Karam Chand Puran Chand vs Union Of India
1991 Latest Caselaw 321 Del

JUDGMENT

S.B. Wad, J.

(1) Shamshad Manjil, two storeyed building, on the Plot measuring 5556 Sq. Yds., was acquired by Delhi Administration by Section 4 a notification on 24.8.1962. The property is owned by Karam Chand, Puran Chand, Ram Krishan and Smt. Kirpal Kaur each having l/4th share in the property. They have filed the present appeals against the judgment of the learned Additional District Judge dated 11th March, 1968. The Land Acquisition Collector in his award dated 4th December, 1963 had fixed the market value of the property (building as well as land) at Rs. 2,ll,040.00 . The Additional District Judge raised compensation amount to Rs. 3,16,034.00 . The Claimants/appellants have claimed compensation for land of Rs. 16,94,580.00 , at the rate of Rs. 350.00 per sq. yd. They have also claimed Rs. 4,30,000.00 as compensation for the building. Appeal No. 406/68 is filed jointly by Karam Chand Puran Chand. Appeal No. 284/68 is filed by Ram Krishan and Appeal No. 19/1969 is filed by Smt. Kirpal Kaur.

(2) The learned Collector fixed the market value on the basis of Capitalizing of rent which the; property was fetching. Naturally, therefore, there is no separate assessment of compensation of building and the land. The learned Additional District Judge has rejected the said method of capitalising the income/rent and has preferred to assess the market value on the basis of the sale instances, valuer's report, and the Court decisions. He has relied upon . In support of his conclusions that capitalising income is not a very satisfactory method and the same could not be resorted to unless there is no other method and evidence available. We are in respectful agreement with the decisions of the said High Courts and we endorse the conclusion of the learned Additional District Judge as the correct conclusion. There is yet another reason why the method of capitalising income is not a proper method for fixing market value in the present case. The property was originally an evacuee property with the Rehabilitation Ministry. The Rehabilitation Ministry normally gives the property at a very nominal rent to tenants, the only object to keep the property in use till its final disposal under the relevant enactments. The income/rent in such cases does not correctly represent the market income of the property. The learned counsel for. the respondent has fairly consented that the method of capitalising income is not the proper method for the fixing of the market value of the present property.

(3) There are four buildings on this huge plot of 5556 Sq, yds. on the main Roshanara Road. Roshanara Road is a 100 ft. road, and is in the heart of the commercial area of old Delhi. The main building was two storeyed puce building fitted with flush system, electricity and having marble chips flooring and glazed titles. There is a double storeyed annexe which is a puce building. There are out-houses and servants quarters attached to the main building. Some shops were constructed by the Rehabilitation Department in the front portion of the building. In the main building Industrial Training Institute was running and its workshop was located in the annexe. Other portions were let out to different tenants who were continuing since the time the building was with the Rehabilitation Department. There were a number of big trees also on the plot. Karam Chand one of the appellants was in the occupation of two flats at the time of acquisition of the building. , According to the evidence of Puran Chand, who appeared on behalf of the appellants, appellants had the plan of constructing flats-cum-shops on the front portion and residential buildings and godowns at the back portion. He has further stated in his evidence that there are cinema houses and other commercial buildings on both sides of the road. Offices of large number of transport companies are also on the same road. The building is very near to Sabzimandi and the Railway Station.

(4) Shri V.D. Pisolkar, Architect, who appeared as a witness for the appellants in his report Ex. A.W. 912, described the situation and potential use of the property stating, "the area in question is well suited for any type of commercial business such as offices, schools, hospitals, cinemas, shopping area etc. Delhi Master Plan stipulates this area for flatted industries. A well suited area for this purpose, it is situated almost in tie centre of a thickly populated portion." Similarly, R. Krishnan, the government valuer, who appeared as a witness for the appellants stated in his valuation report (Ex. A.W.6/1), "Shamshad Manzil is at a very important road Roshan are. It is a very big plot best suited for a big office, school, college, hospital, cinema and alike."

(5) It may be noted that as regards the situation and the potentiality of the property for future commercial uses as described by Puran Chand and the two valuers there is hardly any cross-examination. We, therefore, accept this evidence as truly and correctly leading to situation and potential use of the property for the purpose of fixing market value. We also note that after taking possession of the property, which was demolished, a huge multi-storeyed commercial complex including the Industrial Training Institute and Employment Exchange buildings are constructed by the Government.

(6) The learned Adj found that the evidence produced by the claimants was not satisfactory and relied solely on the evidence of Shri G.T. Sebajawala, Executive Engineer, Cpwd, produced by the respondents. His estimate is Exhibit R-1. Shri G.T. Sehajawala had calculated the value of the site/plot at Rs. 2,54,000.00 and the cost of construction at Rs. 38,217.00 . The rate at which the plot was valued by Shri G.T. Sehajawala was Rs. 50.00 per sq.yard. However, the learned Adj found that there was mistake in Shri G.T. Sehajawala`s calculation, viz., that instead of the actual 5556.3 sq. yards the Executive Engineer has assumed that the area was only 5068 sq. yards. .The learned Adj, therefore, enhanced the compensation for the site/plot on the basis of the correct area of the plot, viz. 5556.3 sq. yards but maintained the rate at Rs. 50.00 sq. yard. The appellants have challenged the evidence of Shri G.T. Sehajawala, the Executive Engineer, as well as the finding of the learned Adj rejecting the claimants evidence as unsatisfactory.

(7) Shri G.T. Sehajawala, Executive Engineer, visited the building in April/May, 1961. The estimate was not prepared on the basis of Cpwd schedule of rates but some formally approved rates by the Chief Engineer, Cpwd for valuation of such properties. He estimated that the building was 80 years old. He admitted that he did not check up the original plan of the building from the Municipal record. He admitted in the cross-examination that he could not refute the suggestion that the building was constructed in 1935-36. He also admitted that the building can be considered as a first class construction. He could not say whether marble was used for the flooring nor whether the Burma teak wood was used for the doors and windows. He admitted that he did not personally make any enquiry as to the value of the land. As regards the building/construction, the method followed by the Executive Engineer was to treat the life of the building as 100 years and holding that the building was already 80 years old reduced the valuation by depreciating the value for 80 years @ l% per year. 5y this method he valued the building/construction at Rs. 38,270.00 . The learned Adj did not compare the evidence of Sbri G.T. Sehajawala with the evidence of the valuers produced by the appellants. He did not record the finding regarding the age of the building but assumed with the Executive Engineer that the building was 80 years old. He overlooked the admission of the Executive Engineer that he could not deny that the construction was made in 1935-36. As regards the rate of Rs. 50.00 per sq. yard for the plot/site the Executive Engineer did not give any supporting evidence. He has admitted in the examination that he had not collected any evidence in regard to the prevalent prices of the plots in or around the Roshnara Road. Shri G.T. Sehajawala, Executive Engineer, had also not considered the location of the building in question and the building potentiality of the site/plot. We, therefore, find that the reliance of the learned Adj solely on the evidence of Shri G.T. Sebajawala, Executive Engineer, was wholly erroneous and the valuation of the plot as well as the construction is, therefore, wrong and unacceptable.

(8) Gopal Dass, AW/3, had purchased plot measuring 200 sq. yards forRs.42,100.00 , at 16, Hathikhana, Delhi, near Roshnara Road, from the Rehabilitation Department. The learned Adj rejected the said sale instance on the ground that the plot was very small as compared to the property in dispute. Similarly, Banwari Lal, AW/4, purchased plot No. 15, Gali Hathikhana, measuring 200 sq. yards for Rs. 27,500.00 in an auction on 17.1.1960, made by the Rehabilitation Department. This sale instance was also rejected by the learned Adj on the ground that the plot was was a small plot. It is well-established that the sale instance of the properties near about the property in question afford best evidence of the market value. Earlier the judicial view was if the plots are very small they do not give correct indication of the market value because small plots fetch better price as compared to the bigger plots. But this is not an invariable rule. It is not the size of the plot but the location and its potential value which . are directly relevant for the purpose of assessing the market value. The two plots mentioned above are in the heart of the old city of Delhi and there is no land whatsoever available in the area for purchase. Considering the location a plot of 200 sq. yards cannot be said to be such a small plot. So also the appellants' plot measuring 5556 sq. yards is also in the old Delhi area. A plot, small or big, in these highly commercialised areas has a very great demand and there would not be any appreciable difference of price between the plots of sizes being considered by us. The better view of law that is now being followed is to take the sale instances even if a small plot is representing the market price, making some allowance and deductions for the fact that the other plot is a bigger plot. We, therefore, have no hesitation in relying upon the said two sale instances adduced in the evidence of Gopal Dass, AW/3 and Banwari Lal, AW/4. The above instance show that the price at that time ranged between Rs. 125.00 per sq. yard to Rs. 210.00 per sq. yard.

(9) The appellants had produced Shri R. Krishnan, AW/6, retired Executive Engineer, who was working as a Central Government valuation officer after his retirement. He had given the valuation of the building based on his knowledge and experience as the government valuer and he stated that he was familiar with the market rates of the plots as well as the material for construction. He had given a detailed report. Ex. AW/6/1. He had stated in his evidence that he had spent a whole day in the preparation of the estimate. According to him the age of the building was 30 years. His evidence and report was rejected by the learned Adj on the basis of some stray sentences in the crossexamination. In the cross-examination he stated that his valuation of the site was based upon somebody whom he met on the spot. After giving allowance to depreciation he valued the cost of the building at Rs. l,63,459.00 . Although the valuer had said that considering the location of the plot, which was best suited for big offices, schools, colleges, hospitals, cinemas, etc. he worked out on that basis that the price of the plot should be Rs. 250.00 'per sq. yard. He has found the sale instances in the year 1961-62 of Rs. 125.00 per sq. yard. Considering the location the said valuer fixed Rs. 100.00 per sq. yard as the market value and, thus, held that the value of the plot should be Rs. 5,72,699.00 . The learned Adj, wholly unreasonably, rejected.the evidence of this valuer, holding that he was interested in the claimants/appellants. When on the basis of location and potentiality the said valuer had himself stated that the proper rate would be Rs. 250.00 per sq. yard, but still valued the site/plot in the present case at Rs. 100.00 per sq. yard, could it be said that he was interested in the appellants/ claimants ?

(10) Another valuer produced by the appellants was Shri B.D. Pisolkar, who held a Diploma in Town Planning from London and was working as an independent Architect since 1949. He had submitted the valuation report as AW.9/l,which he had given after detailed inspection and examination of the building and the plot. In the valuation report be has given the details of various constructions on the site. He found the building as a first-class construction and the age of the building was 30 years. He has also considered the location of the building/site and the near about area and has found big building potential for the building. This report is also rejected by the learned Adj on the ground that no basis for valuation has been given by the valuer and he was an interested person. It may be noted that valuation of Shri G.T. Sehajawala, Executive Engineer, on which the learned Adj relied, had also stated that the estimate was not based on Cpwd scheduled rates, but he has relied upon some rates approved by the Chief Engineer, CPWD. This valuer had estimated the cost of the building at Rs. 2,74,042.00 after giving due margin for the depreciation worked out at one per cent for 30 years. He has deposed that the building in question was situated in the area which the Delhi Master Plan had earmarked for flatted industries. He has also stated that .the building was situated in the centre of the thickly populated area of old Delhi. Relying on some auctions he has estimated the value of the plot at Rs. 115.00 per sq. yard.

(11) The appellants/claimants had also relied upon Award No. 1307 where the learned. Adj had award Rs. 90 per.sq. yard as compensation for the land acquired in 1961. The learned Adj has rejected the same on the ground that the area of Clock Tower is rather away from the Roshnara Road and, therefore, the price at Roshnara Road may not be the same.

(12) We have already held that the sale instances mentioned by AW/3 and AW/4 would show the price range from Rs. 125.00 to Rs. 210.00 per sq. yard. The valuers' reports also show that the market value was about Rs. 100.00 to Rs. 115.00 per sq. yard in the area. Thus, they corroborate the sale instances. Even after giving a margin to the fact that the sale instances deposed by AW/3 and AW/4 are for a smaller plot, we have no hesitation in holding that the market value of the site/plot of the appellants would be Rs. 115.00 per sq. yard. Considering the location of the building on the Roshnara Road, which is a highly commercial area in the heart of the old city with very great building potential, this price is most reasonable.

(13) As regards the cost of construction we have already rejected the evidence of Shri G.T. Sehajawala, Executive Engineer, as an estimate too low and not based on any scientific working out of the cost of the structure. We have also rejected Shri G.T. Sehajawala's finding that the building was 80 years old as not based on any evidence. 'We accept the report of the two valuers that the age of the building was 30 years at the time of the Award/Judgment of the ADJ. As for the valuation of the building, AW/3, Shri R. Krishanan, had given the valuation at Rs. l,63,459.00 . Another valuer, Shri B.D. Pisolkar, had. given the valuation at Rs. 2,74,042.00 . Considering the difference between the. valuations of the two valuers a more reasonable approach would be to arrive at a mean figure of Rs. 2,00,000.00 . The appellants/claimants are, thus, entitled to Rs. 6,38,974.50 as compensation for the site/plot and Rs. 2,00,000.00 for the building/construction. The appellants would also be entitled to simple interest 61 per cent per annum for the first year and 15 per cent per annum thereafter. They would also be entitled to 15 per cent solarium. The interest and solarium would be payable on the enhanced from the date of possession to the date of actual payment.

(14) The appellants in the three appeals will be entitled to l/4 share each of the said amount of compensation of Rs. 8,39,000.00 .

(15) The appeals areallowed.