Agreement to lease, not present demise, is not stampable as a lease where future execution was contemplated.

Correspondence that invited an offer for lease and was accepted only in relation to a future transaction amounted to an agreement to lease, not a present demise. On the surrounding correspondence, the parties had merely undertaken to execute a lease later, and the respondent was recognised as acting as promoter for a cooperative housing society. A mere executory agreement to lease is not a lease and is not chargeable to stamp duty under the Bombay Stamp Act, 1958. The contractual benefit of that agreement could also be assigned, supported by the subsequent governmental sanction of transfer in favour of the cooperative society, making the revenue's demand unsustainable.

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Issues: Whether the correspondence between the parties amounted to a completed lease or only an agreement to lease, and whether such correspondence was liable to stamp duty under the Bombay Stamp Act, 1958.

Analysis: The notice invited an offer for lease and the respondent made its offer expressly as a promoter for a cooperative housing society. The acceptance by the Government, read with the surrounding correspondence, showed that no present demise had taken place and that the parties had only bound themselves to execute a lease in future. The documents also showed that the respondent was consistently recognised as acting as promoter, and the Government subsequently sanctioned transfer of the rights, title and interest in favour of the cooperative society. A mere agreement to lease, not creating an immediate demise, does not amount to a lease and is not an instrument chargeable to duty. The benefit of such an executory agreement could validly be assigned in the manner undertaken here.

Conclusion: The instrument was only an agreement to lease and not a lease. It was not chargeable to stamp duty, and the demand raised by the revenue was unsustainable.

Ratio Decidendi: An executory agreement to lease that does not create a present demise is not a lease and is not chargeable as such to stamp duty; the contractual benefit of that agreement may be assigned where the surrounding circumstances and governmental consent support that course.

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