MUNICIPAL CORPORATIONOFDELHI v. UNITYPROJECTSLIMITED

Tlu-ough: Mr.H.S.Phoolka, SeniorAdvocate Mr. Sanjeev Sabharvvaland Mr. AlokSingh,Advocates versus N.K. GUPTA Respondent ThroughMr.SafijayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum,Advocates forRespondentGNCTD. With LPANo.373/2007 MUNICIPAL COI^ORATIONOF DELHI ~ Appellant Through: Mr.H.S. Phoolka, Senior Advocate IVIr.SanjeevSabharvvaland 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 forRespondentGNCTt). LPANo.374/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough:IVIr.H.S.Phoolka, Senior Advocate Mr. Sanjeev Sabharvvaland Mr. AlokSingh,Advocates versus LPA No.319/2007 Page 1of25 KEY POINT Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo.376/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Ml'. SanjeevSabharwaland Mr. Alok Singh, Advocates versus K.K.ENTERPRISES , .....Respondent TliroughMl*. SanjayGoswamyandMi-. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for Respondent GNCTD. LPANo.377/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPANo.378/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007 Page2 of25 K.K.ENTERPRISES Respondent Through Mr. Sanjay Goswamy andMl'. Ajay Kumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. LPANo.380/2007 MUNICIPAL CORPORATIONOFDELffl Appellant Thi'ough: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharvvaland Mr. AlokSingh,Advocates versus GARIMAAGGRAWAL Respondent Through Mr. SanjayGoswamyandIVIr.AjayKumar, AdvocatesfortheRespondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTt). LPANo.381/2007 VIUNiCIPALCOI^OIUTIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharvvaland Ml-. Alok Singh, Advocates versus N VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.382/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Ml-. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, LPANo.319/2007 Page3of25 Advocates for the Respondents. Ms. IfamMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.383/2007 MUNICIPAL CORPOMTIONOF DELHI . Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VAIODHjVIANPROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr.AjayKumar, AdvocatesfortheRespondents. Ms. Ifam Majid and Ms. Zubeda Begum,Advocates forRespondentGNCTD. LPANo,384/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHVIANPROPERTIES Respondent ThroughMr. SanjayGoswamyaridMr. AjayKumar, AdvocatesfortheRespondents. Ms. IfamMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.385/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates versus HARISINGHBUILDER&PROMOTRS Respondent ThroughMr. SanjayGoswamyandMi*. AjayKumar, LPANo.319/2007 Page4of25 Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.386/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Tlirough: Mr.H.S. Phoolka,SeniorAdvocate Mr. SahjeevSabharwaland Mf. Alok Smgh, Advocates versus ICAMALKISHOREAGORAWAL Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor theRespondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.387/2007 MUNICIPAL CORPOIUTIONOF DELHI Appellant Tlirough: 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, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo.388/2007 MUNICIPAL COiy^ORATlONOFDELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus BASANTPROJECTSLTD Respondent ThroughMr. SanjayGoswamyand Mr.AjayKumar, LPA No.319/2007 Advocates for the Respondents. Ms. Irani Majid and Ms.ZubedaBegum,Advocates for Respondent GNCTD. LPANo.389/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Ml-. SanjeevSabharwaland Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr.SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo.391/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for Respondent GNCTD. LPANo.394/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Tlirough: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus LPANo.319/2007 Page6 of25 VARDHMANPROPERTIES .....Respondent Through Mr. SanjayGoswamyand Mr.AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo.395/2007 MUNICIPAL COIIPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHMANPROPERTIES .....Respondent ThroughMr.SanjayGoswamyand Mr.AjayKumar, Advocates for the Respondents. iMs.IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.396/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. Alok Singh, Advocates versus MANISH AGGRAWAL Respondent ThroughMi-. SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum,Advocates for Respondent GNCTD. LPANo.400/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus, LPANo.319/2007 Page7 of 25 VAI^HMANPROPERTIES Respondent ThroughMr. Sanjay Goswamyand Mr. Ajay Kuniar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. ZubedaBegum,Advocates for RespondentGNCTD. LPANo.401/2007 MUNICIPAL CORPORATIONOF DELHI .....Appellant Through; Mr.H.S.Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Smgh, Advocates . versus VARDHMANPROPERTIES .....Respondent Through Mr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms.ZubedaBegum,Advocates forRespondentGNCTD. LPANo.402/2007 MUNICIPAL CORPORATIONOFDELm Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus VARDHiVIANPROPERTIES Respondent Tlu-oughMr.SanjayGoswamyand Mr.AjayKumar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates for Respondent GNCTD. LPANo.403/2007 MUNICIPAL CORPORATIONOFDELHI Appellam Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates LPA No.319/2007 versus VARDI-iMANPROPERTIES Respondent Through Mr. Sanjay Goswamy and Mr. AjayKumar, Advocates for theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo.405/2007 MUNICIPAL CORPORATIONOFDELffl .....Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus UNITYPROJECTSLIMITED .....Respondent Through Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo. 406/2007 MUNICIPAL CORPOR^VTIONOFDELffl Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus KEYPOINT Respondent ThroughMi-. SanjayGoswamyandIVIr.AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum,Advocates forRespondentGNCTD. LPANo.407/2007 MUNICIPAL CORPORATIONOF DELffl Appellant Through:Mi-.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates LPANo.319/2007 Page9 of 25 7-^ versus VARDHNIANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKumar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.408/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. Sanjeev Sabharwal and Mr. AlokSingh,Advocates versus M.M. DEVELOPERS Respondent ThroughMr. SanjayGoswamy^nd Mr.AjayKumar, Advocates for the Respondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo.1051/2007 MUNICIPALCORPORATIONOF DELHI Appellam Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Nil".Alok Singh, Advocates versus VARDHMANPROPERTIES Respondent ThroughMr.SanjayGoswamyandIVIr.AjayKumar, Advocates for the Respondents. Ms. Irani Majid and Ms. Zubeda Begum, Advocates forRespondentGNCTD. LPANo.1057/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Tlirough: Mr.H.S.Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mi". Alok Singh, Advocates LPA No.319/2007 Page 10of25 versus VARDHMANPROPERTIES Respondent ThroughMr. SanjayGoswamyandMr. AjayKuftiar, Advocates for the Respondents. Ms. IramMajid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.1058/2007 MUNICIPAL CORPORATIONOF DELHI Appellant Through: Mr.H.S. Phoolka,SeniorAdvocate Mr. SanjeevSabharwaland Mr. AlokSingh,Advocates ^ A versus VARDFIMANPROPERTIES .....Respondent Tlii-oughMr. SanjayGoswamyandMi'. AjayKumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.1059/2007 MUNICIPAL CORPORATION OF DELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Mr. Alok Singh, Advocates versus SUNDERCONSTRUCTIONCO. Respondent Through Mr. SanjayGoswamyand Mr. AjayKumar, Advocates for the Respondents. Ms.IrariiMajid and Ms. Zubeda Begum,Advocates forRespondentGNCTD. LPANo.1060/2007 MUNICIPAL CORPORATIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland LPA No.319/2007 Page11of 25 a' Mr. Alok Singh, Advocates versus VARDHMAN PROPERTIES Respondent Tlirough Mr. Sanjay Goswamy and Mr. Ajay Kumar, Advocates for the Respondents. Ms. Iram Majid andMs. ZubedaBegum,Advocates forRespondentGNCTD. LPANo.1061/2007 MUNICIPAL CORPORATION OF DELHI Appellant Tlirough: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwal and Ml'.AlokSingh,Advocates versus VARDHMAN PROPERTIES Respondent ThroughMr. SanjayGoswamyand Mr.AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. AND LPANo.1285/2007 MUNICIPAL CORPOMTIONOFDELHI Appellant Through: Mr.H.S. Phoolka, Senior Advocate Mr. Sanjeev Sabharwaland Mr. AlokSingh,Advocates versus SURYABUILDWELL LIMITED Respondent TliroughMr. SanjayGoswamyand Mr. AjayKumar, Advocatesfor theRespondents. Ms. Iram Majid and Ms. Zubeda Begum, Advocates for RespondentGNCTD. Coram: HON'BLETHECHIEFJUSTICE LPANo.319/2007 Pagel2of25 1% HON'BLEDR.JUSTICES.MURALIDHAR

1. Wliether Reportersoflocalpapersmaybe ^ allowedtoseethejudgment? 2. TobereferredtotheReporterornot? 3. Whether thejudgmentshouldbereported inDigest? JUDGMENT Dr.S.Murhlidhar- J.

1. Theseappealsaredirectedagainstthecommonjudgmentdated 13^*^March, 2007passedbythelearnedSingleJudgeofthisCourtin Writ Petition (Civil)No.8161of2005andBatch. The writpetitions challengedthevalidityof thenoticesissuedby theCollectorofStamps under Section 40 of the Indian Stamp Act, 1899 ('Stamp Act') demanding transfer duty as well as deficient stamp duty and penalty equal to tentimesofthedeficientduty.

2. The demand for transfer duty was made in respect of the conveyanceof plots of land infavourof theappellantswhosuccessflilly bid for them in auctions held by the Delhi DevelopmentAuthority ('DDA')/Municipal Coi-poration ofDelhi ('MCD').Consequently, perpetual lease deeds were executed andregisteredin their favour. The writ petitioners had also paid the appropriate stamp duty and transfer duty in termsofthe certificate issued by the Collector of Stamps in each ofthecases.

3. On29"^August2004ageneralorderwasissuedbytheDivisional LPANo.319/2007 Page13of 25 Commissioner, Delhi stating that the CollectorsofStamp ofdifferent districtshadadoptedvaryingmethods ofcalculationofduty in respectof perpetualleaseswhich hadresultedin the dutybeingshort levied and collected. This conclusion was reached on aninterpretationof Article 35 ofSchedule 1 (A) to the Stamp Act as applicable to Delhi and Section 147 to the Delhi Municipal Corporation Act, 1957 ('DMC Act'). Consequently, theimpugnednoticeswere issued in February2005to eachofthe appellants calling upon them to pay the deficient duty as well as the penalty equaling ten timesofthe deficient duty. In respectof Vardhman Properties, for instance, the auction purchaserhad paid Rs.12,42,215 as stamp duty. This was now recomputed asRs.13,30,604 being theaggregateofRs. 10,79,772 as stamp duty and Rs.2,00,832 as transfer duty. In re-wofking the duty, the total consideration for the perpetual lease was taken as the aggregateofthe premium amount of Rs.1,91,11,000 and the annual rent calculated as a percentage of the t-. premium amount. Inadditiona penalty ofRs.8,88,389 (being tentimes ofthedeficientduty) was also demanded.

4. BeforethelearnedSingleJudgetherespondentscontendedthat they were not challenging the re-workingofthe stamp duty, since the questionofinterpretationofArticle 35 ofSchedule1(A)of theStamp Act was debatable. Their challengewas, therefore,confined to the penalty imposed under the Stamp Act as well as the DMC Act with regardto the stamp duty andtransferdutyrespectivelyas well as the LPANo.319/2007 Page14of25 duesill the transfer duty asdemandedin theimpugnednotices.

5. On thequestionofpenalty,thelearnedSingleJudgecametothe conclusionthat in termsofSection 40ofthe Stamp Act, the power to imposeapenaltywas consequentialupontheCollector ofStamps impoundinganinstrument.Sincenoinstrumenthadyetbeenimpounded bytheCollector,thequestionofimpositionofanypenaltydidnotarise. To the extent,therefore,that theimpugnednoticessoughtto levy penalty,theywereheld to beunsustainableinlaw.

6. The next question before thelearnedSingle Judgeconcernedthe interpretationof therelevantentiy inSection147(2) (b) (v)DMCAct. Afterreferringto thedecisionof thelearnedSingleJudgeofthisCourt in Niagara Hotels & Builders(P)Ltd.v.UnionofIndia 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 grantofthe lease. The learned Single Judge rejected the contentionoftheMCD that the word 'amount'refen-edtopremiumand theword'value'referredto the rent. It was held that theyrefeiTedto the quantum of the rent for the first fifty years of thelease.Consequently, transfer duty would be leviable on one-sixthofthe rent for the first fifty yearsofthe lease. Although the leasereferredto only the first thirty years, the learned Single Judge held that "the transfer duty has to be computedonthebasisof1/6"^oftherentpayableatpresentforthefirst LPANo.319/2007 Page15of ^5 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 respectofthetransferduty under the DMC Actsincethatwas adebatableissue.A directionwas issuedtore-work the transfer duty in terms of thejudgmentofthe learned Single Judge. It was further held that no further stamp duty in addition to theamounts already paid was payable nor was any penaltychargeable.

8. Aggrieved by thejudgmentofthe 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 totalconsiderationpayable under the lease deed. His submission was thatunlessthetotalconsiderationasshownontheleasedeedwas paid by the lessee, the executionofthe perpetual lease deed could not have takenplace.Therefore,the word 'rent' wouldincludethepremium paid by the auctionpurchaserfor obtaining the lease. In other words, the expression 'rent'meant 'rent+ premium' and not the rent alone. Reference was made to the definitionofthe word'premium'inBlack's LawDictionary, 6"^Edition(page1181).Mr. Phoolkathensubmitted that every word occurring in Section 147 (2) (b) (v) DMC Act had to be LPA No.319/2007 Page 16of25 given full effect to keeping in view the context in which the word occurs. Therefore thedisjunctive'or'had to be read as aconjunctive 'and'.Sincethe leasecouldnot havebeenexecutedwithoutthepremium being paid, the legislative intent was to levy transfer duty on the amount equal toone-sixthofthe entireconsiderationpayablein respectofthe lease which, in any event, has been set forth in the instrument. Mi".Phoolka contended that since the annual rent payable is calculated as apercentageof thepremiumpaid,it is ameasure of thepremiumitself. Consequently,there it was logical to include the premium amount as part ofthe rent for the purposesofcomputing thetransferduty.

10. Insupportofhis contention that all words in the statute have to be given full effectMr.Phoolka referred to thejudgmentsofthe Supreme Court inShin-EtsiiChemicalCo. Ltd.v.Aksh Optifibre Ltd. (2005) 7 see234, Manohar Laiv/ VineshAnand(2001) 5SCC407,Noorie Manure Mill v. Commissioner Trade Tax (2007) 10 SCC 478, Associated Cement Co. Ltd.v. StateofMP (2004)9 SCC 727 and IndconStructurals(P) Ltd.v.CommissionerofCentralExcise(2006) 6sec786..

11. Mr.Sanjay Goswaitiy, learnedcounselappearingon behalf of the respondentssubmittedthatataxingstatuteadmits ofonly strict interpretation.Iftheintentionofthelegislaturewastotaxthepremium paidfortheobtainingof aperpetuallease,thencertainlythewordingof LPANo.319/2007 ^3^ theprovisionshould expressly indicate it. Reliance is placed on Section 105ofthe TransferofProperty Act, 1882('TPAct') where the words 'premium'and'rent'have, been separately defined. Relying on the judgmentofthe Supreme Court inCommissionerofIncomeTaxv. PanbariTea Company AIR 1965 SC 1871, it issubmittedthat the expression'premium'and'rent'have to be separately understood and onecannotincludetheotherinthecontextinwhichitisusedinthedeed ofperpetual lease in the instant case. The word'rent'can only refer to the actual rent indicated in the lease deed and not thepremium. Reference isalsomade tothedecisionsinGovind Ramv. Rajphul SinghAIR 1973,Punjab&Haryana94 and S.VenkataramanSwami V. S.AbdulWahab AIR1969Madras 473.

12. In order toappreciatetherespectivecontentions,areferencemay be made first toSection147(2) (b) (v) of the DMC Actwhichreads: "147.Duty ontransferofpropertyandmethod of assessment thereto.-(1) Save asotherwiseprovided in this Act, theCorporation shall levy a duty ontransfersofimmovablepropertysituatedwithin thelimitsofDelhiinaccordancewith theprovisionshereafterinthis sectioncontained. (2) The said duty shall be levied - (a) in the formofa surcharge on the duty imposed by the Indian Stamp Act, 1899 (2of1899) as in force for the time being in the Union Territory of Delhi, on every instrument of the description specifiedbelow, and (b) at such rate as may bedetenninedby the Corporation not exceedingfive per cent, on the amountspecifiedbelow against such instruments- LPANo.319/2007 Descriptionofinstrument Amount onwhich dutyshould levied (i) Saleofimmovable propertyThe amount or value of consideration for the sale, as set forth in instrument. The value of thepropertyof thegreate value, as set forth in the instrument. (ii)Exchangeofimmovable property (iii) Gift ofimmovablepropert;The value of theproperty,as setforth (iv) Mortgage withpossession immovableproperty (v) Lease in perpetuity immovableproperty theinstmment. Theamountsecuredby the mortgage i setforthintheinstrument. Theamountequaltoone-sixthof the wholeamountorvalueoftherent whichwouldbepaidor delivered in respect of the firstfiftyyears of thele; assetforthintheinstrument, (v) Contract for transfer of immovableproperty Ninety per cent of the value of the considerationforthetransferasset (emphasissupplied) outinthecontract."

13. In Niagara Hotels &Builders(P)LimitedalearnedSingleJudge of this Court held that the word'Or'inSection147(2) (b) (v)DMCAct could not be read in a manner so as to enable MCD to levy the transfer dutyon anaggregateboththepremiumamountaswell astherent.In theimpugnedorderin theinstantcases,thelearnedSingleJudgehas heldthat theexpression"amount'or 'value'bothqualified"rentandrent alone"and,therefore,therent,(andnot thepremium)couldaloneform the basis for calculating the transfer duty.

14. Dependingonthecontext,theword 'premium'canhavebotha broadaswell asanarrowmeaning. Thedefinitionofpremiuminthe LawLexiconbyP.RamanathaAiyar,SecondEditionreadsasunder: LPANo.319/2007 ''Prenuiimme^ts asumofmoney paidas coiisidkationforgrantofIfease.Itrepresents 'capitalizedrent which in fact is the difijerencebetweentheActual rentandthe refitWliich miglitotherwisebeobtainedby the lessor. '^PremiumOr otherLikeSums","are sums paid inexcess Of theagreed rent in corisideratiofl of grant, continuance or rehewaloftlietenancy" InBlack's LawDichoiiary, SixthEdition, premiumisdefinedas capitalizedrent"paidmlumpsumatthetimeofleaseisgranted."

15. The questioiiwhether the'rent'payableunderthedeedsof perpetualleaseintheinstantcasesincludesthe'premium'paidwill dependonthecontextinwhich theword isused.Thisdistinctionis aclaiowledgedinthedefinitionsoftheterms'premium'and'rent'in Section105oftheTPActas Well.

16. ThedecisionoftheSupremeCourtinPanbariTeaCompany supportsthecontentionoftherespofidentthat,giventhecontext,the word 'rent' inSectioh147(2)(b)(v)DMC Acthastohaveanarrow meaning. Thequestionthatarosein the saidcasewas "whetherthe premiumcollectedasalumpsum(althoughpayableininstalments) couldalsobeconsideredtobearevenuereceiptinthesamemanneras therent'collected"?Inthesaidcasearegisteredleasedeedhadbeen executedby theAssesseeCompanybywhichtwo teaestateswereleased out to a firm. The consideration for the lease was a combination of LPANo.319/2007 Page20of2? premiumin the sum ofRs.2,25,000of theannualrent ofRs.54,000. The premiumwas to be paid in thefollowingmanner: Rs.45,000 aslump sumatthetimeofexecutionoftheleasedeedandthebalanceof Rs.1,18,000in sixteen half yearlyinstalmentsof Rs.l1,250beforethe 3r'Januaryand Julyofeachyear. TheannualrentofRs.54,000 waspayableinthefollowingmanner:Rs.1,000permonthtobepaidon or before last date of eachmonth,thus,makingin all Rs.12,000per year andthebalanceofRs.42,000tobepaidonorbefore31'^Decemberof eachyear. Intheassessmentyearfor1952-53,theincometaxofficer treated the instalment of Rs. 11,250 paid towards premium as a revenue receipt.This assessment was upheld by theAppellant Assistant Commissioner as well as theTribunal.The High Courtreversedthe Tribunal and held that the sum of Rs.l1,250was a capital receipt and not arevenuereceipt.TheDepartmentthenappealedtheSupremeCourt. The SuprenieCourtreferredtothedecisionsinKamakshya Narain SinghV. CommissionerofIncomeTax(1943)IIITII513,Memberfor theBoardofAgriculture v. CommissionerofIncometax(1957)32 ITR 169 and ChintamaniSaran Nath Sahv.CommissionerofIncome Tax AIR 1961SC732 tounderscorethedistmctionbetweenthe premiumandrent.Itpointedoutthataone-timepaymentofpremium forthegrantofaleasewasknownas'salami'whichisinthenatureofa capitalreceiptinthehandsofthelessor.The SupremeCourt then refen-edto Section105TP Act andobservedasunder: "The section, therefore,brings out the distinction LPANo.319/2007 Page21of25 'V'2.- betweena price paid for atransferof a right toenjoythe property and the rent to be paid periodically to the lessor. When theinterestof thelessorispartedwithforaprice, the price paid ispremiumorsalami.But theperiodical payments made for the continuous enjoyment ofthe benefitsundertheleaseareinthenatureofrent. The formeris acapitalincomeand the latter arevenue receipt.Theremay becircumstanceswhere theparties may camouflagethe realnatureof thetransactionby using clever phraseology. In some cases, the so-called premiumis in fact advance rent and in others rent is defeiTedprice. It is not the form but the substanceofthe transaction thatmatters. Thenomenclatureused may not be decisive or conclusive but it helps the Court, having regard to the other circumstances, to ascertain the intentionofthe parties." On an analysisofthe 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 handsofthe lessor.

17. InHotelKings v.SaraFarhanLukmani(2007) 1SCC202, the Supreme Court emphasized the importanceofa contextualinterpretation and held that while the permitted increase in rent can serve as a yardstick for thelandlordto increase the rents it did not make such permitted increase "a partofthe rent though it may be a consideration for the grant oflease."

18. Theleasedeedintheinstantcasesamakesreferencetotheannual rent that would bepayableinfuture.This is not apre-detenninedfigure butis to beworkedoutasapercentageofthepremiumamount.Thisis setoutintheleasedeed. Forinstanceintheleasedeeddated1^' LPANo.319/2007 Page22of25 ; A December, 2003 in favourofM/s N.K. Gupta, the fourth paragraph of thepreamblereads: . "NOWtmsMbENTURB WiTNESSETH that, inconsiderationoftheamountofRs. 1,31,04,000/-(Rupees One Crore Thirty One lacsand Fourthousandonly)paid towards premiuiitibefore theexecutionofthese presents(thereceiptwhere of theLessor hereby acknowledges) and of therent hereinafterreservedandofthecovenants oh the part of the lessee hereinafter contained, the Lessor doth hereby demise unto theLessee,all that plotoflandbeing theCommercialPlotNo. 09BlockNo. X in the lay out planofNew Friends Colony DistrictCentre"

19. Ih the later portion of the same paragraphofthe leasedeed,the annualrent is stated as being two and a half per cent of Rs.1,31,04,000 andthefirstannualrentinstalmentistobepaidon15^*^January,2008. The relevant portion reads as under: "TOHOLDthepremisesuntothelesseein perpetuityfrom24"" day ofJanuarytwo thousand and tliree YIELDING AND PAYINGthereforeyearly rent payable in advance of.Rs.5/-(RupeesFiveonly)up tothe23'^''dayofJanuarytwothousand andEight andthereafterattherateof two and a half per cent of the premium (the sums already paid and such other sum or sums hereafter to be paid towards premiumuiider thecovenantsandconditions hereinafter contained) or such other enlianced rent as mayhereafterbe assessed uiider the covenants and conditions hereinaftercontainedclearofalldeductions byequalhalfyearlypaymentsonthe15^'' dayofJanuaiyand15^*^dayofJulyineach year at theReserve Bank of India,New Delhi." LPANo.319/2007 Page 23of25

20. A readingofthe aforementioned portionsofthe perpetual lease deed brings out the distinction between'premium'on the one hand and 'rent'on the other. The word 'premium'carries more than one definition;it has to beunderstoodin thecontextinwhichit is used in a lease deed. The question whether the word'premium'is also subsumed in the words "whole amount or valueofthe rent" occurring in Section 147 (2) (b) (v) i)MC Act has to beansweredwithreferenceto the context in which the word is used in the lease deeds in question. A carefulexaminationofthe above clausesofthe 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)DMCActcannotbesaidtoincludethepremiumpaidforthelease.

21. It is also notpossibletoconstmethepremiumpaid asadvance rent since theannualrent in is notindicatedas apre-detemiinedsumin the leasedeed.It is apercentageof thepremiumpaid.Thepremium amountsei-vesas a yardstick for determining the rent payable. It is therefore not possible to interpret the word'rent'in the lease deeds in the instant cases as including the premium paid.

22. This Court is inclined to accept thecontentionof therespondent thatsincewhatissoughtto becollectedis atransferduty, which is an involuntary exaction of revenue, the statute admits of a strict LPA No.319/2007 VP interpretation.Theprincipleenunciatedinthedecisionsrelieduponby theappellantsthateverywordinastatutemustbegivenitsfullmeaning isunexceptionable.However, themeaning sogivenmust beinthe contextof thestatuteingeneralandtheprovisioninparticular.Inthe contextof theleasedeedsinquestionin theinstantcases,theword'rent' cannotpossiblybeinterpretedtoincludethepremiumpaidforthegrant of thelease.Asrightlycontendedby therespondents,if thelegislature intendedtomake thepremiumpaidfortheleaseasincludibleforthe purposesofdeterminingtransferdutythenthestatuteshouldhavebeen expresslywordedtoreflectthatintention.

23. Accordingly, this Court concurs with the conclusion arrived at by the by the learned SingleJudge. The appeals aredismissedwith no ordersastocosts. S.MURALIDHAR, J. CHIEFJUSTICE July02,2008 LPANo.319/2007