Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2006 (4) TMI 542

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... register from the Municipality, and, on the basis of the reports of the Advocate Commissioner and the Chartered Engineer and also taking the guideline value at ₹ 250/- per square feet, fixed the fair rent at the rate of ₹ 2,642/- per month. (iv) The tenant/petitioner, challenging the said fixation of fair rent, filed R.C.A.No.136 of 1994 before the Rent Control Appellate Authority. (v) After hearing the counsel for the parties, the Rent Control Appellate Authority, by the judgment dated 30.07.1996, dismissed the appeal, confirming the findings of the Rent Controller and fixing the fair rent at ₹ 2,642/- per month. (vi) Assailing the orders of both the Rent Controller and the Rent Control Appellate Authority, this Civil Revision Petition has been filed by the petitioner/tenant before this Court. 3. The main point, that has been urged before Justice K.P. Sivasubramaniam, a learned single Judge of this Court (as he then was), by the learned counsel for the petitioner/tenant, is, that the authorities below should not have accepted the guideline value, maintained by the Sub-Registrar's Office, or, the valuation register, maintained by the Municipal .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t reported in 1997 (3) Law Weekly 193 (SRINIVASA GOUNDER V. K.VENKATESAN) had held that the guideline value as maintained by the Sub-Registrar's Office cannot be accepted as correct for the purpose of ascertaining the market value of the property. 4. Therefore, there are two conflicting decisions which require to be resolved. Having regard to the fact that in many Civil Revision Petitions before this Court as well as several similar proceedings before the various Authorities under the Rent Control Act, the same issue arises for consideration, it would be desirable to have the issue resolved at the earliest, by a larger Bench. Therefore, the office is directed to place the papers before My Lord the Honourable the Chief Justice for reference before a Larger Bench. That is how the matter has been referred to this Full Bench, for deciding the issue in question. 7. Let us now quote the relevant observations from the two conflicting decisions, one reported in 1995 T.L.N.J.226 (N.Sulaiman v. R. Ravichandran), rendered by Justice M.Srinivasan, and the other reported in 1997 (3) LAW WEEKLY 193 (Srinivasa Gounder v. K.Venkatesan), rendered by Justice S.S.Subramani : .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... value fixed by the Government for the purpose of stamp duty has no relevance. In paragraph 17 of the judgment, I have said thus :- ..The Government fixes the value only for the purpose of Stamp Duty i.e., for the purpose of its revenue. The value is fixed for the locality and not for a particular survey number. The market value for a particular survey number is the result of a bargain between the parties. That is a matter to be proved by evidence. Judicial notice cannot be taken regarding the value of the property on the basis of a value fixed by the Government. 10. Since the Appellate Authority has relied upon only the hearsay evidence of P.W.1, and that too on the basis of the information ascertained by him from the Sub-Registrar's Office where registers have been kept for the purpose of determining stamp duty, the same cannot be accepted as correct. 8. On a reading of the above observations, it is clear that Justice S.S.Subramani decided the issue in two cases, namely, 1996-2-L.W.6 37 (Rahmath Fathima, T.H.S. v. T.K.Kader Mohideen) and 1997 (3) LAW WEEKLY 193 (Srinivasa Gounder v. K.Venkatesan), holding, that for determination of market value, transaction b .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... and (3) a number of years purchase of the actual or immediately prospective profits of the lands acquired. Same was the view in Tribeni Devi v. Collector of Ranchi ((1972) 1 SCC 480). It was reiterated in catena of decisions, vide, Periyar and Pareekanni Rubbers Ltd. v. State of Kerala ((1991) 4 SCC 195). Therefore, it is settled law that in determining the market value, the Court has to take into account either one or the other three methods to determine market value of the lands appropriate on the facts of a given case to determine the market value. Generally, the second method of valuation is accepted as the best. The question, therefore, is whether the Basic Valuation Register would form foundation to determine the market value.... It is, therefore, clear that the Basic Valuation Register prepared and maintained for the purpose of collecting stamp duty has no statutory base or force. It cannot form a foundation to determine the market value mentioned thereunder in instrument brought for registration. Equally, it would not be a basis to determine the market value under Section 23 of the Act, of the lands acquired in that area or town or the locality or the taluk etc. Evidenc .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... preme Court in the same case, which was later taken before the Supreme Court in Jawajee Naganatham v. Revenue Divisional Officer (1994 (4) S.C.C.595). In a recent case, Land Acquisition Officer v. Jasti Rohini (1995 (1) S.C.C.717), the Supreme Court has observed that valuation register on the basis of the notification under Section 47-A of the Stamp Act is for collection of Revenue and it cannot be the basis for determination of the market value of the land. In this case also, the Supreme Court has observed that the price which the willing seller expects from the willing purchaser is the market price. This Court also in Collector, Nilgiris v. M/s.Mahavir Plantations Pte.Ltd. (AIR 1982 Madras 138) has held that to adopt figures prepared in the valuation guideline would be dangerous because they offer no guarantee of the truth or correctness of data. The Delhi High Court in Inder Prasad v. Union of India (AIR 1985 Delhi 304) also has repeated the same expression that the price which a willing seller might reasonably expect to obtain from a willing purchaser is the test to determine the market value and it cannot be based on the opinion or information given by the Government. There .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Act 24 of 1967) which provides for dealing with instruments of conveyance which are undervalued. The guideline value is a rate fixed by authorities under the Stamp Act for purposes of determining the true market value of the property disclosed in an instrument requiring payment of stamp duty. Thus the guideline value fixed is not final but only a prima facie rate prevailing in an area. It is open to the registering authority as well as the person seeking registration to prove the actual market value of property. The authorities cannot regard the guideline valuation as the last word on the subject of market value. This position is clear in the explanation to Rule 3 of the Tamil Nadu Stamp ( Prevention of Undervaluation of Instruments) Rules,1968. The said Explanation reads as follows : Explanation.- The 'guidelines register' supplied to the officers is intended merely to assist them to ascertain prima facie, whether the market value has been truly set forth in the instruments. The entries made therein regarding the value of properties cannot be a substitute for market price. Such entries will not foreclose the enquiry of the Collector under Section 47-A of the Act or .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... is the result of a bargain between the parties. On the other hand, as pointed out by the Supreme Court, the market value is the value, as described in the sale deed. 14. The methods of valuation for ascertaining the market value, as suggested in the above decisions, are as follows : (1) Opinion of experts (2) The price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages. Evidence of bona fide sales between willing prudent vendor and prudent vendee of the lands acquired or situated near about that land possessing same or similar advantageous features would furnish basis to determine market value. (3) A number of years purchase of the actual or immediately prospective profits of the lands acquired. 15. It is a settled law, as laid down in the judgments referred to above, that in determining the market value, the Court has to take into account either one or the other three methods to determine market value of the lands appropriate on the facts of a given case. According to the Supreme Court, generally, the second method of valuation is accepted, as the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ter setting aside the orders impugned, and to allow the parties to adduce evidence, to help the Rent Controller in arriving at the market value, on the basis of the evidence of bona fide sales between the vendor and the vendee of the lands situated near about that land possessing same or similar advantageous features during the relevant point of time; which is, accordingly, ordered. 21. While the reference was made for Larger Bench, the learned single Judge directed the tenant/revision petitioner to pay a sum of ₹ 1 ,500/- per month commencing from the month of April,2000, towards monthly rent directly to the landlord during the pendency of the above revision petition, which shall be adjusted after final adjudication. 22. We make it clear that the said interim order shall continue till the disposal of the matter by the Rent Controller. 23. Since the R.C.O.P.is of the year 1993 and, by now, thirteen years' period has elapsed, the Rent Controller is directed to dispose of the matter within a period of two months from the date of receipt of copy of this order. 24. Civil Revision Petition is disposed of accordingly. No costs. - - TaxTMI - TMITax - Indian La .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates