Allahabad High Court Judgement

Allahabad High Court Judgement

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JUDGEMENT HEADLINE : Principles For Determining Enhancement Of Monthly Rent Under Section 21(8) Of Rent Act Discussed.
JUDGEMENT TITLE : Smt. Padma Tandon Vs. Viith A.D.J., Alld. & Others On 07/11/2008 By Allahabad High Court
CASE NO : WRIT - A NO. 6779 OF 1995
CORAM : Hon'ble Dilip Gupta,J.

HIGH COURT OF JUDICATURE AT ALLAHABAD

AFR
Reserved
Court No.7

Civil Misc. Writ Petition No. 6779 Of 1995
Smt. Padma Tandon
Vs.
District Judge, Allahabad & Others

With
Civil Misc. Writ Petition No. 11406 Of 1995
State Of U.P. & Others
Vs.
The VIIth Additional/District Judge, Allahabad & Others
~~~~~~~
Hon. Dilip Gupta, J.

The Judgment And Order Dated 15th December, 1994 Rendered In The Appeal Filed By The Landlady Under Section 22 Of The U.P. Urban Buildings (Regulation Of Letting, Rent & Eviction) Act, 1972 (hereinafter Referred To As The "Act") Has Been Challenged In These Two Writ Petitions Which Have Been Filed By The Landlady And The Tenant. The Appeal Had Been Filed By The Landlady Against The Order Dated 26th August, 1981 Passed By The Rent Control & Eviction Officer In The Proceedings That Had Been Initiated By Her Under Section 21(8) Of The Act For Enhancement Of The Monthly Rent. The Landlady Felt Dissatisfied With The Partial Enhancement Of The Monthly Rent By The Appellate Authority And So The Prayer Made In The Writ Petition Filed By Her Is For Enhancing The Monthly Rent Determined By The Appellate Court To That Amount Claimed By Her In The Application Filed Under Section 21(8) Of The Act, While The Prayer Made In The Writ Petition Filed By The Tenant Is For Setting Aside The Enhancement Of The Monthly Rent By The Appellate Court.
Smt. Padma Tandon Is The Landlady Of Bungalow No.7 Mission Road, Allahabad (now Bungalow No.19), While The Head Mistress, Government Girls Normal School, Allahabad Is The Tenant Of The Said Premises. The Landlady Moved An Application On 16th January, 1979 Under Section 21(8) Of The Act For Enhancement Of The Monthly Rent With The Allegation That The Market Value Of The Building, On The Basis Of The Details Set-out In Annexures 1 & 2 To The Application, Is Approximately Rs.26,63,474/- And, Therefore, The Annual Rent Of The Building On Such Valuation Calculated At The Rate Of 10% Of The Market Value Of The Building In Accordance With The Provisions Of Section 21(8) Of The Act Would Come To Rs.2,66,347.40. The Monthly Rent, Accordingly, Would Be Rs.22,195.62, Which Rent Was Claimed By Her, Apart From The Water Tax, With Effect From The Month Of February 1979. The Landlady Also Filed A Valuation Report Dated 5th May, 1979 Submitted By Sri Tara Chand, Government Approved Valuer, Wherein After Inspection, Appraisal And Analysis He Assessed The Value Of The Property As On 16th January, 1979 At Rs.23,97,000/-. The Valuation Of The Property Was Done By Land And Building Method In Which The Valuation Of The Structures Was Assessed At Rs.3,17,261/- And The Value Of The Land Measuring 16,640 Sq. Metres At The Rate Of Rs.125 Per Sq. Metre Was Assessed At Rs.20,80,000/-Thus, The Total Value Of The Property Was Assessed At Rs. 23,97,000/-.
The Rent Control & Eviction Officer By The Order Dated 26th August, 1981 Allowed The Application Of The Landlady In Part And Enhanced The Monthly Rent Of The Building From Rs.379/- Per Month To Rs.989/- Per Month Taking The Market Value Of The Building To Be Rs.1,12,760/-.
Feeling Aggrieved, Both The Landlady And The Tenant Filed Appeals Before The District Judge Under Section 22 Of The Act. At The Appellate Stage, The Landlady Also Filed The Report Of The Tehsil Authorities Dated 18th December, 1978 Wherein The Valuation Of The Land, Trees And Well Was Assessed At Rs.20,05,700/-. The Landlady Also Filed An Affidavit Of Sri Tara Chand Mentioning Therein That He Was A Qualified Engineer For The Last 36 Years Who Was Working As An Hony. Professor In The Moti Lal Nehru Engineering College, Allahabad And Was A Registered Valuer Of Government Of India, Ministry Of Finance, New Delhi For Wealth And Income Tax Purposes. He Stated That He Had Inspected The Building And Prepared The Valuation Report Dated 5th May, 1979 And He Had Again Inspected The Property On 20th November, 1981 And Prepared The Report Dated 28th November 1981 Which Was Enclosed Alongwith The Affidavit. Before The Appellate Court The Tenant Also Filed Objections To The Application Filed By The Landlady Under Section 21(8) Of The Act Mentioning Therein That The Valuation Given By The Landlady In The Application On The Basis Of Annexures 1 & 2 Was Excessive; That The Land Was Government Estate Land Which Could Not Be Transferred Without Prior Permission Of The State Of U.P.; That The Market Value Of The Disputed Building Was Hardly Rs.45000/- And That The Report Of The Valuation Filed By The Landlady Was Based On Surmises And Conjectures And Was Not Reliable. The Landlady Filed A Reply To The Said Objections Filed By The Tenant Mentioning Therein That In The Affidavit Filed Before The Rent Control & Eviction Officer By Ram Pal Singh, The Valuation Of The Building Was Admitted As Rs.10 Lacs And That It Was Incorrect To State That The Land In Question Over Which The Building Was Situated Was Government Estate Land Since The Land Was Free-hold Land And Could Be Transferred Without The Permission Of The District Magistrate Or The State Government. The Tenant Also Filed Documentary Evidence To Bring On Record Certain Sale-deeds And Agreements To Sell To Which A Reply Was Filed By The Landlady.
The Learned District Judge By Judgment And Order Dated 12th July, 1982 Allowed The Appeal Filed By The Landlady In Part But Dismissed The Appeal Filed By The Tenant. The Market Value Of The Property Was Determined At Rs.8,30,000/- And Accordingly The Monthly Rent Of The Building Was Calculated At Rs.7083.30 With Effect From February 1979.
The Landlady As Well As The Tenant Filed Writ Petitions In This Court For Setting Aside The Aforesaid Judgment. The Writ Petition Filed By The Tenant Was Dismissed Whereas The Writ Petition Filed By The Landlady Was Allowed By The Judgment And Order Dated 19th May, 1992. The Impugned Judgment Of The Learned District Judge Was Set Aside And The Case Was Remanded To The Learned District Judge For Deciding It Afresh In Accordance With The Observations Made In The Judgment. The Relevant Portions Of The Judgment Are:-
"The First Submission Of The Learned Counsel For The Petitioner Challenges The Incorrect Calculations Made By The Learned District Judge. The Basis Of Calculation Of The Market Value Was The Award Of The Special Land Acquisition Officer In Which The Rate Of Land Was Assessed At Rs.16.90 Per Sq. Yard. Even If Three Times Multiple Is Taken As Correct It Would Be Rs.50.70 Paise Sq. Yard I.e. Rs.60.63 Sq. Meter And On This Basis An Area Of Land Comprising Of 16,640 Sq. Meter, The Market Value Comes To Rs.10,08,700 Instead Of Rs.8,32,000. In My Opinion, If The Basis Of Calculation Of Multiple Is Accepted To Be Correct As Also The Rate Of Land Fixed By The Learned District Judge, There Is An Error Apparent On The Face Of Record In Calculating The Market Value.
Learned Counsel For The Petitioner Then Submitted That The Rate Assessed At Rs.50 Per Sq. Meter Is Also Not Correct Assessment. The Market Value Of The Land Was Assessed Under Section 23 Of The Land Acquisition Act As It Prevailed On The Date Of Notification Under Section 4 Of The Act In The Year 1962 And Thus The Rate Of Rs.16.90 Per Sq. Yard Was Not In The Year 1965 But In The Year 1962.
The Multiple Of Three Times Is Also Without Any Basis. The Price Hike Of The Land Was Maximum Between The Period 1970 To 1980 And During This Period Also The Rise Was Abnormal Between 1975 To 1980. Both The Contentions Appear To Be Correct. The Multiple Of Three Times Has No Basis And Is Vague Calculation Which Is Conjectural And Is Not Borne Out From Any Material On Record.
I Have Also Considered The Entire Material On Record. In The Presence Of The Report Of Government Approved Valuer Sri Tara Chand, Which Has Given A Very Detailed Assessment Of Each Item Of The Property, Learned Judge Was Not Correct In Rejecting This Report Only On The Ground That It Was Based On Approximate Assessment. The Correctness Or Incorrectness Of The Approximate Assessment Has To Be Adjudged And Compared On The Basis Of Some Other Material On Record. But The Technical Report Of An Expert Cannot Be Rejected Merely On The Ground That It Was Based On Approximate Basis.
..........................................................

The Landlady Has Brought On Record The Report Of The Tehsil Authorities Dated 18.12.1978 Valuing The Land, Trees And Wall Of The Accommodation At Rs.20,05,700. This Value Was Got Assessed For The Director Of Education, Uttar Pradesh Through The Tehsil Authorities In Respect Of The Disputed Accommodation. The Report Was Filed Alongwith The Affidavit Of The Petitioner And Was Not Controverted. This Report Of The Department Itself Through The Revenue Authorities Who Are The Government Own Department For This Purpose, Has Been Ignored By The Learned Judge On The Same Ground That The Property Being Under Tenancy No Willing Purchaser Would Pay The Price As There Is No Hope Of Getting Possession Over The Building And The Prospective Purchaser Will Not Be Willing To Invest Any Sum For The Building Which Is Yielding Rent Of Only Rs.379 Per Month.
In My Opinion, The Interest Of Landlord Of Such Building Have Been Adequately Taken Care By Making Suitable Provisions And Providing For The Assessment Of Rent On The Basis Of Market Value And Not On The Basis Of Letting Value Or Annual Rental Value Or On The Basis Of Municipal Assessment. The Learned Judge Grossly Erred In Taking Into Consideration The Fact That The Disputed Building Would Remain Under The Tenancy And This Aspect Would Completely Diminish The Value Of The Building And The Prospective Purchaser Of The Property Would Not Invest Any Sum.
The Valuation Report Submitted On The Request Of The State Government By Its Own Department Should Be Treated As Binding On The State Government........
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In The Report Of Registered Valuer He Has Given Details Of The Building And Their Value And Has Assessed The Total Valuation At Rs.3,17,000. There Was No Material On Record To Controvert The Aforesaid Report With Regard To The Valuation Of The Existing Building. There Is Only An Affidavit On Record Of Smt. Malti Misha, Head Mistress, Government Girls Normal School, Mission Road, Allahabad, Giving Her Own Estimation Of The Value Of The Building At Rs.64000. The Learned Judge Has Not Considered The Aspect Of The Matter In Correct Prospective And On The Basis Of Material On Record.
For The Aforesaid Reasons The Impugned Order Of The Learned District Judge Is Liable To The Set Aside And The Petition Is Allowed. The Case Is Remanded To The Learned District Judge, Allahabad For Deciding The Case Afresh In Accordance With Observations Made Above And On The Basis Of Evidence On Record. The Respondent No.3 Shall In The Meantime Continue To Pay The Assessed Rent"

After The Matter Was Remanded To The Learned District Judge For Deciding The Appeal Afresh, The Landlady Moved An Application Dated 30th March, 1993 Before The Rent Control & Eviction Officer For A Fresh Revision/enhancement Of Rent W.e.f. 30th March, 1993 Under Section 21(8) Of The Act Since A Period Of 5 Years Had Expired From The Date Of Last Order Of Enhancement. The Landlady Thereafter Moved An Application Dated 14th February 1994 Before The Learned District Judge For Amending The Previous Application Filed Under Section 21(8) Of The Act On 16th January 1979, Without Prejudice To The Legal Rights In The Proceedings Before The Rent Control & Eviction Officer, Since In The Meantime The Market Value Of The Property Had Appreciated. It Was Inter-alia Stated In The Application That The Market Value Of The Building As On 30th March, 1993 Was Rs.1,12,04645/- On The Basis Of The Valuation Report Dated 10th February 1994 Submitted By The Approved Valuer Sri Satya G. Paul And, Therefore, The Monthly Rent Should Be Rs.93,370/- W.e.f. 1st April, 1993. This Amendment Application Was Allowed By The Appellate Court By The Order Dated 27th April, 1994. The Landlady Also Filed An Affidavit Enclosing Therein The Report Submitted By Sri Satya G. Paul. The Tenant Also Filed An Additional Written Statement To The Amended Paragraphs Of The Application.
It Also Needs To Be Mentioned That In The Meantime The Landlady Had Also Filed A Suit For Eviction Of The Tenant From The Property In Dispute. The Suit Was Decreed And The Revision Filed By The Tenant Was Dismissed By The High Court. Thereafter, The Tenant Filed Civil Appeal No.3646 Of 1984 Before The Supreme Court Wherein The Following Order Was Passed On 10th September 1984:-
"At The Hearing Of The Above Appeal Shri Gopal Subramanian Learned Counsel For The Appellant And Shri S.N. Kackar, Learned Counsel For The Respondent Submitted That The Parties Have Agreed To Settle The Dispute Between Them In The Following Terms :
''It Has Been Agreed Between The Parties That The State Of U.P. Will Retain The Constructed Area Which Is About 2000 Sq. Yds. Plus 2000 Sq. Yds. Of Open Land Appurtenant To The Building And The State Govt. Will Release Immediately All The Remaining Land To The Respondent Landlord. The Exact Demarcation Of The Open Land Of 2000 Sq. Yds. To Be Retained By The State Of U.P. Will Be Intimated To The Landlord Within Three Weeks And The Vacant Possession Of The Remaining Land Will Be Handed Over To The Landlord Within Four Weeks From Today.'
They Pray That An Order May Be Made In The Above Terms In Substitution Of The Order Of Eviction Passed By The High Court. It Is Ordered Accordingly.
We Further Direct That The Rent As Fixed By The District Judge, Allahabad Viz. Rs.7,083/- Per Month Would Be Payable Immediately By The State Of U.P. For The Above Area To Be Retained By Them But This Will Be Subject To The Orders Of The Allahabad High Court In Writ Petitions Pending Before It For Fixation Of The Rent U/s 21(8) Of The U.P. Rent Control Act.
In View Of The Foregoing The Requisition And Acquisition Proceedings In Respect Of The Suit Property Do Not Survive. The Appeal Is Accordingly Disposed Of."

The Writ Petitions Referred To In The Aforesaid Judgment Of The Supreme Court Are The Two Writ Petitions That Were Decided By This Court In The Year 1992. It Needs To Be Mentioned That Pursuant To The Aforesaid Judgment Of The Supreme Court, The Tenant Retained The Entire Constructed Portion And Some Additional Open Land And Handed Over The Possession Of The Balance Open Land I.e. 15,586 Sq. Yards To The Landlady On 22nd October, 1984. The Total Area Of Land And Constructed Portion Of Which Possession Was Retained By The Tenant Is 4308 Sq. Yards Which Is Equivalent To 3602 Sq. Metres.
The Appellate Court By The Judgment And Order Dated 15th December, 1994 Partly Allowed The Appeal Filed By The Landlady And Enhanced The Value Of The Property To Rs.19,80,000/- In Respect Of The Unamended Application For Which The Enhancement Was Claimed By The Landlady From February 1979 And In Respect Of The Amended Application Wherein Enhancement Was Claimed From April, 1993, The Appellate Court Determined The Market Value Of The Building Standing On 4301 Sq. Yards At Rs.36,36,250/-. The Enhanced Monthly Rent W.e.f. February 1979 On The Basis Of The Unamended Application Was, Accordingly, Determined At Rs. 16,508/, While On The Basis Of The Amended Application Was Determined At Rs.30,302/- W.e.f. April, 1993. The Appellate Court, However, Made It Clear That The Enhanced Monthly Rent On The Basis Of The Unamended Application Shall Be Payable From 1st February 1979 Upto 22nd October, 1984 On Which Date Possession Of 15,586 Sq. Yards Of Land Was Given To The Landlady On The Basis Of The Judgment Of The Supreme Court Delivered In Civil Appeal No.3646 Of 1984 Whereafter It Would Be Rs.7083/- As Ordered By The Supreme Court And From April, 1993 Onwards It Would Be Rs.30,302/- Per Month.
It Is This Judgment And Order Dated 15th December 1994 That Has Been Impugned In Writ Petition No.6779 Of 1995 Filed By The Landlady And Writ Petition No.11406 Of 1995 Filed By The Tenant.
These Two Writ Petitions Were Earlier Decided By This Court By The Judgment And Order Dated 9th September, 2004. The Writ Petition Filed By Landlady Was Dismissed With Modification In The Operative Portion Of The Order To The Extent That The Rent Payable By The Tenant From 1st February, 1979 Upto 31st March, 1993 Shall Be Rs.7083/- As The Ordered By The Supreme Court. Accordingly The Writ Petition Filed By The Tenant Was Allowed And The Operative Portion Of The Order Passed By The District Judge Was Modified To The Aforesaid Extent.
Feeling Aggrieved, The Landlady Filed The Special Leave Petition Which Was Allowed By The Supreme Court And The Matter Was Remitted Back To The High Court. The Supreme Court Observed That The Rent Mentioned In Its Earlier Judgment And Order Dated 10th September, 1984 Was Only Tentative Because Rent Of Rs.7083/- Per Month Fixed By The District Judge Was Under Challenge In The High Court. The Supreme Court Ordered That Both The Writ Petitions Shall Be Revived And Both The Parties Shall Be Heard On The Fixation Of Rent Of The Premises.
I Have Heard Learned Counsel For The Landlady And The Learned Standing Counsel For The Tenant And Have Perused The Materials Available On The Record.
The Landlady And The Tenant Are Both Aggrieved By The Determination Of The Monthly Rent By The Appellate Court. According To The Landlady, The Appellate Court Should Have Enhanced The Monthly Rent To That Amount Actually Claimed By Her In The Application Filed Under Section 21(8) Of The Act, Whereas According To The Tenant, The Appellate Court Committed An Illegality In Enhancing The Monthly Rent Fixed By The Rent Control & Eviction Officer.
It Would, Therefore, Be Necessary To Very Briefly Refer To The Findings Recorded By The Appellate Court In The Impugned Judgment Dated 15th December, 1994 And They Are As Follows:-
(i) The Award Given By The Special Land Acquisition Officer In Connection With The Notification Issued In The Year 1962 For Acquisition Of The Land Determining The Market Value Of The Land At The Rate Of Rs.16.90 Per Sq. Yard Cannot Be Relied Upon For The Purposes Of Determining The Market Value Of The Land In The Year 1979 Because Of The Substantial Time Gap.
(ii) The Sale Deed Relied Upon By The Landlady In Respect Of 200 Sq. Yards Of Land Situated In Plot No.15/17 Kasturba Gandhi Marg At The Rate Of Rs.197.37 Per Sq. Metre Cannot Be Relied Upon Because Of The Smallness Of The Area Of Land And Also For The Reason That The Tenant Had Also Filed Sale Deed Dated 23rd July, 1980 In Respect Of The Entire Area Of The Said Plot Measuring 3 Bigha, 19 Biswas For A Sum Of Rs.3 Lacs.
(iii) It Was Not Necessary To Examine The Conflicting Claims Of The Landlady And The Tenant Regarding The Ownership Rights Over The Land As They Were Not Required To Be Considered For The Purpose Of Determining The Market Value Of The Building Under The Provisions Of Section 21(8) Of The Act. It Needs To Be Mentioned That The Contention Of The Tenant Was That The Landlady Was Entitled To Only Six Anas And The State Was Entitled To The Remaining Share, Whereas The Contention Of The Landlady Was That The Rights Possessed By Her Were Bhumidhari Rights With Transferable Interest And, Therefore, She Was Entitled To The Entire Amount.
(iv)The Valuation Report Given By Tara Chand Was Not Relied Upon By The Court Because The Age Of The Building Was Not Mentioned In The Report And Nor Any Evidence Regarding The Age Of The Building Was Produced In The Court. In This Connection The Court Considered The Registered Deed Dated 1st October, 1996 Executed In Respect Of The Tenanted Portion In Which There Was A Mention Of Some Construction And Concluded That In The Year 1979 The Age Of The Building Was More Than 73-74 Years. It Also Noticed That In The Year 1954 Some New Constructions Were Raised But It Was Not Clear As To Who Had Raised The Constructions. The Court, Therefore, Concluded That The Major Portion Of The Constructions Were Very Old And In A Dilapidated Condition. The Court Also Noticed That The Expert Had Determined The Valuation Of The Land Measuring 16,640 Sq. Metres At The Rate Of Rs.125 Per Sq. Metre Which Comes To Rs.20,80,000/- But No Reason Was Mentioned For Adopting This Rate And Even Otherwise In The Application Filed By The Landlady For Enhancement Of The Rent The Total Area Of The Land Was Mentioned As 16,631 Sq. Metres But The Expert Had Increased The Area Of The Land To 16,640 Sq. Metres. The Court, Therefore, Concluded That The Rate Of Rs.125/- Per Sq. Metre Determined In The Expert Valuation Report Cannot Be Accepted.
(v)The Court, However, Came To The Conclusion That Since The Circle Rate Of The Land At The Relevant Time Was Between Rs.100/- Per Sq. Metre And 125/- Per Sq. Metre, The Market Value Of The Land Should Be Taken As Rs.100/- Per Sq. Metre On The Basis Of Circle Rate And Accordingly Determined The Total Value Of The Land As Rs.16,63,100/-.
(vi)The Court Did Not Place Reliance Upon The Report Submitted By The Lekhpal Regarding The Market Value Of The Building At Rs.23,97,000/- As No Details Or The Method Applied For Determining It Had Been Mentioned.
(vii)In Respect Of The Valuation Of The Constructed Area, The Court Took The Average Of The Conflicting Claims Made By The Landlady And The Tenant And Determined The Valuation Of The Building At Rs.1,37,000/-. The Landlady Had Claimed That The Valuation Was Rs.3,17,000/- Whereas The Tenant Had Claimed That The Valuation Was Rs.64,000/-.
(viii)In Respect Of The Enhancement Of The Monthly Rent From April, 1993 On The Basis Of The Amended Application, The Court Determined The Market Value Of The Land At The Rate Of Rs.1000/- Per Sq. Metre On The Basis Of The Circle Rate And Thus For The Area Of 3602 Sq. Metres, It Calculated The Market Value Of The Land At Rs.36,02,000/- And For The Valuation Of The Building Reduced It By 1/4th And Determined It At Rs.34,250/-.
Learned Counsel For The Landlady Submitted That The Appellate Court Committed An Error In Not Accepting The Uncontroverted Valuation Report Of Tara Chand, Government Approved Registered Valuer On The Ground That The Age Of The Building Was Not Mentioned And There Was A Slight Discrepancy Of 9 Sq. Metres; That The Appellate Court Should Have Accepted The Binding Report Of The Tehsil Authorities Regarding The Valuation Of The Building At Rs.20,05,100/-; That The Appellate Court Should Have Taken Into Consideration The Exemplar Sale Deed Of Property Bearing No. 15/17 Kasturba Gandhi Marg In View Of The Directions Issued By This Court In The Judgment Dated 9th May, 1992 And That The Appellate Court Committed An Error In Not Accepting The Uncontroverted Valuation Report Of Satya G. Paul, Government Approved Registered Valuer In Respect Of The Valuation Of The Building On 30th March, 1993 For Enhancement Of The Rent W.e.f. 1st April, 1993.
Learned Standing Counsel Appearing For The Tenant, On The Other Hand, Submitted That The Amendment Application Filed By The Petitioner In The Appeal For Enhancement Of Rent W.e.f. 1st April, 1993 Was Not Maintainable And The Appellate Court Committed An Error In Allowing It; That The Appellate Court Committed An Error In Determining The Value Of The Land By Taking Into Consideration The Circle Rate And Also Committed An Error In Determining The Valuation Of The Building By Taking The Average Of The Conflicting Claims Made By The Tenant And The Landlady; That The Appellate Court Was Not Justified In Holding That The Rights Of The Landlady In Respect Of The Land Were Not Required To Be Examined For The Purposes Of Determining The Market Value Of The Property Under Section 21(8) Of The Act, Since That Was A Relevant Consideration And The Market Value Of The Property Would Depend Upon The Nature Of The Rights Of The Landlady Over The Land And That, In Any View Of The Matter, The Appellate Court Fell In Error In Determining The Monthly Rent W.e.f. 10th September, 1984 Upto 31st March, 1993 At Rs.7083/- Per Month.
I Have Carefully Considered The Submissions Advanced By The Learned Counsel For The Parties.
It Is The Contention Of The Landlady That The Predecessors In Interest Of The Property, Late Lala Ram Charan Das And Late Lala Madho Prasad Had Earlier Purchased The Then Numbered Bungalow No.5, Mission Road, Allahabad From Its Owners Mohd. Ishaq And Others Vide Registered Sale Deed Dated 1st October, 1906 But The Aforesaid Bungalow No.5, Mission Road Was Put To Public Auction On 8th March, 1907 In Compliance Of The Order Of The Court Of Subordinate Judge, Allahabad In The Case No.5 Of 1905 [Gaya Prasad And Others Vs. Intekhab-ud-din And Others (including Mohd. Ishaq)] And Was Purchased By Mohd. Baqar On The Basis Of The Sale Certificate Dated 4th October, 1907 Issued By The Court Of Subordinate Judge, Allahabad. It Was, Therefore, Again Purchased By Late Lala Ram Charan Das And Late Madho Prasad From Mohd. Baqar Vide Registered Dated 23rd January, 1908 And It Was Stated In The Aforesaid Sale Deed That Mohd. Ishaq Had Not Informed That The Aforesaid Bungalow No.5, Mission Road Was To Be Put To Auction In Compliance Of The Order Of The Court. It Is The Contention Of The Landlady That The Aforesaid Bungalow No.5, Mission Road Was The Only Main Bungalow Over Land Nos. 103 And 104 Till The Year 1922, When The Map For Construction Of Another Bungalow Facing Stanley Road Was Sanctioned By The Municipal Board Vide Permit Order Dated 16th March, 1922. This Newly Constructed Bungalow Was Numbered As Bungalow No.16, Stanley Road And Was Constructed Over Land No. 104 And A Portion Of Land No. 103. The Aforesaid Municipal Numbers Of The Bungalows Were Re-numbered And Bungalow No. 5 Became Bungalow No.7 And Is Presently Bungalow No.19, While Bungalow No.16 Became Bungalow No.28. It Is Also The Case Of The Landlady That Harish Tandon Inherited The Aforesaid Bungalows From His Ancestors And Subsequently On 14th May, 1974 Through Partial Family Partition, Padma Tandon (wife Of Harish Tandon) Became The Owner Of The Bungalow No. 7. The State Of U.P. W.e.f. 1st July, 1944 Became The Tenant Of This Bungalow, Which At That Time Had Two Constructions, On A Monthly Rent Of Rs.229/-. The Tenancy Was For The Purpose Of Running A School. Subsequently A Third Construction Was Also Made Sometimes In The Year 1954 By The Predecessors In Interest Of The Landlady And The Same Too Was Taken On Rent By The State Of U.P. W.e.f. 1st November, 1954 And The Monthly Rent Was Enhanced To Rs.379/-.
To Appreciate The Rival Contentions It Would Be Appropriate To Refer To The Provisions Of Section 21(8) Of The Act. Section 21 Of The Act Deals With Proceedings For Release Of Building Under Occupation Of Tenant. Section 21(8) Of The Act Provides As Follows:-
"21(8). Nothing In Clause(a) Of Sub-section (1) Shall Apply To A Building Let Out To The State Government Or To A Local Authority Or To A Public Sector Corporation Or To A Recognised Educational Institution Unless The Prescribed Authority Is Satisfied That The Landlord Is A Person To Whom Clause (ii) Or Clause (iv) Of The Explanation To Sub-section (1) Is Applicable:
Provided That In The Case Of Such A Building The District Magistrate May, On The Application Of The Landlord, Enhance The Monthly Rent Payable Therefor To A Sum Equivalent To One-twelfth Of Ten Per Cent Of The Market Value Of The Building Under Tenancy, And The Rent So Enhanced Shall Be Payable From The Commencement Of The Month Of Tenancy Following The Date Of The Application:
Provided Further That A Similar Application For Further Enhancement May Be Made After The Expiration Of A Period Of Five Years From The Date Of The Last Order Of Enhancement."

A Perusal Of The Aforesaid Section Shows That In The Case Of A Building Let Out To The State Government Or To A Local Authority Or To A Public Sector Corporation Or To A Recognised Educational Institution, The District Magistrate, May On An Application Moved By The Landlady, Enhance The Monthly Rent To A Sum Equivalent To One-twelfth Of Ten Per Cent Of The Market Value Of The Building Under Tenancy.
In Order To Determine The Market Value Of The Building The Value Of The Land As Well As The Value Of The Structure Or Building Have To Be Taken Into Consideration. This Is What Was Observed By The Supreme Court In State Of U.P. & Ors. Vs. VII A.D.J. & Ors., (1992) 4 SCC 429 While Interpreting The Proviso To Section 21(8) Of The Act And The Relevant Observations Are:
"After Giving Our Anxious Consideration To The Facts And Circumstances Of The Case, It Appears To Us That In The Definition Of Building Under Section 3(i) Of The Act, There Is No Express Exclusion Of The Value Of The Land On Which The Building Stands. In The Absence Of Such Express Exclusion, The Land Being Intrinsically Inseparable From The Building Standing Thereon, The Value Of The Land And The Value Of The Structure Or Building Should Be Taken Into Consideration And In Our View The Land On Which The Building Stands Together With The Building Or Structure Constitute One Composite Unit. It May Be Indicated That The Value Of Two Similar Buildings Or Structure Standing On Similar Parcel Of Land May Differ Substantially On Account Of Locational Advantage Of The Site In Question. The Difference Of Valuation Of Land Because Of Such Locational Advantage Creeps Into The Ultimate Valuation Of The Building Or Structure Making One Building More Valuable Than The Other Although From The Structural Point Of View, Both The Buildings Are Identical. In The Aforesaid Circumstances, The Determination Of Valuation Of The Building By Taking Into Consideration The Value Of The Land In Addition To The Value Of The Structure, Does Not Appear To Be Illegal And Improper. In Any Case, The Definition Of ''building' Under The Act Clearly Shows That The Building Thereunder Means Roofed Structure Including The Land Underneath The Said Structure" (emphasis Supplied)

In This Connection Reference May Also Be Made To The Decision Of This Court In Central Bank Of India Vs. A.D.J., Jhansi, 1989 AWC 403, Wherein It Was Observed :
"The Word ''building' Has Been Defined In Section 3 (i) And It Includes Any Land (including Any Garden), Garages And Out-house, Appurtenant To Such Building, Apart From Furniture And Other Fittings And Fixtures Etc. A Reading Of This Definition Along With The Proviso To Sub-Section (8) Makes It Clear That The Building And The Appurtenant Land Cannot Be Separated And They Form Part Of The Building Which Is Covered Under The Act. When The Proviso Speaks Of Market Value Of The Building, It Speaks Of Its Market Value Including The Vacant Land With All Its Situational And Other Advantages. ''Market Value' Is A Term Of Wider Import Than The Cost Of The Building Because It Includes The Advantages Accruing To The Owner On Account Of Inflation, Paucity Of Accommodation Available And The Situation Of The Building Etc. In View Of This, In My Opinion Market Value Of The Property Will Include The Cost Of Structures, The Site Of The Building And The Appurtenant Land."
Thus, It Is Well Settled That For Determination Of Market Value Of A Building For The Purposes Of The Proviso In Question, The Market Value Of The Land Underneath The Super Structures And Also The Land Appurtenant Is To Be Taken Into Consideration. The Value Of Such Land Is To Be Added To The Value Of The Super Structures, Then Only, One Can Arrive At The "market Value Of The Building". (emphasis Supplied)


As Noticed Hereinabove, The Proviso To Section 21(8) Of The Act Requires Determination Of The ''market Value' Of The Building. In View Of The Aforesaid Decisions, The Value Of The Land And The Value Of The Structure Or Building Are Required To Be Separately Determined.
The Concept Of "market Value" Is Present In A Number Of Enactments And The Principles Evolved By The Courts For Determination Of The ''market Value' Would Also Apply For Assessing The Market Value For The Purposes Of Section 21(8) Of The Act.
Valuation Of Lands And Buildings Is A Complex Exercise, Requiring Expertise And Should Be Based On Data Prepared From A Scientific Study. The Supreme Court, Highlighted This Aspect In Bidhannagar (Sale Lake) Welfare Association V. Central Valuation Board & Ors., (2007) 6 SCC 668, And The Relevant Observations Are:
"Valuation Of Lands And Buildings Is A Complex Exercise. It Requires Certain Amount Of Expertise. Valuation Is Made Upon Obtaining Data Prepared From A Scientific Study. Valuation Of A Land Or Building Would Depend Upon Several Factors. Several Methods Of Valuation May Be Applied For Determination Thereof. It Is For The Expert Ordinarily To Arrive At A Decision As To Which Mode Of Valuation Having Regard To A Particular Set Of Factors Would Entail A Correct Evaluation. However, In Determining The Valuation Of A Land Or Building, It Is Not Expected Of A Statutory Authority To Take Recourse To The Course Of Action Which May Be Arbitrary, Unscientific Or Haphazard In Nature......."

In Raghuvans Narain Singh Vs. The U.P. Government AIR 1967 SC 465, The Supreme Court Explained What ''market Value' Meant By Stating It To Be "the Price That A Willing Purchaser Would Pay To A Willing Seller Having Due Regard To Its Existing Condition, With All Its Existing Advantages And Its Potential Possibilities, When Laid Down In Its Most Advantageous Manner, Excluding Any Advantage Due To The Carrying Out Of The Scheme For The Purposes For Which The Property Is Compulsorily Acquired." Similar View Was Also Expressed By The Supreme Court In Thakur Kanta Prasad Singh (dead) By LRs. Vs. State Of Bihar, AIR 1976 SC 2219.
In Ravindra Narain Vs. Union Of India, AIR 2003 SC 1987, The Supreme Court Explained The Approach To Be Adopted For Determining The ''market Value' Of The Acquired Land:
"While Determining The Market Value Of The Land Acquired, It Has To Be Correctly Determined And Paid So That There Is Neither Unjust Enrichment On The Part Of The Acquirer Nor Undue Deprivation On The Part Of The Owner. The Price Which A Willing Vendor Might Reasonably Expect To Receive From The Willing Purchaser Must Be Taken Into Consideration While At The Same Time Disinclination Of The Vendor To Part With His Land And The Urgent Necessity Of The Purchaser To Buy It Must Be Disregarded. Potentiality Of Land Is Also To Be Considered Based On Materials As Are Available."
The Various Acceptable Methods For Determining Market Value Include (i) Comparable Sales Method (ii) Rent Capitalization Method And (iii) Experts Opinion.
In The Present Case, The Appellate Court Has Determined The Market Rate Of The Land For The Period Mentioned In The Unamended Application And Also For The Period Mentioned In The Amended Application Only On The Basis Of The Circle Rate Fixed By The Collector Under The Stamp Act.
The Issue, Therefore, That Arises For Consideration Is Whether The Market Rate Of The Land Under The Act Can Be Fixed On The Basis Of The Circle Rate Determined By The Collector Under The Provisions Of The Stamp Act And The Rules Framed Thereunder. It Would Be Seen That The Indian Stamp Act, 1899 Provides For Payment Of Stamp Duty On "market Value" On Certain Instruments. So Far As The State Of U.P. Is Concerned, Section 47-A Was Inserted In The Stamp Act In The Year 1969. It Permits The Stamp Authorities To Investigate The Market Value Stated In Such Instruments To Check Evasion Of Stamp Duty. Section 47-A Also Empowers The Framing Of Rules For Fixation Of Minimum Market Value. In Exercise Of Such Powers, The UP Government Added Rule 340-A In The UP Stamp Rules, 1942. Subsequently, After Repealing This Rule 340-A, The UP Stamp (Valuation Of Property) Rules, 1997 Have Been Brought Into Force.
The Relevance Of The Minimum Market Value (i.e. Circle Rates) Fixed By The Collector Under S. 47-A Of The Stamp Act Read With The Rules For The Purposes Of Determination Of Market Value Under The Act Has Been Considered In A Catena Of Decisions And It Has Been Repeatedly Held By The Supreme Court That The Rate Determined By The Collector Under The Stamp Act And The Rules Framed Thereunder For The Purposes Of Collecting Stamp Duty Cannot Form The Foundation For Determining The Market Rate Of The Land.
In Jawajee Nagnatham Vs. Revenue Divisional Officer, Adilabad, A.P. & Ors. (1994) 4 SCC 595, The Supreme Court Held That The Basic Value Register Is Maintained Only For The Purpose Of Collecting Stamp Duty And Cannot Form The Foundation To Determine The Market Value. The Observations Are As Follows:-
"The Question, Therefore, Is Whether The Basic Valuation Register Would Form Foundation To Determine The Market Value. The Indian Stamp Act, 1899 Provides The Power To Prescribe Stamp Duty On Instruments, Etc. Entry 44 Of List III, Concurrent List, Of The VIIth Schedule Read With Article 254 Of The Constitution Empowers The State Legislature To Amend The Indian Stamp Act, 1899. In Exercise Thereof All The State Legislature Including The Legislature Of A.P. Amended The Act And Enacted Section 47-A Empowering The Registering Officer To Levy Stamp Duty On Instruments Of Conveyance, Etc, If The Registering Officer Has Reason To Believe That The Market Value Of The Property, Covered By The Conveyance, Exchange, Gift, Release Of Right Or Settlement, Has Not Been Truly Set Forth In The Instruments, He May Refuse Registering Such Instrument And Refer The Same To The Collector For Determination Of The Market Value Of Such Property And The Proper Duty Payable Thereon. On Receipt Of Such Opinion, He May Call Upon The Vendor As Per The Rules Prescribed, To Pay The Additional Duty Thereon. If The Vendor Is Dissatisfied, He Has Been Given The Right To File An Appeal And Further Getting Reference Made To The High Court For Decision In That Behalf. Section 47-A Would Thus Clearly Show That The Exercise Of The Power Thereunder Is With Reference To A Particular Land Covered By The Instrument Brought For Registration. When He Has Reasons To Believe It To Be Undervalued, He Should Get Verified Whether The Market Value Was Truly Reflected In The Instrument For The Purpose Of Stamp Duty; The Collector On Reference Could Determine The Same On The Basis Of The Prevailing Market Value. Section 47-A Conferred No Express Power To The Government To Determine The Market Value Of The Lands Prevailing In A Particular Area, Village, Block, District Or The Region And To Maintain Basic Valuation Register For Levy Of Stamp Duty For Registration Of An Instrument, Etc. No Other Statutory Provision Or Rule Having Statutory Force Has Been Brought To Our Notice In Support Thereof.................. It Is, Therefore, Clear That The Basic Valuation Register Prepared And Maintained For The Purpose Of Collecting Stamp Duty Has No Statutory Base Or Force. It Cannot Form A Foundation To Determine The Market Value Mentioned Thereunder In Instrument Brought For Registration. Equally It Would Not Be A Basis To Determine The Market Value Under Section 23 Of The Act, Of The Lands Acquired In That Area Or Town Or The Locality Or The Taluk Etc. Evidence Of Bona Fide Sales Between Willing Prudent Vendor And Prudent Vendee Of The Lands Acquired Or Situated Near About That Land Possessing Same Or Similar Advantageous Features Would Furnish Basis To Determine Market Value.
......................

Accordingly We Hold That The Basic Value Of Registration Has No Statutory Lands Under Section 23 Of The Act. The Burden Of Proof Is Always On The Claimant To Prove, In Each Case The Prevailing Market Value As On The Date Of Notification Published In The State Gazette Under Section 4(1) Of The Act With Reference To The Sale Deeds Of The Same Lands Or Neighbour's Lands Possessed Of Same Or Similar Advantages And Features Executed Between Willing Vendor And Willing Vendee Or Other Relevant Evidence In The Reference Court."(emphasis Supplied)

This View Was Reiterated By The Supreme Court In P. Ram Reddy & Ors., Vs. Land Acquisition Officer, Hyderabad, Urban Development Authority, Hyderabad & Ors., (1995) 2 SCC 305, And K.S. Shivadiramma & Ors., Vs. Assistant Commissioner And Land Acquisition Officer & Anr. (1996) 2 SCC 62.
The Relevance Of The Circle Rates Under The Stamp Act Was Also Considered By The Supreme Court In Ramesh Chand Bansal Vs. Collector Ghaziabad, AIR 1999 SC 2126 And It Was Observed:
"......Reading Section 47-A With The Aforesaid Rule 340-A It Is Clear That The Circle Rate Fixed By The Collector Is Not Final But Is Only A Prima Facie Determination Of Rate Of The Area Concerned Only To Give Guidance To The Registering Authority To Test Prima Facie Whether The Instrument Has Properly Described The Value Of The Property. The Circle Rate Under This Rule Is Neither Final For The Authority Nor To One Subjected To Pay The Stamp Duty. So Far Sub-sections (1) And (2) Are Concerned They Are Very Limited In Their Application As They Only Direct The Registering Authority To Refer To The Collector For Determination In Case The Property Is Undervalued In Such Instrument. The Circle Rate Does Not Take Away The Right Of Such Person To Show That The Property In Question Is Correctly Valued As He Gets An Opportunity In Case Of Undervaluation To Prove It Before The Collector After Reference Is Made. This Also Marks The Dividing Line For The Exercise Of Power Between The Registering Authority And The Collector. In Case The Valuation In The Instrument Is Same As Recorded In The Circle Rate Or Is Truly Described It Could Be Registered By The Registering Authority But In Case It Is Undervalued In Terms Of Sub-section (1) Or Sub-section (2), It Has To Be Referred To And Decided By He Collector. Thus, The Circle Rate, As Aforesaid, Is Merely A Guideline And Is Also Indicative Of A Division Of Exercise Of Power Between The Registering Authority And The Collector......"

In Krishi Utapadan Mandi Samiti Vs. Bipin Kumar, (2004) 2 SCC 283: AIR 2004 SC 1850, The Supreme Court Also Took The View That The Basic Valuation Register Maintained For Stamp Duty Purposes Cannot Be Relied On While Determining The Market Value. The Supreme Court, In Ranvir Singh Vs. Union Of India, AIR 2005 SC 3467 Held That The Notification Issued By The Union Of India, Fixing Circle Rates, Is Inadmissible In Evidence.
In View Of The Aforesaid Decisions Of The Supreme Court, The Appellate Court Committed An Error In Fixing The Market Value Of The Land On The Basis Of The Circle Rate Fixed By The Collector Under The Stamp Act.
It Is The Contention Of The Learned Counsel For The Landlady That In View Of The Decisions Of This Court In 1981 (1) ARC 25 (Para 7), State Of U.P. Through C.M.O. Allahabad Vs. District Judge, Allahabad ; (2005) 58 ALR 853 (Para 5), Managing Committee Shiksha Parishad Nagawa, Ballia Vs. Assistant Registrar, Cooperative Societies, U.P. And 2007 (2) ARC 527 ((Para) 5), State Of U.P. And Another Vs. Sri Jugal Kishore The Uncontroverted Valuation Report Filed Along With Affidavit Was Binding And As Such The Valuation Of The Land In Question As On 16th January, 1979 At Rs.20,80,000/- And The Valuation Of The Structure As On 16th January, 1979 At Rs.3,17,000/- (i.e. Total Value Of The Building In Question At Rs.23,97,000/-) As Per The Uncontroverted Valuation Report Dated 5th May, 1979 Of Shri Tara Chand, Government Approved Registered Should Be Accepted. Likewise, The Market Value As On 30th March, 1993 Of The Portion Under Occupation Of The Tenant Submitted In The Valuation Report Dated 10th February, 1994 Filed Along With The Affidavit Dated 11th February, 1994 Of Satya G. Paul, Government Approved Registered Valuer Should Also Be Accepted.
A Perusal Of These Two Reports Submitted By Tara Chand On 5th May, 1979 And By Satya G. Paul On 10th February, 1994 Shows That They Have Separately Determined The Value Of The Land And The Value Of The Structure. The Report By Tara Chand Has Determined The Value Of The Land On The Basis Of The Circle Rate Fixed By The Collector While The Report Submitted By Satya G. Paul Has Taken Into Consideration The Circle Rate As Also The Minimum Rate Fixed By The Allahabad Development Authority For A Property Situated About 3-4 Kms. Away Towards The Outskirt Of The City And On The Basis Of The Location Of The Land In Question Has Determined The Market Rate At Rs.2,500/- Per Sq. Metre Which Was The Rate Claimed By The Landlady In The Amended Application Filed By Her.
The Valuation Of The Land Made By Tara Chand In His Report Dated 5th May, 1979 Is Based Solely On The Circle Rate Fixed By The Collector Under The Stamp Act. This, In View Of The Decisions Of The Supreme Court Referred To Above, Cannot Be Made The Basis For Determining The Market Value Of The Land. Likewise, Satya G. Paul In His Report Dated 10th February, 1994 Has Determined The Market Value Of The Land By Taking Into Consideration The Circle Rate Of Rs. 1000 Per Sq. Metre Fixed By The Collector Under The Stamp Act And Also The Advertisement Made By The Allahabad Development Authority For Fixing Minimum Rate Of Rs.950/- Per Sq. Metre For Plots At A Distance Of About 3-4 Kms. But Without Any Reason Whatsoever Has Fixed The Market Rate Of The Land At Rs.2,500/- Per Sq. Metre By Merely Stating That The Location Of The Property Would Fetch The Same. The Determination Of The Market Rate Of The Land By Both The Experts, Therefore, Cannot Be Accepted. The Contention Of The Landlady That The Valuation Of The Land Contained In These Two Reports Should Be Taken Into Consideration, Therefore, Cannot Be Accepted. The Market Rate Of The Land, In Such Circumstances, Is Required To Be Determined Afresh By The Appellate Court.
For Determination Of The Market Value Of The Structure There Are Two Reports Of The Experts. Section 45 Of The Indian Evidence Act Deals With The Opinion Of Experts. It Postulates That When The Court Has To Form An Opinion Upon A Point Of Foreign Law, Or Of Science Or Art Or As To Identity Of Handwriting Or Finger Impressions, The Opinions Upon That Point Of Persons Specially Skilled In Such Foreign Law, Science Or Art Or In Questions As To Identify Of Handwriting Or Finger Impressions Are Relevant Facts. It Further Says That Such Persons Are Called ''experts'.
Valuation Of A Property Is Considered To Be A Science And, Therefore, A Person Well Versed In The Science Of Valuation Is An ''expert'. The Legislature, In Various Legislations, Has Accepted The Role Of Valuers For Evaluation Of Properties (e.g. The Wealth-tax Act, Income-tax Act). Similarly, The Courts Have, Time And Again, Accepted The Role Of Valuers As Experts. However, While Accepting The Opinion Of Valuers, Being Valuation Reports, The Courts Have Evolved Certain Salutary Principles Of Care And Caution.
In The Special Land Acquisition Officer & Anr. V. Sri Siddappa Omanna Tumari & Ors., Reported In AIR 1995 SC 840 The Supreme Court Considered Whether The Court Is Bound To Act Upon The Report Of An Expert Produced Before The Court Regarding The Market Value Of A Land And It Was Observed :
"..........No Doubt, Court Can Act On Such Expert Evidence In Determining The Market Value Of The Acquired Lands, But The Court Having Regard To The Fact That Experts Will Have Prepared The Valuation Reports In The Court And Will Depose In Support Of Such Reports, At The Instance Of The Claimants, Must With Care And Caution Examine Such Reports And Evidence Given In Support Thereof. Whenever Valuation Report Made By An Expert Is Produced In Court, The Opinion On The Value Of The Acquired Land Given By Such Expert Can Be Of No Assistance In Determining The Market Value Of Such Land, Unless Such Opinion Is Formed On Relevant Factual Data Or Material, Which Is Also Produced Before The Court And Proved To Be Genuine And Reliable, As Any Other Evidence. Besides, If The Method Of Valuation Of Acquired Land Adopted By The Expert In His Report Is Found To Be Not In Consonance With The Recognised Methods Of Valuation Of Similar Lands, Then Also, The Opinion Expressed In His Report And His Evidence Can Be Of No Real Assistance To The Court In Determining The Market Value Of The Land. Since The Exercise Of Which Will Have Been Done By The Expert Is Arriving At The Market Value Of The Land In His Report On The Basis Of Factual Data Bearing On Such Valuation, Will Be Similar To That To Be Undertaken By The Court. In Determining The Market Value Of The Acquired Land, It Can No Doubt Receive Assistance From Such Report, If It Is Rightly Done And The Data On Which The Report Is Based Is Placed Before The Court And Its Authenticity Is Established.

Therefore, When The Valuation Report Of An Acquired Land Is Made By An Expert On The Basis Of Prices Fetched Or To Be Fetched By Sale Deeds Or Agreements To Sell Relating To The Very Acquired Lands Or The Lands In The Vicinity Need Arises For The Court To Examine And Be Satisfied About The Authenticity Of Such Documents And The Truth Of Their Contents And The Normal Circumstances In Which They Had Come Into Existence And Further The Correct Method Adopted In Preparation Of The Report, Before Acting On Such Report For Determining The Market Value Of The Acquired Land. The Opinion Expressed In The Report That The Author Of The Report Has Made The Valuation Of The Acquired Lands On The Basis Of His Past Experience Of Valuation Of Such Lands Should Never Weigh With The Court In The Matter Of Determination Of Market Value Of The Acquired Lands, For Such Assertions By Themselves Cannot Be Substituted For Evidence On Which It Ought To Be Based And The Method Or Valuation Adaptable In Such Report.

Therefore, When A Report Of An Expert Is Got Produced By A Claimant Before The Court Giving Market Value Of The Acquired Lands, The Court May, Choose To Act Upon Such Report For Determination Of The Amount Of Compensation Payable For The Acquired Lands, If The Data Or The Material On The Basis Of Which Such Report Is Based In Produced Before The Court And The Authenticity Of The Same Is Made Good And The Method Of Valuation Adopted Therein Is Correct." (emphasis Supplied)

In Union Bank Of India V. Official Liquidator, H.C. Of Calcutta & Ors., (2005) 5 SCC 274, The Supreme Court Was Emphasized That "...........it Is The Duty Of The Court To Apply Its Mind To The Valuation Report For Verifying Whether The Report Indicated Reasonable Market Value Of The Property To Be Auctioned, Even If Objections Are Not Raised."
In Nelson Fernandes & Ors. V. Special. Land Acquisition Officer AIR 2007 SC 1414, The Supreme Court Observed That The Report Submitted By A Valuer Should Be Appreciated By The Courts :
"..............No Reason Whatsoever Was Given By The Reference Court Or By The High Court As To Why The Report Of The Valuer And Her Evidence Cannot Be Relied On. In Our Opinion, The Compensation Awarded By The High Court Had No Basis Whatsoever And Was Not Supported By Cogent Reasons And That It Did Not Consider The Future Prospect Of The Development Of The Land In Question............. The High Court Also Erred In Passing The Order By Holding That The Opinion Of The Government Approved Valuer Was Not Based On Any Opinion Method Of Valuation But Solely On The Basis Of Facilities Available To The Land. In Our View, The High Court Ought To Have Appreciated That The Government Approved Valuer Is An Expert In Her Field And The Opinion Of Such An Expert Ought Not To Have Been Rejected Shabbily." (emphasis Supplied)

Thus, The Determination Of The Value Of The Structure Standing On The Land Has To Be Done In The Light Of The Principles Enunciated Above. The Appellate Court Committed An Illegality In Taking The Average Of The Value Indicated By The Landlady And The Tenant. It Needs To Be Mentioned That The Appellate Court Has Discarded The Said Report Of The Expert For Determination Of The Value Of The Structure On Two Basis Namely That The Age Of The Building Was More Than 73-74 Years And It Was Not Clear As To Who Had Raised The New Construction In The Year 1954 And There Was A Slight Discrepancy Of 9 Sq. Metres Regarding The Total Area Of The Land Since The Report Records It As 16,640 Sq. Metres While It Was 16,631 Sq. Metres Even According To The Landlady. The Report Submitted By The Expert Should Not Have Been Discarded On These Two Grounds Because The Report Does Take Into Consideration The Age Of The Building And A Slight Discrepancy Of 9 Sq. Metres Which Is Proximately .05% Cannot Be Made A Ground To Reject The Report. Thus, The Market Value Of The Structure Has Also To Be Determined Again.
It Has Also Been Contended By The Learned Counsel For The Landlady That The Building In Question Was Valued By The Tehsildar-Sadar, Allahabad Which Valuation Was Binding On The State. This Contention Cannot Be Accepted Because The Valuation Done By The Tehsildar Is Absolutely Vague And Does Not Give Any Reason And Nor Does It Mention The Method Adopted For The Valuation.
The Next Question That Arises For Consideration Is Whether The Nature Of The Interest Of The Landlady In Respect Of The Land Is Required To Be Examined For Determination Of The Market Value Since The Appellate Court Has Observed That It Is Not Necessary To Examine The Same.
It Cannot Be Doubted That If The Government Has Some Interest In The Land Then The Market Value Of The Property Stands Reduced To The Extent Of The Interest Of The Government. If A Land Has A Charge Or Encumbrance Thereupon, The Market Value Of Such Land In The Hands Of Its Owner Is To Be Assessed Keeping In View The Charge Or The Encumbrance Because Such Charge Or Encumbrance Would Depress The Value Of The Land. The Market Value Of A Leasehold Land Can Also Never Be Equal To That Of A Freehold Land. Its Market Value Would Depend On Numerous Relevant Factors Such As The Nature And Purpose Of Lease, Various Restrictions Attached Thereto, The Remaining Period Of Lease Etc. Any Prudent And Informed Transferee Of Leasehold Interest Is Bound To Consider These Factors. These Factors Have Been Examined By The Supreme Court In Kiran Tandon Vs. Allahabad Development Authority, AIR 2004 SC 2006; Brij Behari Sahai (D) Through LRs. Vs. State Of U.P. (2004) 1 SCC 641; Inder Prasahd Vs. Union Of India 1994 (5) SCC 239 And Ratan Kumar Tandon & Ors., Vs. State Of U.P. AIR 1996 SC 2710. The Appellate Court Was, Therefore, Not Justified In Holding That This Factor Was Not Required To Be Looked Into While Determining The Market Rate Of The Land.
In The Present Case, This Court Passed An Order Dated 24th July, 2007 Directing The Parties To File The Valuation Report By An Approved Government Contractor So That The Rent Of The Building Can Be Determined. Pursuant To The Aforesaid Directions Issued By This Court, The Tenant Filed An Affidavit Of The District Basic Education Officer, Allahabad Sworn On 6th September, 2007. It Gives The Valuation Of The Building On The Basis Of The Report Submitted By The Executive Engineer, Construction Division-I Public Works Department, To Be Rs. 8,05,000.00/- Excluding The Cost Of The Land. A Letter Dated 4/5th September, 2007 Sent By The District Magistrate, Allahabad To The District Basic Shiksha Adhikari Was Also Annexed Mentioning Therein That The Building Was Existing On Government Estate Land. The Landlady Also Filed A Voluminous Supplementary Affidavit Sworn On 1st October, 2007 Mentioning Therein That The Land Was Nazul Land And The Petitioner Had An Absolute Right Of Transfer And That It Was Not Government Estate Land. Along With This Affidavit, Various Documents Have Been Referred To.
It Is Not Necessary To Examine The Conflicting Claims At This Stage In These Petitions Since The Appellate Court Should First Examine Them While Determining The Market Value Of The Building. The Records Indicate That Both The Landlady And The Tenant In Respect Of The Aforesaid Dispute Have Filed Various Documents In These Petitions. In Such Circumstances, It Would Be Appropriate If Liberty Is Given To Both The Parties To File The Relevant Documents Before The Appellate Court. This Exercise Should Be Done Preferably Within A Period Of One Month.
Learned Standing Counsel Appearing For The Tenant Also Submitted That The Appellate Court Committed An Error In Allowing The Amendment Application Filed By The Landlady For Enhancement Of The Monthly Rent W.e.f. April, 1993. Learned Counsel Appearing For The Landlady, However, Submitted That The Amendment Application Was Rightly Allowed.
In This Connection It Needs To Be Mentioned That The Landlady Filed A Fresh Application For Further Enhancement Of Rent W.e.f. April, 1993 On 30th March, 1993 Before The Rent Control & Eviction Officer, Allahabad Which Was Registered As Case No.54 Of 1993. This Application Was Filed Not Only After A Lapse Of More Than 14 Years From The Earlier Application Dated 16th January, 1979 But Was Filed After Five Years From The Date Of Order Of The Rent Control And Eviction Officer. The Landlady Also Moved An Amendment Application Dated 14th February, 1994 Before The VIIth Additional District Judge, Allahabad For Enhancement Of The Monthly Rent W.e.f. April, 1993. The VIIth Additional District Judge, Allahabad After Hearing The Objections Filed On Behalf Of The Tenant Allowed The Application Vide Order 27th April, 1994 On The Basis Of The Decision Of This Court In State Of U.P. Vs. District Judge, Allahabad & Anr. 1988 (1) ARC 25. The Intent Behind The Proviso To Section 21(8) Of The Act Is To Entitle The Landlord To Move A Fresh Application For Further Enhancement Of Rent After The Expiry Of The Period Of Every Five Years From The Date Of The Last Order Of Enhancement Of The Rent Control & Eviction Officer. The Amended Application Was Allowed On The Basis Of The Judgment Of This Court In State Of U.P. (supra). There Is, Therefore, No Infirmity In The Order Which Is Also In Accordance With The True Spirit And Intent Of The Proviso To Section 21(8) Of The Act.
The Last Question That Arises For Consideration Is Whether The Appellate Court Was Justified In Fixing The Monthly Rent At Rs.7083/- From 10th September, 1984 Till 31st March, 1993. As Seen Above, The Appellate Court Enhanced The Monthly Rent W.e.f. February, 1979 To Rs.16,5078/- Per Month On The Basis Of The Unamended Application And On The Basis Of The Amended Application, The Monthly Rent Was Enhanced W.e.f. April, 1993 To Rs.30,302/- Per Month. The Appellate Court Had Fixed The Rent At Rs.7083/- Per Month From 10th September, 1984 To 31st March, 1993 Because Of The Decision Of The Supreme Court In Civil Appeal No. 3646 Of 1984. As Pointed Out By The Supreme Court This Rate Of Rs.7083/- Was Tentative And Was Subject To The Orders Passed In The Writ Petitions For Determination Of The Market Rate. The Petitions Had Been Decided In The Year 1992 And The Appellate Court Was Directed To Determine The Monthly Rent Afresh. The Appellate Court Was, Therefore, Not Justified In Fixing The Monthly Rent At Rs.7083/- From 10th September, 1984 To 31st March, 1993. Pursuant To The Decision Of The Supreme Court In Civil Appeal No. 3646 Of 1984 On 10th September, 1984 The Tenant Retained Possession Of 3602 Sq. Metres Of Land And The Possession Of The Remaining Land Was Handed Over To The Landlady On 22nd October, 1984. Thus From 22nd October, 1984 Till 31st March, 1993 The Monthly Rent Should Be Fixed By Making Suitable Proportionate Reduction In The Monthly Rent So Determined And Should Not Have Been Fixed At Rs.7083/- Per Month.
It Is Contended By The Learned Counsel For The Landlady That The Tenant Has Not Paid The Entire Rent On The Basis Of The Directions Of The Supreme Court Contained In The Judgment Dated 10th September, 1984. If That Be So, Then The Tenant Must Pay The Arrears Of Rent To The Landlady Positively By 31st December, 2008.
In View Of The Discussion Made Above, Both The Writ Petitions Are Allowed To The Extent Indicated Above And The Judgment And Order Dated 15th December, 1994 Of The Appellate Court Is Set Aside. The Appellate Court Shall Determine The Monthly Rent Of The Building Afresh In The Light Of The Observations Made Above. It Is Further Directed That The Tenant Shall Continue To Pay Monthly Rent Of Rs.7083/- To The Landlady Till The Appellant Court Decides The Appeal After Remand But The Payment So Made Shall Be Subject To The Decision Of The Appellate Court.

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