# Vinayendra Nath Upadhyay v. State of U.P. and others

- **Citation:** (2011) 1 ILRA 239
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2011-02-11
- **Case number:** Civil Misc. Writ Petition No.51979 of 2005
- **Bench:** F. I. Rebello, C.J. V. K. Shukla, A.P. Sahi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vinayendra-nath-upadhyay-v-state-of-u-p-and-others-41852
- **Pages:** 8

## Headnote

Act 1972-Section 39 (1) read with Indian
Stamp
Act
1899-Section
2(16)-
Registration of instrument of leaseregarding realisation of toll tax from
Shashtri and Chandra Shekhar Bridgewhether
comes
within
preview
of
immovable Property?-held-"Yes" case of
Bilal Ahmad Shervani-not laid down
correct law-overruled.

Held: Para 32 and33

For the reasons aforesaid, we are of the
considered view that the instrument
which
has
been
registered
is
an
instrument of lease which amounts to an
instrument
relating
to
immoveable
property with its extended meaning as
contained under Section 2(16)(c) of the
Indian Stamp Act, 1899 and therefore
we would answer questions No. 1 and 2
in the affirmative in favour of the State.

Accordingly, the decision in the case of
M/s Bilal Ahmad Sherwani does not lay
down the law correctly and stands
overruled. Question No. 3 therefore
stands answered accordingly.
Case law discussed:
AIR 1992 All. 181; AIR (1992) Allahabad 181

## Text

1 All] Vinayendra Nath Upadhyay V. State of U.P. and others
239
Vs. Palitana Sugar Mills (Pvt.) Ltd. & Ors.,
reported in 2003 (2) SCC 111, has held that
it is well settled that a little difference in facts
or additional facts may make a lot of
difference in the precedential value of a
decision. The said judgment has been
followed in the recent judgment of the Apex
Court in the case of Dr. Rajbir Singh Dalal
vs. Chaudhari Devi Lal University, Sirsa &
Anr. Reported in AIR 2008 SCW 5817.

12. In view of the aforesaid, writ
petition is dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.02.2011

BEFORE
THE HON'BLE F. I. REBELLO, C.J.
THE HON'BLE V. K. SHUKLA, J.
THE HON'BLE A.P. SAHI, J.

Civil Misc. Writ Petition No.51979 of 2005

Vinayendra Nath Upadhyay ...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri S.S. Pandey
Sri A.K. Tripathi
Sri Y.D. Dwivedi
Sri Navin Sinha

Counsel for the Respondent:
Sri R.C. Singh
Sri M.C. Chaturvedi
C.S.C.

U.P. Urban Planning and Developmenty
Act 1972-Section 39 (1) read with Indian
Stamp
Act
1899-Section
2(16)-
Registration of instrument of leaseregarding realisation of toll tax from
Shashtri and Chandra Shekhar Bridgewhether
comes
within
preview
of
immovable Property?-held-"Yes" case of
Bilal Ahmad Shervani-not laid down
correct law-overruled.

Held: Para 32 and33

For the reasons aforesaid, we are of the
considered view that the instrument
which
has
been
registered
is
an
instrument of lease which amounts to an
instrument
relating
to
immoveable
property with its extended meaning as
contained under Section 2(16)(c) of the
Indian Stamp Act, 1899 and therefore
we would answer questions No. 1 and 2
in the affirmative in favour of the State.

Accordingly, the decision in the case of
M/s Bilal Ahmad Sherwani does not lay
down the law correctly and stands
overruled. Question No. 3 therefore
stands answered accordingly.
Case law discussed:
AIR 1992 All. 181; AIR (1992) Allahabad 181

(Delivered by Hon'ble F. I. Rebello, C.J.)

1. This reference raises issues
involving the power of the State to impose
and realise Additional Stamp Duty on an
instrument of lease executed for a contract
to realise toll in respect of two bridges in the
district of Allahabad over the river Ganges,
namely Lal Bahadur Shastri Bridge and
Chandra
Shekhar
Azad
Bridge.
The
imposition of this Additional Stamp Duty is
under the provisions of Section 39 (1) of the
U.P. Urban Planning and Development Act,
1972 read with the Indian Stamp Act 1899.

2. The petitioners in all the writ
petitions have assailed the orders of the
Addl. Collector (Finance & Revenue),
Allahabad, under Section 31 of the 1899
Act as also the revisional orders passed by
the Chief Controlling Revenue Authority
under Section 56 (2) of the Act, upholding
the said imposition.
240 INDIAN LAW REPORTS ALLAHABAD SERIES [2011

3. A learned single Judge of this
Court, while proceeding to hear the writ
petitions, took notice of a Division Bench
judgment of this Court relied upon by the
petitioners in the case of M/s Bilal Ahmad
Sherwani and Kishori Lal Vs. State of U.P.
and others, AIR 1992 All. 181, and upon a
request made by the learned Standing
Counsel for reconsideration of the said
judgment, came to the conclusion that the
Division Bench appears to have not been
apprised of the issue whether a toll is a
benefit arising out of land and, therefore,
immovable property. The learned single
Judge was of the opinion that the contention
advanced by the learned Standing Counsel
requires a consideration in view of the
observations made in the referring order
dated 7.2.2006 and accordingly a request
was made to Hon'ble the Chief Justice for
constituting a larger Bench as the learned
single Judge found himself to be bound by
the decision of the Division Bench
aforesaid.

4. The matter was placed before
Hon'ble the Chief Justice, who vide order
dated 31.3.2006, constituted a larger Bench
of three Hon'ble Judges presided over by
Hon'ble the Chief Justice to hear the matter.
Accordingly, the reference has been placed
before us for answering the doubt expressed
by the learned single Judge and for an
authoritative pronouncement on the issues
raised.

5. Before embarking upon the matter
any further, we may clarify that even
though the questions to be answered have
not been formally framed by the learned
single Judge, yet in order to analyse the
issue, we propose to frame the questions
and answer them accordingly. Upon
analysis of the pleadings and the gist of the
order of reference dated 7.2.2006 of the
learned
single
Judge,
the
following
questions, to our mind, arise that need to be
answered:-

(1) Whether an instrument of lease
executed for the right to collect toll on a
bridge executed would amount to an
instrument
conveying
or
transferring
immovable property subject to imposition
of Additional Stamp Duty as defined under
Section 39 of the U.P. Urban Planning &
Development Act, 1973?

(2) Whether the words "immovable
property" incorporated in Section 39 of the
U.P. Urban Planning and Development Act,
1973
carry
the
same
meaning
and
connotation as assigned to them in Section 2
(16) of the Indian Stamp Act, 1899 while
defining the term "lease" thereunder and
consequently includes within its fold any
instrument by which tolls of any description
are let?

(3) Whether the decision of the
Division Bench in the case of M/s Bilal
Ahmad Sherwani and Kishori Lal Vs. State
of U.P. and others, AIR 1992 All. 181, does
not lay down the law correctly and requires
any re-consideration as referred to by the
learned single Judge?

6. Learned counsels Sri Navin Sinha
Senior Advocate on behalf of the petitioners
assisted by Sri R.C. Singh and Sri M.C.
Chaturvedi learned Chief Standing Counsel
for the State have been heard. They have
advanced their submissions, the petitioners
contending that no such additional Stamp
Duty is leviable and the respondent State
supporting the said levy. There are however
certain undisputed areas which need be
mentioned at the very outset.
1 All] Vinayendra Nath Upadhyay V. State of U.P. and others
241

7. The covenant, on which this
additional duty is sought to be levied, is a
lease deed recording an agreement relating
to the right of the petitioners to collect toll
over the bridges in question. The instrument
has been registered as such. The petitioners
have paid Stamp Duty that was charged on
the said instrument including the additional
Stamp Duty under dispute.

8. The Stamp Duty about which there
is no dispute between the parties is that
which has been charged for registering the
instrument under Schedule 1-B, Article -
35(b) read with Explanation-4 and Article
23 of the Indian Stamp Act, 1899. Thus
there is absolutely no quarrel over the
imposition of Stamp Duty on the instrument
treating it to be a transaction of lease as
defined under Section 2(16)(c) of the 1899,
Act. The petitioners do not dispute the
imposition of Stamp Duty to the aforesaid
extent.

9. The doubt expressed by the learned
Single Judge in the reference order arose
when the petitioners relying on the
judgment of a Division Bench of this Court
in the case of M/s Bilal Ahamd Sherwani
and Kishori Lal Vs. State of U.P. and others
[AIR (1992) Allahabad 181) contended that
the imposition of 2% additional Stamp Duty
under Section 39 of the U.P. Urban
Planning and Development Act, 1973 was
illegal and the State had no authority to levy
the same. The learned Single Judge felt
bound by the judgment of the Division
Bench but on first principles expressed his
doubt about the correctness of the said
Division Bench and accordingly referred the
matter to be resolved by a Larger Bench.

10. The petitioners contend that the
definition of the word 'lease' as contained in
Section 2(16) of the Indian Stamp Act, 1899
does not include within its fold every
immoveable property by way of fiction nor
does it include every immoveable property
as understood generally in terms of the
Transfer of Property Act and also the U.P.
Urban Planning and Development Act,
1973. They contend that the word
'immoveable property' as contained in
Section 39 of the U.P. Urban Planning and
Development Act, 1973 is not inclusive of
the definition of lease as contained in the
Stamp Act, 1899 inasmuch as the word
'includes' as contained in Section 2(16) of
the 1899 Act only gives an extended
meaning to the word lease, and not to the
words immoveable property. It is submitted
on their behalf that the word 'lease' is not
synonymous with the word 'immoveable
property' as contained in the 1973 Act and,
therefore, the additional Stamp Duty as
sought to be levied under the 1973 Act
would not apply to a lease which has been
incorporated through an extended meaning
in Section 2(16) of the Stamp Act, 1899.

11. Sri Sinha learned counsel for the
petitioners has urged that the first part of the
definition of the term lease as used in
Section 2(16) of the 1899 Act is not a lease
defining collection of toll to be immoveable
property. It includes the instrument of
collection of toll as a lease only under a
fiction created thereafter and is by itself not
an
instrument
connoting
transfer
of
immoveable property. He therefore, submits
that this definition does not allow the
provisions of Section 39 of the 1973 Act to
be invoked for such instruments in order to
levy additional Stamp Duty @ 2%.

12. Sri Sinha has relied on judgements
to contend that even otherwise the right to
collect toll to the petitioners is only creating
an agency in favour of the petitioners to
realise the toll on behalf of the State
242 INDIAN LAW REPORTS ALLAHABAD SERIES [2011
Government and nothing more. He submits
that it is not a profit arising out of land so as
to include it within the meaning of
immoveable property and the instrument so
executed in favour of the petitioners would
not amount to any instrument of transfer of
immoveable property.

13. The contention advanced is that it
is the right of the public at large to passover
the bridge and in lieu thereof the
Government
is
collecting
toll.
The
petitioners are mere agents to collect the
said toll on behalf of the Government and
are not earning any profit out of land. Even
if the bridge is embedded in the earth, the
same would not be included within the term
immoveable property. He submits that the
judgement in the case of M/s Bilal Ahmad
Sherwani (supra) lays down the law
correctly and therefore, the reference made
by the learned Single Judge deserves to be
rejected.

14. Sri M.C. Chaturvedi learned Chief
Standing Counsel disputing the aforesaid
proposition submits that the word 'means' as
used in Section 2(16) of the Stamp Act,
1899
includes
all
transactions
of
immoveable property and the extended
meaning of the said terminology has been
explained so as to include other instruments
as defined therein. He therefore submits that
the word 'includes' gives an extended
meaning to the terminology of immoveable
property and the same would equally apply
while defining immoveable property as
contained in Section 39 of the 1973 Act.

15. He submits that the splitting of
Section 2(16) of the 1899 Act, as attempted
by the petitioners, on the strength of the
Division Bench judgment in the case of M/s
Bilal Ahmad Sherwani (supra) is misplaced,
inasmuch as, the Division Bench judgment
has incorrectly restricted the inclusive
definition of immoveable property, and
even otherwise upon a perusal of the
definition of the word 'lease' as contained in
Section 105 of the Transfer of Property Act,
the word 'immoveable property' as used in
Section 2(6) of the Registration Act, 1908
and the meaning assigned to the words
immoveable property in Section 3(26) of
the General Clauses Act, 1897, leave no
room for doubt that the extended meaning
of the word immoveable property as
contained in the Stamp Act, 1899 would be
the same as understood in Section 39 of the
1973 Act.

16. His contention is that the
distinction sought to be made by way of
interpretation on behalf of the petitioners by
taking aid of the decision in M/s Bilal
Ahamd Sherwani's case is misplaced which
proceeds on an incorrect assumption that
admittedly there was no transfer of
immoveable property under the instrument.
He contends that by virtue of the extended
meaning, there is no requirement of actual
transfer
of
immoveable
property
as
understood generally and by fiction the
additional duty is leviable on such
instruments. Sri Chaturvedi has also relied
on certain decisions in support of his
argument.

17. In order to appreciate the rival
submissions and the doubt expressed by the
learned
Single
Judge
it
would
be
appropriate to begin with quoting Section
39 (1) of the 1973 Act which is essential for
the understanding of the controversy.

"Section 39(1). Additional Stamp duty
on certain transfer of property.-

(1) The duty imposed by the Indian
Stamp Act, 1899, on any deed of transfer of
1 All] Vinayendra Nath Upadhyay V. State of U.P. and others
243
immoveable property shall, in the case of
an immoveable property situated within a
development area, be increased by two per
cent on the amount or value of the
consideration with reference to which the
duty is calculated under the said Act:

Provided that the State Government
may, by notification in the Gazette,
enhance, the aforementioned percentage of
the increase in Stamp duty up to five."

18. The aforesaid provision therefore
categorically provides that the duty imposed
under the Indian Stamp Act on any deed of
transfer of immoveable property shall stand
increased by 2% in the manner provided
therein. The aforesaid definition therefore
requires that any deed of transfer of
immoveable property shall be subjected to
the additional duty imposed payable at the
time of registration.

19. The word 'immoveable property'
has not been defined under the Indian
Stamp Act. The same is the position under
the U.P. Urban Planning and Development
Act, 1973. The instrument in relation
whereto this dispute has arisen, defines the
agreement as a lease (Patta). The term lease
has been defined under the Indian Stamp
Act to mean a lease of immoveable property
and to also include certain other instruments
as defined therein. Section 2(16) of the 1899
Act is quoted below:

Section 2(16) "Lease". - "Lease
means a lease of immoveable property, and
also includes:

(a) a patta;

(b) a kabuliyat or other undertaking in
writing, not being a counterpart of a lease,
to cultivate, occupy or pay or deliver rent
for immoveable property;

(c) any instrument by which tolls of
any description are let;

(d) any writing on an application for
lease intended to signify that the application
is granted;

[(e) any instrument by which mining
lease is granted in respect of minor
minerals as defied in clause (e) of Section 3
of the Mines and Minerals (Regulation and
Development) Act, 1957;"]

20. The definition leaves no room for
doubt that any instrument by which tolls of
any description are let, as presently
involved is also a lease. The argument of
the petitioners have to be understood in the
light of the above definition as they contend
that the instrument falls within the inclusive
definition of the word 'lease' which is an
extended meaning of the word lease that
does not amount to immoveable property.

21. The term immoveable property
used in Section 39 of the 1973 Act does not
include within itself expressly an instrument
by which tolls of any description are let. It
however, indicates that it applies to any
instrument of immoveable property. The
question is as to whether such instruments
which have been included by virtue of an
extended definition under the Stamp Act
would also amount to immoveable property
as understood in Section 39 of the 1973 Act.
To put it differently, would an instrument of
a right to collect toll amount to a deed of
transfer of immoveable property for the
purposes of levying additional duty under
the 1973 Act.
244 INDIAN LAW REPORTS ALLAHABAD SERIES [2011

22. The definition under Section 39 of
the 1973 Act contains the words "any deed
of transfer of immoveable property". Every
lease of immoveable property would
therefore, also amount to a transaction as
understood under the Indian Stamp Act,
1899. The purpose and intent of Section 39
of the 1973 Act to our mind is to read the
terminology of immoveable property to
include lease in order to levy Stamp Duty
under the Stamp Act 1899. The additional
duty is being imposed on the instruments
presented for registration even as a lease as
defined under Section 2(16) of the Act. The
petitioners also do not dispute the levy of
Stamp Duty on the instrument as a lease. In
such a situation, the instrument which has
been presented to be registered as a lease
means an instrument of a transaction
relating to immoveable property by fiction
of the provisions of Section 2(16)(c) of the
1899 Act. The instrument by itself may not
amount to a transfer of immoveable
property as understood under the Transfer
of Property Act or as suggested by the State,
yet by virtue of the fiction created in
relation to instruments as included under the
extended definition, the additional duty as
leviable under Section 39 would also be
applicable as involved in the present
context.

23. The Division Bench in the case of
Bilal Ahmad (supra) in our opinion,
proceeded on an assumption of admittedly
treating the instrument not to be a transfer
of immoveable property. This in our view,
was an erroneous approach by splitting the
definition clause of the term lease in two
parts. The word lease as defined under the
Stamp Act 1899 cannot be segregated from
the meaning of the word immoveable
property so as to exclude the instruments
which have been included by way of fiction.

24. It is settled proposition of law that
if a statute is sought to be applied by
creating a fiction, then such a fiction has to
be given full effect to by the Courts. Any
attempt to exclude would therefore render
the very purpose of a fiction redundant. The
legislature will be presumed to be aware of
the meaning that it sought to assign to the
terminology of immoveable property while
enacting Section 39 of the 1973 Act to give
it a meaning so as to levy duty under the
Indian
Stamp
Act
1899.
The
term
immoveable property therefore utilized in
the 1973 Act is clearly relatable to all the
instruments as defined in relation to
immoveable
property
including
the
definition of the word lease as contained
under Section 2(16) of the 1899 Act. Any
departure from the aforesaid meaning
would therefore do violation to the statute
and we would accordingly approve of the
view expressed by the learned Single Judge
while proceeding to make the reference.

25. The law laid down by the Division
Bench in the case of Bilal Ahmad (supra)
does not define the aforesaid provisions
correctly and the same deserves to be
overruled.

26. In our opinion, when the
terminology used in Section 39 of the 1973
Act directly requires it to be understood in
relation to the imposition of duty under the
Stamp Act, it is not necessary for this Court
to borrow the meaning of the word
immoveable property as utilized in any
other Act and contended on behalf of the
State. The Stamp Duty is leviable under the
Stamp Act and therefore the meaning
assigned to the words contained therein
have to be understood for the purpose of
additional Stamp Duty under Section 39 of
the 1973 Act.
1 All] Vinayendra Nath Upadhyay V. State of U.P. and others
245

27. It is not necessary to borrow any
meaning of immoveable property from any
other Act for the reason that the levy of
Stamp Duty is an exercise under the fiscal
powers of the State. The pecuniary liability
of Stamp Duty is therefore in the nature of
compulsory exaction which has to be
construed strictly within the parameters of
the meaning assigned in the Act itself. In
our opinion, there is no ambiguity as
explained above nor is it necessary to take
aid of the provisions contained in any other
Act.

28. The contention raised on behalf of
the petitioners is that a grant of lease to
collect toll cannot be equated with the grant
of mining lease and fisheries rights and
collection of market dues, is founded on the
premise that the provisions of Section 3 (6)
of the General Clauses Act read with the
provisions of Sections 3, 4, 5, 105 and 107
of the Transfer of Property Act indicate that
the benefits arising out of land is a
necessary ingredient in order to bring it
within
the
definition
of
immovable
property.

29. This, in our opinion, would be
attempting to read into the definition of
immovable property which is not the
intendment of the definition contained in the
Stamp Act, 1899 as the term lease defined
therein gives an extended meaning so as to
include an instrument relating to letting of
toll as indicated above. We do not find it
necessary to import the meaning of the
words 'immovable property' by deploying
the definition of the words 'immovable
property' as suggested on behalf of the
petitioners.

30. The decisions which have been
relied upon for the said purpose, are
therefore clearly distinguishable and this
aspect of the matter in Bilal Ahmad's case,
in our opinion, has not been appreciated.
The entire purpose of imposing additional
stamp duty under Section 39 of the 1973
Act is to generate revenue through levy of a
stamp duty on instruments which in our
opinion would also include an instrument
registered for letting of toll as defined under
the Stamp Act, 1899. When the rights of the
parties are governed by a written document,
it is essential to study and to follow the
terms of such document, just as it is
necessary, when a Court is administering
the sections of a Code, that it should study
the exact language of the section before
troubling itself about decided cases or
general considerations.

31. If by virtue of the said fiction, the
duty is leviable then the issue relating to
profits arising out of land may not be
relevant inasmuch as the collection of toll
through an agent is not a realisation of profit
arising out of land. It is a distinct
contractual right to collect a fee from the
public at large on behalf of the Government.
Such an Agent does not exercise any
control over the passage of public at large
over the bridge. That right continues to be
regulated by the State Government and not
by the Agent appointed by the State
Government. The petitioners only collect
toll from those who passover the bridge in
the manner and to the extent as required by
the State Government under the terms of the
covenant which has been registered and on
which Stamp Duty has been paid. There is
no right created in favour of the petitioners
to receive profit out of land. It is only the
profits or losses that accrue from collection
of toll that is the subject matter of the
instrument.

32. For the reasons aforesaid, we are
of the considered view that the instrument
246 INDIAN LAW REPORTS ALLAHABAD SERIES [2011
which has been registered is an instrument
of lease which amounts to an instrument
relating to immoveable property with its
extended meaning as contained under
Section 2(16)(c) of the Indian Stamp Act,
1899 and therefore we would answer
questions No. 1 and 2 in the affirmative in
favour of the State.

33. Accordingly, the decision in the
case of M/s Bilal Ahmad Sherwani does not
lay down the law correctly and stands
overruled. Question No. 3 therefore stands
answered accordingly.

34. The reference having been
answered, let the papers be placed before
the concerned Bench for disposal of the writ
petitions.
---------