K.C. Agrawal, J.
1. This is a reference made by the Chief Controlling Revenue Authority, the Board of Revenue, Allahabad under Section 57 of the Indian Stamp Act. The questions referred to us are these: --
1. Whether the Board is competent to refer this instrument to the High Court under Section 57 of the Stamp Act in view of the fact that the Collector, Dehradun, had already determined Rs. 2.25 as proper duty payable on a similar document?
2. Whether the document is an instrument of lease as defined in Section 2(16) of the Stamp Act and is chargeable with duty under Article 35 (a) (v) Schedule 1-B thereof ?
3. If not, whether it is a conveyance in consideration of Rs, 16,50,000/- and is liable to duty under Article 23, Schedule I-B, ibid?
4. If the document is neither a lease nor a conveyance then whether it is a mere agreement chargeable with duty under Article 5 (c) Schedule I-B ibid ?
5. If the document does not fall in any of the categories aforesaid, then, what is the correct nature of the deed and what stamp duty is payable thereon
2. The statement of the case submitted by the Board of Revenue shows that the document under reference was executed by 1. The Governor of Uttar Pradesh and 2. Indian Drugs and Pharmaceuticals Limited (a Government of India Undertaking). By this agreement the State Government agreed to allow the Company to draw 11 cusecs of water from river Ganga at Rishikesh annually for a period of 25 years in consideration of yearly payment of Rs. 6,000/- per cusec, i. e. Rs. 66,000/- per annum. When this document was submitted to the Collector, a doubt arose about its true nature. Thereupon, the matter came up before the Board of Revenue. Having found that important questions of law were involved, the case was referred to the High Court under Section 57 of the Stamp Act for decision of the questions already mentioned,
3. A look at the agreement reveals, the following salient features: --
1. The Company was entitled to take 11 cusecs of water per year from river Ganga,
2. The Company had to pay Rs. 6,000/-per cusec per annum,
3. This amount was to be paid by the Company after giving due credit to the water returned by the Company in a particular year.
4. The Company had to make its own arrangement for taking the water supply from such place in the Ganga river as the Chief Engineer permitted.
4. Before proceeding to decide the questions referred to us, it appears appropriate to mention, briefly, the principles applicable in interpretation of a document required to be stamped. In order to determine whether a document is sufficiently stamped, the Court must look at the entire document. For finding out the true character of an instrument one has to read the instrument as a whole and then to find out the dominant purpose.
5. Now the first question that arises is whether the agreement is a lease. The term lease has been defined in Section 2(16) of the Indian Stamp Act as under: --
'Lease -- 'Lease' means a lease of immovable property, and includes also --
(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 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'. It would thus be found that a lease in order to be covered by the definition given above must be in respect of an immovable property. The expression 'immovable property' has not been defined in the Stamp Act. The Transfer of Property Act also does not define it except to say that immovable property does not include standing timber, growing crops or grass. Section 3 of the General Clauses Act, however, defines 'immovable property' as including benefits that arise out of the land.
6. In the instant case, as we have seen above, the agreement was in respect of taking off 11 cusecs of water by the respondent Company. In order that the instrument could be described as lease, it was necessary that the water was found to be immovable property. Black's Dictionary, Fourth Edition, at page 1761 gives the meaning of the word 'water' as under: --
'Water is neither land nor tenement nor susceptible of absolute ownership. It is a movable thing and must of necessity continue common by the law of nature. It admits only of a transient usufructuary property and if it escapes for a moment, the right to it is gone for ever, the qualified owner having no legal power of reclamation. It is not capable of being sued for by the name of 'water' nor by the calculation of its cubical or superficial measure, but the suit must be brought for the land which lies at the bottom covered with water. As water is not land, neither is it a tenement, because it is not of a permanent nature, nor the subject of absolute property. It is not in any possible sense real estate and hence is not embraced in a covenant of general warranty. Mitchell v. Warner 5 Com 518.'
It could be seen that water is neither land nor a tenement. Accordingly, water could be considered only as movable property, AS the instrument does not create any right over any immovable property, the same could not be considered as a lease,
7. In Alamsher v. Ram Chand, (1898 Pun Re 11) the Court held that 'Water .........though it can be made into movable by severance or removal from the earth. Similarly, standing timber, which has to be cut down and removed is movable property'. The document in question relates to the right of the Company given under it to take water from the river after getting the same pumped out. The Company had not been conferred any right in the land or the stream itself. The right given is only to take out 11 cusecs of water. As water is not immovable property, Clause 2 (16) of the Stamp Act would not be attracted to the present case.
8. In Board of Revenue v. A. M. Ansari : 3SCR661 , the controversy was whether a person acquiring a right to pluck fruits, cut, carry away and appropriate forest produce existing on land could be said to have acquired right over an immovable property. The Supreme Court negatived the case of the Revenue and held that the acquisition by the respondent not being an interest in soil but merely a right to cut the fructuous naturals, the agreement in question possessed the characteristics of licence and did not amount to lease.
9. Next comes the question whether the instrument could be considered to be a 'conveyance.' The term 'conveyance' has been defined in Section 2(10) of the Stamp Act as under: --
'Conveyance -- 'Conveyance' includes a conveyance on sale and every instrument by which property, whether movable or immovable is transferred inter vivos and which is not otherwise specifically provided for by Schedule I, Schedule I-A or Schedule I-B, as the case may be'.
This term denotes an instrument in writing by which some title or interest is transferred from one person to another. It would appear from this definition that an actual transfer of property is an essential feature of a 'conveyance'. Consequently, an agreement to transfer property in the future cannot be treated as a conveyance.
10. The present case appears to be of that type. Under the instrument in question, no rights have been transferred. In fact, law does not require a document in writing for the purposes of transferring movable property. Sale of movable property takes place when it is delivered.
11. Emphasis may be laid at this place on the words 'on sale' and 'is transferred' used in the definition of the word 'conveyance'. These words are significant. They denote that the document itself should create or vest a complete title in the subject matter of the transfer in the vendee. If, therefore, there is no transfer, the requirement of conveyance or sale could not be said to be satisfied. A perusal of the various clauses of the instrument would show that no transfer of water took place under it. Parties had simply agreed to sell and purchase water in the future. Even the amount which was payable by the Company was not stated in this document. The quantum of the liability depended on a future contingency. Clause (1) of the Agreement provided : --
'The Company will pay at the rate of Rs. 6,000/- per cusec per annum clear of all deductions for the maximum quantity of water drawn by them at any time during the year after deduction for water returned............'
This shows that the payment of the amount depended on certain circumstances which had to take place in the future, No transfer was made to a purchaser under this document. The fact that there was a hope or the expectation or the strong probability of a sale serves merely to emphasise that there was no sale. A complete title in water since did not vest under the document, the same could at the most be said to be an agreement. As such, it falls under Article 5 (c) of Schedule I-B,
12. The next argument that is required to be considered is whether the right conferred on the Company was a 'profits a prendre'. In Halsbury's Laws of England, Fourth Edition, Paragraph 240, meaning of the 'profits a prendre' has been given as under: --
' 'A profits a prendre' is a right to take some thing of another person's land. It may be more fully defined as a right to enter another's land and to take some profit of the soil, or a portion of the soil itself, for the use of the owner of the right.'
Black's Dictionary, Fourth Edition, at page 1476 also gives the meaning of the aforesaid expression as under: --
'Profits a prendre --called also 'right of common'. A right exercised by one man in the soil of another, accompanied with participation in the profits of 'the soil thereof. A right to take a part of the soil or produce of the land............The term includes the right to take soil, gravel, minerals and the like from another's land. Munsey v. Mill & Garitty, 115 Tex 469 : 283 SW 754, 759; Mathews Slate Co. of New York v. Advance industrial Supply Co., 172 N.Y.S. 830, 832, 185 App. Div. 74; the right to take seaweed, Hill v. Lord 48 Me. 100; and to take coal or timber, Huff v. Me Cauley, 53 Pa 206 : 91 Am. Dec. 203; the right to hunt, St. Helen Shooting Club v. Mogle, 234 Mich. 66, 207 N. W. 915 : 61 Cann, 185, 14 LRA 386; and the right to cut grass, Baker v. Kenney, 145 Iowa 638 124 N. W. 901, 139 An. St. Rep. 456; but not the right to take running water, since it is not a product of the soil, Hill v. Lord 48 Me, 83.'
12A. In Bhola Nath Nundi v. Midnapore Zamindari Co. Ltd., ((1904) 8 Cal WN 425) the Calcutta High Court held: --
'A profits a prendre is an incorporeal right clothing the possessor of it with an interest in the land. It is a right to enter on the land of another and take therefrom a profit of the soil. It is so called because the claimant is entitled to take the profit for himself'.
13. Dealing with the question as to whether the water is the produce of the soil, it was pointed out by Lord Campbell C. J. in Race v. Ward, ((1855) 119 E. R. 259), that water, as it issues on excavation of a well or a tank is not to be considered as produce of the soil and that a right to enter on land and to take such water may be considered as an easement. This case was followed in Jibananda Chakrabarti v. Kalidas Mullick, (AIR 1915 Cal 199). Patna High Court in Thakurji Shri Jugul Sarkar v. Rajmangal Prasad (AIR 1926 Pat. 187) held that Section 17 of the Easements Act is intended to apply not to right of irrigation in natural streams but to rights in nature of profits a prendre, which did not include a right to water. This would show that the Patna High Court held that right to take water was not a profits a prendre.
14. The discussions made above would show that in order to be a profits a prendre two things are necessary. Firstly, the person claiming must have interest in the land and secondly, it must be in respect of a produce or profit of the soil. In the instant case, both the requirements are wanting. Under the instrument the Company neither was given any interest in the land nor the water is a product of soil. Accordingly, the submission of the State's counsel cannot be accepted.
15. The controversy involved for decision in Ananda Behera v. State of Orissa : 2SCR919 , was different. In that case, the dispute was about fishery rights. The Supreme Court held that the right was in the nature of a profits a prendre and as a profits a prendre is an immovable property, the same can be acquired only by a document in writing. In that case, therefore, the two requirements necessary for claiming the right of profits a prendre was satisfied. Such is not the position in the present case.
16. The only other point, which remains to be considered is about the maintainability of the reference. This question stands concluded by a decision of a Special Bench in Darbari Singh Saini v. Board of Revenue : AIR1972All519 . We did not feel persuaded to accept that as the Collector, Dehradun had already declared Rs. 2.25 as proper duty payable on a similar document, the present reference was incompetent Counsel could not supply any legal basis to substantiate this submis-sion. As a question of law arose, the Board of Revenue was right in referring the same to the High Court. In Banarasi Dass Ahluwalia v. Chief Controlling Revenue Authority, Delhi : 1SCR685 the Supreme Court held that the Chief Revenue Authority is bound to state the case in compliance with its obligation.
17. Before parting, we may state that the Company had also filed an application under S. 58 of the Indian Stamp Act for referring the case back to the Revenue Authority on, the ground that in para 3 of the statement of the case it had wrongly been stated 'that under the agreement a right had been given to the Company to construct and instal a pump house in the bed of the river and to draw water therefrom.' We have gone through the agreement and other relevant documents. Since we find from the agreement that the above statement was incorrect, we did not consider it necessary to refer the case back to the Board for a fresh statement. We have decided the present reference ignoring the aforesaid mis-statement of the fact which had been made by the Board of Revenue in its referring order.
18. For these reasons, we answer question No. 1 in the affirmative and questions Nos. 2 and 3 in the negative. Question No. 4 is answered in the affirmative by holding that the document was an agreement and was chargeable with stamp duty under Article 5 (c) of Sch. I-B. Question No. 5 does not arise for decision.
19. Let the papers be returned to the Board of Revenue with the above answers. The parties shall bear their own costs.