The Hon’ble Supreme Court in a recent judgment dated 15th July 2026 in Zaki Ullah Khan vs. State of Uttar Pradesh and Others answered the following issue:
ISSUE
Whether a deed framed as a “Licence for fishing”, granting an individual fishing rights in a water body for a period exceeding one (1) year, constitutes a lease or transfer of an interest in immovable property in the nature of profit à prendre and consequently, whether such instrument is compulsorily registrable under Section 17(1)(d) of the Registration Act, 1908 and liable to the appropriate stamp duty.
INTRODUCTION
A document may be described as a “licence”, but it does not necessarily remain a licence in the eyes of law. The true character of such document depends upon the rights it creates and the substance of the transaction. The Hon’ble Supreme Court through its decision in Zaki Ullah Khan vs. State of Uttar Pradesh and Others, answered the above-mentioned issue in the affirmative, whereby the Hon’ble Supreme Court held that the right to catch and carry away fish from a tank or water body constitutes a 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.
BRIEF FACTS
The dispute arose from licence of fishing of fishing rights in the Sharda Sagar Jalashya, Pilibhit, Uttar Pradesh. The appellant had succeeded in an auction conducted by the Uttar Pradesh Matsya Vikas Nigam Ltd. Subsequently, a document framed as “licence for fishing” was executed in favour of the appellant. The licence was granted for a period of three (3) years on payment of auction amount of Rs. 38.01 lakhs for the period 01.09.1998 to 30.6.1999; Rs. 41.81 lakhs for the period 01.09.1999 to 30.6.2000 and Rs. 45.99 lakhs for the period ending on 01.09.2001. Thus, the ‘licence’ was issued for a total period of three years. 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.
Vide Order dated 23.03.2006, the Collector, Pilibhit, Uttar Pradesh, directed the appellant to pay the deficit stamp fee of Rs. 15,72,525/- and in the absence of non-deposit of the charged amount/deficit stamp fee, the same shall be recovered as arrears of land revenue. The Collector’s Order dated 23.03.2006 was affirmed by the Chief Controlling Authority U.P. at Allahabad by its order dated 06.10.2006 which, in turn, was called in question before the High Court and has been duly affirmed vide Order dated 01.09.2009. The Collector and the CCA, passed the orders imposing the liability on the appellant to pay the deficit stamp duty of Rs. 15,72,525/- mainly on the ground that the subject deed though referred as licence, is in fact a lease requiring registration under Section 17(1)(d) of the Registration Act, 1908 if the value of the document is more than Rs. 100/-, and the same would attract stamp duty as a ‘lease’. The reasoning given by the Collector was found in favour with the CCA and the High Court. Consequently, the appellant challenged the High Court Order before the Hon’ble Supreme Court of India.
THE APPELLANT’S ARGUMENT(S)
The principal argument on behalf of Appellant was that the document was merely a licence and the same could not be treated as a lease exceeding one (1) year. Another argument was that the fishing activities were not permitted throughout the calendar year and hence, the grant of such right could not be granted as one extending beyond one (1) year for purposes of compulsory registration. The Appellant also sought parity by relying on Hon’ble Supreme Court’s decision dated 12.02.2025 in Farookh Ahmad v. State of Uttar Pradesh, wherein also, a licence of the same nature was in issue, the Hon’ble Supreme Court has set aside the order passed by the High Court wherein the appellant, Farookh Ahmad, was held responsible for payment of the stamp duty as a lease.
STATUTORY FRAMEWORK GOVERNING FISHING ACTIVITIES
Under Section 6(4) and (5) of the Fisheries Act, 1897 read with the Rules framed thereunder, fishing activity is not permissible during the breeding season, i.e. during the rainy season and therefore, the fishing activity is always restricted to be carried out for a period excluding the breeding season, the same being in the nature of a regulatory suspension.
The fishing and allied activities in the State of Uttar Pradesh are governed under the U.P. Fisheries Act, 1948.
INTERPRETATION
The Hon’ble Supreme Court held that restricting fishing activities in the subject Jalashya to 10 months in a year upon grant of permission from the Uttar Pradesh Matsya Vikas Nigam Ltd. is in accord with the provisions of the 1948 Act and the 1954 Rules. 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 Hon’ble Supreme Court referred to its decision in Anand Behera v. State of Orissa, (1955) 2 SCC 303, a five Judge Bench held that the right to catch and carry away fish in specific sections of the lake over a specific future period is a right to take some profit of the soil for the use of the owner of the right and in India, it is regarded as a benefit that arises out of the land and as such, is immovable property. Hence, such a right constitutes a profit à prendre.
Section 3(26) of the General Clauses Act, 1897, defines “immovable property” as including benefits that arise out of the land. The Transfer of Property Act does not define the term except to say that immovable property does not include standing timber, growing crops or grass. As fish do not come under that category the definition in the General Clauses Act applies and as a profit a prendre is regarded as a benefit arising out of land it follows that it is immovable property within the meaning of the Transfer of Property Act.
The Hon’ble Supreme Court also referred to its decision in Santosh Jayaswal v. State of M.P. (1995) 6 SCC 520, whereby it observed that 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.
DISTINGUISHING FAROOKH AHMAD
The Hon’ble Supreme Court observed that its decision dated 12.02.2025 in Farookh Ahmad v. State of Uttar Pradesh is clearly distinguishable inasmuch as the Hon’ble Supreme Court set aside the order passed by the High Court because in the said matter, the High Court had not adverted to the terms and conditions of the licence for deciding whether a document is a lease instrument or not.
The Hon’ble Supreme Court noted that 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.
THE DECISION
The Hon’ble Supreme Court declined to interfere with the concurrent findings of the Collector, the Chief Controlling Authority and the Allahabad High Court. The Hon’ble Supreme Court held that the “licence for fishing” is in substance an instrument akin to a lease deed and since the right under such licence was granted for a period exceeding one (1) year, the instrument was compulsorily required to be registered and liable to the appropriate stamp duty as per law. The appeal was accordingly dismissed.
CONCLUSION
The decision in Zaki Ullah Khan vs. State of Uttar Pradesh and Others brings together three interconnected areas of law – property, registration and stamp duty; to reaffirm a principle that has been settled for decades: a right to catch and carry away fish from a water body can constitute a profit à prendre and therefore an interest in immovable property. Provided that such a right is granted for period exceeding one (1) year, the transaction cannot escape the statutory requirements of registration and stamp duty merely because the document is framed as “licence” or because fishing is seasonally prohibited. Hence, the substance of the right granted carries substantially greater weight than the label attached to such a document.
By - C. George Thomas and Dhananjay Kataria
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