CASE LAWS LAND & BUILDINGS: COMPLETE E-BOOK

FREE COMPLETE STUDY MATERIAL NOTES FOR IBBI EXAMINATION

E-BOOK

ONLINE BATCH STUDY MATERIAL-50 HRS EDUCATIONAL COURSE UNDER RULE 5(1) READ WITH RULE 12(2)(a) FOR REGISTRATION AS VALUERS UNDER THE BANNER OF CEV IAF RVO

UNIT-13

CASE LAWS LAND & BUILDINGS: COMPLETE E-BOOK

R.C. COOPER VS. UNION OF INDIA, (1970) AIR SC 564

BACKGROUND

In 1970, the Supreme Court, in its judgement on Rustom Cavasjee Cooper v. Union Of India, popularly known as the Bank Nationalization case, held that the Constitution guarantees the right to compensation, that is, the equivalent money of the property compulsorily acquired. The Court also held that a law which seeks to acquire or requisition property for public purposes must satisfy the requirement of Article19(1)(f). The 25th Constitutional Amendment sought to overcome the restrictions imposed on the government by this ruling.

VALUATION-RELATED EXTRACT OF THE JUDGEMENT

The object underlying the principles of valuation is to award, the owner the equivalent of his property with its existing advantages and its potentialities. Where there is an established market for the property acquired the problem of valuation presents little difficulty. ……………………….READ MORE

1.	RUSTAM C. COOPER vs UNION OF INDIA	Property means the highest right a man can have to anything, it includes ownership, estates and interest in coporeal things and also rights such as trademarks, copy rights, patents, etc. Court has included all types of property viz. tangible.
2.	SORAB TALATI vs JOSHEPH MICHEM	The court approved of investment theory to fix standard rent of the rent controlled premises. Return or yield from Gilt Edged Security is the basis for determining the fair return to the landlord for his investments in land & buildings.
3.	COMMISSIONER OF WEALTH TAX vs P.N. SIKAND	In determining the values of the leasehold interest of the assessee in the land for the purpose of wealth tax assessment, the price would have to be reduced by 50% of the unearned increase in the value of the land (which is diverted to the lessor).
4.	WENGER & CO vs DISTRICT VALUATION OFFICER – DELHI HC	Combination of methods (Owner occupied – sale comparison & tenanted portion – capitalization method) – adopted by DVO and his approach is not only acceptable but also in accordance with the principles of evaluation.
5.	JAWAJI NAGNATHAN vs REVENUE DIVISIONAL OFFICER	Basic valuation register prepared and maintained for the purpose of collecting stamp duty cannot form foundation to determine the market value of the property under registration.
6.	CHIMANLAL HARIGOVINDDAS vs SPECIAL LAND ACQUISITION OFFICER	The court cannot take into account the award passed by the SLAO unless it is produced and proved before the court. The market value is to be determined as on date of publication of the notification under sec 4 of LAA. Plus factors and minus factors are to be considered while determining the market value
7.	CONTROLLER OF ESTATE DUTY VS. RADHA DEVI JALAN	• Rented properties must be valued by rental method. • In case of building which are in posession of tenant and the tenants cannot either be evicted or the rent payable by them cannot be enhanced, except in accordance with the provisions of the rent act, the only appropriate method of valuation is to capitalise the annual rent by certain number of year’s purchase. The method of valuing the land and the building separately and adding up the value would be improper in such cases, because that would ignore the impact of the Rent Control Act on the value of the land the building.
8.	COMMISSIONER OF INCOME TAX VS. SMT. ASHIMA SINHA	Arguments on behalf of the valuation officer have not properly understood the logical reasoning behind the reversionery value and therefore failed in producing proper evidence and properly presenting the concept of reversionary value before the High court. The High court has therefore misled in delivering such absolutely incorrect and erroneous judgement. It needs to be cautioned at this stage, that the judgements of the courts should always be read in the context of the evidence duly proved and arguments submitted before the court and should never be followed blindly.
9.	COMMISSIONER OF INCOME TAX VS. ANUP KUMAR KAPOOR AND ORS.	• The valuation officer under the method adopted by him, has taken the value of the land twice, once in arriving at the figure by the’yield or rental’ method and again in applying the ‘reversionary’ method. This is in our view was wholly wrong. • In this case Calcutta court rejected concept of reversionery value of land. The above case was fully tenanted property and obviously therefore land reversion was not possible and hence its value could not be added.
10.	COMMISSIONER OF INCOME TAX VS. VIMLABEN BHAGWANDAS PATEL	• The rate of capitalisation should be not unreal and must have regard to the commercial rate of return after taking into consideration the various constraints and insecurities in the property market. • After considering payment provision v/s 11(1) of U.L.C.R. Act of 1976, the court opined, “In our opinion, the reasonable and appropriate rate of capitalisation would be 81/3 time the net average annual income which would give yield of 12% per annum on the investment of capital.