Valuation of Shopping Malls-Part II

 Submitted by:

A. M. Ibrahim. B.Arch., FIE (I), FIV, FICA.

Kadayanallur – Tamil Nadu.

https://drive.google.com/file/d/1etbck_qtlAfIvLiOnz0HKfGDWAuglNPo/view?usp=sharing

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Good Article on Valuation of a space or shop in a mall

 Submitted by:

A. M. Ibrahim. B.Arch., FIE (I), FIV, FICA.

Kadayanallur – Tamil Nadu.

https://drive.google.com/file/d/1dep5uFL_cgRXBiYVOGzMFRRk6ELjFijk/view?usp=sharing

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Good article on Valuation of Immovable Property for Secured Lending Purposes

Submitted by:

A. M. Ibrahim. B.Arch., FIE (I), FIV, FICA.

Kadayanallur – Tamil Nadu.

https://drive.google.com/file/d/1o0ORtAanYXwHPrkB_57CWl2Ckc-u1-1K/view?usp=sharing

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Principles and Practice of Valuation (Immovable Property)

 Submitted by:

A.M IBRAHIM. B.Arch., MIBC, FIV, FICA. 

Kadayanallur-Tamil Nadu

 https://drive.google.com/file/d/1tvPuihoQLbwztgK8PcdA9rK6TYbkfZdb/view?usp=sharing

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Good article on Basic principles for valuation of Leasehold Interests

Submitted by:

A. Mohammed Ibrahim. B. Arch, FIE (I), FIV, MIBC, FICA.

Registered Architect, Registered Valuer and Certified ADR Professional.

https://drive.google.com/file/d/191yFv-ZRgxulfR75ZZtZCBTXxFoLgS2v/view?usp=sharing

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Good article on Capital gain valuation for Income tax purpose

 Submitted by 

A. Mohammed Ibrahim. B. ARch, FICA.

https://docs.google.com/document/d/1FqqUFF8ZkGXx_ZbC_efH3DuYU0lZ9vxJ/edit?usp=sharing&ouid=116244845031154956013&rtpof=true&sd=true

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When court should decide issue of undervaluation of suit as preliminary issue?

 In the case of The Church of Christ Charitable Trust and Educational Charitable Society v. M/s. Ponniamman Educational Trust, as reported in MANU/SC/0515/2012 : AIR 2012 SC 3912, after referring to the relevant provision, it has been held that --

"In order to consider an application under Order VII Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial Court at any stage of the suit."

5. But in the case of Meenakshisundaram Chettiar v. Venkatachalam Chettiar, as reported in MANU/SC/0016/1979 : 1980 (1) SCC 616, it has been held that --

"The plaintiff is entitled to give a tentative valuation if in spite of his genuine efforts, he is unable to make out an exact valuation, but plaint is liable to be rejected in case of deliberate undervaluation."

6. "Similarly, in the case of Sujir Keshav Nayak v. Sujir Ganesh Nayak, as reported in MANU/SC/0284/1992 : 1992 (1) SCC 731, it has been held that --

"In suit filed before Court of limited pecuniary jurisdiction, defendant has right to raise objection as to undervaluation of the suit which has to be decided as preliminary issue by the Court. It has also been held that if Court, on being prima-facie satisfied that valuation of suit was arbitrary, can direct the suit to be properly valued."

It has been further held that --

"In suits for accounting or for dissolution of partnership and accounting filed in Courts of limited pecuniary jurisdiction the plaintiff must take every care to disclose valuation which is not arbitrary, as the plaint is liable to be rejected on objection of the defendants, but in suits of such nature, filed before Courts of unlimited jurisdiction, the valuation disclosed by the plaintiff can be accepted as correct. This however, does not mean that Court's power to examine the correctness of valuation is taken away. If on perusal of plaint, the Court is prima facie satisfied that the plaintiff has not been fair and valued the suit or relief arbitrarily it is not precluded from directing the plaintiff to value it properly and pay Court-fee on it. Thus, summarizing the law, it has been held as under:

(1) Where the question of Court-fee is linked with jurisdiction, a defendant has a right to raise objection and the Court should decide it as a preliminary issue.

(2) But in those cases where the suit is filed in Court of unlimited jurisdiction, the valuation disclosed by the plaintiff or payment of amount of Court-fee on relief claimed in plaint or memorandum of appeal should be taken as correct.

(3) This does not preclude the Court even in suits filed in Courts of unlimited jurisdiction from examining if the valuation, on averments in plaint, is arbitrary."

7. In the present case, the trial Court with a limited pecuniary jurisdiction, cannot be said to have erred in directing the plaintiff to value the suit as per the guidelines inasmuch as it is very much within the jurisdiction of a Civil Judge even if material would not have been brought to the notice of the Civil Judge, to direct the plaintiff to value the relief as per the market guidelines.

IN THE HIGH COURT OF MADHYA PRADESH (GWALIOR BENCH)

W.P. No. 7303 of 2016

Decided On: 26.10.2016

 Manoj Jain and Ors.

Vs.

Pramod Jain and Ors.

Hon'ble Judges/Coram:

Vivek Agarwal, J.

Citation: AIR 2017 Madhya pradesh 39

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When valuation of different plots will differ for grant of compensation under land acquisition case?

If 'Comparable Sales Method of valuation of land' is adopted for determining the market-value of an acquired plot of land, it generally holds goods determination of the market-value of several acquired plots of land if acquisition of all such plot of land is made pursuant to the same preliminary Notification. But, if any of the factors, such as, location shape, size, potentiality or tenure of one plot of acquired land widely differs from the other plot(s), acquired land(s) then the market-value of each plot of land acquired has to be determined independently of the other(s) even if all of them had been acquired pursuant to the same preliminary Notification. The reason is not far to seek since the differential factors relating to different acquired plots greatly affect their value. Hence, if any salient factors of different acquired plots of land, which greatly affects their value is ignored or is not taken into consideration by the Court while determining the market-value of acquired lands, it will have failed to apply the correct principle of valuation adoptable in valuation of different types of acquired lands.

Supreme Court of India

M/S. Printers House Pvt. Ltd. vs Mst. Saiyadan (Deceased) By L. ... on 14 October, 1993

Equivalent citations: AIR 1994 SC 1160, JT 1993 (6) SC 123, 1993 (4) SCALE 173, (1994) 2 SCC 133, 1993 Supp 3 SCR 296

Bench: J Verma, B J Reddy, N Venkatachala

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How to prove loss of business or profit?

He has provided for loss of business for which he has

shown the value of the business, but he had not taken any
steps to ascertain what business the claimant was carrying
on on the acquired land.  He would need the figures of the
income of the last 3 years prior to the acquisition.  Since in
his opinion no other details to assess the compensation for
loss   of   business   was   necessary,   he   did   not   verify   any
documents showing the business of the claimant to compute
its loss.  He did not know that the claimant had claimed an

income   of   Rs.9000/­   p.a   from   fire   wood   business   and

Rs.15,000/­ p.a as rent from the residential premises.   He

computed the profits of the business of the claimant only

from the information given by the claimant. 

{28}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

LAND ACQUISITION REFERENCE NO.5 OF 2006

The Special Land Acquisition Officer (7)

And

Pundalik Raghunath Mahulkar  ...Claimant

And

The Commissioner of Gr. Mumbai, 

Municipal Corporation, Mumbai 

CORAM : MRS. ROSHAN DALVI, J.    

           

    Citation: 2015(2)ABR730, 2015(4)ALLMR795, 2015(2)BomCR497, 2015(4)MhLj778

              Date of Pronouncing the Judgment: 2nd March,2015

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What is method for valuation of mesne profits?

 It is settled law that while ascertaining mesne profit the
test to be applied is, not what the landlord has lost or would have
earned by letting out or using the property himself but the test is
what the wrongful occupant had actually received or might withordinary diligence have received therefrom. (Umayun Dhanrajgir Vs.
Ezra   Aboody 2008 (6) Bom. C.R. 862
,     Kesardeo   Vs.   Nathmal   Kisanlal   Goenka 1964  Indian Law Reports 364
,
Smt.Purificacao Fernandes Vs. Hugo Vicente de PerpetuoAIR 1985 BOMBAY 202
 and Fateh
Chand Vs. Balkishan Dass AIR 1963 SC 1405
).
22 How to measure mesne profit or the methods of valuation
have   been   summarized   in   Umayun   Dhanrajgir   Vs.   Ezra   Aboody
(supra).  Paragraph­31 of the said judgment reads as under :­
“31.   Having   taken   survey   of   the   various   cases   and
methods of valuation, it can be broadly summarised as
under :­
(i) The claim for `Mesne Profit  remains floating till
the   decree   of   possession   is   passed   in   favour   of   the
plaintiff, which can also be termed as royalty ;
(ii) The measure of Mesne Profits is the value for the
use of the premises and not necessarily the value of the
property ;
(iii) Value for use will be determined by :­

(a) What that value will be in the hands of the person
in wrongful possession ;
(b)   comparables,   if   available   and   applicable   in   real
sense ;
(c)   finding out the prevailing rate of rental at which
the wrongful person ought to have found equivalent

accommodation.”

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 CIVIL  APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.790 OF 2012
IN
MISC. APPEAL NO.158 OF 2011
IN
MISC. NOTICE NO.909 OF 1993
IN
L.E.SUIT NO.291/338 OF 1983

Mridangraj Hiralal Suchak  alias Barfiwalla, V/s. Bank of Baroda )

CORAM: K.R.SHRIRAM, J.
DATED  : 18TH  MARCH 2015
Citation; 2015(4) MHLJ 282 Bom

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Appellate forum is determined on basis of valuation in plaint and not on basis of contents of decree

That apart the general proposition of law which has been laid
down by the judgments cited (supra) is that the Appellate forum is determined
on the basis of the valuation as originally set out in the plaint and not on the
basis of the contents of the decree.
 In my view, the application of the said proposition of law results in
uniformity in so far as the Appellate forum is concerned, as otherwise it would
happen that the Plaintiffs may choose one Appellate forum and the Defendants
another. Hence though the valuation for the purposes of court fees would
change in a given case, for the purposes of jurisdiction it would remain the
same. Such a scenario cannot be said to be alien to the legal frame work which
is applicable to the valuation of the suit. The learned Senior Counsel Shri
Kumbhakoni is therefore right in submitting that the valuation a suit for the
purposes of payment of court fees and for the purposes of jurisdiction should
not be confused with each other.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.654 OF 2011
 Sagar Dattatraya Sakhare ]

Versus
 Shri Sanjay Waman Sathe ]


CORAM : R. M. SAVANT, J.

Pronounced on : 26th June 2014
Citation; 2015(3) ALLMR667

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Whether one third deduction is permissible towards development cost at the time of valuation of acquired land ?

Consistent view taken by this Court is that one third deduction is made towards the area to be used for roads, drains, and other facilities, subject to certain variations depending upon its nature, location, extent and development around the area. Further, appropriate deduction needs to be made for development cost, laying roads, erection of electricity lines depending upon the location of the acquired land and the development that has taken place around the area.

Reiterating the rule of one third deduction towards development, in Sabhia Mohammed Yusuf Abdul Hamid Mulla (Dead) by Lrs. and Ors. vs. Special Land Acquisition Officer and Ors., (2012) 7 SCC 595, this Court in paragraph 19 held as under:-

“19. In fixing the market value of the acquired land, which is undeveloped or underdeveloped, the courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land in acquired. In Kasturi vs. State of Haryana (2003) 1 SCC 354) the Court held: (SCC pp. 359-60, para 7) “7… It is well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for road and other civic amenities to develop the land so as to make the plots for residential or commercial purposes. A land may be plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; may be the land is situated in the midst of a developed area all around but that land may have a hillock or may be low-lying or may be having deep ditches. So the amount of expenses that may be incurred in developing the area also varies. A claimant who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that the area adjoining his land is a developed area, is not enough, particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land the character or a developed area. 

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014 ALLSCR3728
Read original judgment here;click here

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Basic concept of “deduction for development” for valuation of acquired land

 The “deduction for development” consists of two components. The first is with reference to the area required to be utilized for developmental works and the second is the cost of the development works. For example, if a residential layout is formed by DDA or similar statutory authority, it may utilize around 40% of the land area in the layout, for roads, drains, parks, playgrounds and civic amenities (community facilities), etc.

 The development authority will also incur considerable expenditure for development of undeveloped land into a developed layout, which includes the cost of leveling the land, cost of providing roads, underground drainage and sewage facilities, laying water lines, electricity lines and developing parks ands civil amenities, which would be about 35% of the value of the developed plot. The two factors taken together would be the “deduction for development” and can account for as much as 75% of the cost of the developed plot.

 On the other hand, if the residential plot is in an unauthorized private residential layout, the percentage of “deduction for development” may be far less. This is because in an unauthorized layout, usually no land will be set apart for parks, playgrounds and community facilities. Even if any land is set apart, it is likely to be minimal. The roads and drains will also be narrower, just adequate for movement of vehicles. The amount spent on development work would also be comparatively less and minimal. Thus the deduction on account of the two factors in respect of plots in unauthorized layouts, would be only about 20% plus 20% in all 40% as against 75% in regard to DDA plots.

 The “deduction for development” with reference to prices of plots in authorized private residential layouts may range between 50% to 65% depending upon the standards and quality of the layout.

The position with reference to industrial layouts will be different. As the industrial plots will be large (say of the size of one or two acres or more as contrasted with the size of residential plots measuring 100 sq. m to 200 sq m), and as there will be very limited civic amenities and no playgrounds, the area to be set apart for development (for roads, parks, playgrounds and civic amenities) will be far less; and the cost to be incurred for development will also be marginally less, with the result the deduction to be made from the cost of an industrial plot may range only between 45% to 55% as contrasted from 65% to 75% for residential plots.

19. If the acquired land is in a semi-developed urban area, and not an undeveloped rural area, then the deduction for development may be as much less, that is, as little as 25% to 40%, as some basic infrastructure will already be available. (Note: The percentages mentioned above are tentative standards and subject to proof to the contrary.

 Therefore the deduction for the “development factor” to be made with reference to the price of a small plot in a developed layout, to arrive at the cost of undeveloped land, will be far more than the deduction with reference to the price of a small plot in an unauthorized private layout or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure.

 Even among the layouts formed by DDA, the percentage of land utilized for roads, civic amenities, parks and playgrounds may vary with reference to the nature of layout-whether it is residential , residential- cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the roads, extent of community facilities, parks and playgrounds provided.

 Some of the layouts formed by the statutory development authorities may have large areas earmarked for water/sewage treatment plants, water tanks, electrical substations, etc. in addition to the usual areas earmarked for roads, drains, parks playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the “deduction for development” factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%.”

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014 ALLSCR3728

Read original judgment here;click here

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When market value of acquired land can be determined on the basis of average price paid under sale transactions?

 Determination of Market Value on the basis of average price paid under sale transactions: For ascertaining the fair market value of the acquired land, High Court adopted the ‘average method’ by averaging the sale price of Exs A-7 to A-10 and calculated the rate at Rs.37,433.75 paise per sq. yard. The appellants contend that when land is being compulsorily taken away, the landholder is entitled to claim the highest value which similar land in the locality is shown to have fetched in a bonafide transaction and High Court was not justified in averaging the sale prices of four perpetual lease deeds. Appellants placed reliance upon the judgments of this Court in M. Vijayalakshmamma Rao Bahadur vs. Collector (1969) 1 MLJ SC 45 and State of Punjab and Anr. vs. Hans Raj (D) by Lrs. And Ors., (1994) 5 SCC 734. In Hans Raj case (supra) it was held as under: “4. Having given our anxious consideration to the respective contentions, we are of the considered view that the learned Single Judge of the High Court committed a grave error in working out average price paid under the sale transactions to determine the market value of the acquired land on that basis. As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for fixing the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value.”

Referring to Hans Raj’s case in Anjani Molu Dessai vs. State of Goa And Anr., (2010) 13 SCC 710, this Court held as under:- “20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bonafide transaction, will be considered. Where however there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price. But where the values disclosed in respect of two sales are markedly different, it can only lead to an inference that they are with reference to dissimilar lands or that the lower value sales is on account of undervaluation or other price depressing reasons. Consequently, averaging cannot be resorted to. We may refer to two decisions of this Court in this behalf.”

20. Where the lands acquired are of different type and different locations, averaging is not permissible. But where there are several sales of similar lands, more or less, at the same time, whose prices have marginal variation, averaging thereof is permissible. For the purpose of fixation of fair and reasonable market value of any type of land, abnormally high value or abnormally low value sales should be carefully discarded. If the number of sale deeds of the same locality and the same period with short intervals are available, the average price of the available number of sale deeds shall be considered as a fair and reasonable market price. Ultimately, it is in the interest of justice for the land losers to be awarded fair compensation. All attempts should be taken to award fair compensation to the extent possible on the basis of their accessibility to different kinds of roads, locational advantages etc. Four perpetual lease deeds A-7 to A-10 relied upon by the appellants are of the same locality – Vasant Kunj Residential Scheme and relate to the period ranging from September 1995 to December 1996, but they are just prior to Section 4(1) notification. In our view, the High Court was justified in taking the average of the said four exemplars and approach adopted by the High Court in averaging the sale prices of Exs A7 to A10 cannot be said to be perverse.

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014 ALLSCR3728

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Whether Comparable sales method of valuation is preferred over capitalization of net income method or expert opinion method?

The courts adopt comparable sales method for valuation of land while fixing the market value of the acquired land. Comparable sales method of valuation is preferred rather than methods of valuation of land such as capitalization of net income method or expert opinion method, because it furnishes the evidence for determination of the market value of the acquired land at which the willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issuance of notification under Section 4 of the Act.

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014ALLSCR3728

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Whether valuation of acquired land can be done on the basis of auction sales?

 Deduction Towards Competitive Bidding: Exs A7 to A10 exemplars are perpetual lease deeds of commercial plots auctioned in Vasant Kunj area. Learned senior counsel for the respondents contended that this auctioned commercial site can never be equated to the value of large extent of agricultural land like the land acquired in the present case and those plots auctioned are developed plots on which the Government had spent a considerable amount. It is contended that the auction prices of commercial plots in exemplars are not true index of a fair market value of the land at the relevant time because elements of speculation and unfair competition in such auctions and suitable deduction ought to have been made for competitive bidding.

26. While considering the competition involved in auction sales of commercial/residential plots and observing that the element of competition in auction sales make them unsafe guides for determining the market value of the acquired lands, in Executive Engineer, Karnataka Housing Board v. Land Acquisition Officer, Gadag And Ors., (2011) 2 SCC 246 paras 6 & 7, this Court held as under:-

“6. But auction-sales stand on a different footing. When purchasers start bidding for a property in an auction, an element of competition enters into the auction. Human ego, and desire to do better and excel over other competitors, leads to competitive bidding, each trying to outbid the others. Thus in a well advertised open auction-sale, where a large number of bidders participate, there is always a tendency for the price of the auctioned property to go up considerably. On the other hand, where the auction-sale is by banks or financial institutions, courts etc. to recover dues, there is an element of distress, a cloud regarding title, and a chance of litigation, which have the effect of dampening the enthusiasm of bidders and making them cautious, thereby depressing the price. There is therefore every likelihood of auction price being either higher or lower than the real market price, depending upon the nature of sale. As a result, courts are wary of relying upon auction-sale transactions when other regular traditional sale transactions are available while determining the market value of the acquired land. This Court in Raj Kumar v. Haryana State (2007) 7 SCC 609 observed that the element of competition in auction-sales makes them unsafe guides for determining the market value.

7. But where an open auction-sale is the only comparable sale transaction available (on account of proximity in situation and proximity in time to the acquired land), the court may have to, with caution, rely upon the price disclosed by such auction-sales, by providing an appropriate deduction or cut to offset the competitive hike in value. In this case, the Reference Court and the High Court, after referring to the evidence relating to other sale transactions, found them to be inapplicable as they related to far away properties. Therefore we are left with only the auction-sale transactions. On the facts and circumstances, we are of the view that a deduction or cut of 20% in the auction price disclosed by the relied upon auction transaction towards the factor of “competitive price hike” would enable us to arrive at the fair market price.” (Underlining added)

27. The above principle was reiterated in Raj Kumar And Ors. v. Haryana State And Ors., (2007) 7 SCC 609 where in para 16, this Court has held as under:-

“16. All the relevant aspects have been taken into consideration and we do not find any error in principle committed by the High Court justifying our interference in appeal. An argument was raised that the prices of lands fetched in auction had been ignored on the basis that prices fetched in auction-sales cannot form the basis. It was submitted that there was no general rule that such prices cannot be adopted. On considering the relevant facts disclosed, it cannot be said that the High Court has committed any error in discarding those auction-sales while determining the compensation payable. The element of competition in auction-sales does not make them safe guides.

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014ALLSCR3728   

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Distinction in valuation of ‘Freehold land’ and ‘leasehold land’

‘Freehold land’ and ‘leasehold land’ are conceptually different. If a property subject to a lease and in the possession of a lessee is offered for sale by the owner to a prospective private purchaser, the purchaser being aware that on purchase he will get only title and not possession and that the sale in his favour will be subject to encumbrance namely, the lease, he will offer a price taking note of the encumbrances. Naturally, such a price would be less than the price of a property without any encumbrance. But when a land is acquired free from encumbrances, the market value of the same will certainly be higher.

Supreme Court of India

Kapil Mehra & Ors vs Union Of India & Anr on 17 October, 2014

Bench: T.S. Thakur, R. Banumathi

Citation;2014 ALLSCR3728                                                            

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VALUATION UNDER LAND ACQUISITION ACT 2013

Submitted by; A. MOHAMMED IBRAHIM  ARCHITECT

(Valuation with reference to THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT 2013 – (herein after called as “RTFCT LARR Act 2013).

 (Key words: I:  Land Act Brief and history, Retrospective operation of LA ACT 1894, II: Public Purpose and Consent of land owners, III: Time limit for AWARD, IV:, Special provisions to safeguard food security V: Urgency Clause, VI & VII deals with minimum compensation payable in the Principal Act and VIII: deals with amendments passed in Lok Sabha on 10/3/2015).

(Quote) The land acquisition process is carried out under the provisions of the Land Acquisition Act, 1894 which came into force w.e.f. 2 February, 1899. This Act has been amended from time to time (in pre-independence and post-independence). So far, the Act has been amended 17 times. Since 1960's large scale acquisition is also being done for companies and private sector. Various sections of the Act have also been amended from time to time by the State Governments to meet their specific requirements. (Unquote) Source: 31^st Lok Sabha Report May, 2012/Vaisakha, 1934 (Saka).

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When plaint can be rejected for wrong valuation of suit?

The Court also found that the Suit was not valued

properly for the purposes of the Court fees and jurisdiction.

Learned Trial Judge refereed to Section 6 (iv)(d) of the

Bombay court fees Act and observed that 1⁄4 th ad valorem fee

was leviable on the market value of the Suit property.

Valuation for the purposes of the Court fees and jurisdiction

was made at Rs 1000/- only as stated in Para 23 of the Plaint

despite the fact that the residential property is situated at

Matunga, prime area in City of Mumbai where market price

cannot be less than Ten Lakhs.

It is true that the plaintiff is free to make his or her

own estimation of the reliefs sought in the Plaint. But if

meager, arbitrary, and unreasonable the

valuation appears

Court can consider the prayers made and valuation made for

reliefs of declaration and injunction in respect ownership title

claimed over suit property, and may reject the plaint if

valuation for the purposes of the Court fees and jurisdiction is

found deliberately wrong.

In the Plaint valuation was stated in Para 23 thus;

“23.The Plaintiff values the relief claimed in the Suit

at Rs 1000/- and has paid the court fees accordingly”

This was deliberate, bald and vague statement in mischievous

disregard to the relevant provisions of the Suit valuation Act as

well as the the Bombay court Fees Act or willful ignorance of

relevant provisions of law to avoid revenue. By improper and

unjust valuation with scant disregard for the provisions of the

Suit valuation Act and the provisions of the Bombay Court

Fees Act the plaintiff can not allowed to get away from the

fiscal liability before approaching the Court of law.

No care was taken by the Plaintiff to cure the

defect of wrong valuation and vagueness

in description of

the suit property despite the fact that specific written objections

were taken by the defendant. The Plaintiff could have valued

the Suit separately for the purposes of the Court fees and

jurisdiction of the Court as contemplated under the

Suit

Valuation Act and mentioning the relevant provision of the

Bombay Court fees Act. Valuation for the purposes of the Court

fees and for the purposes of the jurisdiction may also be the

same. But when the plaintiff in substance wanted to claim the

declaration as to the right , title as Owner of the immovable

residential property situated at Matunga, prime area in City of

Mumbai capable being valued in terms of money preferably by

the Government ready reckoner price and was duty bound to

state the market price of the property by reasonably estimating

the suit for the purposes of valuation of the Suit and for

jurisdiction of the Court and ought to have made payment of

ad valorem court fees stating the relevant provisions briefly for

benefit of the ministerial officer of the Court for to file the

plaint. . This was not done even till plaint was rejected by the

Court and not even till this appellate stage. The plaintiff must

be vigilant to give description of the immovable suit property

with its full description including boundaries thereof as

required in Order 7 rule 3 of the civil procedure code, as

amended in state of Maharashtra and cannot suppress the

market value of the Suit property from the court, as required to

be stated for the purposes of valuation of the suit for the

purpose of jurisdiction of the court as also for payment of the

Court fees. The relevant facts which need to be looked into for

whether to return or reject the plaint

are the

deciding

averments made in the plaint. The trial Court can exercise the

power to reject the plaint at any stage of the suit even before

registering the plaint or after issuing summons to the defendant

or

at any time before the conclusion of the trial. For the

purposes of deciding an application under clauses (a) and (d) of

O.7, R. 11, the averments in the plaint are the relevant and not

the defence pleas taken by the defendant in the written

statement. Defence would be wholly irrelevant at the stage of

rejection of the plaint under order 7 Rule 11 (Saleembhai &

Ors. v. AIR 2003 SC 759). Hence no fault is found with the

impugned order rejecting the Plaint as barred by Article 58 of

the Limitation Act as also the plaintiff continued to run the risk

of rejecting of plaint due to wrong valuation for the purposes of

the Court fees and jurisdiction in view of the provisions under

Order 7 rule 11 (d) of the Code of Civil procedure.

APPELLATE SIDE

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

FIRST APPEAL NO. 729 OF 2013

Kishorbhai Premchand Shah

Vs

HIRJI BHOJRAJ & SONS

CORAM:-A. P. BHANGALE, J.

DATED : 2/9/2013

Citation;2014(1) ALLMR185

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How to value fruit bearing trees in land acquisition case?

As noted, the procedure is not foreign insofar as the assessing the land value based on the comparable sale instances. The Apex Court in Airports Authority of India (supra) has accepted this principle by saying "Therefore, it would be open to the Land Acquisition Officer or the Court, either to assess the land with all its advantages and fix the market value thereof on the basis of comparable sale instances. In case where comparable sale instances are not available and where there is reliable and acceptable evidence on record of the annual income multiplied by appropriate multiplier for its capitalisation. In the case of fruit-bearing trees their net yield is to be taken into consideration, that is to say, by deducting expenses incurred for getting the yield and also the value of the timber and expenses to cut and remove the trees from the land."

Bombay High Court

State Of Maharashtra vs Deoram Fakira Palmahale And Ors. on 6 September, 2007

Equivalent citations: 2007 (6) MhLj 556

Bench: A V Mohta

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