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.