Agreement deemed lease, not license; respondent liable for property tax under Delhi Municipal Act

The court held that the agreement constituted a lease rather than a license, making the respondent liable for property tax. The steel structures qualified as buildings under the Delhi Municipal Corporation Act, and the respondent was primarily responsible for the payment of property tax. The court disposed of the appeals accordingly, with no order as to costs.

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Issues Involved:
1. Whether the agreement for the erection of oil storage tanks constitutes a lease or a license.
2. Whether the steel structures qualify as buildings under the Delhi Municipal Corporation Act.
3. Whether the respondent is primarily responsible for the payment of property tax.

Issue-Wise Detailed Analysis:

1. Whether the Agreement Constitutes a Lease or a License:
The primary question was whether the agreement for the erection of oil storage tanks and associated structures constituted a lease or a license. The court examined the definitions under Section 105 of the Transfer of Property Act and Section 52 of the Indian Easements Act. The document's substance was preferred over its form, focusing on the parties' intention. The court noted that exclusive possession typically indicates a lease, but this is not conclusive. The court emphasized that the grantee had exclusive possession of the land and structures, which were substantial and long-term, indicating a lease rather than a license.

2. Whether the Steel Structures Qualify as Buildings:
The court considered whether the steel structures, including oil storage tanks, fell within the definition of "building" under Section 2(3) of the Delhi Municipal Corporation Act. The definition includes any structure, whether of masonry, bricks, wood, mud, metal, or other material. The court referred to a Supreme Court judgment which held that oil tanks could be considered buildings. The court concluded that the structures in question met the statutory definition of buildings, making them subject to property tax.

3. Whether the Respondent is Primarily Responsible for Property Tax:
The court examined whether the respondent was responsible for property tax under Section 120 of the Delhi Municipal Corporation Act. The court noted that the grantee was in exclusive possession of the land and had constructed substantial buildings. Despite the document being termed a license, the court found it constituted a lease, making the respondent liable for property tax. The court also noted that the grantee was required to pay all taxes, cesses, and rates in respect of the land and buildings, further indicating a lease.

Conclusion:
The court held that the agreement constituted a lease rather than a license, making the respondent liable for property tax. The steel structures qualified as buildings under the Delhi Municipal Corporation Act, and the respondent was primarily responsible for the payment of property tax. The court disposed of the appeals accordingly, with no order as to costs.

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