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The Associated Cement Cos. Ltd. Vs. Government of Andhra Pradesh and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberW.P. No. 5572 of 1977
Judge
Reported inAIR1981AP320
ActsIndian Stamp Act, 1899 - Sections 2, 2(10), 2(16), 9 and 9A - Schedule - Article 31(1); Mineral Concession Rules 1960; Transfer of Property Act, 1882 - Sections 105 and 108; Mines and Minerals (Regulation and Development) Act, 1957; Indian Easements Act, 1882 - Sections 52
AppellantThe Associated Cement Cos. Ltd.
RespondentGovernment of Andhra Pradesh and anr.
Appellant AdvocateK. Srinivasa Murthy and ;S.R. James, Advs.
Respondent AdvocateGovt. Pleader for Industries
DispositionPetition partly allowed
Excerpt:
property - payment of stamp duty - sections 2 (16), 2 (10), 9-a, schedule 1-a and article 31 (1) (iv) and (c) of stamp act, 1899 and form k of mineral concession rules, 1960 - matter regarding determination of character of mining lease granted by state government to ascertain stamp duty whether payable or not - mining lease renewed for certain period - provisions in form k fully complied with - section 2 (16) covered such mining lease - held, stamp duty payable as mining lease is 'lease' under section 2 (16) - stamp duty to be calculated on basis of annual dead rent. - - --105. a lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share.....order1. this writ petition raises the question whether a mining lease granted by the state government in form-k prescribed by the mineral concession rules, is a 'lease' as defined by the indian stamp act and requires to be executed on a stamp-paper of the requisite value.2. the relevant circumstances are : the petitioner. associated cement cos.. ltd., mancherial was granted a mining lease for quarrying lime-stone over an area of 1,900 acres in ralli reserve forest area, lakshattipet taluk in adilabad district, under the provisions of the mines and minerals (regulation and development) act, 1957. the original lease was granted in 1956, and was renewed, at the request of the petitioner, under g. o. ms. no. 596, dated 21-5-1977 for a period of 20 years. the petitioner was called upon to pay.....
Judgment:
ORDER

1. This writ petition raises the Question whether a mining lease granted by the State Government in Form-K prescribed by the Mineral Concession Rules, is a 'lease' as defined by the Indian Stamp Act and requires to be executed on a stamp-paper of the requisite value.

2. The relevant circumstances are : the petitioner. Associated Cement Cos.. Ltd., Mancherial was granted a mining lease for quarrying lime-stone over an area of 1,900 Acres in Ralli Reserve Forest area, Lakshattipet Taluk in Adilabad District, under the provisions of the Mines and Minerals (Regulation and Development) Act, 1957. The original lease was granted in 1956, and was renewed, at the request of the petitioner, under G. O. Ms. No. 596, dated 21-5-1977 for a period of 20 years. The petitioner was called upon to pay stamp-duty under Article 31(a)(iv) and Article 31(c) of Schedule 1-A of the Indian Stamp Act. by the District Registrar, in a sum of Rs. 98,525/-. The petitioner made a representation to the Inspector General of Registration and Stamps. The Assistant Inspector-General of Registration & Stamps however, intimated him, according to the petitioner, that it is a 'conveyance', requiring a stamp-duty of Rs. 1,23,425/-. It is these orders of the Asst. Inspector-General which are being supported by the Government of Andhra Pradesh -- which are challenged in this writ petition. The petitioner's contention is that the mining lease executed in Form-K prescribed by the Rules, is not a 'lease' as denned by the Stamp Act. nor is it a 'lease' as defined by Section 105 of the Transfer of Property Act and, therefore, does not require to be executed on a stamp-paper, either as a 'lease' or as a 'conveyance'.

3. According to the counter-affidavit filed by the Asst. Inspector-General of Registration & Stamps, the document in question is a 'lease' as denned by Section 2(16) of the Indian Stamp Act and requires to be stamped as such. He denied that he ever asked the petitioner to pay the stamp-duty as if the document in question is a 'conveyance'. He submitted that when his opinion was sought he intimated the petitioner that it is a lease for 20 years, chargeable with duty of Rs. 1,23,425/-.

4. The question, therefore, that arises is whether the mining lease in Form-K granted to the petitioner in this case, falls within the definition of 'lease' in the Stamp Act as contended by the respondents, or it is only a 'licence' as contended by the petitioner.

5. The expresion 'conveyance' is defined by Clause (10) of Section 2 of the Indian Stamp Act. It reads :

' 'Conveyance' includes a conveyance on sale and every instrument by which a property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I or by Schedule I-A, as the case may be'.

'Lease' is defined by Clause (16) in the following words :--

'Lease' means a lease of Immovable property, and includes also--

(a) a patta.

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

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

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

6. This definition being only inclusive, it is necessary to turn to S. 105 of the T. P. Act which defines 'Lease' in the following words:--

'105. A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or in every thing of value to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent'.

7. The expression 'licence' is not defined by the Stamp Act, but is defined by Section 52 of the Indian Easements Act. 1882 in the following words :--

'Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor something which would in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence'.

It may be stated that Article 31 (a) (iv) of Schedule 1-A of the Stamp Act, provides for the stamp-duty for a lease, for a period exceeding 10 years, but not exceeding 20 years. In such a case, the stamp-duty payable is the same as on 'conveyance', for a consideration equal to twice the amount or value of the average annual rent reserved; while Article 31 (c) provides for stamp-duty in the case of a lease granted for a fine or premium, or for money advanced in addition to rent reserved. In this case also, the stamp-duty is payable as if on a 'conveyance', for a consideration equal to the amount or value of such fine or premium, or advance, as set forth in the lease, in addition to the duty which would have been payable on such lease, if no fine or premium or advance had been paid or delivered. 8. Now the distinction between a 'lease1 and a 'licence' is well settled in law. While a licence does not create any estate or interest in the property to which it relates, a lease does create such an estate or interest in the property. Whether a particular document operates as a 'lease' or a licence' is a matter to be determined on a reading of the document as a whole. The words used, or the language employed is not by itself, conclusive. What has to be ascertained is the intention of the parties, and this has to be done on a total comprehension of the document. I must also mention, in view of the contentions urged before me, that merely because there are certain restrictive clauses in a document, it does not by itself amount to a licence. Restrictive clauses may be found even in a lease-deed. For example, a lease deed in respect of 100 acres of land, may provide that the lessee shall not interfere with the roads, buildings, water-ways passing through or situated in that extent. Merely because such restrictions are found in the deed, it does not follow that it is a licence, on the ground that exclusive possesion is not assured to the other party. Of course, the question whether exclusive possession is given or not, is certainly held to be a very material circumstance in construing the nature of the document. The ultimate question always is whether an interest in property is created by the document and exclusive possession of the immovable property leased out is given, or whether the other party is merely allowed to make use of the property for a particular purpose while retaining possession and control over the property in/by the owner.

9. A few decisions cited by the counsel may now be referred to for understanding the principles evolved in this behalf. The first of the decisions referred to is in Board of Revenue v. A. M. Ansari, : [1976]3SCR661 . After referring to the definitions of 'lease' and 'license', the Court observed: (At p. 1816)

'A close study of the above definitions shows that it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. A licence does not create an interest in the property to which it relates while a lease does. There is in other words transfer of a right to enjoy the property in case of a lease. As to whether a particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form.....'

The Court referred with approval to the decision in Associated Hotels of India Ltd. v. R. N. Kapoor : [1960]1SCR368 where it was observed 'if a document gives only a right to use the property in a particular way or under certain terms while it remains in pos-session and control of the owner thereof, it will be a licence.....'. The Court then referred to the terms and the salient features of the agreement before it. The first salient feature of the agreement noticed by the Court was that it is for a short duration of 9 to 10 months; secondly, that it did not create any estate or interest in the land: and thirdly, that thereunder the respondents were not granted exclusive possession and control of the land but were merely granted the right to pluck, cut, carry away and appropriate the forest produce that might have been existing at the time of the contract, or which might have come into existence during the short period of the currency of the agreement. It was observed :

'The right to go on the land was only ancillary to the real purpose of the contract. Thus, the acquisition by the respondents not being an interest in the soil but merely a right to cut the fructus naturals, we were clearly of the view that the agreements in question possessed the characteristics of licences and did not amount to leases In this case too, the question arose under the Stamp Act. The Court distinguished the decision in Mahadeo v. State of Bombay. : AIR1959SC735 'where seemingly a somewhat different view was expressed' on facts. It was observed that, in that case, apart from the right to take the leaves of tendu trees, there were further benefits including the right to occupy the land, to erect buildings and to take away other forest produce not necessarily standing timber, growing grass or crop, and the rights were spread over many years.

10. It would now be appropriate to refer to the decision in Mahadeo v. State of Bombay. : AIR1959SC735 . In this case, the estate-holders had executed agreements for a period of 5 to 10 years giving the other side the right to pluck and carry away tendu-leaves. The Supreme Court referred to the terms of one of the agreements which was found to be typical of the several agreements concerned therein. The original agreement was executed in 1944. and was valid for a period of 10 years. But even before the expiry of the said lease, it was extended for a further period of 10 years. The relevant terms extracted in the judgment are to the following effect : (At pp. 739-40)

'Before this I had given you a similar contract selling Tendu leaves produce by contract dated 7-7-1944 registered on 12-7-1944. In pursuance of that registered contract, which is for five years from 1947 to 1951 and another for subsequent five years from 1952 to 1956 in all for ten years, you are to remain in possession and occupation of the areas and the Tendu leaves produce till the termination of the year 1956 for which time you continue your possession and thereafter in pursuance of this contract you continue for further period of ten years your possession and occupation from 1957 to 1966 as is usual and customary pruning and coppicing Tendu leaves plants, burning them, and instal Fadis for collection of Tendu leaves and construct Kothas (godowns) for storage of the leaves at your sweet will and choice on any open plot or land within the estate with my permission and you are allowed to take free of all costs any Adjat timber, bamboos etc., from my forests for constructing them. I shall charge you no further consideration. In the same manner, for the purpose of constructing these godowns and such thing you may according to your convenience (you may) manufacture bricks at any place you like in the vicinity of any rivers, rivulet. Nala or pond at your costs. I shall not receive from you any extra amount as rent for the use and occupation of land that will be used for construction of Kothas for manufacturing bricks and for locating Fadis (Bidi leaves collection centres). All those are included in the consideration fixed for this contract. All these rights are already conferred on you in the previous contract dated 7-7-1944 and under this contract for the entire contract period. It is also open to you to collect Tendu leaves not only those growing in the summer season but also those growing in Kartik ......'

On a consideration of the above terms, the Court observed: (At pp. 740, 741)

'.....In all these cases, there is not a naked right to take the leaves of Tendu trees together with a right of ingress and of egress from the land; there are further benefits including the right to occupy the land, to erect buildings and to take other forest produce not necessarily standing timber, growing crop or grass.....the agreements conveyed more than the tendu leaves to the petitioners. They conveyed other forest produce like timber, bamboos, etc., the soil for making bricks, the right to prune, coppice and burn tendu trees and the right to build on and occupy land for the purpose of their business. These rights were spread over many years, and were not so simple as buying leaves so to speak, in a shoo. The expression 'growing crop' might appropriately comprehend tendu leaves. but would not include 'Adiat timber', bamboos, nor even tendu plants. The petitioners were not to get leaves from the extant trees but also such trees as might grow in the future. They could even burn the old trees, presumably, so that others might grow in their place. In these circumstances, the agreements cannot be said to be contracts of sale of 'goods' simpliciter.....'.

11, The next decision which requires a reference, is Tarkeshwar Sio Thakur Jiu v. B. D. Dey & Co., : [1979]3SCR18 . After referring to the definitions of 'lease' and 'immovable property' in the various enactments, the Court observed : (at pp. 1674, 1675).

'A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral. Is a 'right to enjoy immoveable property' within the meaning of Section 105; more so, when -- as in theinstant case--it is coupled with a right to be in its exclusive khas possession for a specified period. The 'right to enjoy immoveable property' spoken of in Section 103. means the right to enjoy the property in the manner in which that property can be enjoyed. If the subject-matter of the lease is mineral land or a sand-mine, as in the case before us. it can only be enjoyed and occupied by the lessee by working it, as indicated in Section 108, T. P. Act, which regulates the rights and liabilities of lessors and lessees of immoveable property.....'.

The Court observed further : (At p. 1675)

'.....The discussion will not be complete without noticing the decision of the Patna High Court in Commr. of Income-tax. Bihar & Orissa v. Kamaksha Narain Singh (ILR 20 Pat 13 : AIR 1940 Pat 633 (SB)), which is in point, In that case, after an exhaustive survey of all the decisions on the subject (including some of those which have been cited before us), a Full Bench consisting of three eminent Judges, held that coalmining settlements whereby certain rights of entering upon the land of the settlor, sinking shafts etc., and winning and taking away the coal are granted in consideration of receiving a salami and annual sums computed on the amount of coal raised and the amount of coke manufactured, subject always to a minimum annual sum which was always payable irrespective of what coal was raised or coke manufactured, were not 'a sale of coal' but could be regarded as 'leases' within the meaning of Section 105 read with Section 108, T. P. Act. or within the legal acceptance of the term 'lease' in this country. This decision of the High Court was affirmed by the Judicial Committee, and the appeal filed by Kumar Kamakhava was dismissed: (See 70 Ind App 180 : AIR 1943 PC 153).....'.

Then the Court proceeded to apply the test evolved by the Patna High Court to the facts of the case before it. and held that inasmuch as the annual fixed payment in the case before them had no relation whatsoever with the Quantity of sand extracted and appropriated, and more importantly since the other side was given a right to enter into and remain in khas possession of the mineral field for the stipulated period of 9 years, the transaction concerned therein was a 'lease', and not a 'licence'.

12. Now let me examine the relevant terms and conditions of the lease in Form-K. prescribed by the Rules, from the above point of view. After describing the parties. the document savs:

'.....in consideration of the rents and royalties, covenants and agreements, by and in these presents and the schedule hereunder written, reserved and contained and on the part of the lessee/ lessees to be paid, observed and performed, the State Government (with the approval of the Central Government) hereby grants and demises unto lessee/ lessees, all those mines, beds/veins seams of lime-stone marbs, clays, shales, and lumps.....situated, lying and being in or under the lands which are referred to in Part I of the said schedule, together with the liberties, powers and privileges to be exercised or enjoyed in connection herewith, which are mentioned in Part-II of the said schedule subject to the restrictions and conditions as the exercise and enjoyment of such liberties, powers and privileges which are mentioned in Part III of the said schedule, except and reserving out of this demise unto the State Government the liberties, powers and privileges mentioned in Part IV of the said schedule to hold the premises hereby granted and demised unto the lessee/ lessees from the.....day of....19..... for the term of 20 years thence next ensuing yielding and paying therefore unto the State Government the several rents and royalties mentioned in Part V of the said schedule at the respective times therein specified subject to the provisions contained in Part VI of the said schedule, and the lessee/lessees hereby covenants/covenant with the State Government as in Part VII of the said schedule is expressed and the State Government hereby covenants with the lessee/lessees as in Part VIII of the said schedule as expressed and it is hereby mutually agreed between the parties hereto as in Part IX of the said schedule is expressed'.

Then follow the several Parts referred to in the above extract. Part-I describes the area of the lease. An area of 1900 Acres situated within the particular boundaries is mentioned in Part-I, Part-II mentions the liberties, powers and privileges to be exercised and enjoyed by the lessee subject to the conditions and restrictions in Part-III. In para 2 it is mentioned that the lessee shall have the liberty and power at all times, during the period aforesaid, 'to enter upon the said lands and to search for mines, bore, dig, drill or win, work, dress, process, convert, carry away and dispose of the said mineral/ minerals, and also to sink, drive and make pits, shafts and inclines etc. Similarly, the lessee is given a power to make, maintain and use any pits, shafts. water and air-ways and other works, and to erect, construct, maintain and use any engine, machinery-plant, dressing floors, furnaces, coke ovens, brickkilns, workshops, store-houses, bungalows, godowns, sheds, and other buildings and other works etc., and also to make use of any roads and ways, and to make any tramways. Railway-roads, aircraft landing grounds and other ways, in or over the said lands, and to use and maintain the same, and also the liberty and power to quarry and get stone gravel and other buildings and road materials etc. and to use and employ the same. All the above liberties and powers are given for the purposes mentioned in the document, viz., for the purpose of mining and removing the lime-stone in the said area. For the same purpose, the lessee is given the power to enter upon and use a sufficient part of the surface of the land, mentioned in Part-I, for the purpose of stocking, keeping, storing or depositing therein any produce of the mines or works carried on, and any tools, equipment, earth and materials and substances, connected therewith. Again, for the same purpose, the lessee is empowered to enter upon, and use a sufficient part of the said lands to beneficiate any ore produced from the said lands. The lessee is also empowered to convert into coke any coal or coal dust produced from the said lands, and to carry away the same. Similarly he is empowered to clear under-growth and brushwood, and to fell and utilize any trees or timber thereon, but the State Government is entitled to ask the lessee to pay for any trees or timber felled by the lessee, at the rates specified by the designated authority. Part-Ill mentions the restrictions and conditions, subject to which the lessee shall exercise the liberties, powers and privileges granted to him in Part-II, Part-III mentions that the lessee shall not erect any building or other stucture, and shall not carry on any surface operations in or upon any public pleasure ground, burning or burial ground, or place regarded as a sacred place, or any houses or village sites, or public road, or public ground, so as to injure or prejudicially affect any buildings, work properties, or rights of other persons and that, no land shall be used for surface operations which is already occupied by persons other than the State Government for works or purposes not included in the lease, and that the lessee shall not interfere with any right of way, well or tank. The lessee shall not. without the express consent and sanction of the designated authority, cut or remove any timber or trees, or clear any brushwood or under-growth. He shall also have to pay for the trees or timber felled or removed by him. The lessee shall not. without the previous sanction in writing of the appropriate authority, enter upon any reserved forest included in the said lands, nor shall he fell, cut or use any timber or trees. Paragraph 6 in Part-III says 'the lessee/lessees shall allow the existing and future holders of Government licences or leases over any land which is comprised in or adjoins. or is reached by the land held by the lessee. reasonable facilities of access thereto....'. Part-IV then mentions the liberties, powers and privileges reserved to the State Government. The State Government or its lessee, or persons authorised by it are entitled to enter into or upon the said lands and to search for win work, dig, raise dress process, convert and carry away minerals other than the said minerals, and any other substances, and for those purposes to sink, drive, make, erect, construct, maintain and use such pits, shafts, inclines, drifts, levels, and other lines, waterways, airways. water-courses, drains, reservoirs, engines, machinery plant, building canals, tramways, railway roadways and other works and conveniences, as may be deemed necessary and convenient, provided that such activities shall not cause hindrance or interference to, or with the liberties. powers, and privileges reserved to the lessee under the deed. Similarly, the State Government or its lessee or persons authorised by it are empowered to enter into or upon the said lands, and to make through the same any railway roadways, tramways, etc. for the purpose of repairing those lines and means of communication. Again the proviso is that such work shall not interfere with the liberties and powers reserved to the lessee under the deed.

13. Part-V mentions the rents, royalties, etc., payable by the lessee. Except for the first year of the lease, the lessee is liable to pay 'dead rent' as specified in Clause 2 of Part-V. Clause 2 says that, during the subsistence of the lease, the lessee shall pay to the State Government annual dead rent for the lands demised and described in Part-I of the said Schedule, at the rate for the time being specified in the Third Schedule to the Act. Clause 3 prescribes the rate and mode of payment of royalty, while Clause 4 provides for payment of 'rent and water rate to the State Government in respect of all parts of the surface of the said lands which shall from time to time be occupied or used by the lessee/lessees under the authority of these presents at the rate of Re. 1/-per acre.....of the area so occupied or used.....'. This rent has also to be paid in the manner provided in Clause 2. However, no rent is payable in respect of the occupation and use of the area comprised in any roads or ways to which the public have full right of access. Part-VI contains provisions regarding the computation of rent and royalty, and how to realise them in case they are not paid in time. Part-VII contains the covenants undertaken by the lessee. It includes the payment of rent and royalties, and the obligation of the lessee to maintain and keen the boundary marks in rood order: to commence the operations within one year: to secure and keep in good condition the pits, shafts, etc., and also to report to the State Government the discovery in the leased area of any mineral not specified in the lease, within sixty days of such discovery. The lessee is also bound to keep records and accounts regarding production and employees etc., at his place of business, and to maintain all other plants and weighing machines etc., in good order. He is also obliged to exercise the liberties and powers granted to him under the lease-deed in such a manner as to offer no unnecessary or reasonably avoidable obstruction or interruption to the development and working within the said lands, or any minerals not included in the lease, and is bound to afford to the Central and State Governments and to the holders of prospecting licenses or mining leases, at all times, reasonable means of access and safe and convenient passage in respect of any minerals within the said land, not included within the lease and for the purposes connected therewith Part-VIII contains the covenants undertaken by the State Government, while Part-IX contains certain general provisions.

14. Now, if the provisions of the lease-deed are examined and analysed in the light of the principles of law emerging from the decisions referred to hereinbefore, it would follow that the respondents were right in their opinion that the mining lease executed by the petitioner in Form-K. requires to be executed on a stamp of the value prescribed by the Stamp Act. It must be noticed that, according to Part-V of the lease-deed, the lessee is obliged to pay what is called 'dead rent' in addition to the royalty payable on the mineral, mined by him. While the royalty is payable only for, and basing upon the quantity of the mineral mined by the lessee, the dead-rent is a fixed amount payble every year at the rate of Re. 1 per acre for the area comprised in the lease-deed excluding of course the roads and ways, and other areas of communal use. Reference in this connection may also be had to Section 9-A of the Act. which was introduced by the Amendment Act 56 of 1972. The Section reads :

'9A. (1) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, shall, notwithstanding anything contained in the instrument of lease or in any other law for the time being in force, pay to the State Government, every year, dead rent at such rate as may be specified, for the time being, in the Third Schedule, for all the areas included in the instrument of lease.

Provided that where the holder of such mining lease becomes liable, under Section 9, to pay royalty for any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area, he shall be liable to pay either such royalty or the dead rent in respect of that area, whichever is greater'.

15. Third-Schedule to the Act pre-scribes the rate of dead-rent, it is to the following effect:--

Period of mining lease: Rated dead rent per hectare:

1)First year.Nil2)Second year to flfth year .Rs. 12-503)Sixth year to tenth year.Rs. 25/- 4)Eleventh year onwards.Rs. 37-50

16. Thus, whether the lessee removes and/or consumes any mineral, or not, he is liable to pay dead-rent at the prescribed rate. Of course, if he also removes and/or consumes the mineral and pays royalty thereon, and if the amount of royalty exceeds the rent, he shall pay the royalty alone. Thus, one of the tests affirmed in Tarkeshwar Sio Thakur Jiu v. B. D. Dey & Co., : [1979]3SCR18 viz., the payment of annual fixed amount irrespective of the quantity of the mineral extracted and appropriated is satisfied in this case. Another factor to be noticed in this connection is that, the lease is executed for a fairly long period, viz., 20 years. It is not for a short period like 9 months, or one year, as was the case in Board of Revenue v. A. M. Ansari, : [1976]3SCR661 , It is true that the real purpose of the lease is to enable the lessee to win, remove and take away the particular mineral, but, it cannot be forgotten that the several clauses in the lease specifically empower the lessee not only to win and carry away the mineral, but also to make, maintain, and use any pits, shafts, waterways, and air-ways, and to erect and construct, maintain and use any engines, machinery plants, dressing floors, furnaces, coke ovens, brickkilns, workshops, store-houses, bungalows, godowns, sheds and other buildings and works, within the area granted to him. He is also empowered to enter upon and use a sufficient part of the surface of the land, mentioned in Part-I, for the purpose of stocking, heaping, storing or depositing therein any produce of the mines or works carried on, and instruments and tools connected therewith. He is also empowered to clear the under-growth and brushwood and to fell and utilize any trees or timber there, provided, of course, he compensates the Government in that behalf. It is true, as pointed out by Mr. K. Srinivasa Murthy, the learned counsel for the petitioner, that the petitioner is not empowered to erect any building or other structure, and is also prohibited tram carrying on any surface operations in or upon any public plea-sure ground, or burning or burial ground, or place regarded as sacred, or any houses or village sites, or public grounds, or over the surface land already occupied by persons other than the State Government, but it does not follow that he is not given the possession of the remaining area covered by the lease-deed. i.e., the area mentioned in Part-I of the lease-deed, Mr. K. Srinivasa Murthy further argued that any other person may also be granted a lease in respect of the very same area, in respect of another mineral. Probably, it is so. But, so far as the present case is concerned, no such contingency has arisen and, therefore, it is not necessary for me to consider what would be the position of the two lessees (for two different minerals) in such a case. On an overall consideration of the terms of the lease-deed, I am of the opinion that the lease-deed executed by the petitioner is a 'lease' within the meaning of Clause (16) in Section 2 of the Indian Stamp Act and has, accordingly, got to be executed on a stamp-paper of the requisite value.

17. The next Question is : on what basis should the stamp-fee be calculated It is stated by Mr. K. Srinivasa Murthy that, in this case, the respondents calculated the stamp-fee payable under Article 31 (a) (iv) of Schedule I-A of the Act, which provides that, in case of a lease for a period exceeding 10 years but not exceeding 20 years, the stamp-duty payable is the same as or 'conveyance' for a consideration equal to twice the amount or value of the average annual rent reserved. His complaint is that, the authorities to the average royalty paid by the lessee for the previous years, i.e., during the period covered by the original lease, and adopted the same for this purpose. I am of the opinion that the complaint is justified. The basis of calculation must be the same whether the lease-deed is executed for the first time, or whether it is executed by way of renewal. Now. because the present case is a case of renewal, the authorities are taking an average of the previous years as the basis for calculation. But, this basis cannot apply where the lease is being excuted for the first time. There must be a uniform principle in all such cases. In the case of a fresh lease, no one can say -- at the time of the execution of the lease-deed -- whether the lessee would in fact remove and/or consume the mineral; and even if he does, in what quantity In other words, the royalty payable by him in future is un-ascertainable. The only definite and ascertainable basis in such a case, however, is the annual dead-rent prescribed by Section 9-A, read with Third Schedule to the Act. That is the minimum amount which has to be Paid by the lessee during the subsistence of the lease, irrespective of the fact whether he removes and/or consuumes the mineral and pays any royalty thereon, or not.

18. For the above reasons, the writ petition is allowed in part. It is declared that while the lease-deed executed by the petitioner in Form-K in this case amounts to a 'lease' as defined in Clause (16) of Section 2 of the Indian Stamp Act and is accordingly liable to stamp duty, the stamp-duty has to be calculated with reference to Article 31 (a) (iv) of Schedule I-A to the Act. taking the annual dead-rent as the average annual rent reserved under the lease-deed. In the circumstances of the case, there shall be no order as to costs. Advocate's Rs. 250/-.


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