TMI Blog1994 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 8, 1994, under section 269UD(1A) of the Act on the ground that the apparent consideration was lower for various reasons mentioned therein and the value of the land is much higher than the agreed rate. An example of a plot of land at A-90, Triveni Nagar, near Durgapura Station, sold by the Jaipur Development Authority on November 7, 1992, at Rs. 1,781 per sq. metre was taken. Adjustment of five per cent. on account of less development of the plot and ten per cent. on account of general condition of the plot was given and 12 per cent. was added on account of the time gap. On the basis of the rate of Rs. 1,692 per sq. metres, the value of the land of 7,943 sq. metres was calculated at Rs. 1,34,39,556. The petitioner was asked as to why the order for pre-emptive purchase under section 269UD be not made and the case was fixed for March 21, 1994. Objections were submitted by the vendor as well as the petitioner that 40 per cent. of the land would be required to be left for amenities like parks and roads besides the cost of development of roads, electricity, water supply, etc. The sub-division has not been effected. It was also stated that the market price of the land in Durgapura noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the RIICO for industrial land which is Rs. 100 per sq. metre for fully developed land. Even if the valuation is to be taken on the basis of the residential plot, the cost of development and reduction of area on account of the facilities have to be taken into consideration besides the fact that it would take around 12 months to develop the property over which at least Rs. 18 lakhs would have to be deducted on account of interest alone. Possession has been taken only of land covered under godowns and the open area is said to be under the co-ownership of Smt. Krishna Kumari. The final agreement with the co-owner has not been arrived as yet, and there can be a change of site also. No notice was issued for treating the property as a commercial property. The value of the godown was also not mentioned in the notice issued. The grievance of the petitioner is also that they were given only ten days ' time for filing the reply and thus the principles of natural justice have been violated. A reasonable opportunity as directed by the apex court has also not been given. The notice was received on March 11, 1994, and there was a strike by Government staff from March 16, 1994, to April 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of the land approved by the Jaipur Development Authority, for commercial use to the extent of 1,087 sq. yards, it is submitted that the cost should be calculated at Rs. 1,800 per sq. metre as fixed by the Jaipur Development Authority on November 4, 1992, and if 12 per cent. is added for the time-gap, it comes to Rs. 2,016 per sq. metre and the total cost of this land comes to Rs. 21.93 lakhs from which deduction for demolition and interest charges should be given. I have considered the arguments of both learned counsel for the petitioner. The objection which has been taken by learned counsel for the respondents is that the writ petition is not maintainable as the petitioner and the vendor have contravened the provisions of the Act by transferring the property before any permission could have been given by the appropriate authority and for which reliance has been placed on the decision given by a Division Bench of this court in the case of Rajasthan Patrika Ltd. v. Union of India [1995] 213 ITR 443 (D. B. Civil Writ Petition No. 3426 of 1991) decided on April 22, 1994. It is observed that so far as the preliminary objection is concerned, the respondents are to blame thems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order. On the basis of the reply submitted, the various contentions raised therein were also taken into consideration. The case was adjourned on the request of the parties from March 21, 1994, to March 24, 1994. The opportunity which has been given in the present case cannot be said to be not a reasonable one. The appropriate authority has also taken into consideration the fact that the transferor has assured the purchaser that the property sold is free from all encumbrances and the responsibility to get the land partitioned was also undertaken ; the fact of conversion was also stated. There are residential colonies adjoining the present land. As per cost of construction on the basis of norms applicable in the case of CPWD structures the value of godown was estimated at Rs. 42 lakhs. The submission of learned counsel for the petitioner is that the fact that the figure of Rs. 42 lakhs was not mentioned in the notice does not vitiate the order because, even the cost of land itself was considered as more than the apparent consideration shown in the agreement and the fact that the cost of the godown has to be separately considered was also mentioned in the notice. The contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object to the area sold has been not proved by any evidence on record. The vendor has taken up the obligation on her part not only for sub-division but has assured the petitioner that the property under the agreement is free from all encumbrances and the conversion charges in respect thereof have already been paid. It is not on record as to how much conversion charges have been paid but, it is the responsibility of the vendor that, if the conversion charges are found to have been not paid she has to bear the same. A notice was given to the Jaipur Development Authority in order to find out as to whether the plan which was earlier approved is the final plan or they have the power to revise the plan once approved. It is stated by Mr. R. D. Rastogi on behalf of the Jaipur Development Authority that even if a plan is approved, the Jaipur Development Authority has the jurisdiction to revise the said plan. The property which has been directed to be purchased by the appropriate authority is on the basis of the agreement entered into and on the same terms and conditions. The dispute with regard to the possibility of a different area of land or the other questions which have been raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The various factors are there on the basis of which out of the various methods by which the valuation of the immovable property can be made, appropriate method is to be adopted. It depends on the location of the property, the purpose for which the property is used, the nature of the property, the time when the agreement is entered into and similar other objective factors. The valuation, therefore, has to be done by a method which is more objective and could furnish reliable data to arrive at a just conclusion. In respect of land, comparable cases provide the better guide. The comparable cases could be which are in respect of the land having similar character and is in the proximity of the land under agreement having similar advantages and amenities. The proximity in time is also an important factor in such a case. The location, frontage, transport facilities and other amenities besides the size of the plot are relevant considerations. The method of belting is also applied in respect of land having a large area as the front of the land on the main side fetches a higher price than the next belt and so on. In this method, the plot is divided into belts on the basis of distance fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may have a dramatic effect on the figure of sale achieved. Even in the same market, the value of shops may differ on account of location. The profit which is derived on account of situation, location or special circumstances of the property is taken as basis for valuing the property. It is considered appropriate in respect of hotels, cinemas, shops, petrol pumps and other commercial properties. (v) Cost of replacement : This method is applicable in respect of property which is to be designed or used for a special purpose to meet specific requirement arid the valuation of such property is derived from the value of alternative sites plus cost of building. The property in such cases have no sale instances in the market and thus no comparable cases could be found. The price of an alternative site and cost of erection of the building is taken into consideration. This cost of replacement is also referred as contractors method. (vi) Break-up method : The break-up method or asset breaking method is adopted for loss incurring concerns which have no chance of revival. (vii) Municipal valuation : Under this system taxes which are calculated by municipal authorities as a percenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary figure. The contention of the petitioner that the said godown is to be demolished is contrary to his own averment in the petition that the godowns are used for storing the goods and it will take a number of months in transporting the goods and that the petitioner is carrying on his business there, which is near to the airport as well. In an area which is already constructed long back and the business is being carried on neither there is any possibility of any authority demolishing the structure or restraining the purchaser from carrying on the activities. The contention that the building is to be demolished cannot be taken into consideration at this stage, even if the construction is finally demolished after a number of years. The valuation which has been arrived at by the appropriate authority of the constructed area, therefore, cannot be said to be unreasonable or requiring any interference by this court as there is no evidence on record by which it could be concluded that the petitioner has no intention to carry on the business in the said premises where it is being carried on by him under the agreement. The method of valuation of the godown has rightly been taken on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h on the valuation date imagining a willing buyer to purchase the property from a willing seller in respect of the property ; (ii) In respect of the immovable property, there is no fixed market such as market for shares or for other commodities, like sugar, cloth, etc. In order to arrive at a valuation in respect of the property, there must necessarily be certain element of guess. But the guess must be based on certain facts and according to certain principles which would be, in the facts and circumstances of each case, as fair as possible to the Revenue as well as to the assessee in trying to imagine reasonably and intelligently the price which was expected to be fetched if it was possible to sell the property in question on the relevant valuation date. (iii) Such a determination, therefore, involves adopting certain methods in determining the valuation and there are different kinds of methods, as mentioned in the circulars of the Board and the principles enunciated in the several decisions of the court as noticed before. (iv) Which one of the various methods would be suitable for a particular case must depend upon the nature of the property, the location of the property, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the annual rent. But this also is not a conclusive method. This court had in Special Land Acquisition Officer v. T. Adinarayan Setty [1959] Supp. 1 SCR 404 ; AIR 1959 SC 429, indicated at page 412, the methods of valuation to be adopted in ascertaining the market value of the land on the date of the notification under section 4(1) which are : (i) opinion of experts ; (ii) 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 ; and (iii) a number of years' purchase of the actual or immediately prospective profits of the lands acquired. These methods, however, do not preclude the court from taking any other special circumstances into consideration, the requirement being always to arrive as near as possible at an estimate of the market value. In arriving at a reasonably correct market value, it may be necessary to take even two or all of those methods into account inasmuch as the exact valuation is not always possible as no two lands may be the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assan Koya, AIR 1968 SC 1201, it has been observed : " in determining compensation payable in respect of land with buildings, compensation cannot be determined by ascertaining the value of the land and the ' break-up value ' of the buildings separately. The land and the building constitute one unit and the value of the entire unit must be determined with all its advantages and its potentialities. " The method of capitalisation of return actually received or which might reasonably be received from the land and the buildings in respect of a property which is used for business purposes was approved. In CWT v. Raghubar Narain Singh [1984] 146 ITR 228, it was held by the apex court that the market value of an asset would be a question of fact, but if the Tribunal has arrived at its conclusion by taking wrong principles into consideration, then such a finding would not be binding on the High Court. The contention that the area is in the vicinity of a factory which is emitting a foul smell and chemicals cannot be considered because it is mentioned in the order that a number of other colonies have also been developed and had it been the position the residents of the colonies would have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction as contemplated in the case of Sahib Singh [1992] Supp. AILACC 593 (SC) referred to above is given, still the value exceeds more than 15 per cent. of the apparent consideration. In these circumstances, I am of the view that the action of the appropriate authority in making the order of the pre-emptive purchase is not contrary to law. The reliance on the letter dated November 4, 1992, with regard to the reserve price is of no avail because it is not the market value but is only the reserve price below which the Jaipur Development Authority cannot sell or allot a plot to any person even of a reserved category and such price cannot be taken into consideration while determining the market value for pre-emptive purchase under Chapter XX-C. The market rates for the purpose of registration of an immovable property as notified by the Sub-Registrar can also have no application for determining the market value under Chapter XX-C of the Act. It is limited only for payment of the stamp duty. The said notification also does not take into consideration the difference of value, even of the plots in the same locality having different situation. As such the value notified for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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