CHIEF CONTROLLING REVENUE AUTHORITY Vs. SATYAWATI SOOD

JUDGEMENT

(1.) The main question on which our opinion is ught in this reference under section 57(2) of the Indian Stamp Act, 1899, is whether the five indentical letters dated 6th March 1961 written by Smt. Satya Wati to Jagdish Rai, Raman Kumar, Ajay Kumar, Satish Kumar and Sudershan Rani are liable to stamp duty under Article 35 of Schedule l-A(Delhi) of the Stamp Act as being a "lease" as defined in section 2(l6)(b) of the said Act.

(2.) Under section 107 of the Transfer of Property Act, it is only a lease of immovable property which is from year to year or which is for a term exceeding one year or which reserves a yearly rent that can be made only by a registered instrument. The second paragraph of section 107 which is relevant is as follows:-

(3.) Firstly, the first two paragraphs of action 107 of the Tranter of Property Act lay down only two modes of making leases, namely, (1) by a registered instrument and (2) by an oral agreement accompanied by delivery of possession. Between these two, there is no half way house. That is to say, a lease cannot be made by an unregistered instrument only as distinct from an oral agreement accompanied by delivery of possession. It is to be noted that the proviso to section 107 enables a State Government by notification in the official Gazette to direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession. These half way houses can constitute valid leases only if they are authorised by a notification by the State Government under the proviso to section 107. Since no such notification is said to exist in Delhi, it is common ground that a valid lease in Delhi can be made only either by aregistered instrument or by an oral agreement accompanied by delivery of possession. In the present case it is the second mode of making a lease, namely, by an oral agreement accompanied by delivery of possession which was adopted. What is contended on behalf of the Revenue is that the letters dated 6th March 1961 which reduced the terms of the oral lease to writing constitute a part of the same transaction of lease and form the lease itself. They are, therefore, the half way house which is not authorised in Delhi by section 107 of the Transfer of Property Act inasmuch as they are an unregistered instrument of lease. If the contention of the Revenue is correct, then the question of such a document being examined and impounded under section 33 and being validated under section 35 would arise. The question of the levy of a penalty by the Collector under section 40 of the Stamp Act would also then have to be considered.