Agreement to lease lacks stamp duty liability where no present demise or present interest in land is created.

An agreement to lease is chargeable as a lease under Article 36 of the Bombay Stamp Act, 1958 only if it effects an immediate and present demise or transfers a present interest in the property. Here, the document repeatedly treated the occupier as a licensee, limited use to construction-related entry, and expressly postponed any legal interest until execution and registration of a future lease. It therefore remained a mere agreement to lease, not an operative lease in praesenti, and was not chargeable to stamp duty as a lease.

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Issues: Whether an agreement of lease, which expressly states that no legal interest in the land passes until execution and registration of the lease and contemplates a future grant of lease, is chargeable to stamp duty as a lease under Article 36 of the Bombay Stamp Act, 1958.

Analysis: Article 36 of the Bombay Stamp Act, 1958, read with Explanation III, charges an agreement of lease as a lease only where there is an immediate and present demise. The document here repeatedly described the occupier as a licensee, confined its use to entry for construction purposes, and expressly negatived any present demise or transfer of legal interest until the contemplated lease was executed. The arrangement therefore remained an agreement to lease and not an operative lease in praesenti. The distinction between a lease and a licence, and between a present transfer of an interest and a mere permission to use property, supported this conclusion.

Conclusion: The document was not chargeable as a lease under Article 36 of the Bombay Stamp Act, 1958, and stamp duty on that footing was not payable.

Ratio Decidendi: An agreement for a future lease is not liable to stamp duty as a lease unless it effects an immediate and present demise or transfers a present interest in the property.

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