SAIYED SHABAN ALI V. SHEIKH MOHAMMAD ISHAQ AIR 1939 ALL. 724

 SAIYED SHABAN ALI V. SHEIKH MOHAMMAD ISHAQ AIR 1939 ALL. 724

FACTS

• A document labeled "paper No. 7C" signed by the lessee was under scrutiny.
• It detailed the lessee's obligations, including alterations to the premises, monthly rent of Rs. 9, and a fixed five-year occupation period. Vacating the premises before five years would still require payment of rent for the full term.
• The document was executed on December 11, 1927, with a stamp duty of 8 annas.
• The learned Judge of the Small Cause Court was of the opinion that the document was an agreement only, whereas the Inspector of Stamps held the view that it was a lease as well as an agreement.
• To decide the question present reference is made to HC.

ISSUE  

• The question was whether the document qualified as solely an agreement or both an agreement and a lease under Section 61 of the Stamp Act.

RULE

• Since the document resembled both a lease and an agreement, it was charged as a lease, which had a higher duty.

HELD

• The document clearly outlined obligations typical of both a lease and an agreement.
• According to the Stamp Act, a lease includes any written undertaking to occupy or pay rent for immovable property.
• When an instrument falls under multiple categories in the Stamp Act, it's charged the highest applicable duty.
• Since the document resembled both a lease and an agreement, it was charged as a lease, which had a higher duty.
• The annual rent exceeded Rs. 100 but didn't surpass Rs. 200, warranting a duty of Rs. 2 as per conveyance rates.
• Given the lease term exceeded three years, the duty equated to a conveyance for the average annual rent.
• The court declared the document chargeable as a lease, determining a duty shortfall of Re. 1-8-0 and imposing a penalty of Rs. 15. A copy of the judgment was to be forwarded to the Collector.