Dr. Kishore Chand Kapoor & Ors. Vs. Dharam Pal Kapoor & Ors.
EmailAppeal: Civil Appeal No.3828 of 1986.
(Aising Out of Petition for Special Leave to Appeal (Civil) No.2018 of 1984).
(Aising Out of Petition for Special Leave to Appeal (Civil) No.2018 of 1984).
Petitioner: Dr. Kishore Chand Kapoor & Ors.
Respondent: Dharam Pal Kapoor & Ors.
Apeal: Civil Appeal No.3828 of 1986.
(Aising Out of Petition for Special Leave to Appeal (Civil) No.2018 of 1984).
(Aising Out of Petition for Special Leave to Appeal (Civil) No.2018 of 1984).
Judges: S.S.VENKATARAMIAH & MURARI MOHAN DUTT,JJ.
Date of Judgment: Oct 24, 1986
Head Note:
PARTITION ACT, 1893:
Section 2 and 3 (1) – Compromise decree passed – Commissioner for Partition appointed by High Court reported that building was incapable of being divided by metes and bounds – Order of Single Judge that property be sold by public auction rightly set aside by the Division Bench – Valuer appointed – Property valued at Rs. 4, 92,500 following “land and building method” – Respondent No.1’s challenge to valuation method rejected.
Section 2 and 3 (1) – Compromise decree passed – Commissioner for Partition appointed by High Court reported that building was incapable of being divided by metes and bounds – Order of Single Judge that property be sold by public auction rightly set aside by the Division Bench – Valuer appointed – Property valued at Rs. 4, 92,500 following “land and building method” – Respondent No.1’s challenge to valuation method rejected.
Cases Reffered:
State of Kerala v. P.P. Hassan Koya, AIR 1968 SC 1201.
JUDGEMENT:
DUTT, J.
1. The special leave has already been granted. As elaborate arguments were made at the hearing of the special leave petition, we proceed to dispose of the appeal on merits.
2. The appeal has been preferred by the two plaintiffs and the defendants 3 and 4 and is directed against the order of the Delhi High Court under Section 3(1) of the Partition Act, 1893.
3. The preliminary decree was passed by a learned Single Judge of the High Court in terms of a compromise entered into between the parties. By the compromise decree the share of each party was declared as one-sixth in the suit property comprising 200 sq. yds. of land and a two-storeyed building standing thereon. The appellants 1 and 4, who were the plaintiffs, applied for passing a final decree under Order XX Rule 18 of the Code of Civil Procedure. A Commissioner for Partition was appointed by the High Court. According to the report of the Commissioner, the building was incapable of being divided by metes and bounds. The finding of the Commissioner was accepted by all the parties in the suit. The plaintiff-appellants filed an application for sale of the property by public auction under Section 2 of the Partition Act. Respondent 2, Smt. Savitri Devi Behl, who was defendant 2 in the suit, also made a similar application. Thus three of the parties in the suit, having in aggregate a half share in the property, applied for the sale of the property in question by public auction under Section 2 of the Partition Act. On the other hand, respondent 1 and appellant 2, who were respectively defendants 1 and 3, made two separate applications praying for the purchase of the shares of the other parties at a valuation. On the said applications, the learned Single Judge of the High Court directed that the property should be sold by public auction and the highest bid in that auction would determine the true market value of the property. On an appeal by defendant-respondent 1, the Division Bench of the High Court rightly set aside the said order and directed that the shares of the plaintiff-appellants and respondent 2 would be sold to either of the applicants, namely, appellant 3 and respondent 1. Being aggrieved by the said order of the Division Bench of the High Court, the appellants have preferred the instant appeal.
4. The position now is that appellant 3, Smt. Ram Dulari Dhawan, who made an application under Section 3(1) of the Partition Act, is no longer willing to purchase the property herself. Now it is only respondent 1, Shri Dharam Pal Kapoor, who is only willing to purchase the shares of the other parties so that the entire property may be allotted to him.
5. The suit has been pending since 1973 and, with a view to expediting the partition of the property, this Court without deciding the correctness or otherwise of the order of the Division Bench of the High Court, by its order dated April 13, 1986 appointed Shri O.P. Goel, a Government Valuer, to value the property in dispute and to submit his report on or before August 8, 1986. This Court, however, by its order dated August 4, 1986, rejected the report of the valuer since it related to the year 1978. By agreement of the parties, Col. R.K. Kohli (Retd.) was appointed a valuer of the property. Col. Kohli was directed to value the property as on the date of the order after giving notice to the parties and to submit the report to this Court within four weeks from that date. Col. Kohli has since submitted his report of valuation. It is stated in the report that the present market value (September 1986) of the property is worked on “building and land method”, that is, the depreciated value of the building plus the market value of the land as available to the owners in September 1986. In the opinion of the valuer, this is the most appropriate method of valuation in this case.
6. The property is situate at R/845, New Rajendra Nagar, New Delhi, and, admittedly, defendant-respondent 1, Shri Dharam Pal Kapoor, is in possession of the same. It appears that after taking into consideration the size, situation, location, emplacement and the utility, he came to the conclusion that the market value of the land should be at the rate of Rs 2250 per sq. meter. Accordingly, the total market value of the land at the above rate, as per the valuer, is Rs 3,76,250, and the depreciated value of the building is Rs 1,16,000. The total market value of the property, therefore, as found by the valuer, is Rs 4,92,250, say Rs 4,92,000.
7. The learned counsel for respondent 1 has challenged the mode of valuation of the property. It is submitted by him that the valuer was wrong in valuing the land and building separately. According to the learned counsel, the land and building should have been valued as one unit on the rental basis. Further, it is submitted by him that the value of the entire property in dispute could not have been more than Rs 1,20,000. In support of the said contention, the learned counsel has placed much reliance upon a decision of this Court in the State of Kerala v. P.P. Hassan Koyal*1, relating to determination of compensation under the Land Acquisition Act. In that case, it has been held by this Court that in determining compensation payable in respect of land with buildings, compensation cannot be determined by assessing the value of the land and the “break-up value” of the buildings separately; the land and the building constitute one unit and the value of the entire unit must be determined with all its advantages and its potentialities. The trial court in that case proceeded to capitalize the net annual rental having regard to the rate of return of 3 1/2 per cent from gilt-edged securities by multiplying it by 35 times inasmuch as there was clear evidence about the rental of the building. This Court while approving the method adopted by the trial court in valuing the building observed that it cannot be laid down as a general rule applicable to all situations and circumstances that a multiple approximately equal to the return from gilt-edged securities prevailing at the relevant time forms an adequate basis for finding out the market value of the land. It cannot, therefore, be said that the method of capitalization of the rent actually received or which might reasonably be received from the land or the building is the only method that should be adopted in valuing land and building. In the instant case, the valuer has taken into consideration all relevant factors and has valued the property in question at Rs4,92,000. No objection seems to have been taken by respondent 1 before the valuer. It is difficult for us to accept the contention of respondent 1 that the market value of the property in suit comprising a two-storeyed building and land measuring 167.22 sq. mtrs. cannot be more than Rs 1,20,000. In this connection, it may be pointed out that the building had been renovated and new additions were made in 1967. This fact has also been noticed by the valuer.
. It is next contended on behalf of respondent 1, that, as prayed by the plaintiff-appellant and respondent 2, the property should be put up for auction sale so that the highest bid in the auction may determine the market value of the property. This was exactly the order that was passed by the learned Single Judge of the High Court, but respondent 1 felt aggrieved by the said order and preferred an appeal to the Division Bench of the High Court. Such a contention is not only devoid of any merit, but also is not maintainable at the instance of respondent 1, who has expressed his willingness by an application under Section 3(1) of the Partition Act to buy up the shares of the other parties at a valuation. Respondent 1, therefore, cannot be allowed to blow hot and cold. The contention is, therefore, rejected.
9. There is also no merit in the contention of respondent 1 that the plaintiff-appellants having prayed for the sale of the property by public auction under Section 2 of the Partition Act, cannot oppose the prayer of respondent 1 for such sale. It appears to us that respondent 1 being in possession of the property wants to prolong the proceedings as much as possible.
10. It is submitted on behalf of the appellants that the valuation of the property, as made by the valuer, is low, but they will accept such valuation if reseondent 1 wants to purchase the shares of the other parties including the appellants on the basis of such valuation. It is submitted by the learned counsel for the appellants that the market value of the property in dispute cannot be less than Rs 6 lakhs and in case respondent 1 does not purchase the shares of the other parties on the basis of valuation made by the valuer, the appellants undertake to this Court to purchase the shares of respondent 1 and of respondent 2 on the basis of the valuation of the property at Rs 6 lakhs. In other words, the appellants offer to pay Rs 1 lakh to each of the respondents 1 and 2.
11. After considering the facts and circumstances of the case and the submissions made on behalf of the parties, we accept the valuation as made by Col. Kohli (Retd.) at Rs 4,92,000. Respondent 1 will be entitled to purchase the shares of the appellants and respondent 2 by paying to each of them a sum of Rs 82,000, that is, in all a sum of Rs 4,10,000. If the said sum of Rs 4,10,000 is deposited by respondent 1 in the Delhi High Court within two months from the date, a final decree will be passed in the suit allotting the entire property to respondent 1. The appellants and respondent 2 will be entitled to withdraw their respective shares in the said sum of Rs4,10,000 without furnishing any security. If, however, no such deposit is made within the period mentioned above, respondent 1 will be debarred from purchasing the shares of the other parties and, in that case, the appellants will be entitled to purchase the shares of respondents 1 and 2 by paying to each of them a sum of Rs 1 lakh, that is, in all a sum of Rs 2 lakhs as agreed to and undertaken by them. The said sum of Rs 2 lakhs shall be deposited by the appellants in the High Court within two months from the date of expiry of the period allowed to respondent 1. If such deposit is made, the final decree will be passed allotting the entire property jointly to the appellants. Respondents 1 and 2 will be entitled to withdraw their respective shares in the said sum of Rs 2 lakhs, that is to say Rs 1 lakh each, without furnishing any security.
12. The impugned order of the Delhi High Court is set aside. The appeal is disposed of accordingly. There will, however, be no order as to costs.
Appeal dismissed.
1. The special leave has already been granted. As elaborate arguments were made at the hearing of the special leave petition, we proceed to dispose of the appeal on merits.
2. The appeal has been preferred by the two plaintiffs and the defendants 3 and 4 and is directed against the order of the Delhi High Court under Section 3(1) of the Partition Act, 1893.
3. The preliminary decree was passed by a learned Single Judge of the High Court in terms of a compromise entered into between the parties. By the compromise decree the share of each party was declared as one-sixth in the suit property comprising 200 sq. yds. of land and a two-storeyed building standing thereon. The appellants 1 and 4, who were the plaintiffs, applied for passing a final decree under Order XX Rule 18 of the Code of Civil Procedure. A Commissioner for Partition was appointed by the High Court. According to the report of the Commissioner, the building was incapable of being divided by metes and bounds. The finding of the Commissioner was accepted by all the parties in the suit. The plaintiff-appellants filed an application for sale of the property by public auction under Section 2 of the Partition Act. Respondent 2, Smt. Savitri Devi Behl, who was defendant 2 in the suit, also made a similar application. Thus three of the parties in the suit, having in aggregate a half share in the property, applied for the sale of the property in question by public auction under Section 2 of the Partition Act. On the other hand, respondent 1 and appellant 2, who were respectively defendants 1 and 3, made two separate applications praying for the purchase of the shares of the other parties at a valuation. On the said applications, the learned Single Judge of the High Court directed that the property should be sold by public auction and the highest bid in that auction would determine the true market value of the property. On an appeal by defendant-respondent 1, the Division Bench of the High Court rightly set aside the said order and directed that the shares of the plaintiff-appellants and respondent 2 would be sold to either of the applicants, namely, appellant 3 and respondent 1. Being aggrieved by the said order of the Division Bench of the High Court, the appellants have preferred the instant appeal.
4. The position now is that appellant 3, Smt. Ram Dulari Dhawan, who made an application under Section 3(1) of the Partition Act, is no longer willing to purchase the property herself. Now it is only respondent 1, Shri Dharam Pal Kapoor, who is only willing to purchase the shares of the other parties so that the entire property may be allotted to him.
5. The suit has been pending since 1973 and, with a view to expediting the partition of the property, this Court without deciding the correctness or otherwise of the order of the Division Bench of the High Court, by its order dated April 13, 1986 appointed Shri O.P. Goel, a Government Valuer, to value the property in dispute and to submit his report on or before August 8, 1986. This Court, however, by its order dated August 4, 1986, rejected the report of the valuer since it related to the year 1978. By agreement of the parties, Col. R.K. Kohli (Retd.) was appointed a valuer of the property. Col. Kohli was directed to value the property as on the date of the order after giving notice to the parties and to submit the report to this Court within four weeks from that date. Col. Kohli has since submitted his report of valuation. It is stated in the report that the present market value (September 1986) of the property is worked on “building and land method”, that is, the depreciated value of the building plus the market value of the land as available to the owners in September 1986. In the opinion of the valuer, this is the most appropriate method of valuation in this case.
6. The property is situate at R/845, New Rajendra Nagar, New Delhi, and, admittedly, defendant-respondent 1, Shri Dharam Pal Kapoor, is in possession of the same. It appears that after taking into consideration the size, situation, location, emplacement and the utility, he came to the conclusion that the market value of the land should be at the rate of Rs 2250 per sq. meter. Accordingly, the total market value of the land at the above rate, as per the valuer, is Rs 3,76,250, and the depreciated value of the building is Rs 1,16,000. The total market value of the property, therefore, as found by the valuer, is Rs 4,92,250, say Rs 4,92,000.
7. The learned counsel for respondent 1 has challenged the mode of valuation of the property. It is submitted by him that the valuer was wrong in valuing the land and building separately. According to the learned counsel, the land and building should have been valued as one unit on the rental basis. Further, it is submitted by him that the value of the entire property in dispute could not have been more than Rs 1,20,000. In support of the said contention, the learned counsel has placed much reliance upon a decision of this Court in the State of Kerala v. P.P. Hassan Koyal*1, relating to determination of compensation under the Land Acquisition Act. In that case, it has been held by this Court that in determining compensation payable in respect of land with buildings, compensation cannot be determined by assessing the value of the land and the “break-up value” of the buildings separately; the land and the building constitute one unit and the value of the entire unit must be determined with all its advantages and its potentialities. The trial court in that case proceeded to capitalize the net annual rental having regard to the rate of return of 3 1/2 per cent from gilt-edged securities by multiplying it by 35 times inasmuch as there was clear evidence about the rental of the building. This Court while approving the method adopted by the trial court in valuing the building observed that it cannot be laid down as a general rule applicable to all situations and circumstances that a multiple approximately equal to the return from gilt-edged securities prevailing at the relevant time forms an adequate basis for finding out the market value of the land. It cannot, therefore, be said that the method of capitalization of the rent actually received or which might reasonably be received from the land or the building is the only method that should be adopted in valuing land and building. In the instant case, the valuer has taken into consideration all relevant factors and has valued the property in question at Rs4,92,000. No objection seems to have been taken by respondent 1 before the valuer. It is difficult for us to accept the contention of respondent 1 that the market value of the property in suit comprising a two-storeyed building and land measuring 167.22 sq. mtrs. cannot be more than Rs 1,20,000. In this connection, it may be pointed out that the building had been renovated and new additions were made in 1967. This fact has also been noticed by the valuer.
. It is next contended on behalf of respondent 1, that, as prayed by the plaintiff-appellant and respondent 2, the property should be put up for auction sale so that the highest bid in the auction may determine the market value of the property. This was exactly the order that was passed by the learned Single Judge of the High Court, but respondent 1 felt aggrieved by the said order and preferred an appeal to the Division Bench of the High Court. Such a contention is not only devoid of any merit, but also is not maintainable at the instance of respondent 1, who has expressed his willingness by an application under Section 3(1) of the Partition Act to buy up the shares of the other parties at a valuation. Respondent 1, therefore, cannot be allowed to blow hot and cold. The contention is, therefore, rejected.
9. There is also no merit in the contention of respondent 1 that the plaintiff-appellants having prayed for the sale of the property by public auction under Section 2 of the Partition Act, cannot oppose the prayer of respondent 1 for such sale. It appears to us that respondent 1 being in possession of the property wants to prolong the proceedings as much as possible.
10. It is submitted on behalf of the appellants that the valuation of the property, as made by the valuer, is low, but they will accept such valuation if reseondent 1 wants to purchase the shares of the other parties including the appellants on the basis of such valuation. It is submitted by the learned counsel for the appellants that the market value of the property in dispute cannot be less than Rs 6 lakhs and in case respondent 1 does not purchase the shares of the other parties on the basis of valuation made by the valuer, the appellants undertake to this Court to purchase the shares of respondent 1 and of respondent 2 on the basis of the valuation of the property at Rs 6 lakhs. In other words, the appellants offer to pay Rs 1 lakh to each of the respondents 1 and 2.
11. After considering the facts and circumstances of the case and the submissions made on behalf of the parties, we accept the valuation as made by Col. Kohli (Retd.) at Rs 4,92,000. Respondent 1 will be entitled to purchase the shares of the appellants and respondent 2 by paying to each of them a sum of Rs 82,000, that is, in all a sum of Rs 4,10,000. If the said sum of Rs 4,10,000 is deposited by respondent 1 in the Delhi High Court within two months from the date, a final decree will be passed in the suit allotting the entire property to respondent 1. The appellants and respondent 2 will be entitled to withdraw their respective shares in the said sum of Rs4,10,000 without furnishing any security. If, however, no such deposit is made within the period mentioned above, respondent 1 will be debarred from purchasing the shares of the other parties and, in that case, the appellants will be entitled to purchase the shares of respondents 1 and 2 by paying to each of them a sum of Rs 1 lakh, that is, in all a sum of Rs 2 lakhs as agreed to and undertaken by them. The said sum of Rs 2 lakhs shall be deposited by the appellants in the High Court within two months from the date of expiry of the period allowed to respondent 1. If such deposit is made, the final decree will be passed allotting the entire property jointly to the appellants. Respondents 1 and 2 will be entitled to withdraw their respective shares in the said sum of Rs 2 lakhs, that is to say Rs 1 lakh each, without furnishing any security.
12. The impugned order of the Delhi High Court is set aside. The appeal is disposed of accordingly. There will, however, be no order as to costs.
Appeal dismissed.
