M/S Brijwasi Infratech Pvt. Ltd. v. Vikas Jain

7. From the above order it is clear that this Court had after considering that the market value of the property would have to be ascertained, appointed a Court Valuer for valuing the suit property. This order was challenged by the Defendant. Vide order dated 10th April, 2019, the ld. Division Bench disposed of the appeal in the following terms.

8. Pursuant to the order of the Division Bench further applications have been filed by the parties. On 26th March, 2019, this Court had noticed that there were enormous divergence in the valuations given by the Court Appointed Valuer and the Defendant. The Court Appointed Valuer was directed to file further documents to support his valuation, pursuant to which an additional valuation report dated 26th May, 2019 was filed by the Valuer. Arguments were heard thereafter in the I.As.

9. The following applications have been moved by the parties being i. I.A. No.7829/2019 seeking to place on record the market value of the suit property along with a valuation report; ii. I.A.7830/2019 for placing on record the proposal for purchase of the property by the Defendant; iii. I.A.8004/2019 by the Plaintiff seeking to place on record valuations for the suit property.

10. The submission of ld. counsel for the Plaintiff - Ms. Shalini Kapoor is that the valuation of the suit property must be on the basis of the market rate prevalent today. She submits on the basis of the printouts from various websites such as www.99acres.com, www.magicbricks.com etc., that the current market value of the suit property is more than Rs.[3] lakhs per sq. yard. She also relies upon the valuation report filed by the Court Appointed Valuer. On the basis of various neighbouring properties and the values available online of various real estate websites, she submits that the market value of the suit property is more than Rs.17 crores. She further submits that the valuation given by the Defendant is not the proper market value and is much below the market rates for these properties. She further relies upon the valuation reports placed on record by Shri N.K. Lather and Mr. B.P. Singh. As per Mr. N. K. Lather, the total value of the suit property including the land value and the cost of construction is Rs.18.07 crores. As per Mr. B.P. Singh, the value of the property is approximately Rs.16.59 crores including the value of the land and the cost of construction. She thus, prays that her client be allowed to purchase the Defendant’s 1/16th share in the suit property as the Plaintiff is already the owner of 15/16th share in the suit property.

11. On the other hand, Mr. Thakur, ld. counsel on behalf of the Defendant has vehemently urged that in view of the Division Bench’s order, this Court would have to first determine the market price of the suit property and thereafter, the Defendant ought to be permitted to be given a chance to purchase the Plaintiff’s share. In his two applications, the Defendant has placed on record two valuation reports given by one Mr. S. N. Bansal and M.L. Agrawal, who are both Government approved Valuers. As per Mr. Bansal, the circle rate value of the property is Rs. 3.91 crores and the fair market value of the suit property is Rs. 4.22 crores. He submits that this valuation has been arrived at on the basis of comparative sale deeds of the properties in the neighbourhood. The Defendant further relies on a report of Shri M.L. Agrawal, according to which, the value of the suit property by comparable rate method is Rs. 3.91 crores and the fair market value is about Rs. 3.99 crores. Analysis & Findings

12. The Court in this case has to determine the fair market value of the suit property as both the parties have given extremely disparate valuations. The valuation being given by the Defendant is almost 1/4th of what the Plaintiff is ascribing to the suit property. Under these circumstances, the Court has to analyse all the valuation reports which have been placed on record. The valuation given by the Defendant is of Shri S. N. Bansal and Mr.

M. L. Aggarwal. Both of them claim to be Government approved Valuers.

13. The said report classifies the property as middle-class property in a residential area. It is described as a built-up residential property. The date of valuation is March, 2019 and the plot area is 593.20 sq. yards (496 sq. meters) i.e. approximately 600 sq. yards. It notes that there are four shops on the ground floor and the construction dates back to 1971-72. The property has a ground floor, first floor and second floor and servant quarters. The circle rate in this area is taken as Rs. 70,080/- per sq. meter. Thus, the total land value has been given as Rs. 3,47,75,097/-. The cost of construction is taken as Rs. 43,62,649/- and thus the total value as per the circle rate method is given as Rs. 3,91,37,746/-. The Valuer has then taken the comparative sale method wherein four other properties have been considered. On the basis of the sale value of these four properties, the market rate is taken to be 8% above the circle rate and accordingly, by comparative sale method. the fair market value that has been arrived at is Rs. 4,22,68,800/-. Analysis of Mr. Bansal‟s report:

14. Insofar as the circle rate is concerned, the same would not govern the fair market value of a property. For establishing the market value, Dr. Bansal has cited four sale deeds. A perusal of these sale deeds shows that they relate to small properties of which the biggest is of 38 sq. meters and the smallest is of 6.68 sq. meters of land. The sale consideration is between Rs. 5.70 lakhs to Rs. 40 lakhs. The first sale deed is for a residential property. The second sale deed relates to one shop. The third sale deed is for a third floor with roof rights. These properties, cannot be considered to be comparable properties as they are extremely small properties. None of these properties can be compared to the property in question, which is a commercial property having four shops on the ground floor admeasuring 500 sq. meters. The fundamental error that Dr. Bansal has made is to consider the property as a residential property whereas in fact, the report itself shows that the property has four shops on the ground floor. Valuation report by Mr. M. L. Agrawal

15. This report also considers the property as one for residential use. This Valuer has observed that the property is in a dilapidated condition. As per the circle rate method, the Valuer has taken the value of the land and the construction as Rs. 3,91,37,747/-. As per the fair market value, the Valuer has given an approximate value of Rs. 4 crores. In order to arrive at this valuation, the Valuer has considered five sale deeds, to submit that the average rate per sq. meter is Rs. 70,613/-. The sale deeds relate to properties which range from 70 sq. meters to 163 sq. meters and are dated between 2018 to 2019. Analysis of Mr. M.L. Agarwal‟s report

16. A perusal of the sale deeds relied upon shows that the first one is of a 83 sq. meter plot which has been sold as per the circle rate for Rs. 21,85,000/-. It is clear that this sale deed is not a sale deed based on the market value. The second property is of 81 sq. meters which has again been sold at a value of Rs. 27,50,000/-, which is computed on the basis of the circle rate of the property. The same applies to the remaining two sale deeds, out of which one property of 73 sq. meters has been sold for Rs. 66 lakhs wherein the value of the land is as per the circle rate. In the 4th sale deed also, which relates to a property of 152 sq. meters, the sale consideration has been fixed at Rs. 40 lakhs, which is again based on the circle rate. Thus, all the four sale deeds relied upon by this Valuer are based on the circle rate of the properties. The fifth sale deed relating to a plot of 163 sq. meters has been sold at a sale consideration of Rs. 36 lakhs, which is again based only on the circle rate. Thus, all the five properties that have been relied upon by Shri M. L. Agrawal to determine the fair market value have all been valued only on the circle rate as described in the sale deeds itself. The circle rate in these sale deeds is taken as Rs.70,080/- per sq. meter. Valuation Reports relied upon by the Plaintiff - by Shri N.K. Lather and B.P. Singh

17. The report of Shri N.K. Lather considers the property to be a commercial-cum-residential property. It is mentioned to be a freehold property. The valuation report notes that the area enjoys all civic amenities such as schools, hospitals, markets, etc. and that properties are not easily available in this area. The report states that from enquiries made from property dealers and real estate agents, the per sq. yard rate is between Rs.

2.90 lakhs - Rs. 3.10 lakhs. Thus, Rs. 3 lakhs is adopted as the per sq. yard rate. On the basis of this rate, the value of the land is fixed at Rs. 17,80,47,000/- and cost of construction at Rs. 27,34,604/-. The total market value of the property is given as Rs. 18,07,81,600/-. This report does not rely upon any comparable sale deeds.

18. The second report of Shri B. P. Singh also considers the property as commercial-cum-residential property which is freehold. On the basis of enquiries made from the local area, brokers and real estate agents, this Valuer considers Rs. 2.50 lakhs - Rs. 2.75 lakhs as the rate per sq. yard. Accordingly, the value of the land is given as Rs.16,32,09,750/-, cost of construction is taken as Rs. 27,34,604/- and the total value ascribed is Rs.16,59,44,400/-. Analysis of Plaintiff‟s valuation reports

19. Both these reports do not rely upon any comparable sale deeds and they are merely based on enquiries from brokers and real estate agents. However, both the Plaintiff’s valuers give valuations which are similar in nature.

20. The Plaintiff has also placed on record website printouts and photographs of the local area along with the Government of India notification, which states that the road called as Satnam Road where properties A-1 to E-4/30, Krishna Nagar fall, has been described as a commercial street. The property in the present case is A-1/3, which would fall within the said notification as being located on a commercial street. Thus, the notification dated 15th September, 2006 is relevant in order to determine the market value of this property. Valuation Report of Court Appointed Valuer

21. The Court Appointed Valuer has given a detailed report again considering this to be a residential area. However, the Court Appointed Valuer has done a market survey with local residents and property dealers. As per the circle rate method, the Court Appointed Valuer has valued the suit property at Rs. 3,91,38,104/-. On the basis of market value, the Court Appointed Valuer has determined the value as Rs. 13,87,96,808/-. In this report, the Valuer has, however, placed photographs of the property on record, which clearly shows that there are shops on the ground floor. All the plans of the various floors have been placed on record. The Valuer has also placed on record two sale deeds given by Shri Vikas Jain to him. This valuation report has been objected to by the Defendant on the following grounds:

1) That no market survey has been done as there is no evidence of any market survey.

2) That no documentary evidence has been placed on record for arriving at the market value.

3) That the property cannot be valued on the basis of the rent that is being fetched in the area, as only four shops have been rented.

22. The Valuer was thereafter asked to file a supplementary report. The same has been filed as an additional valuation report. In this report, the Valuer has stated that there was no sale instance found by him of Block A-1 or Block A, Krishna Nagar, Delhi in the record of the Sub-Registrar’s Office. He has also given the details of all the property dealers whom he contacted to enquire about the market value. He also states that he made enquiries with the local residents in A-1 block. He further relies upon the portals such as www.99acres.com, www.nestoria.in, www.magicbricks.com. One of the properties he relies upon is an advertisement for sale of a floor, which is 200 sq. yards, which was being offered for Rs. 5 crores. He also mentions another property of 800 sq. feet, which is a two-floor building, by which he arrived at the conclusion that the per sq. yard rate was Rs. 4.27 lakhs. Similarly, on www.99acres.com, another property of 2097 sq. feet was analysed to be having a price of Rs. 4.29 lakhs per sq. yard. Thereafter, he also analysed various rent agreements, which are registered in the area relating to floors/shops in Krishna Nagar, which were fetching a very high rental amount. On the basis of all this evidence, the Court Appointed Valuer concludes as under:

23. A comprehensive analysis and perusal of all these reports shows that while the Defendant appears to be deliberately undervaluing the property, the Plaintiff’s Valuers do not have any supporting documents with their reports. The Court Appointed Valuer, on the other hand, has in his initial report along with the supplementary additional report, given enough evidence on record, both on the basis of real estate websites, lease deeds, rental values and from enquiries made from the local area, that the market value of the property is quite high considering that it has enormous potential for being rented out as also the location of the area. He has based his report on the basis of market survey and enquiries made from local real estate agents.

24. While determining the market value, the Court is not bound to consider only registered sale deeds. As per the Court Appointed Valuer there are no recent registered sale deeds in the same block of Krishna Nagar. Thus, the evidence in the form of website entries from leading real estate portals is a reasonable basis for determining the fair market value of a property.

25. The Plaintiff has also placed on record the Gazette notification dated 15th September, 2006 to show that the property is actually on a commercial street. Thus, the reports, which consider the property to be a residential property, cannot be considered as credible. Though, the Court Appointed Valuer has stated that the property is located in a residential area, he is conscious of the fact that various shops exist on the property. He has also considered the rent agreements for shops in the local locality. Thus, the property would have to be considered as a property capable of being put to a commercial use. As per the application filed by the Plaintiff, who is the owner of a substantial part of the property, the value ascribed is Rs. 3 lakhs per sq. yard.

26. Ld. Counsel for the Plaintiff relies on Punjab National Bank v. Sahujain Charitable Society and Ors., (2007) 7 SCC 83 wherein the Supreme Court has deemed it just to allow the party with a significant share in the property to purchase rights of other stakeholders with smaller shares even though they were offering a higher price for the property. The relevant portion of the said judgment reads as under:

On the other hand, the judgments cited on behalf of the Defendant lay down various principles for determining the valuation of the property. Especially, the principles laid down in Printers House Pvt. Ltd. v. Saiyadan and Ors., (1994) 2 SCC 133, i.e. that comparable sale method is to be favored by the Courts and factors such as the size, locality, potentiality etc. of the property in question are to be kept in mind. While comparable sale deeds could be one standard, none of the sale deeds placed on record by the Defendant can be held to be comparable. In G. Pankajakshi Amma and Ors. v. Mathai Mathew (Dead) through LRs and Anr., (2004) 12 SCC 83, the Court has held that unaccounted transactions cannot be considered for valuation of a property. There cannot be any doubt, as held in Amena Bibi & Ors. v. SK. Abdul Haque, AIR 1997 Cal 59, that the Court Commissioner’s report can be challenged by the parties and as held in Nilima Mishra v. Krishna Kumar Mishra, 2015 SCC OnLine Cal 560, depreciation is one of the factors that has to be considered. In Asha Rani v. NDMC & Ors., (2015) 221 DLT 730, it was held that a residential land can be put to commercial use.

27. None of these propositions can be doubted. In the present case, however, there are certain facts that need to be borne in mind:

1) That the Plaintiff is the owner of 15/16th share in the property.

2) That the Defendant owns only 1/16th share.

3) That none of the sale deeds filed by the Defendant’s Valuers are comparable. They all use only the circle rate to determine the sale consideration.

4) That the Plaintiff’s Valuers have only conducted enquiries and given the valuation.

5) The Court Appointed Valuer has used various realistic sources such as local brokers and real estate agents, leading websites as also the potential rent that can be fetched in the area on the basis of registered rent deeds.

28. On the basis of the above-mentioned facts and evidence on record, the Court determines that Rs. 3.75 lakhs per sq. yard is a fair market value of this property. The Plaintiff has suggested Rs. 3 lakhs, however, there is evidence which has been placed by the Court Appointed Valuer, which shows that the valuation could be as high as Rs. 4.29 lakhs per sq. yard. On this basis, it is held that Rs. 3.75 lakhs per sq. yard is the fair market value of the suit property. The area of the suit property is 593.20 sq. yards. Thus, the total value of the suit property is fixed at Rs. 22,24,50,000/-. In terms of the decision of the Supreme Court in PNB (supra), the Plaintiff being the owner of 1/15th share in the suit property and the Defendant clearly appearing unwilling to value the property at the fair market value, the Plaintiff would be held entitled to purchase the 1/16th share of the Defendant. The value of the 1/16th share of the Defendant in the property is determined at Rs. 1,39,03,125/-.

29. A final decree is accordingly passed, directing partition of the suit property by valuing the 1/16th share of the Defendant in the suit property at Rs.1.39 crores. The Defendant shall execute a sale deed in favour of the Plaintiff and sell his 1/16th share in the suit property for Rs.1.39 crores. All the expenses of stamp duty and other registration expenses etc. shall be borne by the Plaintiff.

30. The Defendant, at the time of execution of the sale deed, shall hand over vacant and peaceful possession of the areas in his occupation to the Plaintiff. The sale deed shall be executed within a period of 3 months from today. The suit and the applications are disposed of. Decree sheet be drawn up in the above terms.

PRATHIBA M. SINGH JUDGE OCTOBER 23, 2019