1. This is a reference made by the Collector of Ahmedabad invoking our revisional powers under Section 61 of the Indian Stamp Act with reference to the decision of the Joint First Class Subordinate Judge, Ahmedabad, before whom two documents, Exs. 416 and 417, were produced. The learned Subordinate Judge was of opinion with regard to Ex. 416 that it was an agreement, and required a stamp of eight annas plus Rs. 5 as penalty. The Collector of Ahmedabad is of opinion that the document ia an agreement as to the first part and a release as to the second part, and therefore required a stamp of eight annas with regard to the first part and Rs. 5 on the second part, Rs. 10-8-0 in all plus penalty of Rs. 105. This position is not contested on behalf of the defendants. We, therefore, accept the view of the Collector, and hold that the document, Ex. 416, is in part an agreement, and in part a release, and requires a stamp of eight annas for the first part and Rs. 5 on the second part.
2. With regard to the second document, Ex. 417, the Joint First Class Subordinate Judge was of opinion that it was an agreement. The Collector of Ahmedabad is of opinion that an agreement to lease is a lease as defined in Clause (b) of Section 2(16) of the Indian Stamp Act, that the amount of Rs. 2 lakhs constituted a premium for the lease, and the duty leviable was Rs. 2,000 under Article 35(c) of Schedule I of the Indian Stamp Act. The document, Ex. 417, was passed in favour of Maneklal by Motilal Govindlal with reference to 4,260 square yards which belonged to one Bai Dhanlakshmi. The document was passed on the basis that Maneklal would secure a registered lease from Bai Dhanlakshmi, and after the lease was secured, Motilal was to advance a sum of about Rs. 2 lakhs for building shops on the land, and after the construction of the shops Motilal agreed to take the shops on rent for a period of fifteen years. The rent was to commence after the shops became ready, and were delivered into the possession of Motilal. Out of the amount of two lakhs, Rs. 11,001 were paid in cash on the day of the execution of the document, and the balance out of Rs. 25,000 was to be paid within three or four days. The remaining amount of Rs. 1,75,000 was to be paid at the rate of Rs. 20,000 per month when the building would be under construction. The amount of Rs. 2 lakhs was to be recouped by Motilal by taking the same out of the rents. The document was passed on January 15, 1920. A registered lease was passed in favour of Maneklal by Dhanlakshmi on January 22, 1920, a week after this agreement. It is urged by the learned Goverment Pleader that the document Ex. 417 is an agreement of lease, and falls within the definition of 'lease' under Section 2(16)(b) of the Indian Stamp Act as a kabulayat or other undertaking in writing to occupy or deliver rent for immovable property, and reliance is placed on the case in Reference Under Stamp Act, Section I.L.R (1894) Mad. 280 in support of the contention that an agreement of lease requires a stamp even though it was contemplated by the parties that a regular deed was to be effected afterwards, The proviso to Article 35 of the Indian Stamp Act lays down that 'in any case when an agreement to lease is stamped with the ad valorem stamp required for a lease, and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed one rupee.' It is, therefore, contended that every agreement to lease must be stamped with an ad valorem stamp, and when a subsequent lease contemplated by the parties is actually effected, a stamp of one rupee would suffice. The question, therefore, in this reference is whether the document, Ex. 417, is an agreement of lease within the meaning of Section 2(16) of the Indian stamp Act. 'Lease' is also defined in the Indian Registration Act, Section 2(7), as including 'a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease'. Both under the Indian Stamp Act and the Indian Registration Act an agreement to lease is included in the word 'lease,' Though the Indian Stamp Act and the Indian Registration Act are not strictly in pari materia, it has been held in Chandrashankar v. Bai Magan I.L.R (1914) Bom. 576: 16 Bom. L.R. 236 that the two Acts may be read together, and that the definition in the Indian Stamp Act with regard to a composition deed might be accepted in considering the question under the Indian Registration Act. According to the decision of the Privy Council in Hemanta Kumari Debi v. Midnapur Zemindari Company an agreement to lease must be a present demise. It must be a document which effects an actual demise or operates as a lease in presenti, and not an agreement that in certain contingencies a lease will be granted. So far as the Indian Registration Act is concerned, there is consensus of opinion in the different High Courts as reflected in the decisions in Secretary of State v. Sir Mahomed Yusuf : (1919)21BOMLR1130 , Panchanan Base v. Chandi Charan Misra I.L.R (1910) Cal. 808 and Swaminatha Mudaliar v. Ramaswami Mudaliar I.L.R (1920) Mad. 399, that an agreement to lease must be an actual demise. If this view accepted with regard to the Indian Registration Act can be applied in considering the question under the Indian Stamp Act, it must follow that an agreement to lease must amount to an actual demise and not an agreement that in certain contingencies a lease win be granted. In the present document there is no actual demise, but there is an agreement to lease the land under certain contingencies which may or may not happen. The first contingency was that Maneklal should secure a registered lease from Bai Dhanlakshmi with regard to 4,260 square yards. The second contingency was that Motilal should advance from time to time amounts to the extent of Rs. 2 lakhs to Maneklal. The third contingency, which though not contemplated in the document, must in the nature of things be inferred, was that the Municipality should give permission to construct the market which was proposed to be erected on the 4,260 square yards. If all these contingencies happened, then Motilal was to pay Rs. 455 per shop as rent for the shops that would be erected on the land, and the rent was to commence after the shops became ready and were delivered into the possession of Motilal. The number of shops to be built was not fixed under the agreement nor was the time fixed within which the shops were to be erected on the land, The document, Rs. 417, is an agreement by Motilal to advance Rs. 2 lakhs in order to enable Maneklal, after securing a lease of the plot from Bai Dhanlakshmi, to build shops on the land, and there is a subsidiary agreement that if the shops were built and possession of the shops was delivered to Motilal, he was to pay Rs. 455 per shop per month as rent, The document is, therefore, a simple agreement and not an agreement to lease.
3. Assuming that the document is an agreement to lease, the question would next arise whether the lease which includes agreement to lease falls under Article 35(c) of the Indian Stamp Act 'where the lease is granted for a fine or premium or for money advanced in addition to rent reserved.' It is contended on behalf of the Collector that the Rs. 2 lakhs mentioned in the agreement is either a premium or money advanced in addition to rent reserved. We are of opinion that the amount of Rs. 2 lakhs was only a loan which was agreed to be paid by Motilal to Maneklal, and did not form part of the consideration of the lease. The amount was to be repaid out of the rents, and Motilal was to the extent of the advances a creditor of Maneklal, and was entitled to be recouped out of the rents which would become payable after the construction of the shops. The amount of Rs. 2 lakhs does not, in my opinion, constitute either a fine or premium or money advanced in addition to the rent. Article 35(6) also 1928 does not apply because rent is mentioned as being payable. The question remains whether it is a lease which falls under Clause (a) of Article 35 'where by such lease the rent is fixed and no premium is paid or delivered' and where the lease purports to be for a term in excess of three years. It does not appear that any rent is fixed under this agreement. What is fixed is a scale of rent per shop. The number of shops is not mentioned in the agreement, and the rent for the year for the premises to be let is not fixed, and though the rent is said to commence from the time the possession is handed over to Motilal, there is no certain period from which the rent is to run. We think that for the purpose of effecting an agreement of lease it is necessary that the premises to be let should be in existence. This view is supported by Woodfall on Landlord and Tenant, at p. 158, and Halsbury's Laws of England, Vol. XVIII, p. 369. At the time of the agreement the lessor had no interest in the property to be let. The premises to be let were not in existence. In Reference Under Stamp Act, Section I.L.R (1894) Mad. 280 the lessor had interest in the property agreed to be leased and there was a present demise of existing property. In our opinion the agreement, Exhibit 417, is an agreement to advance Rs. 2 lakhs for building shops, and in the eventuality of Maneklal getting a registered lease from Bai Dhanlakshmi and building shops out of the money advanced by Motilal, there was a further agreement that Motilal was to take the shops in lease for fifteen years after they became ready and were delivered into the possession of Motilal. We think that this document does not amount to an agreement to lease, but falls under a simple agreement, and must be stamped with a stamp of eight annas.
4. We, therefore, under Section 61(2) of the Indian Stamp Act, record a declaration that with regard to Exhibit 416 the stamp duty payable was Rs. 10-3 plus a penalty of Rs. 105, and with regard to Exhibit 417 the stamp duty payable was eight annas and the penalty Rs. 5. We make no order as to costs.
5. I agree. The document in question, Exhibit 417, is passed by Motilal to Maneklal, and after stating that Maneklal has taken on rent from Bai Dhanlakshmi the property in question, the executant Motilal binds himself to take on rent all the shops to be constructed on the said land according to the first plan for period of fifteen years, After reciting the payment of Rs. 25,000 as earnest money, he undertakes to advance Rs. 1,75,000, that is, in all Rs. 2 lakhs for the construction of buildings on this land. Credit for this advance is to be given to him by Maneklal out of the rents. The rents are fixed at Rs. 455 per year for each shop. After the registration of Maneklal's lease Motilal is to execute a fair document in respect of the same as agreed. The first question is whether under Article 35 of Schedule I to the Indian Stamp Act this document constitutes a lease or agreement to lease. The Collector in his letter of reference has given his opinion that the document falls under Article 35(c), that is, where the lease is granted for a fine or premium or for money advanced in addition to rent reserved. It has been contended by the learned Government Pleader that under Section 105 of the Transfer of Property Act the transfer of a right to enjoy immovable property in consideration of a price paid or promised (which price is called the premium) is a lease, and that this advance of Rs. 2 lakhs made or to be made by Motilal constitutes the premium. But as a matter of fact this money advanced by Motilal is not a premium, because it is not a price paid to the lessor, but an advance which was to be repaid out of the rent payable as it accrued due. It is then contended that it is money advanced under Article 35(c). But that clause speaks of money advanced in addition to rent reserved. This is not money advanced in addition to rent reserved. It is as a matter of fact a payment of rent in advance, and it forma part of the rent itself, and is not a separate payment. I am, therefore, of opinion that under no circumstances could this document fall under Article 35(c). Obviously it cannot fall under Article 85(b), which refers to a case where the lease is granted for a fine or premium, or for money advanced and where no rent is reserved. In the present case rent is reserved. It follows, therefore, that the only article under which this document could fall would be Article 35(a), and as the lease purports to be for a term of fifteen years it would fall under Clause (iii) of Article 35(a). There are, however, other considerations which have been put forward which lead me to agree with the view that the document does not conform to the definition of a lease at all. In view of the ruling of the Privy Council in Hemanta Kumari Debi v. Midnapur Zamindari Company that there must be a present interest created in order to satisfy the definition of a lease under the Indian Registration Act (and there is no reason why, the definition in the two statutes being almost entirely the same, the same considerations should not apply here), it will appear that there is no present demise in this case. As a matter of fact the alleged lessor Maneklal did not obtain a lease from the owner Bai Dhanlakshmi until a week later than the execution of the document in question, and, therefore, at the Baker J, date of Ex. 417 he was not in possession of any interest in this ~T land which was capable of being demised by him. I need not refer to the other cases which have already been quoted in the judgment of my learned colleague. Again, this document refers to buildings which have yet to be built. The learned Government Pleader has referred to a distinction between Section 122 and Section 105 of the Transfer of Property Act. Although there is no definition of immovable property in the Transfer of Property Act, he has pointed out that in Section 122, which refers to gifts, the word 'existing' is used, and he argues that, therefore, immovable property dealt within Section 105, which refers to leases, need not be in existence. There does not appear to be any ruling in this country directly on this point, although there are several English cases, but it has been laid down by Lord Halsbury at p. 869 of Vol. XVIII, of his Laws of England, as well as at p. 158 of Woodfall's Landlord and Tenant, 21st edition, that in order to create a lease the existence of the premises to be leased is essential. We find, therefore, that in the present case not only were the premises purporting to be agreed to be leased not in existence, but the ostensible lessor had no interest in the property which was to be leased at the time of the agreement, and in these circumstances I agree that this document does not fulfil the conditions of an agreement to lease. If there could be no lease of the property at that time, the document could not amount to an agreement to lease, for the property was not in existence. I, therefore, concur in the order which has been made.