Fishing rights granted for over one year constitute a lease of immovable property requiring stamp duty and registration.

The appellant secured, through an auction conducted by the Uttar Pradesh Matsya Vikas Nigam Ltd., a document titled “licence for fishing” conferring rights to conduct fishing and remove fish from the Sharda Sagar Jalashya, Pilibhit, for a three-year period from 1998 to 2001, against payment of the auction consideration for each year.

Although fishing was permitted for only approximately ten months in each year because fishing was prohibited during the statutory breeding season, the licence itself covered the entire three-year term.

The Collector, Pilibhit, held that the document was in substance a lease of immovable property and directed the appellant to pay deficit stamp duty of Rs. 15,72,525, recoverable as arrears of land revenue.

The Chief Controlling Authority and the High Court affirmed that determination.

Whether a document granting fishing rights in a tank or reservoir constitutes a transfer of a profit à prendre, and consequently an interest in or benefit arising out of immovable property for the purposes of stamp duty and registration.

Whether the document, notwithstanding its description as a “licence” and the restriction of actual fishing activity to ten months in each year, was in substance a lease or an instrument akin to a lease for a term exceeding one year and therefore compulsorily registrable and chargeable with stamp duty.

Whether the decision in Farookh Ahmad v. State of Uttar Pradesh required the impugned orders to be set aside.

Section 3(26) of the General Clauses Act, 1897 treats benefits arising out of land as immovable property; accordingly, a right to catch and carry away fish from a specified water body is a profit à prendre and constitutes immovable property, as held in Anand Behera v. State of Orissa, (1955) 2 SCC 303.

Under Section 17(1)(d) of the Registration Act, 1908, a lease of immovable property from year to year or for a term exceeding one year is compulsorily registrable.

Section 2(16) of the Stamp Act, 1899 treats a lease as including instruments granting rights to cultivate, occupy, or otherwise enjoy immovable property, and such an instrument must bear the appropriate stamp duty.

Relying on Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh, (1977) 4 SCC 145, and Santosh Jayaswal v. State of Madhya Pradesh, (1995) 6 SCC 520, the Court held that fishing rights are benefits arising out of land and are therefore instruments attracting stamp duty; where the term exceeds one year, compulsory registration follows.

The Court also considered the regulatory provisions of Sections 3 and 6 of the U.P. Fisheries Act, 1948 and the U.P. Fisheries (Development and Control) Rules, 1954, which prohibit fishing during specified breeding seasons but do not shorten the contractual duration of the licence.

The Court examined the substance and terms of the document rather than its description as a “licence.”

Clause 6 specifically granted the appellant the right to conduct fishing and remove fish from the Jalashya, which was a right to take a benefit from the land and therefore a profit à prendre.

Applying Anand Behera, Bihar Eastern Gangetic Fishermen, and Santosh Jayaswal, the Court treated that right as immovable property for stamp and registration purposes.

The fact that fishing could not be carried on during the breeding season was only a statutory regulatory suspension and did not reduce the licence’s three-year duration.

Since the document operated for more than one year, it was compulsorily registrable under Section 17(1)(d) of the Registration Act and liable to stamp duty as an instrument akin to a lease.

Farookh Ahmad was distinguished because, in that case, the High Court had not examined the terms and conditions of the document, whereas the authorities in the present case had considered them and recorded a categorical finding regarding its legal character.

Its three-year duration made it compulsorily registrable under Section 17(1)(d) of the Registration Act, 1908, and liable to the applicable stamp duty.

The orders of the Collector, the Chief Controlling Authority, and the High Court were upheld.

The appeal was dismissed, and any pending applications were disposed of.