Zaki Ullah Khanv.State of U P & Ors

Supreme Court Holds Fishing Rights Grant Is a Lease of Immovable Property, Upholds Stamp Duty Levy

Case Snapshot

Case Name: Zaki Ullah Khan v. State of U.P. & Ors.

Citation: 2026 INSC 788

Bench: Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar

Date of Judgment: July 15, 2026

Area of Law: Stamp Duty, Registration Law, Property Law, Fisheries Law

The Judgment in One Line

Right to catch fish (profit a prendre) from a water body is immovable property; a licence for more than one year is a lease attracting stamp duty.

Why This Judgment Matters

This landmark judgment reaffirms that the right to catch fish from a water body—a profit a prendre—constitutes "immovable property" under Section 3(26) of the General Clauses Act, 1897. A document granting such rights for a period exceeding one year is a "lease" within the meaning of Section 2(16) of the Indian Stamp Act and Section 17(1)(d) of the Registration Act, attracting stamp duty. The Court distinguished Farookh Ahmad, clarifying that the determination depends on the terms of the document. The judgment protects State revenue and ensures that fishing rights, like other interests in land, are properly documented and stamped.

Background

The appellant was granted a "licence for fishing" in the Sharda Sagar Jalashya, Pilibhit, Uttar Pradesh, for a period of three years (from September 5, 1998 to June 30, 2001). He paid auction amounts of ₹38.01 lakhs, ₹41.81 lakhs, and ₹45.99 lakhs for successive years. The document was titled "licence" rather than "lease." The Collector, Pilibhit, directed the appellant to pay deficit stamp duty of ₹15,72,525, treating the document as a lease of immovable property. The Chief Controlling Authority and the High Court affirmed this. The appellant appealed, seeking parity with Farookh Ahmad v. State of U.P., where the Supreme Court had set aside a similar order.

Issues Before the Court

1. Whether the deed granting fishing rights in a water body is a lease of immovable property chargeable to stamp duty.

2. Whether the fact that fishing activities were restricted to 10 months in a year reduces the period of the licence.

3. Whether the decision in Farookh Ahmad applies to the present case.

What Did the Supreme Court Hold?

The Supreme Court dismissed the appeal and upheld the imposition of stamp duty. The Court's reasoning was anchored in settled law:

Fishing Rights Constitute Immovable Property: The Court applied the Constitution Bench decision in Anand Behera v. State of Orissa, which held that the right to catch and carry away fish is a profit à prendre—a right to take some profit of the soil. Under Section 3(26) of the General Clauses Act, 1897, "immovable property" includes benefits that arise out of land. As a profit a prendre is a benefit arising out of land, it is immovable property requiring a registered instrument under Section 54 of the Transfer of Property Act if the value exceeds ₹100.

"Licence" Is a Lease in Substance: The Court held that the document must be read as a whole. Though titled "licence," it granted exclusive rights for fishing and taking away fish from the Jalashya. This is a lease of immovable property under Section 2(16) of the Indian Stamp Act, which defines "lease" to include any undertaking to cultivate, occupy, or pay rent for immovable property.

Restriction on Fishing Does Not Reduce Lease Period: The appellant argued that fishing activities were permitted only for 10 months in a year due to breeding season restrictions under the U.P. Fisheries Act, 1948 and the 1954 Rules. The Court rejected this, holding that regulatory suspension during breeding season does not reduce the period of the licence. The licence itself was for three years; the restriction on fishing activity was a statutory prohibition, not a reduction of the lease term.

Farookh Ahmad Distinguished: The Court clarified that Farookh Ahmad was distinguishable. In that case, the High Court had not adverted to the terms and conditions of the licence. Here, the Collector and the CCA had discussed the terms of the document and recorded a categorical finding that it was an instrument requiring registration. The decision in Farookh Ahmad turned on the failure to examine the document, not on a substantive principle.

Three-Year Period Exceeds One Year: Since the licence was for a period of three years, it fell within Section 17(1)(d) of the Registration Act, which requires registration of leases of immovable property from year to year or for any term exceeding one year. Accordingly, stamp duty was leviable.

Key Legal Principles

1. Profit a prendre is immovable property — the right to catch fish from a water body is a benefit arising out of land, constituting immovable property under Section 3(26) of the General Clauses Act.

2. Substance over form — a document titled "licence" that grants exclusive fishing rights is, in substance, a lease of immovable property.

3. Regulatory suspension does not reduce lease period — restrictions on fishing during breeding seasons do not reduce the duration of the lease; the lease period is determined by the document, not by the permitted activity period.

4. Lease exceeding one year requires registration — under Section 17(1)(d) of the Registration Act, leases for more than one year or from year to year are compulsorily registrable.

5. Stamp duty on lease instruments — under Article 35(a) of Schedule I-A of the Stamp Act, a lease of immovable property requires stamp duty.

6. Farookh Ahmad is distinguishable — the decision turned on the failure to examine the document's terms, not on a substantive principle.

Important Precedents

Anand Behera v. State of Orissa, (1955) 2 SCC 303 (Constitution Bench)

• Held that the right to catch and carry away fish is a profit à prendre, a benefit arising out of land, and therefore immovable property under Section 3(26) of the General Clauses Act.

Santosh Jayaswal v. State of M.P., (1995) 6 SCC 520

• Held that the right to catch fish is a profit à prendre attached to or a benefit to arise out of the land; it is an instrument for stamp duty purposes; a lease exceeding one year is compulsorily registrable.

Bihar Eastern Gangetic Fisherman Co-operative Society Ltd. v. Sipahi Singh, (1977) 4 SCC 145

• Held that a profit à prendre is immovable property; its grant requires a registered instrument.

Godwin Construction Pvt. Ltd. v. Commissioner, Meerut Division, 2025 INSC 1207

• Affirmed that a document must be read as a whole to determine its true nature.

Farookh Ahmad v. State of U.P., 2025 SCC OnLine SC 221

• Distinguished: the Court set aside the High Court's order because it had not adverted to the terms of the licence; it did not lay down a substantive principle.

Practical Impact

For advocates: This judgment is crucial when advising clients on documentation for fishing or other natural resource rights. A document granting such rights for more than one year—regardless of being called a "licence"—will be treated as a lease, requiring stamp duty and registration. Advocates must ensure proper stamp duty payment to avoid penalties.

For future litigation: The judgment settles the law on fishing rights as immovable property. It clarifies that the Farookh Ahmad decision is not a blanket rule; courts must examine the terms of the document. The judgment also confirms that statutory restrictions on activity do not reduce the lease period.

May be cited: In any case involving the classification of fishing rights, mining rights, or other natural resource extraction rights as leases, and in cases where the Farookh Ahmad decision is cited for the proposition that fishing rights are not leases.

Lawcurb Quick Insight

The Court's distinction of Farookh Ahmad is significant. That decision was based on the High Court's failure to examine the document, not on a substantive principle. The present judgment reaffirms the settled law that fishing rights constitute immovable property and that the document must be examined on its terms.

Lawcurb Practice Note

When drafting documents granting fishing or similar rights, ensure the document is properly stamped as a lease if it exceeds one year. Do not rely on the title "licence" to avoid stamp duty. Courts will examine the substance of the rights granted, not the nomenclature.

Remember This Ratio

Fishing rights (profit a prendre) constitute immovable property; a grant exceeding one year is a lease chargeable to stamp duty.

Exam Lens

Q: What is a profit a prendre, and how is it classified under Indian property law? A: A profit a prendre is the right to take some profit of the soil, such as fish, minerals, or timber, from another's land. Under Section 3(26) of the General Clauses Act, 1897, it is classified as "immovable property" because it is a benefit that arises out of land.

Q: When does a "licence" for fishing become a "lease" for stamp duty purposes? A: When the document grants exclusive rights to fish and take away fish for a period exceeding one year, it constitutes a lease under Section 2(16) of the Indian Stamp Act and Section 17(1)(d) of the Registration Act, regardless of being titled "licence."

Q: Why was Farookh Ahmad distinguished from the present case? A: In Farookh Ahmad, the High Court had not adverted to the terms and conditions of the licence to determine whether it was a lease. The Supreme Court set aside the judgment for that reason. In the present case, the authorities had examined the terms of the document and recorded a categorical finding that it was an instrument requiring registration.

Final Outcome

• Appeal dismissed — the Supreme Court upheld the orders of the Collector, CCA, and High Court.

• Deficit stamp duty payable — the appellant is liable to pay ₹15,72,525 as deficit stamp duty.

• Fishing rights constitute immovable property — the document granting fishing rights is a lease.

• Farookh Ahmad distinguished — the decision is not a blanket rule; the document's terms must be examined.

• No costs — pending applications disposed of.

Lawcurb Verdict

This judgment is a significant reaffirmation of the settled law that fishing rights constitute immovable property and that a grant exceeding one year is a lease requiring stamp duty and registration. By distinguishing Farookh Ahmad, the Court has clarified that the determination depends on the terms of the document, not on any broad principle. The judgment protects State revenue and ensures that rights in natural resources are properly documented and stamped. A principled decision that upholds the law on stamp duty and registration.

This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.