9911796707
TMI Blog1999 (3) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings were that the building had ground plus three upper floors, each of which had an area of 13,910 square feet. That, the fourth floor admeasured 2,524 square feet and the building had a frontage of 108 square feet falling on Tardeo Road. That, the building was a RCC structure having RCC beams and columns and slabs and all essential amenities including lift, storage tank, etc., were duly provided. Further, leave and licence agreement was entered into between the aforestated vendors on the one hand and the respondent herein on June 12, 1963, under which either party to the leave and licence agreement could determine the licence at any time by giving twelve calendar months notice. According to the reasons given, the licensee itself had purchased the premises and hence the present market value of the property was determinable by the land and building method. According to the said reasons, the possession of the licensee under the above agreement was a notional vacant possession. Pursuant to the notice issued by the competent authority on April 12, 1985, the parties were heard. The respondent herein contended before the competent authority that it was a protected tenant by v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had filed a valuation report which itself shows that the lowest valuation of Rs, 87.14 lakhs represented the fair market value on the basis of the land and building method. That, the said valuer had applied five different methods of valuation in which the lowest valuation was Rs. 14.44 lakhs arrived at by the rent capitalisation method taking the property as fully tenanted whereas the other lowest valuation was of Rs. 87.14 lakhs on the land and building method. The competent authority came to the conclusion that there was no merit in the contention of the respondent that the property was tenanted, particularly in view of the fact that both the above companies were controlled and managed by F. Hoffman La Roche Company Limited, Switzerland, and as both the companies were owned by Messrs. F. Hoffman La Roche Company Limited, Switzerland, the real owner of the property was the said Swiss company. The competent authority also came to the conclusion that under the above circumstances, the owner was claiming the tenancy against itself. The competent authority also found that the vendor-company had no interest of its own other than the interest of Messrs. F. Hoffman La Roche Company Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was valued by the rent capitalisation method. The Tribunal found that even the Departmental Valuer in his report, valued the property at Rs. 13.54 lakhs by taking the rate of capitalization at 9.5 per cent., i.e., multiple of 10.53. The Tribunal found that the competent authority had failed to apply its mind to the report of the Departmental Valuation Officer. In the circumstances, the Tribunal came to the conclusion that the tenancy could not have been ignored by the competent authority. Accordingly, the Tribunal allowed the application. Being aggrieved by the decision of the Tribunal, the Department has preferred this first appeal. Dr. Chandrachud, learned Additional Solicitor-General appearing on behalf of the appellants, contended that the transferor and the transferee companies were interconnected as indicated by the pattern of the shareholding referred to hereinabove. He pointed out that apart from the shareholding, the managing director of the vendor-company was a director of the respondent-company. That, the abovementioned Swiss company Messrs. F. Hoffman La Roche Company Limited-was managing the affairs of the transferor and the transferee companies. That Voltas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, the rent capitalization method was the correct method for arriving at the fair market value and applying that method, it cannot be said by any stretch of imagination that there was undervaluation of the property. He contended that the competent authority erred in coming to the conclusion that Rs. 50 lakhs represented understatement of consideration. Accordingly, he contended that the Tribunal was right in setting aside the order of the competent authority. We do not find any merit in this appeal preferred by the Department. On the facts and circumstances of the present case, the position which emerges is that on June 12, 1963, a leave and licence agreement was entered into between the vendor-company on the one hand and the respondent-company on the other hand. The leave and licence agreement did not stipulate any particular period. The respondent-company was the licensee in possession of the property on February 1, 1973, when the Rent Act was amended. On that date, the respondent-company became the protected tenant. The competent authority erred in ignoring the provisions of the Bombay Rent Act as amended with effect from February 1, 1973. The sale in question took p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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