Madras High Court
State Bank Of India vs G.M.Sanjeevi Naidu(Deceaed) on 6 June, 2012
Author: G.Rajasuria
Bench: G.Rajasuria
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 6.06.2012 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA C.R.P.(NPD).No.3714 of 2008 State Bank of India, Arakkonam Branch, No.1, Bazar Street, Arakkonam, Vellore District. ... Petitioner vs. 1.G.M.Sanjeevi Naidu(Deceaed) 2.S.Prabhu .. Respondents Civil revision petition preferred against the judgement and decree dated 22.11.2006 passed by the Subordinate Judge (Rent Control Appellate Authority), Ranipet, Vellore District, in R.C.A.No.1 of 1996 partly reversing the order dated 31.10.1995 passed by the District Munsif,(Rent Controller), Arakkonam, Vellore District, in R.C.O.P.No.7 of 1994. For Petitioner : Mr.P.Om.Prakash For Respondents : Mr.P.Nalliyappan for R2 ORDER
Inveighing the judgement and decree dated 22.11.2006 passed by the Subordinate Judge (Rent Control Appellate Authority), Ranipet, Vellore District, in R.C.A.No.1 of 1996 in partly reversing the order dated 31.10.1995 passed by the District Munsif,(Rent Controller), Arakkonam, Vellore District, in R.C.O.P.No.7 of 1994, this civil revision petition is focused.
2. The parties, for the sake of convenience, are referred to hereunder according to their litigative status and ranking before the Rent Controller.
3. Compendiously and concisely, the germane facts absolutely necessary for the disposal of this revision would run thus:
(i) The respondent herein/landlord filed the R.C.O.P.No.7 of 1994 invoking Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act (hereinafter referred to as 'the Act' for short), as against the revision petitioner/tenant, for getting the fair rent fixed in respect of the demised premises leased out to the latter, for running the bank in that premises.
(ii) The petition was resisted by the tenant by filing counter.
(iii) During enquiry, the landlord examined himself as P.W.1 along with P.W.2 and P.W.3 and Exs.A1 to A8 were marked. On the tenant's side, one S.Jeyaraman examined himself as R.W.1 along with R.W.2 and Exs.B1 and B2 were marked.
(iii) Ultimately the Rent Controller fixed the fair rent in a sum of Rs.22,500/-, as against which, the revision petitioner herein filed the appeal and the appellate authority slightly modified the order of the Rent Controller.
4. Being aggrieved by and dissatisfied with the order and judgement of the respective authorities below, this revision has been focussed on various grounds.
5. The learned counsel for the petitioner would put forth and set forth his arguements, which could pithily and precisely be set out thus:
(i) It is the contention of the revision petitioner/Bank that the bank was in possession and enjoyment of the demised premises ever since 1973 as lessee and accordingly if worked out, it comes to 21 years as on the date of filing of the RCOP; whereas, for depreciation purpose, the age of the building was taken as 16 years, which is totally antithetical to the reality.
(ii) The land value of the building was erroneously assessed, by placing reliance on the evidence of P.W.3-the public official as well as Ex.A7-the extract of the guideline register.
(ii) In fact Ex.B1-the photo copy of the sale deed dated 14.7.1993 and Ex.B2-the certified copy of the original of the sale deed dated 14.7.1993 were ignored by both the Courts below. The building referred to in Ex.B2 is very near to the demised premises and the real value of the building is found spelt out therein.
(iii) It so happened that earlier in the said Ex.B2-the sale deed, the value of the property was specified in a sum of Rs.100/- per square foot of land and it having been referred to the Deputy Collector for proper valuation, it was valued at Rs.325/- per sq.foot. Whereas, the learned Rent Controller assumed and presumed as though the value in that locality was Rs.833/- per square foot, without any basis.
As such, the learned counsel for the petitioner/tenant would pray for modifying the order of both the Courts below and for fixing the fair rent appropriately.
6. In a bid to torpedo and pulverise the arguments as put forth and set forth on the side of the revision petitioner, the learned counsel for the respondent would pilot his arguments, which could pithily and precisely be set out thus:
(a) Even by phantasmagorical thoughts it cannot be visualised that the value of a property would be far below the guideline value. Ex.B1 is not a reliable piece of document for this case, because in the said document, per square foot of land was projected as though it was worth only Rs.100/- and thereafter, legal action was initiated by the authorities concerned and per square foot of land was assessed in a sum of Rs.325/-, which is not even half the value of the guideline.
(b) The evidence of P.W.3-the public authority also is not of any help to the revision petitioner/tenant, but he supported virtually the contention of the landlord-the respondent herein.
(c) The location of the demised premises was taken into account and accordingly, the Rent Controller assessed the fair rent and that was also confirmed by the appellate authority, virtually, warranting no interference in revision.
(d) The revision petitioner/Bank did not produce any rent receipt to show that it had been in occupation of the demised premises ever since 1973.
Accordingly, the learned counsel for the respondent would pray for the dismissal of the revision.
7. The points for consideration are as under:
(i) Whether the age of the building as 16 years arrived at by the Rent Controller, is tenable in the wake of the evidence given by P.W.1 himself before the Rent Controller?
(ii) Whether the Rent Controller was justified in fixing the value of per square foot in a sum of Rs.833/- for assessing the fair rent?
(iv) Whether there is any perversity or illegality in the orders passed by both the Courts below?
8. Point No.(i) On the one hand, the tenant, so to say, the bank would assert categorically as though it had been in possession and enjoyment of the demised premises as lessee ever since 1973. If that be so, certainly the bank must be in a position to produce some evidence in that regard. There is no knowing of the fact as to why the bank was not in a position to produce directly any evidence in that regard. However, the onus of proof is on the landlord to prove the age of the building.
9. P.W.1, in his deposition would categorically assert that the said building was constructed after obtaining approval, but no approval plan was produced. During cross-examination, P.W.1 would admit that even before 1978, so to say, 16 years anterior to the filing of the RCOP, the bank had started occupying the premises as lessee for a monthly rent of Rs.1,300/-. In such a case, I could see considerable force in the submission made by the learned counsel for the revision petitioner/bank that the Court can very well presume that the age of the building must be more than 16 years. But both the authorities below failed to take note of the same.
10. In such a case, the age of the building can be taken as 20 years and accordingly, the factor 20 should be applied for depreciation purpose in valuing the building. Accordingly, point No.(i) is decided.
11. Point No.(ii) Ex.B2 is the certified copy of the sale deed dated 14.7.1993, which is the one relied on heavily by the tenant to show the actual value of the land in that locality. On the other hand, the learned counsel for the landlord would place reliance on Ex.A3-the sale deed 27.11.1991, Ex.A5-the sale deed 14.12.94, Ex.A7-the extract of the guideline register dated 16.2.1995 and also the deposition of P.W.3-the official. The Rent Controller, by way of striking a balance between the rival contentions, assessed the value of the land in a sum of Rs.833/- per square foot. It has to be seen as to whether the authorities below were justified in rejecting Ex.B2(Ex.B1). It is glaringly and clearly understandable that the parties to the said document-Ex.B2 under valued it. As such it is a tainted document, and because of the intervention of the authorities the said document was referred to the authority concerned for valuing the document properly. Whereupon it appears, the authority concerned under the Stamp Act, assessed the value of the land in a sum of Rs.325/- per square foot, which is obviously far below the guideline value i.e. Rs.833/-.
12. The core question arises as to how far the said assessment could be taken as an exemplor one for the purpose of this case and that too, in the wake of Ex.A3-the sale deed 27.11.1991 and Ex.A7-the guideline dated 16.2.1995 and also the evidence of P.W.3-the public official.
13. The Court could visualise the normal course of events. So far Ex.B2 is concerned, as has been pointed out supra, it had not emerged out of bona fide intention in respect of valuation was concerned and there is no knowing of fact as to how the land could be assessed in a sum of Rs.325/- per square foot, when the guideline value in that locality was Rs.830/- per square foot.
14. However, the learned counsel for the tenant would vehemently argue that the competent authority assessed so and it could rightly be taken as a guiding factor.
15. My discussion supra would demonstrate and display that certainly such assessment cannot be pressed into service against the landlord to his detriment and that too, when such assessment was far below half of the guideline value.
16. Ex.A3 is a document of the year 1991 and the Engineer concerned in his assessment enhanced every year up to 1994 i.e. three times at the rate of 10% per annum for arriving at the land value, which in my opinion cannot be found fault with for the foregoing reasons.
17. Ex.A3 emerged without any blemish and it is relating to the property in the same locality. No doubt, it is in respect of a small area, but that is also referring to a building plot, over which, actually a building is situated.
18. At this juncture, it is just and necessary to analyse the location of the demised premises. Ex.A2 is the plan, which would picturesquely detail and delineate that the demised premises is bounded on three sides by roads and on the one side by hotel. As such, the location itself is an attractive one.
19. The learned counsel for the tenant would try to point out that the location was not so attractive and it would not fetch higher rent.
20. The cumulative reading of the evidence and also the analysis of the documents, including the Ex.A3-the sale deed 27.11.1991 and Ex.A7-the extract of guideline register dated 16.2.1995, be speak and betoken that the location of the demised premises is attractive and certainly that would fetch good rent and the building is not in a congested place at all.
21. The Rent Controller simply assessed the value of the land in a sum of Rs.833/- per square foot mostly based on the guideline value. However, the calculation made by the Engineer based on Ex.A3 would reveal that the land per square foot was assessed in a sum of Rs.798/-. In my considered opinion the said calculation is a reliable one for assessing the fair rent in this case. The exemplor document Ex.A3 was of the year 1991, whereas, the RCOP was filed in the year 1994 and for the three years' period, the land value was increased at the rate of 10% per annum, and accordingly, the said valuation was arrived at, which is incommensurate with the dictum laid down by the Honourable Apex Court relating to the land acquisition matters. Some of the precedents are as under:
(i) (2004) 6 SCC 533 [Delhi Development Authority vs. Bali Ram Sharma and others], certain excerpts from it would run thus:
"6. The lands which are the subject-matter of these appeals are acquired for the same purpose as in the aforementioned appeals, but the notification under Section 4(1) of the Act was issued on 25.2.1981 i.e. subsequent to Section 4(1) notification dated 17.11.1980. Obviously, there would be escalation of prices in regard to these lands. Hence, we think it just and appropriate to give 5% increase in the market value in respect of the lands in these appeals. In the result these appeals are also allowed and the impugned judgments are modified by reducing the amount of compensation from Rs.345 per sq yard (amounting to Rs.3,45,000 per bigha) to Rs.76,55 per bigha + 5% escalation. The respondents are entitled to statutory benefits available under the Act based on the amount of compensation as modified above. No costs.Civil Appeal No.4157 of 2003
7. The land which is the subject-matter of this appeal is acquired for the purpose as in the aforementioned appeals, but the notification under Section 4(1) of the Act was issued on 24.11.1981 i.e. subsequent to Section 4(1) notification dated 17.11.1980. Obviously, there would be escalation of price in regard to this land. Hence, we think it just and appropriate to give 10% increase in the market value in respect of the land in this appeal. In the result this appeal is allowed and the impugned judgment is modified by reducing the amount of compensation from Rs.345 per sq yard (amounting to Rs.3,45,000 per bigha) to Rs.76,550 per bigha + 10% escalation. The respondent is entitled to statutory benefits available under the Act based on the amount of compensation as modified above. No costs." (emphasis supplied)
(ii) 2011(13) SCALE CHANDRASHEKAR (D) BY LRS.AND OTHERS V. LAND ACQUISITION OFFICER AND ANOTHER, certain excerpts from it would run thus:
"25. Insofar as the contention advanced at the hands of the learned counsel for the appellants on the issue of deduction under the head of 'de-escalation' is concerned, reference may be made to the decision rendered by this Court in Delhi Development Authority v. Bali Ram Sharma, (2004) 6 SCC 533, wherein this Court found it appropriate to allow annual escalation, at the rate of 10 per cent, in order to determine the market value of the acquired land. In ONGC (2008) 14 SCC 748, this Court held, that provision of 7.5 percent per annum towards escalation of land costs, was appropriate to arrive at the market value of the acquired land. In Valliyammal & Another(2011) 8 SCC 91, this Court was of the view that 10 percent per annum escalation in price, should be added to the specified price to determine the market value. It is therefore apparent, that escalation in the market value has been determined by this Court at percentages ranging between 7.5 percent per annum to 10 percent per annum. . . . . . . . "
(emphasis supplied)
22. The core question arises as to what would happen to Ex.A5-the sale deed dated 14.12.1994.
23. It is quite axiomatic and obvious that Ex.A5 emerged during the pendenty of RCOP and as such, it cannot be considered. Ex.A7-the extract of the guideline register marked through P.W.3-the Public official, would reveal that from 1.4.1994 onwards the guideline value of the land was Rs.915.20 per square foot. As such, the valuation arrived at by the Engineer in a sum of Rs.798/- is less than the guideline value.
24. Wherefore, I am of the view that the appropriate assessment of the land shall be Rs.798/- per square foot as on the date of filing of the RCOP and that should be adhered to for assessing the fair rent.
25. Both the Courts below, by resorting to rough and ready method, fixed the fair rent, which warrants interference and accordingly it is interfered with.
26. Accordingly, the aforesaid points are answered as under:
Point No.(i) is answered to the effect that the age of the building arrived at by the Rent Controller as 16 years is untenable and the factor 20 should be applied for depreciation purpose in valuing the building.
Point No.(ii) is answered to the effect that the Rent Controller was not justified in fixing the value of per square foot in a sum of Rs.833/- for assessing the fair rent and it should be Rs.798/- per square foot. Accordingly, the order stands modified as under:
1. Type of building and age:
Type of building - Type I Age - 20 years
2. Constructed area of the building and cost of construction:
constructed area 3,732 sq.ft Cost of construction per sq.foot Rs.163/-(3732 X 163) Cost of petition mentioned building Rs.6,08,316.00 From the total construction cost electricity 5% drainage 5% total 10% Rs. 60,831.60 .....................
6,69,147.60 .....................
Depreciation 20 years 6,69,147.60 x 0.818 Cost of construction, excluding depreciation: 5,47,362.74 Value per square feet Rs.798/- Total value of the plot area (1951 X 798) 15,56,898.00 ------------------ 21,04,260.74 2= % Schedule-I amenities 52,607.00 --------------- Total value 21,56,867.74 --------------- Fair rent per year 12% in total value 2,58,824.00 One month rent Rs.21,569.00
27. In the result, the revision petition is partly allowed. However, there is no order as to costs.
Msk 06.06.2012 Index:Yes/No Internet:Yes/No To
1. The Subordinate Judge (Rent Control Appellate Authority), Ranipet, Vellore District
2.The District Munsif,(Rent Controller), Arakkonam, Vellore District G.RAJASURIA,J msk C.R.P.(NPD).No.3714 of 2008 06.06.2012