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Report No. 67

5.21. Second part of the definition considered.-

The second part of the definition of "lease" in the Stamp Act has four clauses. These deal with particular classes of instruments. The main object of these is-(i) to check avoidance of duty by not executing a lease, and (ii) to extend the definition to the letting out of "tolls", which are not "immovable property" in the stricter sense.

5.22. Tolls.-

The sub-clauses do not seem to have raised such controversy. But sub-clause (c), which relates to a toll, could be explained in some detail. A toll is an imposition for the privilege of using a bridge, road, ferry, or market, or for catching fish, cutting and appropriating trees for fuel etc.1 A tax paid for some liberty, particularly for the privilege of passing over a bridge or on highway, the tax paid for the use of a ferry,2 or the tax paid for selling in a market or fair,3or the tax paid for the right of fishing in a river, is a toll.4

Sub-clause (c) has, thus, extended the meaning of the term "lease"; for, the right to levy tolls, though concerning the user of land or water, is not regarded in law as an interest in immovable property. An ijardar of tolls does not acquire any interest in the land or water concerned.5 Toll is distinguished from octroi which is a duty levied on good entering a certain area, town or territory. There are several Central Acts relating to tolls-

(a) The Indian Tolls Act, 1851 (an Act for enabling Government to levy tolls on public roads and bridges);

(b) The Indian Tolls Act, 1864;

(c) The Indian Tolls Act, 1888; and

(d) The Indian Tolls (Army and Air Force) Act, 1901.

1. (a) Goodrich v. Venkanna, (1878-81) ILR 2 Mad 104;

(b) Financial Commissioner of the Punjab's Circular No. 35, dated 13th August, 1883: 1934 Punjab Stamp Manual, Part IB, Chap. 3, para. 2.

(c) Ram Pritam v. Shoobulchunder, 1888 LLR 15 Cal 259.

2. Deputy Collector, Rohri v. Denmial, 1883 Born PJ 11; Madras Stamp Manual (1958) 107-15.

3. President of the Taluk Board v. bikshminarayana, 1908 ILR 31 Mad 54.

4. Midnapore Zamindary Co. v. Trailokya, AIR 1924 Cal 562.

5. Standard Coal Co. v. C.C.R.A. Bengal, 1948 ILR 2 Cal 323.

5.23. Agreement to lease.-

It should, lastly, be noted that the entry in the Schedule to the Stamp Act1 charges duty on an agreement of lease also. We shall deal with this at the appropriate place.

1. Article 35, Stamp Act.

5.24. Lease and licence-Introductory.-

We may, at this stage, refer to the distinction between "lease" and "licence". A person may lawfully enter on land either in exercise of right as owner of an interest in land, or because the owner has given him permission. The owner might have granted him a licence-an interest conferring the right of exclusive possession,-or he might merely have given a licence,1 permitting him to enter the land or use it for specified purposes.

1. For history of licences, see Holdsworth H.E.C., Vol. 7, pp. 327, 328.

5.25. Definition of 'licence'.-

The classic definition of a 'licence' was propounded by Vaughan, C.J. in the seventeenth century in Thomas v. Sorrell, 1673 Vaughan 351. He said "a dispensation or licence properly passeth no interest nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful."

The expression "licence" is not defined in the Stamp Act, or in the Transfer of Property Act. The Easements Act, defines it as follows:1

"52. Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence."

1. Section 52, Indian Easements Act, 1882.

5.26. Distinction between lease and licence.-

In the law of property, lease and licence are distinguished by stating that a lease transfers an interest in land, which a licence does not. Where exclusive occupation is not given, the right is only of licence.1 A licence is merely a personal right, and does not amount to an interest in property.2

1. AIR 1959 SC 1262 (1269).

2. AIR 1968 SC 175: (1968) 1 SCR 23.

Indian Stamp Act, 1899 Back

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