Vikas Jain vs Brijwasi Infratech Pvt Ltd

Asha Menon, J

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 Rs. 3.75 lakhs/sq.yard, and the respondent has been given the right to purchase the 1/16th share of the

appellant in the suit property.

The facts as are relevant for the disposal of this appeal are as 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 1/4th 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.

It is not in dispute that the respondent had on 23rd April, 2010, purchased the ½ share of late Yagdev Sharma and the 1/4th share of late Suresh

Chand from their successors-in-interest, vide registered sale deeds. The three brothers of the appellant sold their 3/4th 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 1/16th 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

15/16th share and the appellant was owner with 1/16th share.

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 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. 24th September, 2014 which he would pay as per the schedule set out in the application.

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 15/16th share of the

respondent at a “fair market value determined in terms of lawâ€​ before the Single Judge.

Following the said order, the appellant filed his proposal on 22nd 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.

Agrawalâ€, which reports he had filed on the record. The appellant had also filed objections to the Valuation Report and the 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 Rs.

3.75 lakhs/sq.yards, and permitted the respondent to purchase the 1/16th share of the appellant.

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 Rs. Â 22 crores which was more than what the court appointed Independent Valuer had

himself recommended i.e. just over Rs. 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 Rs. 1.25 crores and had

valued the suit for partition at Rs. 3crores. Therefore, the valuation of the appellant at Rs. 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 Rs. Â 17-18 crores and submitted that the offers made by the

appellant were insincere. The dismissal of this appeal was sought.

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 Rs. 18.07 crores and Rs. 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 Rs. 4.22 crores and Rs. 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 Rs. Â 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 Rs.

 22,24,50,000.

The appellant has relied on “Guidelines for Valuation of Immovable Properties 2009†(“Guidelinesâ€) 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 “Guidelinesâ€,

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 characteristicsâ€​. The learned Single Judge appears to have followed it to a ‘T’.

These “Guidelinesâ€​ 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.

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 Rs. 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, 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.

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

Rs. Â 4 crores, was correctly, not found acceptable by the learned Single Judge.

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 Rs. 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 Rs. 16,59,44,400. This was the reason for the learned Single Judge not

accepting the valuations.

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 Rs. 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.

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.

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 buildersâ€. The reference

to real estate websites 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 Rs. Â 3.75 lakhs per sq. yard as the fair

market value, that is Rs. Â 22,24,50,000. We do not find any cause to interfere with this assessment.

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.

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 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.

That being the position, list on 16.7.2020 for ‘admission’.â€​

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

mangerâ€​ attitude, which need not be encouraged.

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 decree of partition

granted to it. We do not propose to go that way.

We accordingly uphold the judgment and decree passed by the learned Single Judge. The appeal is dismissed being devoid of merit.