- Case
- DEEPAK FERTILISERS AND PETROCHEMICALS CORPORATION LTD. v. THE CHIEF CONTROLLING REVENUE AUTHORITY AND ORS. (Bombay High Court, 18-12-2025)
- Law
- Constitution of India, Transfer of Property Act, Indian Easements Act, Maharashtra Stamp Act.
Facts: Deepak Fertilizers bid for a plot in Navi Mumbai under a CIDCO scheme for staff housing. They paid a premium and entered into an 'Agreement To Lease' with CIDCO in 1995. The Collector of Stamps objected, claiming deficient stamp duty, arguing the agreement was essentially a lease. The Petitioner contended it was a mere license.
Procedural Posture: The Chief Controlling Revenue Authority upheld the Collector's order. Deepak Fertilizers then filed a writ petition under Article 227 of the Constitution of India in the Bombay High Court, seeking to quash the Revenue Authority's order.
Issue: Is the 'Agreement To Lease' between Deepak Fertilizers and CIDCO a lease, requiring ad valorem stamp duty, or merely a license?
Holding: The Bombay High Court held that the 'Agreement To Lease' was a license, not a lease, and therefore not chargeable with stamp duty as a lease. The Court allowed the writ petition and quashed the orders of the Chief Controlling Revenue Authority and the Collector of Stamps.
Reasoning: The Court relied on previous decisions, including Jasubhai Business Services Pvt Ltd v. State of Maharashtra and State of Maharashtra v. Atur India Pvt Ltd, emphasizing that an agreement to lease does not create a present demise (transfer of interest) and is merely an executory instrument. The Court noted that the agreement explicitly stated it was not a demise and granted only a license to enter the land for construction. The Court also highlighted that the actual lease deed was to be executed later, after fulfilling certain conditions. The Court stated, "The aforesaid decisions of the Hon'ble Supreme Court and this Court make it unequivocally clear that an Agreement To lease which does not create a present demise cannot be termed as a lease and is considered a license only and cannot be chargeable to stamp duty as a lease."
