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Government of Bombay Vs. Ismail Ahmed Hafiz Moosa - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberLand Acquisition Reference No. 25 of 1923
Judge
Reported inAIR1924Bom362; (1924)26BOMLR227
AppellantGovernment of Bombay
Respondentismail Ahmed Hafiz Moosa
Excerpt:
land acquisition-compensation-market value-recent sale of the property-price of the property is index of its market value-price inflated by boom-deduction out of the price.;where the property under acquisition has been recently purchased, the price paid is prima facie the market value thereof.;frenchman v. assistant collector, haveli (1922) 24 bom. l.r. 782, followed.;where the price so paid has been influenced by a boom which is followed by a fall in price, the court should make a reasonable deduction in awarding compensation under the land acquisition act. - - --] as regards the situation of the property it may be observed that though there is a good view of the sea from the southern side of the property, there is on the opposite side of the road a range of servants' quarters attached..........it was also contended on behalf of government that there was a general fall in the value of landed property in bombay between the date of purchase and the date of declaration. the evidence on record shows that the claimant bought the property at the top of the market. the claimant's surveyor, mr. patel, said in his evidence:-i heard of the boom in laud in bombay. january 1920 was about the height of the boom and the high level continued till july-august 1920. the prices fell generally all over bombay. what i mean by ' generally' is that in some localities there was no decline in prices. i do not know of any locality in which by the actual sales it could be said that there was no decline. generally there was a fall of from 15 to 20 per cent. 7. in his re-examination he said that he.....
Judgment:

Mulla J.

1. [After setting out the facts as above the judgment proceeded.--] As regards the situation of the property it may be observed that though there is a good view of the sea from the southern side of the property, there is on the opposite side of the road a range of servants' quarters attached to the residence of H.H. the Gaekwar.

2. Before me the claimant's surveyor put in a valuation on a rental basis. He estimated the rents at Rs. 608 per month and he valued the vacant land at Rs. 50 per square yard. Mr. Kanga also adopted the same basis. Mr. Patel, surveyor for claimant, sought to support his value of vacant land by capitalising the ground rent of three plots of land situated at Varli Point. As regards rents he relied upon the rents derived from the building built on one of the said three plots. Counsel for Government contended that having regard to the situation of the said three plots and the character of the said building it was impossible to compare the property in reference with those plots either as regards rents or the value of vacant land. I inspected the property in the company of counsel and the surveyors for Government and claimant, and I entirely agree that the said three plots situated as they are in a superior locality can hardly afford any basis for determining either the rents of the property in reference or the value of the vacant land attached to it.

3. The property in reference consisted originally of a ground floor structure. The upper floors were added about fifteen years ago. The whole property was let out prior to the date of declaration, which is April 21, 1921, to the Bombay Municipality at a monthly rent of Rs. 165. The property was subject to the provisions of the Bombay Rent (War Restrictions) Act.

4. Government relied for their estimate of rents on the rents of an adjoining bungalow which was acquired and demolished about a year ago. But the rents of that bungalow also were subject to the provisions of the Rent Act. There is, therefore, no basis in the present case for determining what rents the property would realise after the repeal of the Rent Act. Nor are there any materials for ascertaining the value of the vacant land. Such being the facts, this is pre-eminently a case in which the property should be valued according to the principle laid down by Sir Norman Macleod in Frenchman v. Assistant Collector, Haveli : (1922)24BOMLR782 that principle being that where the property under acquisition has been recently purchased, the price paid is primes facie the market value thereof. In the present case the agreement for sale was made on January 29, 1920. The property was notified for acquisition on April 21, 1921. The claimant paid Rs. 91,000 for the property and that prima facie is the market value thereof. The claimant may claim more than the price paid, and it is open to him to contend that he bought the property at less than its market value, or that there has been a general rise in the value of property between the date of purchase and the date, of declaration. On the other hand, it is open to Government to show that the price paid by the claimant was so high that no prudent purchaser would have paid it, and also that there has been a general fall in the value of property in the neighbourhood between the date of agreement and the date of declaration.

5. It was argued on behalf of Government that the purchase by the claimant at the price paid by him was a bad bargain, and that he did not get a return of more than one and a half percent, on his investment. But the obvious answer to that is that the rents of the property were controlled by the Rent Act, and the return is not to be measured by restricted rents.

6. It was also contended on behalf of Government that there was a general fall in the value of landed property in Bombay between the date of purchase and the date of declaration. The evidence on record shows that the claimant bought the property at the top of the market. The claimant's surveyor, Mr. Patel, said in his evidence:-

I heard of the boom in laud in Bombay. January 1920 was about the height of the boom and the high level continued till July-August 1920. The prices fell generally all over Bombay. What I mean by ' generally' is that in some localities there was no decline in prices. I do not know of any locality in which by the actual sales it could be said that there was no decline. Generally there was a fall of from 15 to 20 per cent.

7. In his re-examination he said that he did not know of any instance of sale in the locality which showed that there was a fall in the price of land in the locality.

8. Mr. Kanga, surveyor for Government, stated in his evidence as follows:--

When the claimant bought the property, the market was at its height in Bombay. The high water mark continued till July August 1020. Then there was a fall. In April 1921, there was no demand for landed Property in Bombay. As a result the market was going down. Generally the percentage of fall was 25 per cent.

9. In his cross-examination he said that he could not say that there was a decline in this locality but that generally there was a fall. He added that he could not give any instance of sale in this locality which showed either a rise or fall. He further said that there had been no sale at all in this locality since 1919.

10. Mr. Dadachanji, a Civil Engineer who was called to prove the leases of the three plots of land referral to above, stated in his evidence as follows:-

We endeavoured to find lensees for other plots. Since we took the lease the demand for land has decreased considerably and prices have fallen. I cannot say by how much they have fallen between April 1920 and April 1921, The above remarks are confined to our land. All over Bombay there was a fall.' He further said that there had been no property market in Bombay since the beginning of 1921. He added that he was unable to say what the percentage of fall was between April 1920 and April 1921.

11. It is clear from the evidence of these three witnesses that the height of the boom was reached in January February 1920, that the maximum prices were maintained until July -August. 1920, and there was then a fall, according to Mr. Kanga, of 25 per cent, and according to Mr. Patel, of from 15 to 25 percent. The rise and fall have been of such a marked character that they cannot be ignored though there is no specific sale in this neighbourhood showing either a rise or fall. Such being the case, I take the percentage of fall in this locality at 15 per cent., and I hold that the market value of the land in reference at the date of declaration was the price paid by the claimant less 15 per cent., and award Rs. 91,000 being the price paid by the claimant less 15 per cent., plus 15 per cent, for compulsory acquisition. The Collector to deposit the excess, namely, Rs. 498, in Court, or to pay the same to the claimant or to his attorneys.

No order as to costs.


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