Fishing Licence Granted For Over One Year Is Treated As Lease And Attracts Stamp Duty: Supreme Court

The Court was hearing an appeal concerning whether a deed by which fishing rights were settled in favour of the appellant for rearing fish from Sharda Sagar Jalashya was a lease of immovable property and, therefore, chargeable to stamp duty. The Collector, Pilibhit had directed payment of deficit stamp duty of ₹15,72,525, which was affirmed by the Chief Controlling Authority, the Allahabad High Court and now the Supreme Court.

A Bench of Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar held: “… when the right is given to a person to catch fish in the tank, it is profit à prendre attached to, or a benefit to arise out of the land. Therefore, it is an instrument for the purpose of stamp duty and since the duration of the licence which is in fact a lease, is for more than a year, it is compulsory registrable and liable to stamp duty as an instrument of lease.”

Advocate Abhishek Swarup appeared for the appellant, while Advocate Shaurya Sahay appeared for the respondent-State.

Background

The appellant had obtained a document titled “licence for fishing” after succeeding in an auction conducted by Uttar Pradesh Matsya Vikas Nigam Ltd. for Sharda Sagar Jalashya, Pilibhit. The document conferred rights for carrying out fishing activity and taking away fish from the Jalashya.

The Collector treated the document as a lease requiring registration under Section 17(1)(d) of the Registration Act, 1908 and chargeable to stamp duty as a lease. The Chief Controlling Authority and the High Court affirmed that view.

Before the Supreme Court, the appellant relied on an earlier order in Farookh Ahmad v. State of Uttar Pradesh and argued that fishing activity was permitted only for ten months in a year, not for the entire period. The State argued that the right to rear fish from a pond amounts to profit à prendre, which is immovable property and is compulsorily registrable when granted for more than a year.

Court’s Observations

The Court first noted that the document was titled as a fishing licence but had been granted after auction for Sharda Sagar Jalashya. It found that the licence was issued for a total period of three years and that permission to carry out fishing activity was different from the licence conferring the right to carry on such activity.

The Court observed: “Permission for carrying out ‘fishing activities’ is altogether different than ‘licence to carry on fishing activities’. Such permission is granted only on the basis of licence, inasmuch as fishing activity is not allowed to be carried out throughout the year.”

Rejecting the argument that seasonal restrictions reduced the duration of the licence, the Court referred to the fisheries law framework governing prohibition of fishing during breeding season. It noted that such restriction was statutory and regulatory in nature.

The Court stated: “Prohibition of fishing for a particular period has thus statutory backing. However, that by itself would not convert the licence for a period less than one year.”

The Bench then examined the terms of the document and found that it conferred specific rights to conduct fishing and remove fish from the Jalashya. It observed: “In the licence itself, it is clearly mentioned in Clause 6 that the same is granted for specific rights of conduct of fishing and for taking away fish cot from the Jalashay. Thus, the licence was exclusively granted for carrying out fishing activity.”

The Supreme Court relied on Anand Behera v. State of Orissa (1955), where a five-Judge Bench had held that the right to catch and carry away fish for a specified future period is profit à prendre and, in India, a benefit arising out of land amounting to immovable property.

The Court further relied on Santosh Jayaswal v. State of M.P. (1995), where it had been held that the right to catch fish in a tank is a benefit arising out of land and requires proper stamp duty and registration depending on the duration of the grant.

Applying these principles, the Court held that the document in the present case was akin to a lease deed. It observed: “In our considered view, the law being fairly well settled and having not being diluted by this Court’s judgment in Farookh Ahmad (supra), the document in question, the terms of which we have referred to in the preceding paragraphs, would be an ‘instrument’ akin to a lease deed.”

The Court also distinguished the appellant’s reliance on Farookh Ahmad, noting that in that case the High Court had not examined the terms and conditions of the licence. In the present case, however, the Collector and the Chief Controlling Authority had considered the document’s terms before holding that it required mandatory registration.

The Bench noted: “ … in the present case, the Collector and the CCA, have discussed the terms of the document to record a categorical finding that the document is an ‘instrument’ requiring to be mandatorily registered being for a value more than Rs.100/- and for a period more than a year.”

Conclusion

The Supreme Court dismissed the appeal and declined to interfere with the orders passed by the Collector, the Chief Controlling Authority and the High Court.

The demand of deficit stamp duty against the appellant, treating the fishing-rights document as an instrument akin to a lease deed, was therefore sustained.

Cause Title: Zaki Ullah Khan v. State of U.P. and Others (Neutral Citation: 2026 INSC 827)

Appearances

Appellant: Advocates Abhishek Swarup and Chetan Sharma, with M/s. Manoj Swarup and Co., AOR

Respondents: Shaurya Sahay, AOR, with Advocates Aman Jaiswal and Sharvi Sharma

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