PADMA Vs. STATE OF MADHYA PRADESH
LAWS(MPH)-2004-10-31
HIGH COURT OF MADHYA PRADESH
Decided on October 11,2004

PADMA Appellant
VERSUS
STATE OF MADHYA PRADESH Respondents




JUDGEMENT

- (1.)THE Harda Municipal Council (third respondent) auctioned the lease hold rights (for a period of 30 years) in regard to certain shops owned by it. According to the terms of auction, the Lessees will have to pay the agreed premium and a monthly rent (the rent had to be increased by 25% every three years ). The petitioners were the successful bidders in regard to various shops. The third respondent sent communications dated 25-1-2000 to each of the petitioners requiring them to get their lease deeds registered. The petitioners had to pay stamp duty under Article 35 (a) (v) and 35 (c) of Schedule I-A of the Stamp Act at conveyance rate in regard to five times the average annual rent and in regard to the premium/advance. The petitioners gave a representation dated 10-9-2001 to the State Government seeking exemption from payment of stamp duty under Section 9 of the Indian Stamp Act, 1899 (as amended in Madhya Pradesh, for short 'the Act' ). Such exemption was not granted. The petitioners, therefore, filed this petition for a declaration that Article 35 (a) (v) and 35 (c) of Schedule I-A of the Act, when applied together, to a lease transaction, is arbitrary and, therefore, unconstitutional. In the alternative, they sought a direction to the State Government to exempt or reduce the stamp duty in regard to their lease deeds by exercising power under Section 9 of the Act. They also sought a direction to third respondent to deliver possession of their shops forthwith, which they did not press during arguments.
(2.)ARTICLES 35 (a) (v) and 35 (c) of Schedule I-A of the Act, referred to in the writ petition were in force from 1-4-1997 till 12-8-2002. the entire Schedule I-A to the Act was substituted in Madhya Pradesh with effect from 13-8-2002. Article 33 (a) (v) and 33 (c) of the current Schedule I-A (which is in effect from 13-8-2002) corresponds to Article 35 (a) (v) and 35 (c) of Schedule I-A which was in force when the writ petition was filed. As an instrument has to be stamped as per the law in force as on the date of execution and as the lease deeds are yet to be executed, what will be applicable will be Article 33 (a) (v) and 33 (c) of Schedule I-A, now in force. There is no material difference between the earlier Article 35 and present Article 33 in so far as Clause (a) (v) and Clause (c) are concerned. We extract below the relevant portions of Article 33 for ready reference :description of Instruments Proper Stamp-duty 33. Lease.- Including an underlease or sub-lease and any agreement to let or sub-let or renewal of lease :- (a) whereby such lease the rent is fixed and no premium is paid or delivered-
(i) where the lease The same duty as a Bond purports to be for a term (No. 12) for the whole less than one year; amount payable or deliverable under such lease.

(ii) where the lease The same duty as a Bond purports to be for a (No. 12) for the amount of terms of not less than average annual rent one year but not more reserved. than five years;

(iii) where the lease The same duty as a purports to be for a term Conveyance (No. 22) for a exceeding five years but market value equal to the not exceeding ten years; amount or value of one and half times the average annual rent reserved.

(iv) where the lease The same duty as a purports to be for a term Conveyance (No. 22) for a exceeding ten years but market value equal to three not exceeding twenty times the amount or value years; of the average annual rent reserved.

(v) where the lease The same duty as a purports to be a for a Conveyance (No. 22) for a term exceeding twenty market value equal to five years but not exceeding times the amount or value thirty years. of the average annual rent reserved.

(vi) where the lease The same duty as a purports to be for a term Conveyance (No. 22) on exceeding thirty years or amount equal to the in perpetuity or does not market value of the purport to be for a property. definite period.
**** **** **** **** *** (c) Where the lease is The same duty as a granted for a fine or Conveyance (No. 22) for a premium or for money market value equal to the advanced or to be amount or value of such advanced in addition to fine or premium or advance rent fixed. as setforth in the lease, in addition to the duty which would have been payable on such lease, if no fine or premium or advance has been paid or delivered : Provided that where the lease purports to be for a term exceeding thirty years or in perpetuity or does not purport to be for a definite period, the duty on such lease shall be chargeable as a conveyance (No. 22) on the market value of the property leased :
(3.)THE petitioners point out that the stamp duty payable on a lease for a term exceeding 30 years or a lease in perpetuity, is the same as the stamp duty on a conveyance (sale) irrespective of the rent or the premium/advance. On the other hand in regard to a lease for 30 years, stamp duty is payable at conveyance rate on five times the average annual rent plus the premium. They submit that a lease for a term exceeding 30 years or a lease in perpetuity involves a 'bigger' or 'larger' transfer than a lease for a term of 30 years. They contend that the stamp duty payable on a lease for a term of 30 years should necessarily be less than the stamp duty payable for a lease for a term exceeding of 30 years or lease in perpetuity, as otherwise the provision relating to stamp duty will be absurd the arbitrary. But according to them, the stamp duty payable under Article 33 (a) (v) and 33 (c) in regard to a lease for a term of 30 years, is more than the stamp duty payable under Article 33 (a) (vi) and the proviso to Article 33 (c) in regard to a lease for a term exceeding 30 years or a lease in perpetuity. This according to them is arbitrary and, therefore, unconstitutional.


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