C.R.K. Prasad vs The Sub-Collector, Vijayawada

P. Chennakesav Reddy, Actg. C.J.

The question referred to us for decision by the Commissioner of Survey, Settlements and land Records, Hyderabad and the Chief Controlling Revenue Authority under S. 57 of the Indian Stamp Act 1899, hereinafter referred to as ''the Act'' i.e. whether stamp duty in the case should be levied in accordance with Art. 31 (a) (iv) of Schedule I-A of the Act.

The facts giving rise to the reference are short and simple: a partnership firm by name National Art Pictures, Vijayawada, represented by its Managing partner C. Jaganmohan Rao, a film distributor, executed an agreement of lease dated 21-12-1970 in favour of C.R.K. Prasad, son of Jaganmohan Rao. The lease related to the exclusive rights of distribution, exploitation, screening and exhibiting the picture called ''Babruvahana'' for a period of fifteen years commencing from 21-12-1970 for a lump sum of Rs.90, 000/- for the area comprised within the entire State of Andhra Pradesh. The agreement was not executed on any stamp paper as both the parties wanted to have it executed subsequently on a stamp paper and register it, if necessary. Subsequently the Managing partner of the lessor firm Jaganmohan Rao died. Therefore, C.R.K. Prasad filed a petition before the Sub-Collector, Vijayawada, under S. 40 of the Act to fix the stamp duty and penalty on the agreement produced and grant the certificate as required under the Act. The Sub-Collector by his proceedings dated 14-6-1978 levied a stamp duty of Rs.4050/- and penalty of Rs.5/- and directed C.R.K. Prasad to remit the total amount of Rs.4050/- in the Sub Treasury, Vijayawada, under proper head of account. Aggrieved against the said order of the Sub-Collector, a revision petition was filed by C.R.K. Prasad before the Chief Controlling Revenue Authority who is the Commissioner of Survey, Settlements and Land Records, Andhra Pradesh. The Chief Controlling Revenue Authority was of the opinion that the deed in question, though entered into as an agreement of lease for a period of fifteen years and he stamp duty ought to be levied under Art. 31 (a) (iv) of Sch. I-A of the Act and accordingly referred to the High Court the aforesaid question under S. 57 of the Act.

The answer to the question must necessarily depend upon the recitals in the agreement itself. There is no dispute that the agreement relates to the distribution of the picture ''Babruvahana'' produced by National Art Pictures, Vijayawada. The recitals in the agreement relevant for the purpose of this case read:

"Whereas M/s. N.A.D. released the picture on 20-1-64 and their period of distribution, therefore, expired by 20-10-69;

Whereas the lessors have agreed to lease out the said picture to the lessee herein for distribution and exploitation throughout Andhra pradesh for a period of 15 years commencing from this 21st Day of December 1970;

Whereas the lessors have further undertaken to take delivery of all the existing prints and publicity material from M/s. N.A.D. and deliver the same to the lessee at the earliest for purpose of distribution and exploitation;

Now this agreement witnesseth and it is hereby mutually agreed to by and between the parties hereto as follows: -

The lessors hereby grant and assign to the lessee the sole and exclusive rights of distribution, exploitation, screening and "exhibiting the picture ''Babruvahna'' referred to above for a period of 15 years commencing from the 21st day of December 1970 for a lump sum of r.90, 000/- for the area comprised within the entire State of Andhra pradesh, which is agreed to be paid as hereinafter provided.

The learned counsel Mr. N.V. Ranganatham, appearing as amicus curiae submits that the agreement does not relate to any immovable property and it is therefore not a lease within the meaning of S. 2(16) of the Act.

''Lease'' is defined under S. 2(16) of the Act as follows:

" ''Lease'' means of lease of immovable property, and includes also

a patta;

a quabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate, occupy or pay or deliver rent for immovable property;

any instrument by which tolls of any description are let;

any writing on an application for a lease intended to signify that the application is granted."

On the other hand, the learned Government Pleader submits that the agreement is a mortgage and therefore stamp duty is payable as a conveyance.

On a careful reading of the recitals in the agreement, we have no hesitation in holding that it does not relate to any immovable property. It undisputedly relates to the exclusive rights of distribution of the Gtelugu picture ''Babruvahana'' produced by the National Art Pictures Vijayawada. Can the picture ''Babruvahana'' be immovable property? The answer must immediately be no. there is nothing in the deed o support the contention of the learned Government Pleader that the agreement amounts to a mortgage deed as defined in S. 2(17) of the Act. A Full Bench of the Madras High Court in Board of Revenue, Chepauk, Madras Vs. K. Venkataswami Naidu, held that a lease of properties relating to a touring cinema is not chargeable to stamp duty under Art. 30(a) (I) because the equipment of the touring cinema being collapsible and capable of being removed does not fall within the category of immovable property.

In our opinion the agreement in question is not a lease chargeable to stamp duty under Art. 31(a) (iv) of Sch. I-A of the Act. The reference is answered accordingly. No costs. Advocate''s fee Rs.500/-. Mr. N.V. Ranganatham who has b3en appointed as amicus curiae shall be paid a fee of Rs.500/-.

Order accordingly.