So far as the question of compensation is concerned, Mr. Naidu is right that it cannot be based on the valuation of the building ‘Garment House’. After all, what was leased out was the land; the construction on the land, if any, made during the subsistence of the tenancy, was to belong to the lessee. Compensation can accordingly be based only on the value of the land, the fruits of which may be said to be lost unto the Plaintiffs as a result of the stay of the eviction decree obtained by them. There is another way of looking at the land value. The land may well be commercially exploited either by retaining the structure (since the terms of the lease permit such retention upon payment) or, alternatively, by demolishing the existing structure and constructing on the land. In either case, the landlord would have to incur capital cost by purchasing the building or paying for the new construction. In either premises, commercial letting of constructed premises cannot be the basis of valuation; it would have to be letting of land.{Para 8}
13 The only legitimate basis for working out interim compensation in our case appears to be the actual price paid for the suit property (i.e. essentially the land) by Respondent No.19. Respondent No.19 has acquired reversionary right of the lessors in the suit property for a sum of Rs.5.50 crores. Evidently, this has been a concrete deal at arms length between men of commerce; it does take into account or, at any rate, must be presumed to have taken into account, all aspects arising out of the lessee’s right to the existing structure at the expiry of the lease. It may safely, at least for our purposes, which, as we have seen above, in any event, involve a certain ad-hocism, be taken as the basis for working out a fair interim compensation.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.357 OF 2017
Vijay Anant Gangan Vs Zenabibi Gulam Rasool And Others
CORAM : S.C. GUPTE, J.
PRONOUNCED ON : 5 NOVEMBER 2020
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