TMI Blog1998 (10) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent. The amount of consideration set out in the agreement being Rs. 60 lakhs while in the valuation of the authority, the market value of that property is held to be Rs. 80.67 lakhs based upon the guideline value in the area. The tenant of the premises whose possession is set out in Form No. 37-I and whose possession has also been verified by the authority by personal inspection and to whom notice has been issued calling upon him to surrender vacant possession, has challenged the action of the appropriate authority seeking possession from the tenant while the proposed vendor and the purchaser have challenged the order of the appropriate authority seeking to exercise its power of compulsory purchase. The proposed vendors are the widow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that if the agreement provides that the sale of property is free of encumbrance, then the tenant would have no right to retain possession of the land as the consideration for the sale would be presumed to include the value of the tenant's interest. The order of the appropriate authority was based solely on the guideline value which it did not choose to discount in any manner, However, no comparable sales were available in the area. Though the property was tenanted, the tenant having been there for over 20 years and the tenant had not consented to vacate the premises, the appropriate authority did not discount the value by reason of the conditions which the vendors had sought to impose on the vendee by their letter dated February 5, 1991 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act registered in March, 1991. The agreement of sale was entered into with that company on May 17, 1991. The company has not chosen to set out any of the conditionalities allegedly agreed to on February 10, 1991. The authority cannot, therefore, be faulted for not placing any reliance on those letters. The proposed vendee had clearly confined itself to the conditions set out in the agreement and those were the conditions which were required to be examined by the authority. The criticism made against the authority for ignoring the letters is quite unjustified. It is no doubt true that the authority has referred to a statement made about the vendors to the effect that the vendors are not in need of money. That however is a statement which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tenant. It has directed notice to be issued to the tenant to surrender possession. It is therefore obvious that the authority prima facie regarded the tenancy as bona fide. Once it is found that a tenantis in occupation of a substantial part of the property, it was incumbent on the part of the authority to discount the guideline value to such an extent as was required to truly reflect the value of the property burdened with the tenancy. The Tribunal (?) has failed to do so. Though it had relied upon the decision of the Supreme Court in the case of C. B. Gautam [1993] 199 ITR 530, that reliance must now be held to be unsustainable in the light of the modification effected to the law by the introduction of the provisos with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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