Delhi High Court
Vikas Jain vs M/S Brijwasi Infratech Pvt Ltd on 3 November, 2020
Author: Asha Menon
Bench: Rajiv Sahai Endlaw, Asha Menon
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 03rd November, 2020
+ RFA(OS) 1/2020 & CM No.25750/2020 (for stay)
VIKAS JAIN ..... Appellant
Through: Mr. Apratim Animesh Thakur with
Ms. Nikita Chitale, Advocates.
versus
BRIJWASI INFRATECH PVT LTD .....Respondent
Through: Ms. Shalini Kapoor, Mr. Dikshant
Khanna, Ms. Bindita Chaturvedi
and Mr. Sangram Singh Kheechi,
Advocates.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
HON'BLE MS. JUSTICE ASHA MENON
[VIA VIDEO CONFERENCING]
JUSTICE ASHA MENON
1. This appeal is against the judgement and decree dated 23rd October,
2019 passed in a civil suit filed by the respondent herein against the
present appellant, seeking the partition of the property bearing No. 3,
Block A-1, Krishna Nagar, New Delhi-51, ('suit property') whereby the
suit property has been valued at the rate of ₹3.75 lakhs/sq.yard, and the
respondent has been given the right to purchase the 1/16 th share of the
appellant in the suit property.
2. The facts as are relevant for the disposal of this appeal are as
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follows. The suit property was originally owned by late Chunni Lal who
executed sale deed dated 14th February, 1958 transferring equal shares in
the suit property to Sh. Yagdev Sharma and Sh. Bhim Dev. During their
lifetime, these joint purchasers further sold their respective shares in the
suit property. Sh. Bhim Dev sold his ½ share to Sh. Suresh Chand and Sh.
Tej Kumar Jain, the father of the appellant, both of whom acquired 1/4 th
share each in the suit property. On the death of Sh. Tej Kumar Jain, his
four sons succeeded to his 1/4th share, in equal proportion. Thus, the
appellant came to hold a 1/16th share in the suit property.
3. It is not in dispute that the respondent had on 23rd April, 2010,
purchased the ½ share of late Yagdev Sharma and the 1/4 th share of late
Suresh Chand from their successors-in-interest, vide registered sale
deeds. The three brothers of the appellant sold their 3/4 th share out of the
1/4th share of late Tej Kumar Jain in the suit property to the respondent
vide a registered sale deed executed on 29th October, 2010. Thus,
admittedly it owns the entire suit property save for the extent of 1/16 th
share of the appellant in it. On the strength of these sale deeds the
respondent filed a suit for partition. A preliminary decree was passed in
the suit on 18th April, 2017 to the effect that the respondent was the
owner of the suit property to the extent of 15/16 th share and the appellant
was owner with 1/16th share.
4. The court appointed a Local Commissioner to divide the suit
property by metes and bounds. In the meantime, the appellant filed an
application under Section 4 of the Partition Act, 1893 claiming that the
suit property was a dwelling house and he being the sole resident desired
to exercise his right of pre-emption and expressed his willingness to
RFA(OS) 1/2020 Page 2 of 11
purchase the share of the respondent at the "value assessed by" the court,
ascertained as on the date of filing of the suit for partition, i.e. 24 th
September, 2014 which he would pay as per the schedule set out in the
application.
5. Vide order dated 31st October, 2018 the application was dismissed,
holding, for reasons given, that the suit property had lost its character of
"dwelling house" and to peg the value of the house at a rate prevalent
four years prior to the date of the order would be unfair to the parties and
a fairer date would be the date when the appellant had moved his
application under section 4 of the Partition Act, 1893 i.e. 12th July, 2018.
An Independent Valuer Sh. Kameshwar Prasad Singh was appointed by
the court to calculate the value of the suit property. The appellant was
granted the option of paying to the respondent the value of its share or to
be paid the value of 1/16th share in the suit property. The appeal preferred
by the appellant against this order dated 31st October, 2018 was disposed
of by a consent order dated 10th April, 2019 as the respondent agreed to
sell its share to the appellant for a fair market value and the court directed
the appellant to place a proposal for the purchase of the 15/16 th share of
the respondent at a "fair market value determined in terms of law" before
the Single Judge.
6. Following the said order, the appellant filed his proposal on 22 nd
May, 2019 pegging his offer to purchase the share of the respondent in
case the valuation arrived at by the court was "below or within range of
0% to 7% escalation from the valuation reports of Dr. S.N. Bansal and
Mr. M.L. Agrawal", which reports he had filed on the record. The
appellant had also filed objections to the Valuation Report and the
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Supplementary Valuation Report of the court appointed Independent
Valuer Sh. Kameshwar Prasad Singh. The respondent also brought on
record two valuation reports from their side. The learned Single Judge
considered all these reports and vide the impugned judgement fixed the
value of the suit property at the rate of ₹3.75 lakhs/sq.yards, and
permitted the respondent to purchase the 1/16th share of the appellant.
7. Aggrieved, the appellant has alleged that the learned Single Judge
had fixed an arbitrary value for the property. Sh. Apratim Animesh
Thakur, learned counsel for the appellant has vehemently urged that the
learned Single Judge had relied on websites such as magicbricks.com and
99acres.com to fix the value of the suit property at over ₹ 22 crores which
was more than what the court appointed Independent Valuer had himself
recommended i.e. just over ₹13 crores and thus the valuation was
perverse and against the guidelines for valuation. According to learned
counsel, the circle rates ought to have been accepted or the comparative
method used by determining the value on the basis of contemporaneous
sale deeds relating to properties in the same area. He submitted that the
respondent had purchased the rest of the shares for ₹1.25 crores and had
valued the suit for partition at ₹3crores. Therefore, the valuation of the
appellant at ₹4 - 4.2 crores was reasonable and a fair market value of the
suit property and the appellant should be allowed to purchase the shares
of the respondent at the said valuation. On the other hand, Ms. Shalini
Kapoor, counsel for the respondent contended that the valuation placed
by the learned Single Judge was fair and they were prepared to purchase
the share of the appellant at the said rate, though the market rate presently
maybe around ₹ 17-18 crores and submitted that the offers made by the
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appellant were insincere. The dismissal of this appeal was sought.
8. We have heard the learned counsel for the parties and have
considered the record. A perusal of the impugned judgement would
reveal that it is the contention of the appellant, that the court had
depended only on real estate websites to determine the value of the
property, that is perverse. Five valuation reports were before the court.
Two reports were filed by Mr.N.K. Lather and Mr. B.P. Singh on behalf
of the respondent valuing the suit property at ₹18.07 crores and ₹16.59
crores respectively. Two reports were filed by Mr. S.N. Bansal and Mr.
M.L. Agrawal, Govt. approved Valuers, on behalf of the appellant, who
fixed the value of the suit property at ₹4.22 crores and ₹3.99 crores
respectively. The fifth report was submitted by the Court Appointed
Valuer Mr. Kameshwar Prasad Singh, who fixed the value of the suit
property at ₹ 13,87,96,808. The learned Single Judge analysed all these
valuation reports astutely and in depth before concluding that the fair
market value of the suit property was ₹ 22,24,50,000.
9. The appellant has relied on "Guidelines for Valuation of
Immovable Properties 2009" ("Guidelines") issued by the Directorate of
Income Tax and has filed the extract as Annexure A-22 to the appeal.
Though there is no reason for the court to be bound by these
"Guidelines", nevertheless, we may refer to them fruitfully to determine
the merit of the appeal. Chapter 5 provides for "Methods of Valuation"
and the factors to be considered. One of the foremost and first advice the
Chapter opens with, it appears, is that "Valuation should be realistic
depending on the nature of the property, its use, potential and all other
characteristics". The learned Single Judge appears to have followed
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it to a 'T'.
10. These "Guidelines" provide that for determination of the Fair
Market Value of the property, the following methods may be used:
5.2.1 Land and building method.
5.2.2 Rent capitalisation method
5.2.3 Development method.
5.2.4 Profit method.
5.2.5 Comparable method.
5.2.6 Combination of more than one method for partly owner
occupied and partly tenanted property.
5.2.7 Guidelines rates issued by local Authorities for relevant
period and location in respect of rates of land, construction, flats
commercial properties etc.
Each of these methods has been further elaborated. These methods
are not mutually exclusive, nor have they been listed in a preferential
sequence. Any one or a combination of these methods that is most
appropriate to the case at hand can be adopted.
11. Dr. Bansal (on behalf of the appellant), had adopted the land and
building method and comparative sale method placing reliance on the
circle rates and sale value of four properties to fix the market rate 8%
above the circle rate and arrive at the figure of ₹4,22,68,800. The learned
Single Judge rightly observed that the circle rates cannot be accepted as
the fair market value and also found that the four comparable sale deeds
were in fact not so, as they were in relation to extremely small properties,
RFA(OS) 1/2020 Page 6 of 11
whereas the suit property was in commercial use with four shops and
admeasuring 593.20 sq yards which was wrongly evaluated by Dr. Bansal
as residential.
12. Mr. M.L. Agarwal's report (again on behalf of the appellant)
though appeared to be based on the comparable method relying on five
sale deeds but was actually guided only by the rates fixed by the local
authorities, as the sale consideration in all transactions were the circle
rates. Moreover, the properties, subject matter of these sale transactions
were very small ones. The valuation of the suit property solely on circle
rates at ₹ 4 crores, was correctly, not found acceptable by the learned
Single Judge.
13. The report of Mr. N.K.Lather (on behalf of the respondent) used
the land and building method but did not consider any contemporaneous
sale transactions to arrive at the market value of ₹18,07.81.600.
Mr.B.P.Singh (on behalf of the respondent) also adopted the land and
building method. He too did not rely on any comparable sale deeds to fix
the market value at ₹16,59,44,400. This was the reason for the learned
Single Judge not accepting the valuations.
14. As regards the valuation by the court appointed Valuer, in the light
of the objections raised by the appellant to the valuation given by him, the
court had to call for an explanation from him as to how he had arrived at
the figure of ₹13,87,96,808. In the Supplementary Report, the court
appointed Valuer stated that as there were no sale instances in the vicinity
of the suit property, he had made enquiries from local residents and had
also referred to portals such as www.99acres.com, www.magicbricks.com
and www.nestoria.in and to specific advertisements given therein.
RFA(OS) 1/2020 Page 7 of 11
Further, he analysed rent agreements relating to shops in Krishna Nagar.
He therefore valued the suit property by the Rent Capitalisation Method.
The fundamental objection of the appellant to the valuation of the court
appointed Valuer was that no evidence of market survey had been filed,
no documentary evidence had been placed on record to determine the
market value and the use of the Rent Capitalisation Method was improper
as there were only four shops in the suit property.
15. In this background, the learned Single Judge did not accept any of
the above valuation reports filed by the parties but relied on some of the
observations made by the court appointed Valuer to determine the fair
market value of the suit property. Nothing in the "Guidelines" suggests
that the impugned judgement has been based on faulty principles. Even
the courts have not held that in all cases one method alone is to be
preferred, such as the Comparable Method. The learned Single Judge
took into consideration the comparative sale deeds and found them not
comparable to the suit property as they related to smaller areas. The
location of the suit property on a commercial street as notified vide the
Gazette Notification dated 15th September, 2006, was factored in, as it
reflected the potential commercial use of the property. In fact, the court
noticed that there were four shops in the suit property and several shops
in the vicinity. The mere fact that as of now the permission for
commercial use has not been obtained will not detract from its potential
for future use as a commercial property on payment of requisite charges
in accordance with the Master Plan of Delhi. The "Guidelines" provide
reference not only to rates such as circle rates but also rates that were
being fixed by "reputed builders". The reference to real estate websites
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which have gained reputation over a period of time as facilitators for
buying and selling property in a free market environment cannot be
viewed unscientific. Given the high potential of the suit property, the
court valued the property at ₹ 3.75 lakhs per sq. yard as the fair market
value, that is ₹ 22,24,50,000. We do not find any cause to interfere with
this assessment.
16. We also find no merit in the plea of the appellant that the learned
Single Judge had erroneously denied to him the right to purchase the
shares of the respondent. The conduct of the appellant does not convince
us that his offer is genuine. When he had filed his application under
Section 4 of the Partition Act, 1893, it was a conditional one as the
appellant sought to circumscribe the power of the court to determine the
fair market value to a range from 0% to 7% above the valuation placed by
his own Valuers. Though now the appellant is referring to the valuation
by the court appointed Valuer, he was loathe to accept it. When the
appeal came up for admission this Court gave the appellant several
opportunities to buy the shares of the respondent. In fact, the order dated
5th March, 2020 records as under:
"1. On the last date of hearing, both the parties were
directed to remain present to enable them to mull over the
offers made by each other.
2. Today, there is a change in the counsel for the appellant.
Mr. Mukesh Anand, Advocate enters appearance on behalf
of the appellant, who is also present in Court. He states on
instructions from the appellant that he does not wish to
accept the offer made by the other side for purchasing his
1/16th share in the suit premises for which the value of the
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suit premises was pegged by the respondent between Rs.17-
18 crores and the learned Single Judge has fixed the price at
Rs.22,24,50,000/-, as against the valuation given by the
appellant, which is between Rs.4.00 crores to 4.24 crores.
3. That being the position, list on 16.7.2020 for
'admission'."
17. The learned Single Judge has recorded a finding against the
appellant that he appeared to be deliberately undervaluing the property.
Thus, the appellant only seems to be interested in prolonging the
conclusion of the proceedings by changing his stance, especially in view
of the fact that it is he who is in possession. We cannot permit him to
prevaricate in this fashion. The submission of the learned counsel for the
appellant that the respondent can quote a higher figure only because they
have to pay for 1/16th share whereas he has to pay for 15/16th share, is
only reflective of a "dog in the manger" attitude, which need not be
encouraged.
18. When the constant refrain of the appellant is that he cannot
purchase the shares of the respondent at the value fixed by the learned
Single Judge, which we uphold as a fair market value of the suit property,
there is no meaning in the argument of the appellant that the Supreme
Court had, in Punjab National Bank v. Sahujain Charitable Society and
Ors., (2007) 7 SCC 83, exercised its inherent powers under Article 142 of
the Constitution of India to do complete justice to the parties before it and
that therefore the learned Single Judge was bound to grant an opportunity
to the appellant to buy the shares of the respondent. Such an exercise
would only have the effect of denying to the respondent the fruits of the
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decree of partition granted to it. We do not propose to go that way.
19. We accordingly uphold the judgment and decree passed by the
learned Single Judge. The appeal is dismissed being devoid of merit.
ASHA MENON, J.
RAJIV SAHAI ENDLAW, J. NOVEMBER 03, 2020 RFA(OS) 1/2020 Page 11 of 11