Meerut Corporation licence fee, Supreme Court Judgment in appeal of contractors
December 7, 2017
A Bench of Justice Abahy Manohar Sapre and Justice Navin Sinha pronounced judgment in Civil Appeal No. 3695 of 2009, Nasiruddin & Anr. Etc. vs. The State of Uttar Pradesh through Secretary. The Civil appeal was filed by contractors of Municipal Corporation of Meerut.
Facts of the case are in March 2004, the Corporation issued an advertisement inviting bids from public at large for letting out the right of collection of (1) realization of Tehbazari Fee from squatters, vendors, kiosks and (2) for collecting parking fees. The appellants participated in the public auction held by the Corporation. Their bids were finally accepted. The Corporation accordingly informed to the appellants individually about acceptance of their bids and entered into a formal contract with each appellant to enable them to carry out the work of collection of what is called as "Tehbazari" and "Parking Fees" in terms of the contract. One such contract is . The period of contract was up to 31.03.2005.
The execution of contract led to the disputes among the appellants, Corporation
and the Collector of Stamps, namely, what is the true nature of the contract and
how much stamp duty is payable by the appellants on the contract under the
Indian Stamp Act, 1899.
The Corporation, vide their letter, requested the appellants to deposit the
requisite stamp duty payable under the Stamp Act whereas the Collector of Stamps
requested the appellants to pay stamp duty @ Rs.70/- per thousand on the
contract amount treating the contract as Lease.
The appellants felt aggrieved of the demand raised by the Collector of Stamps
and filed writ petitions in the Allahabad High Court. The Allahabad High Court
upheld the demands raised by the Collector of Stamps and finding no fault
therein dismissed the writ petitions.
The contractors filed SLP with Supreme Court. The Supreme Court examined the
issues and said that "Having heard the learned counsel for the parties and on
perusal of the record of the case, we find no merit in these appeals."
The court opined that "In our opinion, the contract in question also
satisfied the definition of the expression "Instrument" as defined in Section
2(14) of the Stamp Act because it created a right and liability and lastly, it
also satisfied the definition of expression "executed" and "execution" as
defined in Section 2 (12) of the Stamp Act because it contained the signature of
contracting parties."
The court said that:
"In the light of foregoing discussion, we are of the considered opinion that the contract in question is a "Lease" as defined in Section 2(16)(c) of the Stamp Act and is accordingly chargeable to payment of stamp duty as per the rates prescribed in Article 35 of Schedule I of the Stamp Act as "Lease". The conclusion arrived at by the Single Judge in Mohammad Ali vs. Board of Revenue, U.P. (supra) is, therefore, correct which we support with our reasoning given supra."
The court dismissed the appeal with these observations.
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Read the Judgment of Supreme Court dated 06.12.2017