Click the Play button to listen to article

The Supreme Court recently held that a lease deed vesting fishing rights for more than a year in an individual is compulsorily registrable and liable to stamp duty.

The Court held that the right to catch and carry away fish from a water body constitutes profit à prendre—a benefit arising out of land—and is therefore immovable property for the purpose of stamp duty.

“…when the right is given to a person to catch fish in the tank, it is profit à prendre attached to, or a benefit to arise out of the land. Therefore, it is an instrument for the purpose of stamp duty and since the duration of the licence, which is in fact a lease, is for more than a year, it is compulsory registrable and liable to stamp duty as an instrument of lease.”, observed a bench of Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar.

The Court refused to interfere with the Allahabad High Court's order which had upheld the UP authorities' decision to direct the Appellant to pay the deficit stamp fee of Rs.15,72,525/- for the lease deed executed in his favour, for three years between 1998 to 2001, creating fishing rights in Sharda Sagar Jalashya, Pilibhit, Uttar Pradesh.

The Appellant moved the Supreme Court against the High Court's decision, protesting against the deficit stamp duty. He argued that since the permission to conduct fishing activities was not granted for the entire year, inasmuch as by a permission granted by the Uttar Pradesh Matsya Vikas Nigam Ltd. was only for 10 months in a year, the 'licence' cannot be treated to have been issued for more than a year or more to make it a compulsorily registrable instrument to attract stamp duty.

Before the Supreme Court, the appellant argued that he had not been granted permission to conduct fishing activities throughout the year. Under the permission granted by the Uttar Pradesh Matsya Vikas Nigam Ltd., fishing was permitted only for 10 months in a year. He contended that the licence could not consequently be treated as having been granted for a period exceeding one year.

The Bench rejected this argument, observing that permission to carry out fishing activities was distinct from the licence to carry on fishing activities.

It noted that under the Uttar Pradesh Fisheries Act, 1948, and the Uttar Pradesh Fisheries (Development and Control) Rules, 1954, fishing was prohibited during certain breeding seasons. The restriction was regulatory in nature and did not reduce the duration of the licence.

“…restricting fishing activities in the subject Jalashya to 10 months in a year upon grant of permission from the Uttar Pradesh Matsya Vikas Nigam Ltd. is in accord with the provisions of the 1948 Act and the 1954 Rules. Prohibition of fishing for a particular period has thus statutory backing. However, that by itself would not convert the licence for a period less than one year.”, the Court said.

The court relied on 1955 constitution bench judgment of Anand Behera & Anr. V State of Orissa & Anr., where it was held that:

“Right to catch fish is profit a prendre and benefit to arise out of land is an immovable property for the purpose of stamp duty. It would, therefore, be clear that since it is a right given to the appellants to catch fish in the tank, it is a profit a prendre attached to or benefit to arise out of the land. Therefore, it is an instrument for the purpose of stamp duty.”

Noting that the instrument conveying fishing rights upon the Appellant was for three years, therefore, the Court noted that it would require to be mandatorily registered being for a value more than Rs.100/- and thus be subjected to an appropriate stamp duty.

The appeal was dismissed.

Cause Title: ZAKI ULLAH KHAN VERSUS STATE OF U.P.AND ORS.

Citation : 2026 LiveLaw (SC) 934

Click here to download judgment

Appearance:

For Appellant(s) : Mr. Abhishek Swarup, Adv.* Mr. Chetan Sharma, Adv. M/S. Manoj Swarup And Co., AOR

For Respondent(s) : Mr. Shaurya Sahay, AOR Mr. Aman Jaiswal, Adv. Ms. Sharvi Sharma, Adv.

Tags: