2.The Lessee will deposit the amount equal to three monthly installment with the Executive Engineer of Construction Division, P.W.D., Haldwani, hereinafter will be called as Executive Engineer and Executive Engineer will keep this amount with him as partial security for fulfilling and compliance of terms and conditions of agreement prescribed in schedule and out of which he can take such amount as rent which becomes due and payable or can deduct such amounts of penalties from that which may be imposed upon lessee and provision of which has been made hereinafter.” A conjoint reading of the auction notice and the lease agreement makes it clear that tenders were invited from the public for grant on lease collection of toll tax for using Haldwani Bye-Pass Road 14 K.M. (Kathgodam) Gaula bridge and highest bid of Rs.22 lakhs given by the respondent was accepted by the competent authority. The monthly amount payable by the respondent was lease money and not a security for due performance of the contract. Such an agreement clearly falls within the ambit of the term “lease” as defined in Section 2(16)(c) read with Article 35(b) of Schedule I-B and not under Article 57 of Schedule I-B, which gets attracted only when a security bond or mortgage deed is executed for due execution of an office or to account for money or other property received by virtue thereof or for due performance of a contract or the due discharge of a liability. Therefore, the demand of stamp duty of Rs.2,20,400/- from the respondent cannot be termed as illegal. In Banney Khan's case, the Special Bench of the Allahabad High Court was called upon to consider whether the lease executed between Municipal Board, Ujhani and the appellant authorising the latter to collect toll from the premises known as “New Sabzimandi” was a lease falling under Section 2(16) of the Act was chargeable under Article 35(b) of Schedule I-B. The Special Bench referred to the definition of lease, the judgments of the Full Bench in Burmah Shell Oil Storage and Distributing Co. Ltd. of India AIR 1933 All 735 and the Andhra Pradesh High Court in Panchayat Samiti v. Smt. Kethavarapu Kanamma AIR 1973 AP 72 and observed: “................A casual reading of the definition of “lease” indicates that any instrument by which tolls of any description are let comes within the definition of this term. What is, therefore, to be seen is whether the document is an instrument by which tolls of any description are let. In our opinion the agreement before us comes clearly within the language quoted above. This is a document by which all lands and buildings known as “New Subzi Mandi” have been made over by the owners thereof to the applicant for a period of one year. He is entitled to realise fee from occupiers thereof at certain rates in consideration of a sum fixed by public auction. This “letting of tolls” and the document is covered by Section 2(16)(c) of the Stamp Act. It is needless to say that the word “toll” used in this sub-section means any sum of money which is taken in respect of some benefit, the benefit being the temporary use of land, that is, fares and market tolls. It includes all payments or taxes made by persons who frequent the market for the sale of any commodity or any thing which by practice or custom is expected to be sold in the market. This document is signed both by the lessor and the lessee. Therefore, it can hardly be doubted that it is an instrument by which collection of tolls is let and is lease within the meaning of Section 2(16) of the Stamp Act and is chargeable with Stamp duty under Article 35(b) Schedule I-B of the U.P. Stamp (Amendment) Act, 1962.............” In Uppalapati Durga Prasad v. Executive Engineer (R&B) (supra), a Division Bench of the Andhra Pradesh High Court considered a similar question in the context of an agreement signed by the parties in the matter of collection of toll. While rejecting the argument of the writ petitioner that he was not liable to pay stamp duty under Article 35(b) read with Section 2(16) of the Act, the Division Bench observed: “On bare reading of the section it becomes clear that all leases with respect to immovable property would be leases in terms of Section 2(16) but in addition to leases of immovable property in other three categories there would also be lease under category (c) in which any instrument by which tolls of any description are let would be a lease for the purpose of Section 2(16). The instrument by which right to collect toll is conveyed has to be treated as lease for the purposes of Stamp Act. Right to collect toll will never in any circumstances involve immovable property. Basically toll is collected for using a road or bridge and as such neither the road nor the bridge is leased out, only the right to collection is leased out and this right of leasing out the collection is 'lease' for the purposes of Stamp Act.............” In our view, the aforementioned judgments of the Allahabad and Andhra Pradesh High Courts represents the correct legal position on the applicability of Article 35(b) of Schedule I-B of the Act. In Tejveer Singh's case, the Division Bench of the Allahabad High Court considered the question whether the amount offered as security for due performance of the contract for construction of drains culvert etc., is chargeable under Article 57 of Schedule I-B. The Division Bench relied upon the judgment of Special Bench in M/s. Hindustan Sugar Mills Limited v. State of U.P. AIR 1972 Allahabad 8 and of this Court in Board of Revenue v. A.M. Ansari (1976) 3 SCC 512 and held that the stamp duty on such agreement is to be paid under Article 57 of Schedule I-B of the Act, as amended by the State of Uttar Pradesh. The judgment in Tejveer Singh's case was followed by the Division Bench of the Uttarakhand High Court in the case of Naresh Agarwal. These two judgments have no bearing on the issue raised in the writ petition filed by the respondent. Therefore, it must be held that the Division Bench of the High Court committed serious error by disposing of the writ petition of the respondent by relying upon the judgments in Tejveer Singh's case and Naresh Agarwal's case, and that too, without even adverting to the lease agreement executed between appellant No.1 and the respondent. In the result, the appeal is allowed, the impugned order is set aside and the writ petition filed by the respondent is dismissed. The appellants shall now be free to recover stamp duty from the respondent in terms of Notice No.775 dated 25.2.2006. Since no one has appeared on behalf of the respondent, the costs are made easy.
........................J. (G.S. SINGHVI) ........................J. (ASOK KUMAR GANGULY)
NEW DELHI, FEBRUARY 17, 2011.