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This judgment is also a judgment of Hon'ble Division Bench of the Hon'ble Supreme Court consisting of two Hon'ble Judges as is the judgment of the Hon'ble Supreme Court reported in A.I.R. 1968 S.C. 1201. This judgment discloses a slightly different approach in respect of method of valuation which ought to be followed in such cases. In the references before this Court, there is no satisfactory evidence of comparable sales of land with similar dilapidated buildings. The consent order passed by Court of Small Causes at Bombay concerning acquisition of setback land from Handloom House is not relevant for purposes of fixation of market value of acquired property which are subject matter of L.A.R. 105 of 1975 as in this case the buildings were occupied by tenants and the gross monthly income-rent received by the landlord was about Rs. 1200/- per month. Practically all the tenants were accommodated in the new building constructed by the Board. As between the claimants and the tenants, the tenants enjoyed benefit of Bombay Rent Act. The properties were fully encumbered with tenancies. The question to be asked is as to whether the willing buyer would ever offer market value of the property on the footing as if it was a vacant plot of land ignoring factors like tenancies already created, and the claim of tenants for being rehoused. With respect, the theoretical distinction, if any, between the ratio of the two judgments cited above, is of no practical consequence in this case as no satisfactory evidence is led of comparable sale instances in respect of sale of land with structures similarly situates. For all practical purposes, the result is the same. If the capitalisation method is applied in L.A.R. No. 105 of 1975 as it ought to be, the quantum of market value already fixed under the Award is much more than what would come to on application of capitalisation method. Perhaps the rent paid by former tenant who vacated the structures admeasuring about 1400 square ft. was about Rs. 80/- per month. Mr. Korde has not sought enhancement of market value on basis of capitalization method.

In para 12 of the aforesaid judgment, it was observed by the Apex Court that payment of 100 times the net monthly income i.e. 8 1/3 times the net annual income from the property could not be considered too low having regard to the rate of interest on safe investments prevailing from 1976-77. The observation made by the Apex Court in this case indicate that there is nothing wrong in applying capitalization method where acquired property was let out almost fully and fetched rental income. I must clarify that I am not applying basis of compensation being fixed on footing of 100 months rent in this case in view of the fact that the Amending Act is not attracted in this case. However, the general observation made by the Apex Court in respect of application of capitalized method as one of recognised method of valuation are of considerable significance for the purpose of deciding L.A.R. No. 105 of 1975. I have relied on the judgment in the case of State of Maharashtra v. Basantibai only for limited purpose as aforesaid.

41. In this view of the matter the question to be asked as to what the yearly income from the properties which are subject matter of L.A.R. No 105 of 1975. It is conceded that no extra F.S.I. was available and the plots of land forming subject matter of L.A.R. No. 105 of 1975 were fully developed the structures were all let out to tenants. The Rents at which the structures were first let out would be the standard rent of the premises. The gross rental income from the two properties was about Rs. 1200/- per month only. To this amount, an income of about Rs. 100 per month may be added as the income from a hypothetical tenant in respect of the premises vacated by the former tenant which remained to be unlet. if the net annual income on the basis of this rent is capitalized by considering such income for 100 months or more or even for 12 years, the resultant figure would work out to much less than the market value of land and Building in whatever condition as fixed by the Special Land Acquisition Officer in his award. The Special Land Acquisition Officer erroneously applied the method of fixing market value of the land at the rate of Rs. 500/- per square yard. The Special Land Acquisition Officer ought to have applied the capitalization method. If the Court applies the capitalization method, the amount to be fixed would be less than the amount already fixed by the Special Land Acquisition Officer. No case is therefore, made out for interference in respect of fixation of higher market value of the land and the building in whatever condition concerning the Land Acquisition Reference No. 105 of 1975. I have therefore, no hesitation in confirming the market value of this land as fixed by the Special Land Acquisition Officer.

Answer to issues concerning L.A.R. No. 105 of 1975.

Issue No. 1 : in negative. Market value fixed in the Award is confirmed.

Issue No. 2 : first part affirmative. The market value of acquired lands with buildings in scrap condition as fixed under the award as less than market value of the lands etc. worked out on basis of capitalizetion method.

Issue No. 3 : Lands and Building are not required to be val ued separately. Valuation of the property as a composite unit by applying capitalization method is appropriate having regard to facts of the case.