# M/S SDS Infracon Pvt. Ltd. & Anr v. State of U.P. & Ors

- **Citation:** (2025) 4 ILRA 505
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-04-28
- **Case number:** Writ C No. 1920 of 2018
- **Bench:** Piyush Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sds-infracon-pvt-ltd-anr-v-state-of-u-p-ors-53152
- **Pages:** 6

## Headnote

Civil Law -Constitution of India,1950Article
226-Indian
Stamp
Act,1899Section 23-The petitioner company was
allotted a plot by the Yamuna Expressway
Industrial
Development
Authority
for
developing a residential township-The
allotment included payment of a total
premium, part of which was payable in 20
equal instalments along with interest-The
lease deed was executed accordingly after
paying 5% stamp duty on the total
premium-Later, the Sub-Registrar referred
the matter under the U.P. Stamp Act,
claiming a deficiency in stamp duty on the
ground that interest paid in instalments
should have been included in stamp duty
calculation-This led to the initiation of
proceedings
under
Stamp
suit
no.119/2012-13, and subsequent orders
were passed demanding additional dutyThe court held that stamp duty cannot be
levied on interest payable in instalments
under a lease deed, as such interest does
not form part of the consideration for
calculating stamp duty u/s 23 of the
Indian Stamp Act-Reliance was placed on
Supreme court ruling in Bihar State
Housing Board vs. Atma Shah which
upheld that interest on deferred payment
does not attract additional stamp dutyImpugned
reference
and
recovery
proceedings quashed-Direction to refund
amount with interest.(Para 1 to 23)

The writ petition is allowed. (E-6)

List of Cases cited:

## Text

4 All. M/S SDS Infracon Pvt. Ltd. & Anr. Vs. State of U.P. & Ors.
505
positively within fifteen days from
the date of receipt of a certified copy of this
order.

(42) The writ petition is allowed.
Howerver, there shall be no order as to
cost.
----------
(2025) 4 ILRA 505
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.04.2025

BEFORE

THE HON'BLE PIYUSH AGARWAL, J.

Writ C No. 1920 of 2018
With
Writ C No. 30283 of 2018

M/S SDS Infracon Pvt. Ltd. & Anr.
 ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Nisheeth Yadav

Counsel for the Respondents:
Sri Aditya Bhushan Singhal, C.S.C., Sri
Pramod Jain (Sr. Adv.)

Civil Law -Constitution of India,1950Article
226-Indian
Stamp
Act,1899Section 23-The petitioner company was
allotted a plot by the Yamuna Expressway
Industrial
Development
Authority
for
developing a residential township-The
allotment included payment of a total
premium, part of which was payable in 20
equal instalments along with interest-The
lease deed was executed accordingly after
paying 5% stamp duty on the total
premium-Later, the Sub-Registrar referred
the matter under the U.P. Stamp Act,
claiming a deficiency in stamp duty on the
ground that interest paid in instalments
should have been included in stamp duty
calculation-This led to the initiation of
proceedings
under
Stamp
suit
no.119/2012-13, and subsequent orders
were passed demanding additional dutyThe court held that stamp duty cannot be
levied on interest payable in instalments
under a lease deed, as such interest does
not form part of the consideration for
calculating stamp duty u/s 23 of the
Indian Stamp Act-Reliance was placed on
Supreme court ruling in Bihar State
Housing Board vs. Atma Shah which
upheld that interest on deferred payment
does not attract additional stamp dutyImpugned
reference
and
recovery
proceedings quashed-Direction to refund
amount with interest.(Para 1 to 23)

The writ petition is allowed. (E-6)

List of Cases cited:

1. Bih. St. Housing Board & ors.Vs Atma Ram
Shah, Manu/SC/ 2185/1995, Civil Appeal No.
1713 of 1993

(Delivered by Hon'ble Piyush Agarwal, J.)

1. Heard Mr. C.B. Yadav, learned
Senior Counsel assisted by Mr. Nisheeth
Yadav for the petitioner and Mr. Siddharth
Singh, learned Standing Counsel for the
respondents.

2. Writ C No. 1920 of 2018 has
been filed for quashing the reference dated
18.10.2012 in Stamp Suit No. 119/2012-13
and Writ C No. 30283 of 2018 has been
filed for quashing the order dated
30.5.2018 and 21.7.2018 as well as
recovery citation dated 28.8.2018.

3. Learned Senior counsel for the
petitioner submits that the impugned
reference dated 18.10.2012 as well as
consequential
notices
are
without
jurisdiction and during pendency of
present Writ C No. 1920 of 2018, the
impugned orders have been passed, which
506 INDIAN LAW REPORTS ALLAHABAD SERIES
are under challenge in the subsequent Writ
C No. 30283 of 2018. He submits that
when the reference itself is without
authority of law as per Section 23 of Stamp
Act and the present writ petition may be
allowed, then all consequential action and
orders automatically goes.

4. Brief facts of the case as stated
in the writ petitions are that the petitioner is
private
limited
company
incorporated
under the provisions of 'The Indian
Companies Act, 1956' having its business
of infrastructure development. Yamuna
Express Way Development Authority has
been constituted under Section 3 of the UP
Industrial Development Act, 1976 in
District Gautam Buddha Nagar. The State
Government in exercise of its power under
the Land Acquisition Act has acquired the
land of village Jaganpur and handed over
the same to the authorities for planned
development and in pursuance thereof a
scheme was floated for allotment of
Residential Township bearing YEA-RT-01
to which the petitioner's company has
applied. After scrutiny a letter dated
14.6.2010 was issued whereby Plot No. TS01 in Sector 26 A was allotted to the
petitioner. As per Clause 6 of the authority
letter dated 20.7.2010, the payment of
stamp duty @ 5 % of the total premium has
been
computed
by
the
development
authority and in pursuance thereof the
petitioner paid the premium amount.
Thereafter the lease deed was executed on
31.7.2010
but
subsequent
thereto
a
reference was made by Sub Registrar to the
Collector Stamp on 18.10.2012, wherein it
has been stated that the petitioner has paid
the stamp duty upon actual total premium
of the land and not over the interest, which
has been paid to the authority in 20 equal
installments. On the said reference, Stamp
Suit No. 119 /2012-13 was registered and
notices were issued to the petitioner
alleging deficiency of stamp duty, on the
ground that amount of interest were not
included
while
paying
stamp
duty.
Thereafter the petitioner has challenged the
said reference before this Court by means
of Writ C No. 1920 of 2018.

5. Learned Senior counsel for the
petitioner submits that the reference dated
18.10.2012 itself is bad and without
authority of law, which is in the teeth of
Section 23 of UP Stamp Act. He submits
that the Development Authority as per
scheme has contemplated for payment of 5
% of stamp duty on the total premium
fixed, while allotting the land. The said fact
has been mentioned in Annexure No. 5 of
the writ petition. Further, the proceedings
have been initiated on the alleged ground
that apart from the total premium, the
petitioner has paid interest to which the
amount of premium has been enhanced
against which no stamp duty has been paid.
He submits that any payment of interest
cannot be calculated and added to the
premium amount for payment of stamp
duty.

6. He further raises alternative
argument that it is a lease of the property,
which may not be treated as sale of the
property, therefore, the proceedings itself is
bad on this ground alone.

7. Per contra, learned Standing
Counsel
supports
the
impugned
proceedings as well as the impugned orders
and submits that land has been given on
lease for more than 30 years, therefore, the
stamp duty is liable to be paid. He further
submits that the plot in question has been
given over and above the premium amount
in which 20 equal instalments have been
fixed to which the interest has been charged
4 All. M/S SDS Infracon Pvt. Ltd. & Anr. Vs. State of U.P. & Ors.
507
by the development authority but the same
has not been calculated towards the
payment of stamp duty, therefore, the
proceedings has rightly been initiated.

8. After hearing learned counsel for
the parties, the Court has perused the
records.

9. The record shows that the land
in question was allotted to the petitioner for
development of residential township vide
letter dated 14.6.2010 and as per clause 6
of the letter dated 20.7.2010, the stamp
duty @ 5 % as computed (on total
premium)
i.e.
Rs.
9,86,00,715/-
was
required to be paid by the petitioner and on
payment of stamp duty as well as 30 % (of
total premium), i.e. Rs. 1,77,65,895/-,
which was a condition precedent, the lease
deed has been executed.

10. In exercise of powers conferred
under Rule 4 UP Stamp (Valuation of
Property)
Rules
1997
the
District
Magistrate has floated minimum value of
the land, over which the stamp duty was
calculated
keeping
in
view
the
provisions laid down under UP Stamp
(Valuation of Property) Rules 1997 and
minimum value has been fixed in
respect of allotted land was @ Rs.
5000/-. The said provision as required
under the Act has been complied with
by the petitioner.

11. Thereafter the impugned
reference has been made by the Sub
Registrar to the Collector, Gautam
Buddha Nagar alleging therein that the
petitioner has only paid the stamp duty
on actual premium amount in respect of
the allotted land to it. However on
payment of interest, no stamp duty has
been paid on 20 equal instalments, as
mentioned in the instrument, therefore,
the proceedings have been initiated
against the petitioner.

12. It is admitted between the
parties that the proceedings have only
been initiated against the petitioner on
the alleged ground that on the actual
premium amount, the stamp duty was
paid, but for payment in 20 equal
instalments along with interest, the
stamp duty was also required to be paid
on interest, but the same has neither
been calculated nor has been paid by
the petitioner.

13. To decide the issue in hand,
it is relevant to quote Section 23 of the
Stamp Act :-

 "23.
Instruments
reserving
interest. -Where interest is expressly
made payable by the terms of an
instrument, such instrument shall not be
chargeable with duty higher than that
with
which
it
would
have
been
chargeable had not mention of interest
been made therein."

14. On perusal of aforesaid
Section, the payment of interest in an
instrument does not operate to make it
chargeable with higher duty. The duty
will only be chargeable on principal sum
and not to be based on the principal sum
plus interest. In other words, it specifically
prohibits for charging stamp duty on
interest mentioned in the instrument. But in
the present case, the respondent authorities
have chosen in their wisdom to proceed for
charging deficit of stamp duty on the
interest as mentioned in the lease deed,
which were required to be paid in 20 equal
instalments.
508 INDIAN LAW REPORTS ALLAHABAD SERIES
15. The issue in hand has already
been decided by Patna High Court in the
case of Atma Ram Shah Vs. The Bihar
State Housing Board and others, 1992
SCC Online Pat 13. The relevant part of
the judgement is quoted hereunder:-

 "Originally in the writ petition
the petitioner had prayed for a direction on
the respondents to transfer House No. M/2
(double storied) under the Middle Income
Group Housing Scheme situated at Argora
Housing Colony, Ranchi, in the name of the
petitioner by executing proper instrument.
During the pendency of this application,
the respondents issued Annexure 12 by
which the petitioner was informed that as
he has paid a total sum of Rs. 60,357/-
which includes principal and interest, he
should send to the Board typed copy of the
sale deed on the stamp paper by valuing
the same at Rs. 60,357/-. By Annexure 13,
Annexure 12 was referred to and a request
was made to the petitioner to send the sale
deed drawn on stamp paper a draft of
which was sent by Annexure 13 which has
been marked as Annexure 14 to the writ
petition. In view of this development, the
petitioner
filed
an
application
for
amendment of the writ petition for
challenging that part of Annexures 12, 13
and 14 by which the petitioner was
requested to value the sale deed at
Rs.60,357/- and put stamp duty on the
same.

 2. The question which arises in
this case is what should be the value of the
sale deed to be executed by the respondents
in favour of the petitioner with regard to
the house in question.

 3. The petitioner has filed a copy
of the agreement as contained in Annexure
2 to the writ petition entered into by and
between the parties on 15th February, 1967
relating to the house in question. It was
agreed between the parties that the total
sale price of the house would be Rs.
34,500/-. Out of this, the petitioner had
already paid Rs. 14,500/- and balance
amount of Rs. 20,000/- would be payable
by him with interest in 282 monthly
instalments.

 4. It is thus clear from Annexure
2 that the parties agreed that the value of
the house is Rs. 34,500/- notwithstanding
the fact that balance of the sale price
would be paid by the petitioner with
interest in 282 monthly instalments. The
parties never agreed that the interest
should also be added in the sale price of
the house in question. That being the
position, I am of the opinion that the value
of the sale deed to be executed by the
respondents in favour of the petitioner with
regard to this house in question will be Rs.
34,500/-.

 5. The petitioner will draw a sale
deed on the requisite stamp paper,draft of
which is Annexure 14 to the writ petition.
The respondents-Board shall execute and
register the sale deed within thirty days
from the date of receipt of the sale deed
drawn on the requisite stamp paper from
the petitioner.

 6. The application is disposed of
with
the
aforesaid
observation
and
direction."

16. The aforesaid judgement was
challenged by the Bihar State Housing
Board and others before the Apex Court in
Civil Appeal No. 1713 of 1993, (Bihar
State Housing Board and others Vs.
Atma
Ram
Shah),
(reported
in
Manupatra
citation
4 All. M/S SDS Infracon Pvt. Ltd. & Anr. Vs. State of U.P. & Ors.
509
Manu/SC/2185/1995)
which
was
dismissed vide order dated 6.8.1995 passed
by the Bench of Hon'ble Mr. Justice M.M.
Punchhi and Hon'ble Mr. Justice J.K.
Venkataswami. The relevant part of the
judgement is quoted hereunder:-

 "Mr. M.M. Punchhi, J. - The
Appellant Bihar State Housing Board and
its officers-required of the Respondent to
pay a figure of stamp duty chargeable not
only on the original price of Rs. 34,500/- as
fixed but also on the interest paid from time
to
time
on
deferred
payment
of
installments. Its attempt was scuttled by a
Division Bench of the Patna High Court,
forbidding
it
to
charge
stamp-duty
relatable to the interest but only to charge
stamp-duty on the sale price of Rs. 34,500/-
.

 2. The main obligation incurred
by the Respondent subject is embodied in
paragraph 2 of the deed executed before
hand. It mentions that the total sale price of
the house was Rs. 34,500/- the possession
of the house having already been delivered
to the Respondent. It was admitted that the
Respondents had paid a sum of Rs. 14,500/-
by that time and the balance of Rs. 20,000/-
would be treated as loan amount in his
hands, payable by him with interest in as
many as 282 monthly instalments in the
manner stipulated. Steps and action were
envisaged in the event of failure to make
timely payments with which we are not
concerned for the present. All what needs
emphasis is that a fiction apparently had
been created, whereby the price, which
was/otherwise payable had been left with
the purchaser as a loan which would fetch
interest at the rates stipulated. section 23 of
the Indian Stamp Act, 1899 specifically
states that where interest is expressly made
payable by the terms of an instrument, such
instrument shall not be chargeable with
duty higher than that with which it would
have been chargeable had no mention of
interest been made therein. The law
envisaged
the
consideration
for
an
instrument and the interest accruing
thereon in a given situation to be treated
separately Section 24 of the Act provides
the method as to how stamp duty is
chargeable in consideration of debt or
subject to future payment, etc. The
provision as pressed by learned Counsel
for
the
Appellant
would
have
no
applicability to the present set of facts.
Interest chargeable on loan cannot be put
at par with encumbrances; it remaining a
liability though. Thus, in our view, the High
Court was right in Intervening In the
matter and forbidding the Appellant to
charge
stamp
duty
beyond
the
consideration of Rs. 34,500/- and not on
the sum total of interest paid by the
transferee by adding it to the sale
consideration.

 3. We therefore find no merit in
this appeal and the same is dismissed.
There shall be no costs, there being no
opposition."

17. The record shows that the
proceedings have been initiated on the
premise of deficit of stamp duty on the
interest paid by the petitioner. Section 23 of
the Stamp Act specifically prohibits for
charging stamp duty on payment of
interest.

18. It is not in dispute that the
petitioner has paid stamp duty on amount
of actual premium on which the land has
been allotted. The deficit of stamp duty by
making reference is proposed to be charged
on the interest paid in 20 equal instalments.
Though Section 23 envisaged that if the
510 INDIAN LAW REPORTS ALLAHABAD SERIES
instrument
categorically
provides
that
interest needs to be paid on actual amount,
the stamp duty for that instrument would
not be more than it would have been if
interest was not at all mentioned therein.
The payment of interest on the instrument
does not empower the authorities for
charging higher stamp duty on the
instrument. If the interest is paid on and
above the amount payable by the purchaser,
the same can be considered in accordance
with law but higher rate of stamp duty
cannot be charged as contemplated under
Section 23 of the Indian Stamp Act.

19. Further Hon'ble the Apex
Court in the case of Bihar State Housing
Board (supra) had an occasion to
consider the issue which is similar to the
issue
in
hand
and
after
detailed
discussion, Hon'ble the Apex Court has
held that the stamp duty cannot be
charged on the amount of interest paid
under the Indian Stamp Act.

 20. Once Section 23 of the
Indian Stamp Act prohibits for charging
higher stamp duty on such instrument
where interest is expressly made payable as
well as the law is very clear on this subject
as held by Hon'ble the Apex Court in the
case of Bihar State Housing Board
(supra) , the proceedings initiated against
the petitioner by making impugned
reference for charging deficit of stamp
duty on the basis of interest paid by the
petitioner, is not justified.

21.
In
view
of
aforesaid
discussion as well as law laid down by
Hon'ble the Apex Court, the impugned
reference dated 18.10.2012 in Stamp Suit
No. 119 /2012-13 cannot be justified in
the eyes of law and same is hereby
quashed.
22. As the impugned reference
itself
is
quashed,
all
consequential
proceedings as well as the impugned
orders dated 30.5.2018, 21.7.2018 and
recovery citation dated 28.8.2018 are also
hereby quashed.

23. Accordingly, both the writ
petitions are allowed.

24. The authority concerned is
directed to refund any amount deposited
by the petitioner along with interest @
4% per annum from the date of its deposit
till the date of refund, within a period of
two months from the date of production
of a certified copy of this order.

----------
(2025) 4 ILRA 510
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 01.04.2025

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA,
J.

Writ C No. 35050 of 2019

Sunita
Nishad
&
Anr.
...Petitioner
Versus

Debt Recovery Appellate Tribunal & Ors.
 ..Respondents

Counsel for the Petitioner:
Sushil Kumar, Abhiuday Pratap Singh,
Amrendra Nath Tripathi, Meenakshi Singh
Parihar, Rakesh Chandra Tewari

Counsel for the Respondents:
Rakesh Pal, PC Chauhan, Prashant K.
Srivastava, Ramesh Chandra, S.C. Tiwari,
Shailendra Singh Rajawat, Vidya Kant
Sharma