{"id":29441,"date":"2001-08-07T00:00:00","date_gmt":"2001-08-06T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/appropriate-authority-anr-vs-kailash-suneja-anr-on-7-august-2001"},"modified":"2016-10-29T14:39:43","modified_gmt":"2016-10-29T09:09:43","slug":"appropriate-authority-anr-vs-kailash-suneja-anr-on-7-august-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/appropriate-authority-anr-vs-kailash-suneja-anr-on-7-august-2001","title":{"rendered":"Appropriate Authority &amp; Anr vs Kailash Suneja &amp; Anr on 7 August, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Appropriate Authority &amp; Anr vs Kailash Suneja &amp; Anr on 7 August, 2001<\/div>\n<div class=\"doc_author\">Author: R Babu<\/div>\n<div class=\"doc_bench\">Bench: S. Rajendra Babu, K.G. Balakrishnan<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 6050-6051  of  1998\n\n\n\nPETITIONER:\nAPPROPRIATE AUTHORITY &amp; ANR.\n\n\tVs.\n\nRESPONDENT:\nKAILASH SUNEJA &amp; ANR.\n\nDATE OF JUDGMENT:\t07\/08\/2001\n\nBENCH:\nS. Rajendra Babu &amp; K.G. Balakrishnan\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>RAJENDRA BABU, J. :\n<\/p>\n<p>\tThe property comprised in No. G-4(Old No. C-62), Maharani Bagh,<br \/>\nNew Delhi on a plot measuring about 800 sq. yards was agreed to be sold<br \/>\npursuant to an agreement dated July 1, 1993 for a sale consideration of<br \/>\nRs.79 lakhs.  The property consists of two floors &#8211; ground and the first &#8211;<br \/>\nand is in occupation of the tenants.  The agreement provided for<br \/>\nsymbolic delivery of the possession while it was open to the purchaser to<br \/>\nmake use of the portion over the roof on the first floor.  An application in<br \/>\nForm 37(I) was filed on 9.7.1993.  The Appropriate Authority worked out<br \/>\nthe fair market value of the property and the apparent consideration fell<br \/>\nshort by 24 per cent of the fair market value.\tThe Appropriate Authority<br \/>\ncompared the property in question with three different properties as sale<br \/>\ninstances to arrive at the correct market value of the value of the<br \/>\nproperty in question : (1) G-8, Maharani Bagh, (2) D-18, Maharani Bagh,<br \/>\nand (3) N-62, Panchsheel Park.\tThe High Court went into the mode of<br \/>\ncalculation of fair market value adopted by the Appropriate Authority<br \/>\nand stated that in respect of property comprised in D-18, Maharani Bagh<br \/>\nthe agreement had been entered into on 25.6.1991 and on account of the<br \/>\ntime gap of 24 months, the adjustment of plus 24 per cent was to be<br \/>\nmade and in respect of property comprised in G-8, Maharani Bagh, there<br \/>\nwas basement potential and, therefore, adjustment of minus 10 per cent<br \/>\nwas to be made by the Appropriate Authority on that count.  This basis is<br \/>\ntermed to be perverse.\tIn identical circumstances when the valuation<br \/>\nadopted by the Appropriate Authority  was challenged in Appropriate<br \/>\nAuthority &amp; Anr. vs. Sudha Patil (Smt.) &amp; Anr., 1998 (8) SCC 237, this<br \/>\nCourt after examining the decision in <a href=\"\/doc\/1275712\/\">C.B.Gautam vs. Union of India,<\/a><br \/>\n1993 (1) SCC 78 and the absence of provision of filing an appeal against<br \/>\nthe order made by the Appropriate Authority, had stated that the<br \/>\nconclusion of the Appropriate Authority regarding the fair market value<br \/>\nin a matter of compulsory acquisition of immovable property after<br \/>\nconsidering all the germane and relevant materials should be accepted<br \/>\nand the same should not be made a subject matter of the examination as<br \/>\nif it is an appeal.  Reasons set forth by the Appropriate Authority are as<br \/>\nfollows :\n<\/p>\n<p>Subject property<\/p>\n<p>Ist sale instance<\/p>\n<p>Sale agreement<br \/>\n9.7.93<br \/>\nApparent sale<br \/>\nconsideration<br \/>\nDeclared land rate works<br \/>\nout at Rs.21,821 per sq.<br \/>\nmt. Value to be increased<br \/>\nat 1% per month for 24<br \/>\nmonths 24%<br \/>\nSale deed dated<br \/>\n25.6.91, 24 months<br \/>\nearlier sale agreement<br \/>\nHas no<br \/>\nbasement<br \/>\n10% to be<br \/>\ndeducted<br \/>\nThus value to be added is<br \/>\n14% (24%-10%) if 14% is<br \/>\nadded the land rate of<br \/>\nsubject property would<br \/>\ncome to<br \/>\nRs.21,821 x 14%<br \/>\nRs.24,875 or  Rs.25,000<br \/>\nper sq.mt.\n<\/p>\n<p>Value of land<br \/>\nRs.1.30 crores<\/p>\n<p>Depreciated value of the<br \/>\nstructure<br \/>\nRs.9,35,758<\/p>\n<p>Total value of the subject<br \/>\nproperty<br \/>\nRs.1,39,33,758<\/p>\n<p>The property is<br \/>\ntenanted<\/p>\n<p>Depreciated value for 6<br \/>\nyears at 8% is calculated<br \/>\nat :\n<\/p>\n<p>Rs.87,78,267<br \/>\n(Rs.1,39,33,758 x .63)<\/p>\n<p>(a) Thus the value of the<br \/>\nsubject property is<\/p>\n<p>Rs.87,78,267<\/p>\n<p>(b) To this rent for 6 years<br \/>\nis added<\/p>\n<p>Rs.1,42,092<\/p>\n<p>Has barsati<br \/>\npotential of the<br \/>\narea is 149.90<br \/>\nsq. mts.\n<\/p>\n<p>Has no barsati<br \/>\npotential<br \/>\nRs.37,27,500<\/p>\n<p>(c) This is to be added.\n<\/p>\n<p>The value of the subject<br \/>\nproperty is fixed at<\/p>\n<p>Rs.1,26,42,859<br \/>\nOr<br \/>\nRs.1,26,45,000<\/p>\n<p>This is 58% more than<br \/>\nthe apparent considerat-\n<\/p>\n<p>ion of the subject<br \/>\nproperty<\/p>\n<p>(Rs.79,99,390)<\/p>\n<p>Subject<br \/>\nproperty<br \/>\nD-18 (known as<br \/>\nI-15), Maharani<br \/>\nBagh<\/p>\n<p>2nd sale instance<\/p>\n<p>Sale agreement<\/p>\n<p>Sale deed dated<br \/>\n1.12.1992<br \/>\nRs.1.11 crores<\/p>\n<p>Adjusted declared land<br \/>\nrate works out at<br \/>\nRs.29,587 per sq. mt.<\/p>\n<pre>\n\nValue to be increased at\n1% per month 7 months\nearlier to sale agreement\n\nFor 7 months\t     + 7%\n\n\nFAR (not so\nmuch as the\n2nd instance)\n\n\nFAR (140-100)\t    - 28%\n\n\nSide open (not\navailable\/\nwhich is\navailable in 2nd\ninstance)\n\n\t\t\t     - 5%\n\nHas no\nbasement\npotential\n\n- 10\n\n\t  7%\t\t\t  -   43%\n-  36%\n\nDeclared land rate\ndeducting 36%\n29,587 x .64\n\n\n= Rs.18,950 per sq.\nmt.\n\nValue of the land of the\nsubject property\n\n\nDepreciated value of the\nstructure\n\n\n52 x 18,950\nRs.98,54,000\n\n9,33,758\nRs.1,07,87,758\n\n\nTenanted\n\nDepreciated value at the\nrate of 8%\nRs.67,96,287\n(Rs.1,07,87,758 x .63)\n\nRental increase for 6\nyears\nRs.1,42,092.00\n= Rs.28,21,655\n\nBarsati\npotential\n\n148.90 sq.mt. x\n18,950\n\nTotal value of the subject\nproperty\n\n\nRs.97,60,034\n22% higher than to\nAC\n\nSubject\nproperty\n\nSale agreement\n\n\n9.7.1993\n\n\n3rd sale instance\nN-62, Panchsheel\nPark 800 sq.yds.\nhaving FAR\n\n\nLand rate declared works\nout at Rs.28,455 per\nsq.mt.\n\n\nIf the rate of increase of\n1% per month\n\n4 months + 4% time gap\n29.4.1993\nsale agreement consid\neration\nRs.1,56,00,000\n\nRs.35,02,220\n\n\nRs.1,91,02,220\n\nNo open area\n\n\nFalling open area\n\n-5%\n\nNo basement\npotential\n\n\n\nBasement available\n10%\n4%    - 15%\n=  -11%\n\n\n\nThe land rate works out\nat Rs.25,333\n\n\n(28,455 x .89)\n\n\nDepreciated\nvalue of the\nstructure\n\nLand rate of subject\nproperty (ground floor ,\n1st floor) 520 sq. mts.\n\n= 25,333 x 520 =\nRs.131,73,160\n\n= 1,31,73,160.00\n\n\n\n=9,33,758.00\n<\/pre>\n<p>&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;\n<\/p>\n<p>\t\t\t\t\tRs.1,41,06,918.00\n<\/p>\n<p>\t\t\t\t\t &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;\n<\/p>\n<p>The Appropriate Authority added one per cent every month. The<br \/>\nbasement and barsati potential was also taken into account.  The<br \/>\nAppropriate Authority took into account the subject property was<br \/>\ntenanted and made certain calculations such as 6 years deferred value at<br \/>\n8 per cent and 6 years rent was added to the value arrived at by the<br \/>\nabove process.\n<\/p>\n<p>\tThe High Court disapproved this process of arriving at the figures<br \/>\nand that the apparent consideration fell short of the fair market value by<br \/>\nmore than 15 per cent and, therefore, the High Court held that the action<br \/>\nis incorrect.\n<\/p>\n<p>The Department contends that the learned Judges of the High<br \/>\nCourt could not have sit on judgment over the manner of calculations<br \/>\nmade by the Appropriate Authority.  If any of the factors set out therein<br \/>\nhad been ignored in the matter of arrival of fair market value, the same<br \/>\nwould have affected the consideration made by the Appropriate<br \/>\nAuthority.\tThere are several methods of arriving at fair market value<br \/>\nsuch as comparative sale method or the capitalisation of the rent, i.e.,<br \/>\nyield method or any other appropriate method.  But when the<br \/>\nAppropriate Authority adopted one or the other method and in that<br \/>\nprocess there is no inherent error or the factors taken note of by the<br \/>\nAppropriate Authority being relevant, it is submitted that it is not open to<br \/>\nthe High Court to have interfered with such a matter.  This Court in<br \/>\nSudha Patils case [supra] has stated that when the Appropriate<br \/>\nAuthority  comes to the conclusion one way or the other after giving due<br \/>\nopportunity to the parties concerned and there has been under-valuation<br \/>\non that basis by more than 15 per cent of the fair market value, the<br \/>\nAppropriate Authority  had jurisdiction to interfere with the same.\n<\/p>\n<p>\tThe High Court took the view that there is nothing on record to<br \/>\nsuggest as to what were the special reasons for making a purchase order<br \/>\nin respect of wholly tenanted property.\t Even assuming that there was<br \/>\nsome justification for the authority to initiate proceedings for the pre-<br \/>\nemptive purchase of the property under Chapter XX-C of the Act, the<br \/>\nmethod of valuation of the fair market value had to be just and<br \/>\nreasonable.  The authority has compared the values of incomparable<br \/>\nproperties.  While considering comparable instances, the instances of<br \/>\ntenanted properties had to be taken into consideration and not vacant<br \/>\nproperties by discounting without any factual or legal basis.  While the<br \/>\nagreement in relation to property at Maharani Bagh had been entered<br \/>\ninto in June 1991, the agreement for the property in question was<br \/>\nentered into on July 1, 1993.  Therefore, there is no basis for adding 24%<br \/>\non the hypothetical basis that there would be increase of 1 per cent every<br \/>\nmonth.\n<\/p>\n<p>In respect of tenancy, the plea taken before the High Court  is that<br \/>\nthe purchaser had mutual terms to get the property vacated from the<br \/>\ntenant.\t While the ground floor tenancy was from the year 1979 and the<br \/>\nfirst floor tenancy was from the year 1967, there is hardly any<br \/>\njustification to presume that the tenants would vacate in 5\/6 years.  The<br \/>\nsale instance in respect of property comprises in S-39-A, Panchsheel<br \/>\nPark, which was substantially tenanted without any justification, was<br \/>\nnot taken into consideration, though rent capitalisation method was<br \/>\napplied in that case.  Why in respect of one tenanted property rent<br \/>\ncapitalisation method was applied to work out the fair market value and<br \/>\nin the other case land and building method was applied is not clear.  It is<br \/>\non this basis the High Court allowed the writ petition before it.\n<\/p>\n<p>It is no doubt true that the scope of interference under Article 226<br \/>\nof the Constitution is very limited, but that is only in the nature of a<br \/>\njudicial review of the proceedings and not by way of appeal or revision<br \/>\nwhere the scope of interference is much wider.\tIn cases of the present<br \/>\nnature where several methods are available for finding out the value of<br \/>\nthe property and if one or the other method is adopted by the<br \/>\nDepartment and that may be reasonable, it may not call for any<br \/>\ninterference.  However, if there are loopholes or lacunae in the process of<br \/>\nreasoning adopted by that authority in reaching the conclusion as in the<br \/>\npresent case that the tenanted property would be vacated soon or that<br \/>\nthe property is close to the vicinity of the situation of the subject property<br \/>\nif compared, adopting different methods of valuation, then the parties<br \/>\nwho appear before the authorities will definitely have a reason to have a<br \/>\nheart burn.  If one method of valuation is adopted and benefit is given to<br \/>\none party and why that method is not adopted in the other case to reach<br \/>\nthe conclusion the other way is not clear and in our opinion it is<br \/>\nunjustifiable.\tIf in this background the High Court examined the matter<br \/>\nand arrived at a conclusion one way or the other, we do not think it is<br \/>\nnecessary for us to interfere with that finding in a proceeding arising<br \/>\nunder Article 136 of the Constitution.<br \/>\nHence these appeals shall stand dismissed.  No costs.\n<\/p>\n<p>\t\t\t\t    &#8230;J.\n<\/p>\n<p>\t\t\t\t[ S. RAJENDRA BABU ]<\/p>\n<p>\t\t\t\t   &#8230;J.\n<\/p>\n<p>\t\t\t\t[K.G. BALAKRISHNAN]<br \/>\nAugust 07, 2001.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Appropriate Authority &amp; Anr vs Kailash Suneja &amp; Anr on 7 August, 2001 Author: R Babu Bench: S. Rajendra Babu, K.G. Balakrishnan CASE NO.: Appeal (civil) 6050-6051 of 1998 PETITIONER: APPROPRIATE AUTHORITY &amp; ANR. Vs. RESPONDENT: KAILASH SUNEJA &amp; ANR. DATE OF JUDGMENT: 07\/08\/2001 BENCH: S. Rajendra Babu &amp; K.G. Balakrishnan [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-29441","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Appropriate Authority &amp; Anr vs Kailash Suneja &amp; Anr on 7 August, 2001 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/appropriate-authority-anr-vs-kailash-suneja-anr-on-7-august-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Appropriate Authority &amp; 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