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TMI Blog2024 (7) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the High Court (the appellants herein) at the same time referring to the statutory provisions, the constitutional provisions as also the case-laws relied upon by the counsel for the parties. However, there is one aspect of the matter which requires clarification which we shall deal with at the end of this judgment. The doctrine of legitimate expectation has been discussed and elucidated upon in several judgment by this Court. The doctrine provides a framework for judicial review of executive actions, policy changes, and legislative decisions. In UOI. VERSUS HINDUSTAN DEVELOPMENT CORPN. [ 1993 (4) TMI 306 - SUPREME COURT ], this Court emphasized that legitimate expectation primarily grants an applicant the right to a fair hearing before a decision that negates a promise or withdraws an undertaking from which an expectation of certain outcome or treatment arises. It does not, however, create an absolute right to the expected outcome. The protection of legitimate expectation is subject to overriding public interest, which means that even if an individual s expectation is reasonable and based on a past practice or representation by the executive or legislature, it can be denied if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Concession Agreement to be a lease. Once, the stamp duty is payable on the amount spent by the lessee, the demand raised on the whole amount would be unjustified, as such, to the above extent, the demand needs to be set aside with a further direction to the Revenue Officer/Collector (Stamps) of the district concerned to re-calculate the same as observed above and, accordingly, raise the demand. In case, the appellants have deposited the demand raised on the entire project cost then the amount lying in excess with the State would be refunded to them. The appeals stand partly allowed. - VIKRAM NATH And AHSANUDDIN AMANULLAH , JJ. JUDGMENT VIKRAM NATH , J. 1. By the impugned judgment and order dated 11.02.2010, the High Court of Madhya Pradesh at Jabalpur decided a group of twelve petitions wherein the question involved was whether a transaction where the right to collect tolls is given in lieu of the amount spent by the Concessionaire in the construction of roads, bridges etc. under the Build, Operate Transfer (BOT) Scheme amounts to a lease as contemplated under Section 105 of the Transfer of Property Act, 1882 TP Act and Section 2(16) of the Indian Stamp Act, 1899 IS Act . Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a Concession Agreement and, as such, it cannot be treated as a lease but as a license at best. The Collector (Stamps), Bhopal vide order dated 30.04.2004 passed an order exercising power under Section 48-B of the IS Act directing recovery of deficit stamp duty amounting to Rs.1,08,00,000/-(Rupees one crore eight lakhs) said to be payable on the Concession Agreement dated 15.09.2002. Thereafter, a recovery notice was issued on 29.05.2004 by the Collector (Stamps), Bhopal to deposit the aforesaid amount within seven days of the receipt of the said recovery notice. (v) On 6th June, 2004, the appellant challenged the order dated 30.04.2004 by way of a writ petition under Article 226 of the Constitution which was registered as Writ Petition No.2219 of 2004. The High Court vide order dated 03.08.2004 granted interim stay of recovery of any amount pursuant to the impugned order dated 30.04.2004. The High Court, vide judgment and order dated 11.02.2010, dismissed the said writ petition along with eleven other matters and upheld the demand raised by the Collector of Stamps by the order dated 30.04.2004. (vi) Aggrieved by the impugned judgment of the High Court, the appellant preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the period referred to above, it was treated as a lease and the appellants are the victims of this period, whereas all subsequent Concession Agreements under BOT Scheme executed after 10th March, 2008 are exempt from such stamp duty. 6. Further continuing his submissions Mr. Dave, learned Senior Counsel submitted that in view of the Clarification dated 01.07.2002 and subsequent circulation vide letter dated 21.07.2002 throughout the State, once it was clarified that the Concession Agreements under the BOT Projects would be executed on stamp paper of Rs.100/-, the appellants entered into the agreement with the same impression and having calculated their project cost and also their tenders without factoring in 2% stamp duty, had legitimate expectation that the agreement would not require stamp duty @ 2% of the value, but was to be executed only on stamp paper of Rs.100/-. The subsequent demand was contrary to the legitimate expectations of the appellants and, therefore, liable to be set aside. 7. It was next submitted that the Circular of the Chief Secretary dated 1st July, 2002 and its subsequent circulation vide letter dated 21st July, 2002, estopped the State Government from am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im, the ownership of the project land has not been transferred by the State to the MPRSNN and, as such, MPRSNN could not transfer any ownership or interest to the appellants. The Concession Agreement was on the concept of public, profit, partnership (PPP mode). He has further elaborated his submissions by referring to Section 105 of the TP Act. According to him, in a lease, the following three ingredients must pre-exist: (1) There is a transfer of a right to enjoy such property. (2) It is made for a fixed time, express or implied or in perpetuity. (3) There has to be consideration of a price paid or promised. 12. According to Shri Dave, learned Senior Counsel for the appellants, lease means transfer of interest in the property to enjoy the property whereas, license means transfer of property but no interest in the property. According to him, in the present case, there was no transfer of interest in the property, as such, it would not fall within the definition of lease. He has further referred to various clauses of the Concession Agreement in support of his submission. 13. It was next submitted that MPRSNN is a 50% partner in the construction of the project which indicates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court rightly held the Concession Agreements to be a lease. He also referred to definition of lease under the IS Act, as laid down in Section 2(16), which includes any instrument by which tolls of any description are let. He also referred to the definition of immovable property as defined under Section 3(26) of the General Clauses Act, 1897, which would include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. He further referred to various findings recorded by the High Court. He further placed reliance upon three judgments of this Court:- (1) Associated Hotels of India Ltd. Vs. R.N. Kapoor AIR 1959 SC 1262 ; (2) State of Uttarakhand and Ors. Vs. Harpal Singh Rawat (2011) 4 SCC 575 ; (3) Nasiruddin and another Vs. State of Uttar Pradesh Thr. Secretary and Ors (2018) 1 SCC 754 .; 17. Shri Mishra, further referred to the various provisions of the Indian Tolls (MP) Amendment Act, 1972. Insofar as to the challenge of the amendments as being ultra vires is concerned, Shri Mishra submitted that the insertion of proviso (c) to Clause(C) to Entry-33, is only for determining the rate of charging stamp duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of stamp duty payable on lease deeds of a particular type. But for the insertion of the proviso which is sought to be challenged, the stamp duty payable on the lease would be 8% of the market value as provided to be charged on the conveyance under Entry-22 of Schedule 1-A. By inserting the proviso, the stamp duty chargeable on a lease under BOT Project for tolls/bridges, construction of roads etc. would be 2% of the amount spent by the lessee. In fact, insertion of this proviso reduced the rate of stamp duty to be charged to 2% instead of 8% and that too on the amount to be spent by the lessee. 20. The doctrine of legitimate expectation has been discussed and elucidated upon in several judgment by this Court. The doctrine provides a framework for judicial review of executive actions, policy changes, and legislative decisions. In Union of India Ors. v. Hindustan Development Corporation Ors. (1993) 3 SCC 499 , this Court emphasized that legitimate expectation primarily grants an applicant the right to a fair hearing before a decision that negates a promise or withdraws an undertaking from which an expectation of certain outcome or treatment arises. It does not, however, creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the principle that while legitimate expectation warrants fair treatment, it does not preclude the government s flexibility in policy-making. 23. Therefore, the doctrine of legitimate expectation serves only as a procedural safeguard ensuring fairness in administrative decisions and policy changes. It grants the expectant party the right to a fair hearing and an explanation but does not guarantee the realization of the expected benefit. The government s authority to revise policies in public interest remains paramount, with the judiciary intervening only in cases of arbitrariness, unreasonableness, or lack of public interest. This balanced approach ensures that while individuals can expect consistent treatment based on past practices or promises, the government retains the flexibility to respond to evolving needs and priorities. 24. On the doctrine of promissory estoppel, since it is an equitable doctrine, it only comes into play when equity requires a party be estopped from withdrawing its promise. It has been well settled by this Court in several judgments that the principle of promissory estoppel cannot be invoked against the exercise of legislative power. In order to avoid bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion is withdrawn, modified or amended in any manner in exercise of legislative power in larger public interest, then the earlier promise upon which the party acts, cannot be enforced as a right and neither can the authorities be estopped from withdrawing its promise, as such an expectation does not give any enforceable right to the party. Applying the above discussion to the present facts, it is evident that the principles of legitimate expectation and promissory estoppel would not apply here, as the appellants cannot be said to have any enforceable legal right in light of the previous law or policy and executive action, which was subsequently changed by the state legislature in light of larger public interest. Thus, the submissions advanced on behalf of the appellants relating to the challenge to the M.P. Act No.12 of 2002 inserting the proviso (c) to Clause(C) to Entry 33 of Schedule 1-A of the IS Act has to be rejected. None of the case-laws relied upon on behalf of the appellants come to the rescue of the appellants and have no application in the facts and circumstances of the present case. 28. Now coming to the next submission on behalf of the appellants with regard to the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be considered afresh is with respect to determination of the amount spent under the agreement by the lessee. For the said purpose, we reproduce proviso(c) to Clause(C) of the proviso inserted in 2002 : (c) an agreement to lease where the right to collect tolls is given in lieu of the amount spent by the lessee in construction of roads, bridge etc. under the Build, Operate and Transfer (B.O.T.) scheme, shall be chargeable at the rate of two percent on the amount likely to be spent under the agreement by the lessee. 32. From a clear reading of the above proviso (c) to Clause(C), the stamp duty would be chargeable @ 2% on the amount likely to be spent under the agreement by the lessee. Thus, the lessee has no liability to pay any stamp duty on the amount not spent by the lessee but by the lessor or any other stake-holder. The amount spent by the lessee as per the agreement generally was 50% of the total cost of the project. 33. In the case of Rewa Tollway Civil Appeal No. 8985 of 2013 , the total cost of the project was Rs.54 crores, out of which, approximately 50 % would be that of the lessee and 50% to be funded by the lessor i.e. MPRSNN, respondent no.3. However, further reading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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