CH KAMALA Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) THESE writ petitions are by the owners and the prospective purchasers as also by one of the tenants of the first floor of the property bearing Door No. 25, Wallace Garden III Street, Madras 34, comprised in S. No. 62/28, Block No. 13, measuring as extent of three grounds with a building thereon consisting of ground and first floors, each of the floors having about 2,200 sq. ft. of built up area. Their grievance is against the order made by the appropriate authority on October 29, 1994, directing compulsory purchase of the property at a discounted sale consideration which is less than the agreed price of Rs. 25 lakhs for each floor with undivided half-share in the land, to the two purchasers. The tenant of the first floor is a private limited company of which the purchasers of the first floor are directors. The tenant has been in occupation of that portion for over 30 years. The rent being paid by the tenant at the time the order was made by the authority was at Rs. 4,000 p.m.

(2.) THE order of the authority was preceded by a show-cause notice, in which it was stated that the two transactions referred to in the notice, were relevant and comparable to the sale by a third party of two grounds and 2,207 sq. ft. to Alacrity Housing Limited. THE rate per sq. ft. of land in that transaction was mentioned as Rs. 23.86 lakhs per ground if this building there was valued at its scrap value Rs. 21.62 lakhs per ground after providing for the depreciated cost of building. That rate when adjusted up to the date of agreement was mentioned as Rs. 37.91 lakhs per ground. That transaction was on July 9, 1994. THE date of the second transaction mentioned was on May 4, 1992. That property was 19, Khadernawaz Khan Road. THE land rate by taking scrap value of the building is mentioned as Rs. 21.34 lakhs. THE modified rate as on the date of agreement is mentioned as Rs. 25.05 lakhs per ground. As to who modified the value in and the basis for the modification made is not set out in the show-cause notice. THE document under which the two transactions referred to in the notice took place were also not enclosed to the notice. To the notice, the working sheet prepared by the Valuation Officer is enclosed. It was stated therein that the land value based on the scrap value in the transactions among the petitioners was Rs. 15,93,129. A statement of the calculation of the fair market value was also enclosed in which the property compared was one at 20, Khadernawaz Khan Road, with two grounds and 2,207 sq. ft. This property apparently is the one mentioned at Sl. No. 1 in the show-cause notice. THE land rate of that property was taken at Rs. 21,62,000. THE fair market value of this property was calculated at the rate of Rs. 21,62,000 per ground and the property at Rs. 36,67,000. THE discounted value of the sale consideration was, therefore, held to be less by 40 per cent.

(3.) LEARNED counsel for the petitioners submitted that the order of the authority cannot be sustained and is required to be set aside.