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TMI Blog2019 (7) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... q. yards/7945 sq. meters along with two Godowns (Nos.13 and 14) and certain other structures standing thereon, which are part of Khasra No. 126 situated in village Durgapur, Tahsil Sanganeer, Jaipur (hereinafter referred to as the "suit land"). 5. One Smt. Mithilesh Kumari [respondent No. 3 herein (since deleted)] and Smt. Krishna Kumari Roongta jointly owned the suit land. The suit land then became a property of a firm called M/s Rajasthan Industrial Company, which consisted of several partners along with Smt. Mithilesh Kumari and Smt. Krishna Kumari Roongta. This partnership was later dissolved by a dissolution deed dated 31.03.1986 executed by the partners. In terms of the dissolution deed, two godowns (Nos.13 and 14) together with 1/4th undivided share in the suit land fell to the share of Smt. Mithilesh Kumari. 6. On 11.11.1993, the appellants (prospective buyers) herein entered into an agreement with Smt. Mithilesh Kumari for purchase of the suit land for a total consideration of Rs. 99,84,500/( Rs. 1051/per sq. yard). The appellants paid a sum of Rs. 40,00,000/to Smt. Mithilesh Kumari towards the advance for purchase of the suit land. According to the appellants, they we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reemptive purchase order, as envisaged by Section 269 UD (1) of the Act, be not made against the appellants in relation to the suit land. The appellants were asked to file reply to the show cause notice. 12. The appellants (prospective buyers) and the vendor (R3) filed their respective replies to the show cause notice. According to them, firstly, comparison of small developed plot of land in Triveni Nagar with the suit land for determination of the value of the suit land was not justified; Second, development of land would need 40% deduction for amenities such as park, roads, electricity, water supply and all other civic amenities; third, the market rate of the area in question as on 01.04.1991 for the first category was fixed at Rs. 550/per sq. meter and for the second category, it was fixed at Rs. 450/per sq. meter and if one would add 12% due to time element of two years, it would work out to Rs. 690/per sq. meter; fourth, subdivision of the suit land would be required to be got approved from the JDA and, if it is done, it would leave 30% to 40% of the land open for civic amenities; and lastly, one plot measuring 116.3 sq. meters was sold at the rate of Rs. 861.10 per sq. mete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. So far as the appellants' appeal (No.744/1994) is concerned, it was dismissed and so far as the vendor's appeal (SAW No.188/1995) is concerned, it was partly allowed with the direction that upon department taking over possession of the suit land, prospective buyers would be entitled to claim refund of the amount paid to the vendor together with interest @ 6% p.a., out of the maturity amount of the FDR (created by the department) and the remaining amount shall be paid to the vendor. 16. The appellants felt aggrieved and filed review petition in the High Court. The Division Bench, which heard the review petition, was consisted of (Justice R.M. Lodha (as His Lordship then was and later became the CJI) and Justice Rafiq because in the meantime, the Chief Justice S M Jha, who was member of the main judgment had retired). 17. The Review Court dismissed the review petition by a reasoned order dated 24.07.2007 which gave rise to filing of C.A. Nos.9800-9801/ 2010 in this Court by the prospective buyers. So far as C.A. No.9901/2010 is concerned, it is filed by the Union of India (Income Tax Department) against that part of the order which allowed the appeal (SAW 188/1995) filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and deals with all the issues on facts and law raised in the show cause notice and its reply. 26. After setting out the facts in detail up to Para 3, the appropriate authority examined in Paras 4 and 5 the location of the suit land, its area, and its proximity with the main roads, industries and residential colonies situated in the nearby areas etc. The appropriate authority then found that having regard to the topography of the suit land, it has a potential market value. 27. Thereafter, the appropriate authority in Para 7 examined the condition of the two existing godowns bearing Nos. 13 and 14 and other structures standing on the suit land and found as a fact that the condition of the two existing godowns was very good and these godowns were actually being used by the appellants for commercial purposes. 28. Considering the rates applicable as in the case of CPWD structures by cost index and keeping in view the relevant factors such as size, location, condition and the commercial use of the godowns, the appropriate authority fixed Rs. 42 lakhs as being the market value of the two godowns. 29. The appropriate authority then in the same para worked out the rate of the sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s basis works out to Rs. 1727.5 x 7943 =Rs. 1,37,21,532/. If the value of depreciated structure of Rs. 42 lakhs is added, the total value of the subject property comes to Rs. 1,79,21,532/as against the declared value of Rs. 99,84,500/." 31. The appropriate authority then in para 8 considered the appellants' objections to the effect that while determining the market value of suit land, deduction of 30% to 40% should have been given and, if it had been given, there would have been no difference of 15% in the value of the suit land as was required to be made out for invoking powers under Chapter XXC by the appropriate authority for preemptive purchase of the suit land. 32. The appropriate authority, however, rejected this submission finding no merit therein. The appropriate authority then examined the issue in the light of Rule 11 of the Rajasthan Urban Areas (sub division) Rules, 1975 and other relevant facts and came to a conclusion that, if several other aspects such as the location of the suit land and its commercial value is taken into consideration, the market value of the suit land would be substantially enhanced and would come to Rs. 1,46,58,548/as against the apparent con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another sale instance property at A256 Triveni Nagar have not been made available but this property is again very close to the nullah and its surroundings are also very poor. Both of these sale instances cannot be compared with the subject property whereas the sale instance relied by us can be comparable subject to adjustment of time gap, commercial nature etc. iii) The subject property is on main road connecting Durgapura station to Tonk Road. It is very close to Tonk Road. The vacant land adjacent to two godowns of the subject property falls on the side of main road leading to newly developed colonies. In other words, the subject property has vacant land area on the main station road as well as on other side road leading to colonies. This factor has not been added while coming to the valuation; iv) As pointed out earlier, the nature of the subject property is commercial. The value of commercial properties is also about 50% more than the residential properties. If this factor is added, the present market value of the subject property will be substantially enhanced." 34. The appropriate authority then in para 10 also examined the case keeping in view the market rates notified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate authority. We consider it apposite to quote the relevant extract from the judgment with a view to show as to how the issue in relation to process of valuation of the suit land was dealt with by the Division Bench. It reads as under:- ".... But on examination of the impugned order of pre-emptive purchase, we find that the Appropriate Authority in para 8 of the order has categorically noted this argument with reference to Rule 11 of the Rajasthan Urban Areas (Sub-Division, Reconstruction and improvement of Plots) Rules, 1975 and noted that the said rule provides that the saleable are would be about 66% and this may be more if the plot size is smaller but assuming that only 66% would have available are for sale, yet out of 7,943 sq. mtrs. An area equal to 5242.38 sq. mtrs. Would have been available for sale. Appropriate Authority therefore by this alternative mode worked out the rate of the land on the basis of comparable sale instance i.e. 5242.38 sq. mtrs. by adjustment of time gap of +12% which then would come to Rs. 1994.72 per sq. mtrs. It was noted that this was so because the deduction of 34% land contemplates absence of larger size as well as less development. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice to prove the value of suit land, which, according to the authority, was 15% higher than the apparent consideration. It is also not in dispute that a categorical finding was recorded by the appropriate authority that the fair market value of the suit land was 15% more than the apparent consideration mentioned in the agreement of sale by the parties. As mentioned above, these findings were examined by the writ Court, intra appellate Court and lastly the review Court in their respective jurisdiction. They were upheld. 45. In our considered opinion, these findings are based on appreciation of evidence. We do not find these findings to be either arbitrary or illegal or against any statutory provisions and nor they can be regarded as being perverse to the extent that no reasonable man could ever reach to such conclusion. We also find that these findings are in conformity with the requirements of Section 269 UD of the Act and the law laid down by the Constitution Bench in the case of C.B. Gautam (supra). 46. Learned counsel for the appellants, however, argued that since there was no reference of the two godowns in the show cause notice and secondly, the appellants w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asthan Bench at Jaipur in Division Bench Special Appeal No.188 of 1995 whereby the appeal filed by the vendor (respondent No.1 in this appeal) was partly allowed with a direction to the appellants(Income Tax Department) that the prospective buyers would be entitled to the refund of the amount paid to the vendor together at the rate of 6% p.a. out of the maturity amount of the aforesaid FDR and remaining amount be paid to the vendor. 2. On perusal of the record, we find that the Single Judge of the High Court had passed an interim order dated 14.09.1994 directing the parties to maintain status quo. He also directed that the period of stay order would be excluded for making the payment by the respondent to the seller depending upon the outcome of the writ petition. This order was later modified on 27.09.1994. While extending the stay order, the Single Judge, however, clarified that in case, if the action impugned is held bad in law, the vendor would be entitled for reimbursement of the loss occasioned to her. It was, however, submitted before the Division Bench of High Court in the appeal that the concerned authorities had invested the amount of apparent sale consideration, i.e., R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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