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Judgment
Immaneni Panduranga Rao, J.—The short question that arises for consideration in this case is whether the action of the Joint Sub-Registrar (the third respondent herein) in computing the value of the house property at 18 times the annual rental value of the building for arriving at the valuation of the said property for the purpose of levying stamp duty and registration charges is proper?
The facts leading to the filing of the Writ Appeal are briefly as follows: The respondent herein presented a sale deed for registration showing the valuation at Rs. 1,09,478/- for a flat purchased by him at Adarshnagar. The plinth area of the flat is 17,140 sq. feet and the monthly rental value for the premises is Rs. 650/- per month which is split up into Rs. 400/- towards rent of the building and Rs. 250/- for fixtures.
After registering the document, the third appellant arrived at the valuation of the property at Rs. 1,40,400/- and sent the registered document to the Collector u/s 47A of the Indian Stamp Act as introduced by way of amendment in the State of Andhra Pradesh for determining the market value of the property. Aggrieved by that act, the respondent herein filed C.M.A. No. 144 of 1982 on the file of the Chief Judge, City Civil Court, Hyderabad who has confirmed the order of the Sub-Registrar. The decision of the learned Chief Judge, City Civil Court, Hyderabad was sought to be assailed in Writ Petition No. 4955 of 1983. The learned Single Judge allowed the writ petition holding that the burden is on the registering authority to show the particulars and details of valuation; that it is not shown when the building was constructed originally and how the multiplier of 18 is justified in the circumstances; that the multiplier has to be considered on the basis of the date of construction of the building giving the appropriate allowance or reduction for depreciation etc., and as such the valuation adopted by the primary authority is devoid of material and particulars regarding the valuation. Basing on those findings the learned Judge quashed the order of the third appellant. The decision is the subject matter of this appeal.
The learned Government Pleader for Revenue appearing for the appellants submitted that the third appellant has not committed any error in making the calculations, because he has arrived at the rental value of the building based upon the rental value furnished by the respondent himself who happened to be the tenant of the premises before its purchase. The submission made by the learned Government Pleader that the rental value of the premises in question before the purchase by the respondent was Rs. 400/- per month towards the rental value of the building and Rs. 250/- per month towards the rental value of the fixtures is not denied. The learned Government Pleader submitted that taking that as the basis, the Sub-Registrar has arrived at the annual rental value at Rs. 7,800/- and multiplying that amount by 18 times he arrived at the valuation of the property at Rs. 1,40,400/-.
On the question on what basis the multiplier of 18 was adopted by the registering authority, the learned Government Pleader submitted that it is based upon some guide-lines issued to the Sub-Registrar. Undoubtedly those guidelines do not have any statutory force. Therefore, we gave time to both the learned counsel to investigate into the method of valuation adopted under similar enactments. The learned Government Pleader relied upon the decision of a Division Bench of Mysore High Court in Rajasekhara v. Chairman I.T. Board AIR 1957 Mys 20 in which the learned Judge held that 18 years might be deemed to be the appropriate period for the purposes of capitalising the amount to arrive at the market value of building in Urban areas. He also relied upon the decision of a Division Bench of our own High Court in Revenue Divisional Officer and Land Acquisition Officer, Guntur Vs. Pamulapati Venkata Krishniah (died) P.L.N. Choudary and Others, in which the learned Judges have adopted the capitalisation at 33 1/3 years purchase of the rental value for awarding compensation for the land acquired under the Land Acquisition Act. In The Collector Vs. Chaturbhuj Panda and Others, a Division Bench adopted capitalisation at 20 times the annual profit. In State of Kerala v. P.P. Hussain Roya AIR 1968 SC 1202 the Supreme Court has laid down that for determination of compensation in respect of land with buildings under the Land Acquisition Act, separate valuation of land and buildings is not warranted. In that case the Land Acquisition Officer has awarded the compensation at 35 times the net annual rental value. The learned Judges have reduced it to 20 times.
The learned counsel for the respondent relied upon the decision in Special Land Acquisition Officer v. Veerabhadrappa 154 ITR (S.C.) 190 and argued that the multiple of 121 /2 should be applied in the computation of capitalised value of the lands. But in the latest decision of the Supreme Court in Hindustan Oil Mills Ltd. and Another Vs. Special Deputy Collector (Land Acquisition), the learned Judges held that the multiple of 25 is quite reasonable and, therefore, there is no error in the computation by the High Court so far as the value of godown was concerned.
Taking an over all picture of all the decisions referred to above which deal with the computation of the market value of the lands with buildings or the buildings, we hold that the multiple of 18 years rental value adopted by the third appellant is quite reasonable and does not call for any interference.
The learned counsel for the respondent, however, submitted that though the rental value of the building including the value of fixtures is Rs. 650/- per month, no amount is deducted by the third appellant for maintenance of the building and for property tax. The learned Government Pleader argued mat under the terms of the lease the responsibility of the maintenance of building was that of the tenant himself and, therefore, no amount need be deducted towards the maintenance of the premises. In any event, the property tax is not taken into consideration by the third appellant in arriving at the market value of the building. We, therefore, hold that 1/5th of the total rental value of Rs. 650/- per month should be deducted towards the maintenance and property tax and the market value shall be arrived at on the net rental value of Rs. 520/- per month at 18 years net rental value.
The writ appeal is allowed in part to the extent indicated above. There shall, however, be no order as to costs.