M/S REWA TOLLWAY P. LTD. versus THE STATE OF MADHYA PRADESH & ORS.

Citation: [2024] 7 S.C.R. 1129 · Decided: 19-07-2024 · Supreme Court of India · Bench: VIKRAM NATH · Disposal: Case Partly allowed

cites 9 · see the full citation network in Lexace

Judgment (excerpt)

[2024] 7 S.C.R. 1129 : 2024 INSC 539
M/s Rewa Tollway P. Ltd.  
v. 
The State of Madhya Pradesh & Ors. 
(Civil Appeal No. 8985 of 2013)
19 July 2024
[Vikram Nath* and Ahsanuddin Amanullah, JJ.]
Issue for Consideration
In view of the subsequent change of policy by the state legislature 
in light of larger public interest, the appellants were required to 
pay stamp duty on the Concession Agreement executed under the 
Build, Operate & Transfer (BOT) Scheme. Plea of the appellants 
that in view of the previous executive decision that the agreement 
would not require stamp duty, but was to be executed only on stamp 
paper of Rs.100/-, the appellants entered into the agreement with 
legitimate expectation that no stamp duty was required to be paid. 
Whether the appellants had any enforceable legal right in light of 
the previous policy and executive action which was subsequently 
changed in light of larger public interest; whether the Concession 
Agreement was a lease or a bond or a license; when the stamp 
duty was payable on the amount spent by the lessee, whether the 
demand raised on the whole amount was unjustified.
Headnotes†
Legitimate expectation – Promissory estoppel – When not 
applicable – Transfer of Property Act, 1882 – Indian Stamp 
Act, 1899 – Indian Stamp (M.P.) Act, 2002 – High Court held 
that the Concession Agreement was a lease as defined u/s.105 
of the TP Act as also u/s.2(16) of the IS Act and also rejected 
the challenge made by the appellants to the validity of the 
amendment made in proviso (c) to Clause (C) of Article 33 
of Schedule 1(A) as amended by the Indian Stamp (M.P.) Act, 
2002 – Correctness:
Held: Concession Agreement was a lease – Definition of lease 
as given under the IS Act covers any instrument by which tolls 
of any description are let and also u/s.105 of the TP Act, all the 
ingredients of a lease are fulfilled – No infirmity in the judgment of 
* Author
1130
[2024] 7 S.C.R.
Digital Supreme Court Reports
the High Court warranting any interference – Validity of 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, upheld – It is only a statutory 
provision as to what would be the rate of stamp duty payable 
on lease deeds of a particular type – But for the insertion of the 
proviso which was 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 – Principle 
of promissory estoppel cannot be invoked against the exercise 
of legislative power – A prior executive decision does not bar 
the State legislature from enacting a law or framing any policy 
contrary to or in conflict with the previous executive decision 
in furtherance of larger public interest – Law laid down by the 
legislature would not be hit by principle of promissory estoppel or 
legitimate expectation because earlier the executive expressed its 
view differently – If the previous executive decision is withdrawn, 
modified or amended 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 – Appellants did 
not 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, 
principles of legitimate expectation and promissory estoppel are 
not applicable – Stamp duty would be chargeable @ 2% on the 
amount likely to be spent under the agreement by the lessee – 
Lessee had 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 – Once, the 
stamp duty was payable on the amount spent by the lessee, 
the demand raised on the whole amount would be unjustified –  
Demand set aside to that extent – Revenue Officer/Co

Excerpt shown. Read the full judgment & AI analysis in Lexace.