1. The above writ petition is filed challenging Exts.P3 and P6 orders and for a consequential direction to the 3rd respondent to register Ext.P1 sale deed within a time limit to be fixed by this Court.

2. Petitioners 2 and 3 are the partners of the 1st petitioner firm M/s. Kooplicat Ayurvedic Hospital, a partnership firm constituted under the Indian Partnership Act, 1932. Respondents 5 and 6 are the owners of a total extent of 11.25 Ares of land in Perumbaikkad Village, and they constructed a multi-storeyed commercial complex by the name ‘Othalathumoottil Complex’ on the strength of a building permit issued by the Kottayam Municipality. Petitioners 1 to 3 requested respondents 5 and 6, the landlords of the building, to lease out the entire 2nd floor having built-up area of 480.66 sq.mtrs together with 139.35 sq.mtrs open space, besides the north staircase, solely for the purpose of conducting an Ayurveda Hospital and other allied activities. Thus, the parties entered into an agreement and executed Ext.P1 lease deed dated 28.02.2020 in favour of the 1st petitioner partnership firm, which is for a period of 20 years from the date of execution.

3. The deed was prepared on stamp papers worth Rs.2,72,500/- as stamp duty was calculated as provided under Article 33(a)(iv) of the schedule appended to the Kerala Stamp Act, 1959 (for short, ‘the Act, 1959’). Thus, it is the case of the petitioner that the stamp duty payable will come to Rs.2,72,237/-, which has been rounded off to Rs.2,72,500/-, and the lease deed was prepared on a stamp paper of Rs.2,72,500/-. Over and above the same, Rs.86,500/- was paid as registration fee, and the petitioners have paid the said amount. But by Ext.P3 order, the 3rd respondent returned Ext.P1 lease deed, refusing to register the same, mainly holding that since in Clause No.17 of Ext.P1 deed it is stipulated that the tenant is given right for building construction and as per Clause no.18 there is also a provision for return of the same to the landlord, stamp duty as per Article 5(c) of the Schedule appended to the Stamp Act, is liable to be paid on the estimated value.

4. The contention of the petitioners is that Article 5(c) is not applicable in the facts and circumstances of the present case. Article 5(c) is applicable in cases where authority or power is given to a promoter or developer for construction and development or sale or transfer of any immovable property, but, in the present case the petitioners have entered into a lease agreement based on mutual consensus, whereby respondents 5 and 6 leased out the entire 2nd floor of the multi storeyed commercial complex for a period of 20 years. Therefore, it is contended that Ext.P1 deed is nothing but an ordinary lease agreement. It is further submitted that Clause 17 in Ext.P1 deed is only a general clause which states that, if the tenant makes any alteration or addition they should obtain the prior consent from the landlord before doing so, and it is only meant to protect the interest of the landlord, thereby restricting the tenants from doing any alteration whatsoever at his whims and fancies. The incorporation of the said clause does not mean that the tenant is going to make any alteration or addition, as it deals with an uncertain contingency, which may or may not arise.

5. A detailed counter affidavit has been filed by the 4th respondent, wherein it is stated that on examination of the deed, tenant has been given the right to carry out a construction of the building as per clauses 16 and 17, and since such authority triggers levy of stamp duty on the cost of construction as per Rules 5(c) and Order 241 of the Kerala Registration Manual, the petitioners were asked to furnish an estimate from the chartered engineer and incorporate the same in the deed. Since the deed lacked any reference to construction details essential for assessing stamp duty and fees under Article 5(c), the Sub Registrar sought for a clarification. Reliance is also placed on the circular dated 29.08.2011 issued by the Land Revenue Commissioner, which mandates that Stamp duty and registration fee must be levied for the cost of construction at the conveyance rate. On an analysis of the above said aspects, the 3rd respondent came to the conclusion that the petitioners are liable to give additional stamp duty as per Article 5(c) of the Act, 1959 or the deed is to be modified to the extent that construction would be removed on expiry of the lease period without any additional stamp duty and fees. Reliance is also placed on Order 241 of the Kerala Registration Manual, which mandates that when in a lease, the lessee undertakes to effect improvements by way of addition to the building etc. the value of improvement should be deemed to be a premium and added to the annual rent for assessing the registration fee payable, and the said principle is applicable for stamp purposes also. Reliance is also placed on Order 245(a) of the Kerala Registration Manual, which provides that any sale or improvements must be treated as a separate transaction and duly valued. Placing reliance on Rule 31 of the Kerala Registration Rules, it is submitted that the registering authority is duty-bound to ensure that all the requirements prescribed in the Act and in the Rules have been complied with before accepting a document for registration. On the strength of the same, it is also submitted that the action of the 3rd respondent as per Ext.P3 and the 4th respondent as per Ext.P6 are perfectly in accordance with law and no interference is called for.

6. I have heard the rival contentions on both sides.

7. Ext.P1 is the lease deed which was presented for registration. Admittedly, it is compulsorily registerable, going by Article 33(a)(iv) of the Act, 1959, which reads as follows:

                  “33. Lease:- including an underlease or sub-lease and any agreement to let or sublet:-

                  (a) Where by such lease the rent is fixed and no premium is paid or delivered.

                  (iv) Where the lease purports to be for term exceeding 10 years but not exceeding 20 years:

                  The same duty as a conveyance (No. 21 or 22, as the case may be) for a consideration equal to twice the amount or value of the average annual rent reserved.”

                  Going by the said Article, the proper stamp duty chargeable is the same as a conveyance (No.21 or 22), i.e. 8% for twice the amount of the value of the average annual rent reserved. Further, the refundable security deposit was stated as a security bond for the purpose of stamp duty registration and going by Article 50(b), a stamp duty of Rs.500/- is payable for the same. Article 50(b) reads as follows:-

                  “50. Security Bond or mortgage deed, executed by way of security for the due execution of an office or to account for money or other property received by virtue thereof or executed by a surety to secure the due performance of a contract.

                  (a) ...

                  (b) in any other case [Five Hundred rupees]”

                  Since the parties have entered into a mutual agreement regarding miscellaneous terms ancillary to the lease, the same is treated as an agreement or memorandum of agreement not otherwise provided for, and a separate stamp duty of Rs.200/- is paid under Article 5(g), which reads as follows:-

                  “5.Agreement or memorandum of an agreement-

                  …

                  (g) If not otherwise provided for

                  [Two hundred rupees] ”

                  Thus stamp paper was purchased for an amount of Rs.2,72,500/- and registration fee to the tune of Rs.86,500/- was paid by the petitioners. The stand taken in Ext.P3 is that the lease deed attracts stamp duty as provided in Article 5(c) of the schedule to the Act, 1959, which reads as follows:-

                  “5(c) – If relating to giving authority or power to a promoter or developer, by whatsoever name called, for construction, development or sale or transfer (in any manner whatsoever) of any immovable property.”

                  Article 5(c) can have application only if it is relates to giving authority or power to a promoter or developer for the construction, development or sale or transfer of any immovable property. To come to the conclusion that Article 5(c) will have application, Clauses 17, 18 and 27 of Ext P1 lease deed is relied on by the 3rd respondent, while issuing Ext.P3 communication. Clauses 17, 18 and 27 of Ext P1 lease deed read as follows:

                  “Clause No.17 and 18 at page No.8 in Ext.P1 deed:-

                  17. That the tenant on making any structural alteration or addition to the demised premises shall obtain consent from landlords;

                  18. That on the termination of lease by these presents the tenant shall be at liberty to remove all such structures or installations made by it in the demised premises if landlords are not ready to pay for it at then applicable market price for such structures or installations in the demised premises;

                  Clause No.27 at page No.10 in Ext.P1 deed:-

                  27. That during the subsistence of the lease period, landlords shall not mortgage, pledge, charge or encumber the scheduled property in any manner without written consent of the tenant. In case of any transfer of the title of demised premises the right of possession of the tenant shall not be affected. Landlords shall obtain appropriate written documents from such transferees stating that such transferee shall step into the shoes of landlords and that they unconditionally agree to the terms and condition of this lease deed by these presents. In such event landlords shall repay the security deposit to the tenant and shall ensure that the tenant shall continue to use the demised premises during the remaining period of the lease”

                  Before examining the above said clauses in Ext P1 deed, the other relevant clauses in the said deed also has to be examined. The relevant clauses are extracted below:-

                  “...

                  WHEREAS landlords constructed a multistoried commercial complex in the said property identified as “OTHALATHUMMOOTTIL COMPLEX” (hereinafter for the sake of brevity also referred to as the “said building”) in accordance with building permit number KPW1/BA/394/17-18 issued from Kottayam Municipality;

                  WHEREAS the tenant requested landlords to lease out the entire second floor bearing door numbers XI/137-O (new number II/200), XI/137-O1 (new number II/200A), X1/137-O2 (new number II/200B) of Kottayam Municipality having built-up area of 480.66 square meters (5173.78 square feet) approximate together with 139.35 square meters (1500 square feet) open space besides north staircase towards water tank on the terrace top both in the said building and all that more particularly described in schedule ‘B’ (hereinafter for the sake of brevity also referred to as the “demised premises”) solely for the purpose of conducting business of Ayurveda Hospital and other allied activities;

                  AND WHEREAS landlords have accepted the above said request and agreed to grant to the tenant the demised premises on lease for a period of twenty years commencinig from 01-03- 2020 (First day of March Two Thousand and Twenty) subject to the terms and conditions hereinafter appearing:-

                  `1. That landlords do hereby grant unto the tenant the demised premises on lease for a period of twenty-years;

                  2. That the parties agree that the monthly lease rentals for the lease of the demised premises shall be Rs.80,000/- (Rupees Eighty Thousand only) per month for the first year and Rs.90,000/- (Rupees ninety thousand only) per month from the second year onwards which will be enhanced at the rate of 5% (five percentage) per annum thereon;

                  3. That the tenant shall be entitled to deduct Income Tax at source (TDS) on the rent at the applicable rates. The tenant shall deposit the amount of Income Tax deducted at source in the account of the Central Government within the period prescribed under the law and shall issue the Tax Deduction at Source certificate to landlords in respect to the tax deduction made on the montly rent payable to the lessor as per Income Tax Act, 1961, in force;

                  4. That the landlord hereby acknowledges the receipt of Rs.9,00,000/- (Rupees Nine lakhs only) from the tenant allowed to be retained as interest free security deposit and the landlord shall repay the same to the tenant on termination of lease by these presents.

                  ...”

                  As per the said clauses in the agreement the multistoreyed commercial complex is already constructed by the landlord and the tenant has requested to lease out the same for running an Ayurvedic Hospital for a period of 20 years from 01.03.2020 agreeing a monthly rent of Rs.80000/- for the first year and Rs.90000/- per month from the second year onwards with an agreement for enhancement at 5% per annum. In the light of the above, let me examine the clauses in Ext.P1 deed relied on by the 3rd respondent for issuing Ext P3 order. Clause 17 of Ext.P1 lease deed mandates that if the tenant on making any structural alteration or addition to the demised premises, shall obtain consent from the landlord. Whereas Clause 18 mandates that on the termination of the lease, the tenant shall be at liberty to remove all such structures or installations made by it in the demised premises if the landlords are not ready to pay for it at the then applicable market price for such structures or installations in the demised premises. Further clause relied on by the 3rd respondent in Ext.P3 is Clause 27 of Ext.P1 deed mandates that during the subsistence of the lease period landlord shall not mortgage, pledge, charge or encumbre the scheduled property in any manner without written consent of the tenant and in case of any transfer of the title of demised premises, the right of possession of the tenant shall not be affected and that the landlord shall obtain appropriate written document from such transferee stating that such transferee shall step into the shoes of the landlord and that they unconditionally agree to the terms and conditions of the lease deed by the said presence. In such event, the landlord shall repay the security deposit to the tenant and shall ensure that the tenant shall continue to use the demised premises during the remaining period of the lease.

8. The contention of the 3rd respondent based on Clauses 17, 18 and 27 of the deed is that the tenant has been given the right to carry out construction of the building and therefore, the stamp duty and fee are leviable under Article 5(c) of the schedule attached to the Act, 1959 holding that said clauses is one giving authority to a promoter or developer for construction, development, or sale or transfer of an immovable property. I am afraid, based on the above said clauses in Ext P1 lease deed, the 3rd respondent cannot hold that Ext.P1 lease deed is leviable under Article 5(c) of the schedule of the Act, 1959, since it is not an agreement between a promoter or developer for construction, development, sale or transfer of any immovable property. A perusal of Ext.P1 deed would reveal that the landlords have already constructed a multi-storeyed commercial complex, in the name ‘Othalathumoottil Complex’ on the strength of a building permit granted by the Kottayam Municipality and the tenant has requested landlord to lease out entire 2nd floor and open spaces, northern stair case etc. for the purpose of conducting business of ayurvedic hospital and other allied activities. Clause 17 only mandates that the tenant can make any structural alteration or addition to the demised premises only after obtaining consent from the landlord. Clause 18 only says that on termination of the lease, the tenant shall be at liberty to remove all such structures or installations made in the leased premises, if the landlord is not ready to pay for them at the then-applicable market rate for structures or installations. Clause 27 only mandates that during the subsistence of the lease period, the landlord shall not mortgage, pledge, charge or encumbre the scheduled property in any manner without the written consent of the tenant, and in case of any transfer of title of demised premises, the right of possession of the tenant shall not be affected.

9. A perusal of these Clauses, i.e. Clauses 17, 18 and 27, would reveal that these Clauses are provided to specify the rights and liabilities of both the lesser as well as the lessee apart from other general conditions. Clause 17 which prohibits any alteration to the demised premises by the tenant without getting consent from the landlord is only meant to protect the interest of the landlord, whereby restricting the tenant on doing any alteration whatsoever on his whims and fancies, and the said incorporation of the clause does not mean that tenant is going to make any alteration or addition and it also deals with an uncertain contingency which may or may not arise. A reading of Ext.P1 itself reveal that it is not a development agreement with an owner or a promoter or developer, where the owner is granting any authority or power to such promoter or developer for carrying out any construction, etc. and Ext.P1 is only a lease deed for letting out the 2nd floor of a constructed building in accordance with law. Likewise, Clause 18 of Ext.P1 deed is another general stipulation, in continuation to Clause 17, that on termination of the lease, the tenant shall be at liberty to remove the structures or installations made by them if the landlords are not ready to pay for it. The said clause also does not create any obligation for the landlord or the tenant regarding the sale and purchase of structures and installations if they are made or exist on termination of the lease. Likewise, Clause 27 of Ext.P1 deed is only to deal with the contingency of a third party stepping into the shoes of the landlord in case of any sale or mortgage of the demised premises, and it only protects the interest of the tenant that even in case of a transfer of property, the lease will continue to subsist.

10. In the light of the above, it is without any doubt that the stand taken in Exts.P3 and P6 that Ext.P1 lease deed will attract stamp duty as provided in Article 5(c) of the schedule in the Act, 1959, is without any basis and therefore I am of the view that they are liable to be interfered with. Consequently, the reliance placed on the registration manual is also held to be without any basis.

11. It is pertinent to note that when the matter came up for consideration on 26.06.2020, this Court has passed an interim order and directed Ext.P1 lease deed to be registered by accepting the stamp duty as paid by the petitioners for the time being, making it clear that the registration of the deed after accepting stamp duty offered by the petitioners will not confer any right on the petitioners in relation to the issue that is arising in the writ petition and in the event the writ petition fails, the petitioners would have to pay the difference in stamp duty as adjudged by this Court to the respondents.

12. Since I have already found that the stand taken in Exts.P3 and P6 cannot be countenanced, above writ petition is disposed of setting aside Exts.P3 and P6, and holding that the registration of the lease deed as per the direction of this Court in the interim order dated 26.06.2020 is perfectly in accordance with law, and the petitioners are not liable to pay any differential stamp duty.

                  With the above said directions and observation, the writ petition is allowed.