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2014 DIGILAW 2867 (ALL)

Anand Agrawal v. State of U. P.

2014-09-15

PANKAJ MITHAL

body2014
JUDGMENT Pankaj Mithal,J. Heard Sri Tarun Agarawal, learned counsel for the landlord and Sri Piyush Shukla, learned Standing Counsel. 2. The dispute in these petitions is about enhancement of rent under Section 21(8) of the U.P. Act No.13 of 1972 (in short 'Act') in respect of part of house No.S-8/108-H-3, Khajuri, D.I.G. Colony, Varanasi. 3. Writ petition No.53967 of 2009 is treated as the leading petition. 4. The respondents in the leading petition are tenants of the aforesaid house since 1953 at the rate of Rs.165/- per month. The part of the house comprising of servants quarters and C.G.I. Shed with the land having an area of 40832 sq. ft. was purchased by the petitioner from the previous owner Smt. Janak Nandini Kunwar vide registered sale deed dated 1.2.1969 and on the intimation given by the previous owner proportionate rent of the said part of the house at the rate of Rs.15/- per month was being paid to the petitioner. 5. The petitioner on 28th June, 2004 moved an application under Section 21(8) of the Act for fixation/enhancement of the rent of the above portion from Rs.15/- per month to Rs.2,84,726/- per month. 6. The Prescribed Authority vide judgment and order dated 28.2.20065 accepted the Valuer's report as submitted by the petitioner and fixed the rent at the rate of Rs.1,00,000/- per month. The petitioner was not satisfied by the rent so fixed by the Prescribed Authority. He, therefore, preferred appeal No.62 of 2005 under Section 22 of the Act. The appeal has been allowed in part and the rent has been fixed at Rs.1,58,000/- per month. 7. Simultaneously, the respondents challenged the rent fixed by the Prescribed Authority by filing appeal No.71 of 2005. The said appeal was dismissed by a separate order. 8. The petitioner has preferred the leading petition for further enhancement of rent as per the Valuer's report. His prayer is that the rent ought to have been fixed at Rs.2,84,726/- per month. On the other hand, the respondents have filed other two writ petitions; one challenging the judgment and order of the appellate court enhancing the rent to Rs.1,58,000/- and the other challenging the judgment and order of the appellate court by which their appeal for reducing the rent as fixed by the Prescribed Authority was dismissed. 9. In this way the above three writ petition are before this Court. 10. 9. In this way the above three writ petition are before this Court. 10. Counsel for the parties consented for final disposal of all the three writ petitions together at the admission stage on the basis of the pleadings which have been already exchanged between the parties in the leading petition. 11. The submission of Sri Tarun Agrawal, learned counsel for the petitioner is that once the courts below have accepted the Valuer's report there Is no justification for confining the fixation of rent to Rs.1,00,000/- per month or Rs.1,58,000/- per month. The appellate court in determining the market value of the portion in question has provided for further depreciation overlooking to the fact that the Valuer has calculated the market value by applying depreciated rate. Lastly, it has been submitted that the value of the land was liable to be calculated by applying the commercial rate and the courts below have erred in applying the residential rate of Rs.450/- per sq. ft. in place of Rs.800/- per sq. ft. 12. On the other hand, learned Standing Counsel has argued that the petitioner is not the owner of the disputed portion, and despite objection to this effect no finding has been recorded by any of the courts below in this regard. Secondly, when the judgment and order of the Prescribed Authority was assailed by both the parties by separate appeals they should have been decided together by a common judgment. The appellate court erred in passing separate judgments in the appeals on the same day. Lastly, it has been submitted that the courts below are not justified in enhancing the rent on the basis of the Valuer's report submitted by the petitioner. The proper course was to direct for the spot inspection of the property and thereafter to fix the rent on its basis. 13. The dispute, as stated above, is in respect of a portion of the above house. The rent of the said portion was being paid to the petitioner at the rate of Rs.15/- per month. 14. The petitioner in the plaint has clearly pleaded that he is the owner and landlord of the said portion of the house in question. He has purchased the same from the erstwhile owner and landlady Smt. Janak Nandini Kunwar vide registered sale deed dated 1.2.1969. 14. The petitioner in the plaint has clearly pleaded that he is the owner and landlord of the said portion of the house in question. He has purchased the same from the erstwhile owner and landlady Smt. Janak Nandini Kunwar vide registered sale deed dated 1.2.1969. The respondents in the written statement in reply to the said averment have stated that they are paying proportionate rent of Rs.15/- per month to the petitioner on the basis of the instructions in writing from the previous landlady but the respondents are not aware about the ownership of the petitioner in absence of any sale deed. The respondents have further in paragraph 2 of the written statement stated that on the basis of the rent being paid and realised by the petitioner they accept the petitioner to be the landlord. 15. In view of the above pleadings of the parties and the admission of the respondents that the petitioner is the landlord and the fact that its rent was being paid to the petitioner there remains no controversy with regard to the relationship of landlord and tenant between the parties. 16. Once it is accepted that the petitioner is the landlord and the respondents are tenants, petitioner is entitle to maintain the application under Section 21(8) of the Act. Thus, the first argument of the learned Standing Counsel that the petitioner is not the owner and the application filed by the petitioner under Section 21(8) of the Act was not maintainable is of no substance. 17. The Prescribed Authority vide judgment and order dated 28.2.2005 has partly allowed the application of the petitioner under Section 21(8) of the Act and fixed the rent at Rs.1,00,000/- per month. 18. The said judgment and order was challenged by both the parties by filing separate appeals viz appeal No.62 of 2005 and 71 of 2005. Since both the appeals were arising out from the same judgment and order in all propriety they ought to have been clubbed and decided by a common judgment. However, decision of the two appeals preferred against the same judgment and order by separate judgments is mere a irregularity. The appellate court decided the appeals separately but there is no conflict in the two judgments. The appeal of the respondents has been dismissed and that of the petitioner has been partly allowed by enhancing the rent further to Rs.1,58,000/-. 19. The appellate court decided the appeals separately but there is no conflict in the two judgments. The appeal of the respondents has been dismissed and that of the petitioner has been partly allowed by enhancing the rent further to Rs.1,58,000/-. 19. In view of the fact that there is no contradiction or conflict in the two judgments of the appellate court, there is no illegality on the part of the appellate court in deciding the appeals separately, which may warrant any interference by this Court. 20. Lastly, I come to the question of fixation of rent of the disputed portion of the above house. 21. The rent of the aforesaid portion prior to the filing of the application under Section 21(8) of the Act was admittedly Rs.15/- per month. The petitioner in the application claimed that the market value of the aforesaid portion is Rs.3,41,67,200/- and according to the formula prescribed under Section 21(8) of the Act its rent comes to Rs.2,84,726/- per month and, therefore, he is entitle to said rent with effect from the date of application. 22. In order to prove the market value of the above portion, petitioner had filed the valuation report dated 23.6.2004 of one G.B. Chatterjee, Chartered Engineer and Registered Valuer. The said engineer valued the property as per Annexure - A to the report. He recorded that the area of the Servants' Quarter is 3259 sq. ft. and that which is covered under C.G.I. Shed is 792 sq. ft. He worked out the market value of the above structure by applying the depreciated rate of Rs.400/- per sq. ft. in respect of the Servants' Quarter and depreciated rate of Rs.250/- per sq. ft. for the area covered by C.G.I. Shed. The market value of the land was calculated by applying commercial rate of Rs.800/- per sq. ft. as notified by the Collector under the Indian Stamp Act. Thus, the total market value of the property was assessed at Rs.3,41,67,000/-. 23. The petitioner proved the valuation report by filing the personal affidavit of the valuer. 24. The respondents were given opportunity to file objections to the said report and to adduce their own evidence. The respondents failed to adduce any evidence in rebuttal. They did not file any report of any other valuer or any evidence to controvert the above valuation report. They, however, filed objections. 24. The respondents were given opportunity to file objections to the said report and to adduce their own evidence. The respondents failed to adduce any evidence in rebuttal. They did not file any report of any other valuer or any evidence to controvert the above valuation report. They, however, filed objections. In the objections they nowhere disputed the area of the Servants Quarter, C.G.I. Shed or the total area of the property involved or the rate which was applied for calculating the market value of the structure. The only objection taken was that the circle rate prescribed by the Collector for the purposes of realisation of stamp duty cannot be applied for fixation of market value of the property for the purposes under Section 21(8) of the Act. 25. The Prescribed Authority in the absence of any evidence or material to show that the above report is incorrect or inadmissible, accepted the Valuer's report and held that the rent of the portion is not liable to be less than Rs.2,84,726/- per month but as in the past the rent of Rs.15/- only per month was being paid proceeded to fix it at Rs.1,00,000/- per month only. 26. The Prescribed Authority overruled the objection that the market value is not liable to be fixed by applying the circle rate notified by the Collector or that it has to be determined in accordance with the municipal assessment. 27. The appellate court in dismissing the appeal of the respondents affirmed the findings of the Prescribed Authority. 28. The appeal of the petitioner, was partly allowed and the Valuer's report was accepted with slight modification that in place of Rs.800/- per sq. ft. it took the residential rate of Rs.450/- per sq. ft. for calculating the market value of the land. Thus, the market value of the land was proportionately reduced and accordingly the rent of Rs.1,58,412.05 was fixed. 29. The submission of the Standing Counsel that the courts below are not justified in fixing/enhancing the rent on the basis of the Valuer's report is completely misconceived and is not tenable in law. Section 21(8) of the Act provides for fixation and enhancement of monthly rent on the basis of the market value of the building under tenancy. 29. The submission of the Standing Counsel that the courts below are not justified in fixing/enhancing the rent on the basis of the Valuer's report is completely misconceived and is not tenable in law. Section 21(8) of the Act provides for fixation and enhancement of monthly rent on the basis of the market value of the building under tenancy. It has been repeatedly held that there is no harm in assessing the market value of the property on the basis of the circle rate notified by the Collector for the purposes of realising the stamp duty. In State of U.P. and another Vs. Amrish Chandra and another 2005 (2) ARC 828 it has been held that for the purposes of determining the market value of the property under Section 21(8) of the Act, circle rate prescribed by the Collector can be taken as the basis. 30. It is also well recognised that in calculating the market value of a building, value of the construction and the value of the land underneath had to be taken independently to work out its total market value. In other words, the value of the construction i.e. the Servants' Quarter and the C.G.I. Shed together with the value of the total land forms the market value of the portion. In Istiyaq Bano Begum Vs. ADJ 2008 (3) ARC 298 it has been laid down that for fixing the fair rent, the value of the building plus that of the land has to be considered. 31. This is what has been done by the valuer. The Valuer has calculated value of the structure by applying the depreciated rate and the value of the land by applying the commercial circle rate and has thus, assessed the market value of the disputed portion. 32. In the event the said market value was not acceptable to the respondents they could have filed their independent report or any other evidence to prove the said report to be incorrect. This they have not done. They only took an objection that the valuation cannot be done on the basis of the circle rate. The said objection has rightly been overruled by the courts below. In Sangat Singh Panwar Vs. IV ADJ and others 1989 ALJ 1264 this Court approved of the fixation of rent under Section 21(8) of the Act as per enhanced circle rate. Again in Smt. Padma Tandon Vs. The said objection has rightly been overruled by the courts below. In Sangat Singh Panwar Vs. IV ADJ and others 1989 ALJ 1264 this Court approved of the fixation of rent under Section 21(8) of the Act as per enhanced circle rate. Again in Smt. Padma Tandon Vs. District Judge and others 1992 (2) ARC 180 this Court approved of fixing rent under Section 21(8) of the Act on the basis of market value and not on the annual rental value or on the basis of Municipal assessment. The Court observed: "In my opinion, the interest of landlord of such building have been adequately taken care by making suitable provisions and providing for the assessment of rent on the basis of market value and not on the basis of letting value or annual rental value or on the basis of Municipal assessment." 33. Accordingly, there is no flaw in fixing the rent on the basis of market value of the property determined as per the circle rate rather on the basis of its annual rental value or on the Municipal assessment. 34. The argument that the courts below ought to have directed for inspection of the property in view of Rule 27 of the Rules framed under the Act. The said rule envisages for local inspection at the discretion of the District Magistrate/Prescribed Authority or the appellate or revisional authority. It is not a mandatory rule. The inspection report could not have given the precise value of the property. Therefore, it was not necessary to have the property inspected. 35. The submission that the Valuer who had submitted the report had not made the inspection in presence of the representative of the respondents and had not given any notice of such a inspection is baseless. The notice before inspection is required only when the inspection is at the instance of the District Magistrate/Prescribed Authority. A private valuer is not supposed to give any notice of inspection likely to be made by him for the purposes of submitting the report. 36. The argument of Sri Tarun Agrawal that the appellate court has erred in applying the residential rate for the purposes of calculating the market value of the land does not appear to have any substance either. There is no evidence or material on record that the disputed property is of commercial nature. 36. The argument of Sri Tarun Agrawal that the appellate court has erred in applying the residential rate for the purposes of calculating the market value of the land does not appear to have any substance either. There is no evidence or material on record that the disputed property is of commercial nature. Therefore, the Valuer was not justified in applying the commercial circle rate for assessing the market value of the land. The appellate court in the above facts and circumstances has rightly applied the residential rate of Rs.450/- per sq. ft. for assessing the value of the land. 37. The appellate court in fixing the rent, however, overlooked the fact that the Valuer had already applied the depreciated rate for the purposes of calculating the market value of the structure. In such circumstances, no further depreciation could have been permitted by the appellate court. 38. In view of the aforesaid facts and circumstances, for the sake of clarity the rental value of the portion in question would be as under: Plinth area of the Servants' Quarter : 3259 sq. ft. x Rs.400/- (Depreciated value)=Rs. 13,03,600.00 C.G.I. Shed : 792 sq. ft. x Rs.250/- (Depreciated value) =Rs. 1,98,000.00 Land : 40832 sq. ft. x Rs.450/- =Rs.1,83,74,400.00 Total =Rs.1,98,76,000.00 Now by taking 10% of the above market value and then by reducing it to 1/12 the rent comes out to be Rs.1,65,600.00 as under: 10% of Rs.1,98,76,000.00 = Rs.19,87,600.00 1/12 of Rs.19,87,600.00 = Rs.1,65,633.33 Say Rs.1,65,600.00 only. 39. Thus, the rent of the above portion is fixed as above @ Rs.1,65,600/- per month w.e.f. the date of application under Section 21(8) of the Act i.e. 28.6.2004. 40. The respondents despite the judgment and order of the Prescribed Authority and the appellate court and the fact that there was no stay of the above have failed to tender the rent fixed by the courts below. 41. Accordingly, the respondents are directed to deposit the entire arrears of rent at the above rate within a period of one month from today failing which the District Magistrate/Collector shall take appropriate steps to recover the said amount from the police authorities and to remit it to the petitioner. 42. The respondents shall henceforth pay monthly rent w.e.f. 15th September, 2014 at the above rate by 22nd of each succeeding month till they remain in its possession as tenants. 43. 42. The respondents shall henceforth pay monthly rent w.e.f. 15th September, 2014 at the above rate by 22nd of each succeeding month till they remain in its possession as tenants. 43. In view of the above, writ petition No.53967 of 2009 is allowed in part as above by fixing the rent at Rs.1,65,00.00 and writ petition No.42340 of 2010 and writ petition No.42342 of 2010 are dismissed.