lease deed could not have taken place. Therefore,the v/ord '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 Dictionaiy,6* Edition (page 1181). Mr. Phoolka then submitted that every word occurring in Section 147 (2) (b) (v) DMC Act had to be LPA No.319/2007 <«\ 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 lease could not have been executedwithoutthe premium being paid, the legislativeintent was to levy transfer duty on the amount equal to one-sixth of the entire considerationpayable in respect of the lease which, in any event, has been set forth in the instrument. Mi'.Phoolkacontendedthat since the annual rent payableis calculatedas a 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 full effect Mr.Phoolkareferred to the judgmentsof 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 Structurals (P) Ltd. v. Commissioner of Central Excise (2006) 6 see 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 intention of the legislature was to tax the premium paid for the obtaining of a perpetual lease, then certainly the wording of LPA No.319/2007 0 /V) the provisionshouldexpresslyindicateit. Relianceis placed on Section 105 of the Transfer of 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 instant case. The word 'rent' can only refer to the actual indicated in the lease deed and not the premium. Reference is also made to the decisions in Govind Ram v. Rajphul Singh AIR 1973, Punjab & Haiyana 94 and S. VenkataramanSwami V. S. Abdul Wahab AIR 1969 Madras 473.

12. In order to appreciate the respective contentions, a reference may be made tirst to Section 147 (2) (b) (v) of the DMC Act which reads: "147. Duty on transfer of property and method of assessment (1) Save as otherwise provided in this Act, the Corporation thereto.- shall levy a duty on transfers of immovable property situated within the limits of Delhi in accordance with the provisions hereafter in this section contained. (2) The said duty shall be levied - in the form of a surcharge on the duty imposed by the hidian (a) Stamp Act, 1899 (2 of 1899) as in force for the time being in the Union Territory of Delhi, on every instrument of the description specified below, and at such rate as may be determined by the Corporation not (b) exceeding five per cent, on the amount specified below against such instruments - LPANo.319/2007 01^ Description of instrument Amount on which duty should levied (i) Sale of immovable property The amount sale, consideration instrument. The value of the property of the greats value, as set forth in the instrument. (ii) Exchange of immovable property (iii) Gift of immovableproperty The value of the property,as set forth (iv) Mortgage with possession immovable property (v) Lease immovable property in perjDetuity (v) Contract for transfer of immovable property the instrument. The amount secured by the mortgage : set forth in the instrument, The amountequal to One-sixthof the whole amount or value of the rent which would be paid or delivered in respectof the first fifty years of the le: as set forth in the instrument, (emphasis supplied) Ninety per cent of the value of the as set consideration out in the contract." for the transfer

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 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 meaning. The definition of premium in the Law Lexicon by P. RamanathaAiyar, SecondEdition reads as under: LPANo.319/2007 "Prenmm means a sum of money paid as considerationfor grant of lease. It represents "capitalized:: rent which di^rence^between the actual rent and the rejit whicli might otherwise be obtainedby thelessofc 'Ti-emutn Of' other Like Sums", "are sums paid in excess of considecatioti of grant, continuance or renewalof the tenancy" the agreed rent In Black's Law Dictionary^ Sixth Edition, premium is defined as capitalizedrent "paidmlump sum at the tune oflease is 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 aclaiowledgedin the defmitions of 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 Sectioft 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 ^s a lump sum (although payable in instalments) could also be consideredto be a revenuereceiptin the same manner as the rent collected"? In the said case a registeredlease deed had been executedby the AssesseeCompanyby which two tea estateswere leased out to a firm. The considerationfor the lease was a combination of LPANo.319/2007 premiumin the sum ofRs.2,25,000ofthe annual rent ofRs.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 instalmentsof Rs.11,250 before the 31®^ January and 31®' July of each year. The annual rent of Rs.54,000 was payablein the followingmanner;Rs.1,000 per month to be paid on or beforelast date of each month, thus, making in all Rs.12,000per year and the balance of Rs.42,000to be paid on or before 31'' Decemberof each year. In the assessmentyear for 1952-53,the income tax officer treated the instalmentof Rs. 11,250 paid towards premium as a revenue receipt, this assessment was upheld by the Appellant Assistant Corrimissibneras 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 appealedthe Supreme Court. The Supreme Court referred to the decisions in Kamakshyii Narain Singh V. CommissionerofIncome tax (1943)IIITR 513, Memberfor the 6oard of Agriculturev. Commissionerof Income Tax (1957) 32 ITR 169 and Chintamani Saran Nath Sah v. Commissioner of Income Tax AlR 1961 SC 732 to underscore the distinction between the premium and rent. It pointed out that a one-timepaymentof premium for the grant of a lease was laiownas 'salami'which is inthe nature of a capital receipt ift 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 LPA N6.319/2007 iPage 21 of 25 between a price paid for a transfer of a right to enjoy the propertyand the rent to be paid periodicallyto the lessor. When the interest of 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 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 deferred 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 analysis of the relevant clauses in 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 Lukmani (2007) 1 SCC 202, the Supreme Court emphasized the importance of a contextual interpretation and held that while the permitted increase in rent can serve as a yardstick for the landlord to increase the rents it did not make such permitted increase "a part of the rent though it may be a consideration for the grant of lease."

18. The lease deed in the instant cases a makes reference to the annual rent that would be payable in future. This is not a pre-detemiined figure but is to be worked out as a percentage of the premium amount. This is set out in the lease deed. For instance in the lease deed dated 1^^ LPANo.319/2007 December, 2003 iii favour of M/s N.K. Gupta, the fourth paragraph of \ the preamble reads: "NOW THIS INDENTURE WITNESSETH that, in considerationof the amount of lis. 1,31,04,000/-(Rupees One Crore Thirty One lacs and Four thousand only) paid towards premium before the execution of these presents (the receipt where of the Lessor hereby aclaiowledges) and of 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 Cefitre"

19. In the later portion of the same paragraph of the lease deed, the annual rent is stated as being two and a half per cent of Rs.1,31,04,000 and the first annual reht instalmentis to be paid on 15^*^ January, 2008. The relevant portiofireads as under: "TO HOLE) the premises unto the lessee in perpetuity from 24^*^ day of January two thousand and three ilELDING AND FAYING therefore yearly rent payable in advance of Rs. 5/- (Rupees Five only) up to the 23'^^ day of January two thousand and ^iight and thereafter at the rate of two and a half per cent of the premium (the sums already paid and such other sum to be paid towards preihium under the covenants and conditions hereinafter enlianced rent as may hereafter be assessed conditions sums hereafter contained) covenants hereinafter contained clear of all deductions by equal half yearly payments on the 15^^ day of Januaiy and 15^'^ day of July in each year at the Reserve Banlc of India, New Delhi." LPA>Jo.319/2007 Page 23 of25

20. A reading of the aforementioned portions of the perpetual lease deed brings out the distinction between 'premium' on the one hand and 'rent' on the other. The word 'premium' carries more thaii 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. A careful examination of the above clauses of the lease deed, leads to the conclusion that the 'premium' paid for the lease is distinct from the 'rent' payable thereunder. In other words, 'rent' in Section 147 (2) (b) (v) DMC Act cannot be said to includethe premium paid for the lease.

21. It is also not possible to constme the premium paid as advance rent since the annual rent in is not indicated as a pre-determined sum in the lease deed. It is a percentage of the premium paid. The premium amount serves as a yardstick for determining the rent payable. It is therefore not possible to inteipret the word 'rent' in the lease deeds in the instant cases as including the premium paid.

22. This Court is inclinedto accept the contentionof the respondent that since what is sought to be collected is a transfer duty, which is an involuntary exaction revenue, statute admits of a strict LPANo.319/2007 L interpretation. The principle enunciated in the decisions relied upon by the appellants that every word in a statute must be given its fiill meaning is unexceptionable. However, the meaning so given must be in the context of the statute in general and the provision in particular. In the context of the lease deeds in question in the instant cases, the word 'rent' cannot possibly be interpreted to include the premium paid for the grant of the lease. As rightly contended by the respondents, if the legislature intended to make the premium paid for the lease as includible for the purposes of determining transfer duty then the statute should have been expressly worded to reflect that intention.

23. Accordingly, this Court concurs with the conclusion amved at by the by the learned Single Judge. The appeals are dismissed with no orders as to costs. S. MURALIDHAR, J. CHIEF JUSTICE July 02,2008 LPA No.319/2007