Moideen Koya vs. K. Girish Kumar & Anr. AIR 2014 Kerala 30
A lease agreement was executed between the landlord and the tenant on 29-09-2010, in which the monthly rent payable was fixed as Rs.3,500/. An amount of Rs. 50,000/- was given by the tenant as security deposit which was refundable on termination of the lease. The Rent Control Court refused to mark the lease agreement for the reason that the same was under stamped and the court ordered payment of the stamp duty alongwith penalty for security and the rent payable as per the lease agreement.
The legal question therefore arose as to whether Article 33(c) will cover a refundable security provided in a lease agreement, even though the same is adjustable towards the rent in arrears.
The Government letter dated 24-02-1983 addressed to the Inspector General of Registration reads as follows:
“In supersession of the instruction issued in Govt. letter No. 18769/E2/75/TD, dated 15-12-1975 and in accordance with the decision of the Delhi High Court in AIR 1980 Delhi 249, the following principles may be observed while classifying lease deeds.
(1) Duty is not chargeable under Article 35(c) of Schedule IA of the Indian Stamp Act, 1899 on the amounts of security/deposit/advance, which is refundable on determination of the lease, in addition to the duty paid on the rent reserved under Article 35(a) of the Schedule.
(2) It will not make any difference in the changeability of duty, if such deposit/advance is adjustable in rent/other charges dues payable under the lease.
(3) The amount of security deposit paid for the due performance of the contract of lease is chargeable under Article 57 of the Schedule read with section 5 of the Act.
Amount of security deposit – cannot be treated as “money advanced” in terms of Article 33(c) – Fact that it is adjustable to – wards unpaid rent – Immaterial – since it paid for due performance of obligations of lease and on termination of lease, it is refundable, such an amount which is refundable will not get character of `money advanced’ – Lessor consequently not bound to pay stamp duty on security deposit.”
A reading of Article 33(a), will show that it covers cases where the rent is fixed and no premium is paid or delivered. Going by Article 33(c), the provision is attracted where the lease is granted for a premium or for money advanced and the same will be in addition to rent reserved. Apparently, the Rent Control Court has treated the security deposit as money advanced for attracting section 33(c) in addition to the rent.
