BOT scheme concession agreements constitute leases under Transfer of Property Act requiring stamp duty on lessee expenditure only

The SC upheld the HC's decision that BOT scheme concession agreements constitute leases under the Transfer of Property Act and Indian Stamp Act. The court clarified that legitimate expectation doctrine provides only procedural safeguards for fair hearings, not absolute rights to expected outcomes, and remains subject to overriding public interest. Promissory estoppel cannot be invoked against legislative power exercise. The SC confirmed stamp duty is payable on amounts spent by the lessee, not the entire project cost, directing revenue authorities to recalculate demands accordingly and refund excess amounts deposited. Appeals were partly allowed with this clarification on stamp duty calculation.

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Issues Involved:
1. Whether the transaction under the Build, Operate & Transfer (BOT) Scheme amounts to a "lease" under Section 105 of the Transfer of Property Act, 1882, and Section 2(16) of the Indian Stamp Act, 1899.
2. Validity of the amendment made in proviso (c) to Clause (C) of Article 33 of Schedule 1(A) by the Indian Stamp (M.P.) Act, 2002.
3. Declaration of Section 48 and 48(B) of the Indian Stamp Act, 1899, as amended by M.P. Act 24 of 1990, as ultra vires.
4. Application of the doctrines of legitimate expectation and promissory estoppel.
5. Determination of the amount spent under the agreement by the lessee for stamp duty purposes.

Comprehensive Issue-wise Analysis:

1. Whether the transaction under the BOT Scheme amounts to a "lease":
The Supreme Court upheld the High Court's decision that the Concession Agreement under the BOT Scheme qualifies as a "lease" under Section 105 of the Transfer of Property Act and Section 2(16) of the Indian Stamp Act. The Court emphasized that all the ingredients of a lease were present, including the transfer of a right to enjoy the property for a fixed period and for consideration. The definition of "lease" under the IS Act, which includes any instrument by which tolls are let, was also considered. The Court referred to previous judgments, including *Associated Hotels of India Ltd. v. R.N. Kapoor* and *State of Uttarakhand v. Harpal Singh Rawat*, to support its conclusion.

2. Validity of the amendment in proviso (c) to Clause (C) of Article 33 of Schedule 1(A):
The Court rejected the appellants' challenge to the amendment, stating that it merely specified the rate of stamp duty applicable to lease deeds under BOT projects, reducing it from 8% to 2% of the amount spent by the lessee. The amendment did not redefine "lease" nor did it interfere with its interpretation. The Court found no merit in the argument that the amendment was arbitrary or violated Article 14 of the Constitution of India.

3. Declaration of Section 48 and 48(B) of the Indian Stamp Act as ultra vires:
The Court did not find any reason to declare Section 48 and 48(B) of the Indian Stamp Act, as amended by M.P. Act 24 of 1990, as ultra vires. The provisions were found to be within the legislative competence of the State and did not violate any constitutional mandates.

4. Application of the doctrines of legitimate expectation and promissory estoppel:
The Court held that the doctrines of legitimate expectation and promissory estoppel did not apply in this case. It was emphasized that these doctrines cannot be invoked against legislative actions. The Court cited *Hero Motocorp Ltd. v. Union of India* to underscore that there can be no estoppel against the legislature in exercising its legislative functions. The Court also referred to *Union of India v. Hindustan Development Corporation* and *Ram Pravesh Singh v. State of Bihar* to explain that legitimate expectation does not create an absolute right and is subject to overriding public interest.

5. Determination of the amount spent under the agreement by the lessee:
The Court clarified that stamp duty should be charged at 2% on the amount spent by the lessee under the agreement, not on the total project cost. The Court directed the Collector (Stamps) to determine the exact amount spent by the lessee and recalculate the stamp duty accordingly. The Court instructed that any excess amount already deposited should be refunded, and any deficit should be paid by the appellants within two months of the fresh demand.

Conclusion:
The Supreme Court upheld the High Court's judgment, affirming that the Concession Agreement under the BOT Scheme constitutes a "lease" and that the amendments to the Indian Stamp Act were valid. The doctrines of legitimate expectation and promissory estoppel were deemed inapplicable against legislative actions. The Court directed a recalculation of the stamp duty based on the actual amount spent by the lessee, ensuring that any excess payment is refunded and any deficit is paid promptly. The appeals were partly allowed to this extent.

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