AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1988 (2) TMI 471
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....2 Bamboo-clumps, situated on the outskirts of the City of Varanasi, originally part of the estate of Raja P.N. Tagore, and now vesting in the Administrator General, West Bengal, was acquired pursuant to the preliminary notification, published in the Gazette, dated, 4.7.1959 for the purposes of the education department of the Government of Uttar Pradesh. 2. Before the Land Acquisition Officer, Appellant claimed compensation of Rs. 8,00,580 (at Rs. 352 per decimal) for the land; Rs. 3,50,000 for the building and structures; Rs. 41,010 for the tree growth; and Rs. 5,000 as compensation for change of residence. The Land Acquisition Officer, however, by his Award dated 4.11.1961 under Section 11 of the Act determined the market-value of the land at Rs. 3,31,340 valuing it Rs. 140 per decimal (or Rs. 14,000 per acre); of the building and structures at Rs. 57,660 and of the tree growth at Rs. 355.83. Appellant, not having accepted the offer contained in the award, sought for a reference under Section 18 of the Act to the Civil Court in proceedings pursuant to which the District-Court enhanced the market-value of the land to Rs. 4,73,200 (from Rs. 140 to Rs. 200 per decimal) leaving ....
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....ket-value of a piece land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economic criteria. The market-value of a piece of property, for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms length. The determination of market-value, as one author put it, is the prediction of an economic event. viz, the price- outcome of a hypothetical sale, expressed in terms of probabilities. Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best, evidences of market- value. Other methods of valuation are resorted to if the evidence of sale of similar lands is not available. In the District-court, appellant relied upon eight transactions of what, according to him, were sale, of similar lands. The transactions at Ext. 18, 20, 21 and 22, dated, 25.3.1952, 1.12.1955, 11.8.1953 & 11.7.1957 respectively were rejected by learned District Judge on the ground that they were....
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....principle that evidence of market- value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper perspective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes; that building lots that could be laid-out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical lay-out could with justification be adopted, then in valuing such small, laid-out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic amenities; expenses of development of the sites by laying- out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price; the profits on the venture etc. are to be made. In Sahib Singh Kalha & Ors. v. Amritsar Improv....
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....lowing an appropriate deduction for the possible appreciation of the land-values during the period of one year. Apart from other difficulties in this exercise, there is no evidence as to the rate and degree of appreciation in the values of land so that the figure could be jobbed backwards from 14.7.1960 to 4.7.1959. 7. It appears to us that even if the value at Rs. 1,250 as on 27.8.1958 indicated by Ext. 2 is adopted and something is added thereto for the possible appreciation for the period till the preliminary notification, also taking into account the trend of appreciation in the prices in the area as indicated by Ext. 24 and the value of small developed sites is estimated somewhere between Rs. 1,400 and Rs. 1,600 per biswa or Rs. 450 to Rs. 500 per decimal, yet, the valuation made in the present case does not call for or justify any upward revision at all. There is a simple way of cross checking these results. The value of small plots- Rs. 500 per decimal as now estimated-represents what may be called the "retail" price of the land. What is to be estimated therefrom is the "wholesale" price of land. In Bombay Improvement v. Mervanji Manekji Mistry, (See AIR 1926 Bombay 420) ....
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....tion. The rate of depreciation is, generally, arrived at by dividing the cost of construction (Less the salvage value at the end of the period of utility) by the number of years of utility of the building. The factors that prolong the life and utility of the building, such as good maintenance, necessarily influence and bring down the rate of depreciation. Hari Shanker Misra PW 3 referring to the nature and quality of the building stated: " The Northern part of this Villa was double storeyed and rest was single storeyed. Its plinth was 3 feet high and rooms were 14 feet high. The building bore 35 rooms and besides this there was a big hall 65 feet x 22 feet. Its floor was made up of some patent stones. Some monthly some market and Vkiya were stoned. The doors were 8 feet x 4 feet and they were made up of Burma teak wood and up ways were double doored. When Improvement Trust occupied the property of Nejai at that time building was well maintained. Over and above the main building there were manager quarters. Kitchen, out house, servant quarters, Chowkidar quarters and a stable. Now they were in good condition. Its boundary wall was 7 feet and at some places they were 8 fe....
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.... not particular to the date of valuation i.e. 20.7.1960. The PWD rates are operative over a period, generally for an year or so. The extent or the quality of construction were also not in dispute. The main building of an area of 18828 sq. ft. consisted of 35 rooms, and a big hall with 'Marble Flooring', 'Burma Teak Shutters', 'Stone Slab Roofing', a portico with 'Glazed Gracian Pillars' etc. In Ext. 1, the main portion was valued at Rs. 12 per sq. ft. Apart from the main building, there were other appurtenances such as the Managers' quarters, kitchen-house, chowkidars' quarters, out-house, stables, pucca wells etc. The other structures have been valued area- wise at much lesser rates, according as the nature of the construction. The decendants of Raja P.N. Tagore, it was claimed, were residing in the building till a few days before possession was taken. There is no evidence to suggest that, the rates mentioned and adopted in Ext. 1 were not rates valid for a spread-out period. It appears to us somewhat unreasonable that the extensive building of 25,000 sq. ft. with big-halls and 35 rooms constructed with quality-material, marble flooring, ....
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....s salvage value divided by the life-span. These, of course, are matters of evidence. In the present case, if we make a rough and ready estimate of the salvage-value at say, 10% of the cost and estimate the period of utility of life-span of the building at, say, 90 years, the depreciation which is the annual loss of value due to physical wear and tear works out to about Rs. 4,000 per year or roughly 1%. Without going to the finer details of the calculation of the depreciation on the progressive written-down values, we think, an estimate of 50% of the cost of the building may, again on a rough and ready basis, be deducted towards depreciation. The market-value of the building as on the date of the preliminary notification could accordingly be fixed at Rs. 2,00,000. Accordingly, the compensation for the buildings and structures is enhanced from Rs. 57,660 to Rs. 2,00,000, point (b) is held and answered accordingly. 10. Re: Contention (c): So far as the tree-growth is concerned, it is trite proposition that where land is valued with reference to its potentiality for building-purposes and on the basis of prices fetched by small sites in a hypothetical lay-out, the tree-growth o....