Tuesday, 26 May 2015

Restrictions on Transfer of Property


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The ownership of immovable  property is classified into freehold and leasehold. Freehold rights would provide the owner an absolute ownership of such property. This means that the owner has full freedom to deal with the property as he likes without any restrictions. Under leasehold right, the lessee does not get any right of ownership, but only a right of possession and enjoyment subject to the restrictions imposed by the lessor. The three important rights enjoyed by the owner of property are: 

1) Right to use
2) Right to destroy and 
3) Right to transfer

No  Fundamental  Right :

The important right is the right to transfer. It may be noted that this right to transfer is not an absolute right, but it is subject to the restrictions imposed by the law. In this regard the first and foremost important restriction flows from the Constitution of India. Before the 44th amendment to the Indian Constitution, Right to property was  a fundamental right u/a 31 dealing with Right to own property and u/a 19 (1) (f) dealing with Right to dispose and enjoy property. These two rights were protected by Art 13 (1) (2) in the Indian Constitution, which provided that any law including rules, regulations, notifications, ordinance etc. to the extent they violate fundamental rights are void.

This protection has come to an end by the 44th Amendment, deleting Right to property in the chapter of Fundamental rights and placing it in the ordinary rights chapter i.e. Art 300 A. Thus, the right to property, more so of immovable property, is no more a fundamental right. 

Various States have enacted laws, imposing restrictions on the rights of the owner of the property.  The Government of Karnataka has prescribed certain ceiling on holding of the agricultural property by persons, companies, societies etc. under the Karnataka Land Reforms Act, 1961. The limit prescribed depends upon the type of land. If the holdings are in excess of prescribed limits, the excess of the holdings will vest with the Government of Karnataka. The Karnataka Land Reforms Act generally prohibits transfer of agricultural property to non-agriculturists and persons having source of income more than Rs.2 lakhs (average for last 5 year income) from non-agricultural sources. Though agricultural property cannot be transferred to non-agriculturists, Karnataka Land Revenue Act provides for conversion of agricultural land to non agricultural land and such converted land can be transferred to non-agriculturists. 

Land  Acquisition :

There is another important legislation i.e., Land Acquisition Act, 1898, which provides for acquisition of property for public purpose. Once the Government issues preliminary notification for the acquisition of such land, whether agricultural or non-agricultural, such property cannot be transferred to any other person. Here again, authorities competent to acquire property are the Central or State Government and other Government agencies like BDA, KIADB, KHB etc.


Zonal  Regulation :

The Comprehensive Development Plan has categorized the areas into various zones like residential, commercial, industrial, green belt area etc., and has also prescribed the various activities which can be carried on in such zones. Permission from planning authorities is required for any change in the land use. In green belt area, only agricultural and allied activities are permitted.

PTCL  Act :

The important social welfare Act with regard to Transfer of property is “The Karnataka SC & ST (PTCL) Act, 1978. The preamble of the Act provides that “An Act to provide for the prohibition of transfer of certain lands granted by the government to persons belonging to the scheduled castes and scheduled tribes in the state, which means any land granted to the landless agricultural labourers belonging to scheduled castes and scheduled tribes cannot be purchased without the permission of the Government.  Any one who purchases such a property will not get clear and marketable title; such property will be eventually acquired by Government and returned to the original owner without any compensation to the purchaser.”

These restrictions on the transfer of property are social in nature i.e., to give effect to the importance of Directive Principles of State policy provided u/a 39(b) & 48A of the Indian Constitution Art 39(b) of the Indian Constitution provides that:

1) The ownership and control of the material resources of the community are so distributed as best to sub-serve the common good.  

2) Article 48 A in the Indian Constitution provides that the state shall endeavor to protect and improve the environment and to safeguard the forests and wildlife of the country. 

Transfer  of  Property  Act :

In the Transfer of Property Act, there are certain restrictions on the transfer of property. The purpose of imposing restrictions on transfer of property in the Transfer of Property Act, 1882 is to protect the interests of creditors and persons having better title to the property and to prevent property being removed from trade and commerce.

There are two kinds of restrictions on the transfer of property.  They are:

1) Restrictions to protect the society as a whole, 

(2) Restrictions to protect the interest of transferor creditors and people having better title. 

According to sec.5, transfer of property could be effected only between living persons and hence no property can be transferred to an unborn person. However, Sec 13 provides for transfer of property to any living person to be held for the benefit of such unborn person.

Sec. 10 in the T.P. Act provides that any condition imposed by the Transferor to the Transferee absolutely from parting with or disposing of his interest in the property is void. This provision facilitates transfer of property by transfer without any restrictions. However, the Act allows temporary restrictions. Various development authorities and societies restrict alienation for some period. This freedom of transferee can be curtailed in case of lease for the benefit of lessor, property transferred to woman, for the benefit of woman not being a Hindu, Mohammedan or Buddhist, so that she shall not have power during her marriage to transfer or charge the  same  or her beneficial interest thereon.

Sec. 52 – Doctrine of Lispendens,  which provides that if any suit relating to immovable property is pending in a competent court of law and during such pendency, if property is transferred, such transfer is subject to decision given by the court.

Sec. 53 deals with fraudulent transfer. It prohibits transfer of property if the purpose and intention behind such transfer is to defraud or delay payment to the creditors of the transferor.

The other restrictions are: Occupant of land under Karnataka Land Reforms Act, 1961 [Sec. 48], Grantee of land under Karnataka Land Reforms Act, 1961 [Sec. 77], Occupancy not transferable without sanction of prescribed authority, Karnataka Land Revenue Act 1964 [Sec. 100].


Foreign nationals of non-Indian origin residing outside India cannot purchase any immovable property in India. Persons of Indian origin means persons who held an Indian Passport any time earlier or whose father or grandfather was a citizen of India.

Non-resident Indians can purchase residential and commercial properties without any restriction on ceiling on the number of properties.  The only restriction on the non-resident Indians is that they cannot purchase agricultural, farm / plantation property. In this regard non-resident Indians need not have to send any document or statement to Reserve Bank of India, Government of India or to any bank—before, during or after such purchase. This freedom is available to all non-residents who are either citizens of India (i.e., holding Indian Passport) or who are persons of Indian origin.  This freedom is available for buying residential or commercial property.


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Monday, 25 May 2015

Documents to be examined before Purchasing the Property


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Documents required in connection with the purchase of property will vary from case to case. In general, the following documents are required to be verified before purchase of any property in order to ascertain the valid title of the Vendor. In certain cases, a need may arise for verification of additional documents, in addition to the above, to finally conclude the valid title of the Vendor.

(A) For purchase of BDA property (formerly City Improvement Trust Board (CITB)):

1.   Allotment letter;
2. Receipts for payment of site value;
4. Possession Certificate;
5. Absolute Sale Deed;
6. Khatha Certificate issued by the BDA;
7. Tax paid receipts;
8. Building plan, if any if the building is constructed;
9. Khatha Certificate from Bruhat Bangalore Mahanagara Palike (if it comes under Corporation Revenue Jurisdiction)/tax paid receipts from BBMP;
10. Re-allotment Letter/Re-conveyance Deed, if property is re-conveyed by the BDA.

(B) For purchase of site within jurisdiction of Bangalore Metropolitan Regional Development Authority (BMRDA) (BDA) Private Layout:

1. Valid conversion order issued by the Deputy Commissioner;
2. Record of Rights Tenancy Crops (RTCs) for 40 years;
3. Documents of Ownership for last 45 years;
4. Relevant mutation register extracts;
5. Akarband/Tippani/Podi extracts;
6. Surveys/Village map;
7. Nil tenancy Certificate;
8. Confirmation from the Competent Authority that there are no acquisition proceedings;
9. Layout plan approval by the Competent Authority;
10. Release order for sites;
11. Endorsement from Assistant Commissioner confirming that no cases are pending under the provisions of Prevention of Transfer of Certain Lands (PTCL) Act;
12. Endorsement from Assistant Commissioner confirming that no cases are pending under the provision of section 79(A) & (B) of Karnataka Land Revenue (KLR) Act;
13. Khatha Certificate issued by the revenue Competent Authority;
14. Latest tax paid receipts;
15. Encumbrances atleast for the last 30 years.

(C) For purchase of Agricultural Land:

1. Origin of the property;
2. Relevant document for flow of title;
3. Mother/parental deeds;
4. Index of land and records of rights;
5. RTC/Phani extracts from 1967 onwards;
6. Relevant mutations extract;
7. Endorsement from Competent Authority confirming that there are no acquisitions;
8. Village Map;
9. Survey map and survey sketch;
10. Akarband, Tippani, Podi extracts/Atlas;
11. Relevant Sale Deeds;
12. 79A & B Certificate under Land Reforms Act issued by A.C.;
13. Certificate for change of survey number, if any;
14. Nil tenancy Certificate;
15. Patta receipt in the name of Vendor;
16. Latest tax paid receipts;
17. Encumbrance Certificate for the last 30 years;
18. Endorsement from Assistant Commissioner that the land does not fall under “S.T. & S.C. Grant Land”.

(D) For purchase of Apartment / Flat:

1. Need Mother Deed to trace the origin of property, including all the other relevant Conveyance Deeds to trace the flow of title. Normally, a title documents for a minimum period of 40 years is required. In certain cases, the title deeds for a longer period may be required;
2. Betterment charges paid receipt wherever applicable;
3. Khatha Certificate and Khatha extract from Concerned Authority (OR) computerised Khatha Certificate and Khatha extract from BBMP are required;
4. Sanction building plan from the Competent Authority;
5. Latest tax paid receipt;
6. Encumbrance Certificate for the relevant period (upto date) for the period of 30 years preferable;
7. In case of high rise building, permission obtained from Airport authority of India, BWSSB, BESCOM, BSNL, Fire Force and Pollution Control Board;
8. Endorsement issued by Assistant Commissioner confirming that no case is pending under provision of PTCL Act;
9. Conversion order, zonal regulation map, RTC from 1967 to till date, mutation records, Index of Land (I.L.) and Record of Rights (R.R) records, Nil tenancy Certificate, Nil acquisition Certificate from the competent authority, endorsement from the Tahsildar/Assistant Commissioner confirming that there are no pending cases under Sec.79A and 79B of Karnataka Land Reforms Act, Village Map, Survey Map, Tippany, Akhar Band, Atlas;
10. Approved Layout Plan or the sketch indicating the particular site on the survey map;
11. Commencement and occupancy Certificate.

In addition to the above documents, if the property is held by a Company/Partnership firm the following documents also are required for scrutiny:

a) Company: Memorandum of Association and Articles of Association of the company, Certificate of incorporation, Resolution passed in the Board meeting of the company for purchase/sale of property;

b) Partnership firm: Partnership Deed, Authorisation letter of the partners authorising certain Partner/s for purchase/sale of property and Acknowledgment of firm (if firm is registered).


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Saturday, 23 May 2015

Safeguarding your Property Rights


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Before entering into an agreement for purchase, verification of title is very important. It is not merely tracing the title  but also examination of the genuineness of the records, identification of the property, notification in newspapers and physical possession of the title of the property. Clear and marketable title free from doubts and encumbrances with a right of physical possession of the vendor are necessary ingredients for peaceful possession and enjoyment of the property by the purchaser.

The first and foremost step in purchase of property is the scrutiny of title deeds before entering into an agreement with the seller / vendor. The ownership can be traced from the title deeds and the revenue records. The following are the methods of scrutiny:


The origin of the property is very important to trace the title of the property. It is otherwise called “Root of Title”. To trace the title of the property, examination of the origin of the property up to a maximum period of 43 years may be required in most of the  cases. If a person is enjoying the property for more than 30 years, he will get title by adverse possession against the government as per the Limitation Act.  As per Section 90 of the Indian Evidence Act 1872 any document executed 30 years before is presumed to be valid.  Will, Partition, Family Settlement are not considered as concrete origin. Some of the old revenue records like Index of Land, Record of Rights, Phani, Survey documents are considered as better origin.

Subsequent  Transfers :

After ascertaining the origin of the property, it should be followed by methodical examination of later events and further transactions in an uninterrupted and sequential manner, involving the previous owners and the present owner of the property. Here, the purchaser's advocate has to very carefully look into all aspects from various legal angles as to how the property was transferred from the previous owners to the present owner. Such a transfer may be by possession, inheritance, settlement, will, sale, mortgage, release, gift etc., involving such intermediate parties. To get a clear picture of rightful ownership, title and interest, the advocate has to carefully examine the title deeds and other supporting documents like revenue and other records. It is also necessary to verify the identity of the names of parties and their family connections and examination of the proceeding involving the parties before any Court of Law and other legal forums and authorities including revenue authorities, if any.  While scrutinizing the documents, Advocates have to apply their mind and logically link the relevancy of one document with the other. 

Present  Status :

“Present Status” is an important factor to establish  ownership over a property. The advocate has to find out who is the present owner and what are the title deeds and supporting documents the vendor has in his possession, whether it is an ancestral property or self acquired property, who are his legal heirs etc. If the legal heirs of the vendor are major, the vendor must ensure their presence while executing the Deed of Conveyance. If they are minors, the vendor has to get the permission from the court before executing the Deed of Conveyance. In some cases the vendor may conceal the fact of existence of legal heirs. Therefore, the advocate must insist upon the vendor to produce either the succession certificate or the family genealogical tree issued by the revenue authority. Similarly, it is necessary to verify and confirm that no acquisition or requisition or any other court  proceedings are pending before any authority. It is also necessary to find out whether there exists any bank loan, charges, encumbrances over the property.  

Statutory  Clearance :

For completing the sale transaction, various statutory clearances are to be obtained from the concerned authorities such as  Income-tax, RBI, revenue authorities, etc. In case of purchase of agricultural land, there are various other clearances to be obtained before executing the Deed of Conveyance.

The advocate must find out in whose name the Khatha stands, whether the Khathedar possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance Certificate to establish his right, title and interest over the property. The advocate has to check the Encumbrance Certificate covering the relevant period, generally for a minimum period of 13 years to 43 years on case to case basis. An examination of Encumbrance Certificate would go to show as to whether any kind of charge has been created on the property and whether such an encumbrance is still subsisting or not. Municipal and other revenue authorities also maintain records as to in whose possession the property exists, what is the amount of tax payable on the property and upto what period tax has been paid. All this can be ascertained from these records.


After thoroughly scrutinizing the documents, the purchaser or his advocate has to crosscheck all documents with the concerned revenue or other departments to ensure that the documents are genuine and are originated from the concerned departments and that they are not fake. In the case of buildings, it must be ensured that the vendor has constructed the building as per sanction plan and according to the statutory guidelines.


The identity of the property must be checked on the spot. Measurements mentioned in the documents must tally with actual physical measurement of the land available on the property. It must also be ensured that there is no encroachment on the property. In case of encroachment, the measurement of the available land must be recorded and this must be mentioned in the Deed of Conveyance. The boundaries in the schedule surrounding the property must be checked physically. Also, the purchaser may make enquiries tactfully with the adjacent property owners about the ownership of the property he is proposing to buy.

Paper  Notification :

Though paper notification is optional, it is always advisable to notify in a leading local newspaper about the buyer's intention to purchase the property. This is done to safeguard the interest of the purchaser. Even after examining the various documents, the Advocate may not be able to find out whether the property is truly free from any claim or not. A paper notification will beget response from genuine claimants, if any. Therefore, paper notification will be of some help to the purchaser to make sure as to the genuineness of the ownership of the vendor.

Physical  Possession :

In the case of a vacant site, the purchaser may, with the permission of the vendor fence the property with barbed wire or he may construct a compound wall and put up a signboard, if necessary, to display his  ownership over  the property.

Even after entering into an “Agreement to Sell”, the purchaser  can continue to make enquiries about the title. A doubtful title cannot be forced upon the purchaser. Purchaser is not bound to complete the sale transaction, if there are defects in the property, material or latent, which are not discernible in the ordinary course. A mere suspicion of fraud will not make the title doubtful and the purchaser cannot reject the title.

It would be of great help if a prospective purchaser utilizes the services of an experienced advocate for a thorough scrutiny of the documents as to the vesting of the marketable title with the vendor and genuineness of the documents who on examination of documents will be in a position to explain to his client about the risk involved in the transaction and guide him suitably so as to save the purchaser from litigations.

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Friday, 22 May 2015

SALE OF DEVELOPMENT RIGHTS TAXABLE


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The tax payer instead of developing the land, transferred the development rights in respect of part of the land to a separate construction company.  As per the agreement, the tax payer jointly with the trust was required to convey the land to the proposed buyers.  Instead of developing land, the tax payer parted with the development rights in respect of part of the land forever.  The possession of the land had also been given during the year along with development rights. 

This was an independent activity having no connection with the development of the remaining part of the land.  The tax payer was following mercantile system of accounting as per which income accrues when it becomes due for payment.  In the instant case, the entire amount become due to the taxpayer in the relevant year on signing of development agreement and on handing over of the possession of the land. Under the mercantile system of accounting the accrual of income does not depend upon receipt of income.  Therefore, the income had accrued during the year since the transfer was complete during the year.  The postponement of payment does not stop accrual of income.  

Therefore, even if part of the payments were received in subsequent years, the entire income had accrued during the year.  However, the Tribunal allowed the deduction in respect of cost of acquisition of development right. 



The Bombay High Court, while hearing petitions seeking to legalise illegal structures in various parts of the city, has ruled that Regularization of unauthorized constructions will have to be permitted on a case-to-case basis and should not be granted as a matter of course.

A division bench of the High Court held that the planning authority had to consider various factors such as infrastructure, congestion, water supply, and roads before regularizing illegal constructions against payment of a penalty.  If there is an increasing pressure and burden on the existing facilities and amenities then the whole system would collapse resulting in large-scale inconvenience, it was observed. 

The cases before the Hon'ble Court pertained to regularization of various structures in Bandra, Goregaon, Boriveli, and Pydhonie apart from the top 17 floors of Gaurav Gagan, a 24-storeyed building in Kandiveli (West).

The Hon'ble High Court further ruled that it cannot be said as a matter of general rule that unauthorized constructions must be regularized if the floor space index (FSI) is available or can be generated in the form of transfer of development rights (TDR) from other sources by the builder. Although section 53(1) of the Maharashtra Regional Town Planning Act provides for regularization of unauthorized structures, the indiscriminate regularization through TDR or FSI can have disastrous consequences. Before the authorities take any decision about regularization they must not only consider the alleged hardship to individual flat purchasers but also the interest of those living in the neighbourhood and the public at large.


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Thursday, 21 May 2015

BY OVERSTAYING A LICENSEE CANNOT CLAIM TENANCY RIGHTS


With the passage of time, the system of giving properties on leave and license basis in Maharashtra is taking its roots, but still a good number of the property owners are apprehensive because they are not sure that they would get back possession of the properties on the expiry of the term. However, in view of the following judicial pronouncement, such fear seems unfounded, provided legal requirements are complied with.

One Shri Mohd. Hussain Furniture Walla, (Licensor) as the owner of Flat No. 51, in Victoria Apartments, St. Alexius Road, Bandra, Mumbai, gave his premises on leave and license basis, as per the Agreement dated 25.03.2003, for a period of 22 months to one Ms. Pari-neeta Choudhary on a monthly license fee of Rs.18,000. In addition, an additional agreement was also executed between the parties for payment of  charges at Rs.10,000 per month in respect of furniture and fixtures in the said premises. The term of the license expired in January 2005 and the licensee continued to occupy the said premises even thereafter and licensor accepted the monthly license fee and the additional charges. Only on 10th December 2005, he moved a petition before the Competent Authority, who, besides ordering eviction of the licensee, also directed her to pay the damages at Rs. 56,000/- per month from 16th January 2005 till handing over possession of the licenced pre-mises to the lessor.

This decis-ion was challen-ged by way of revision u/s 44 of the Maharashtra Rent Control Act by the licensee but the same was dismissed and the order of the Competent Authority was upheld.

Aggrieved by this order the licensee filed a Writ Petition No.2276 of 2008 before the Hon' ble Bombay High Court under Article 227 of the Constitution of India. The matter came up for hearing before Hon'ble Mr. Justice A. M. Khanwilkar on the 9th September 2008, when the licensee pleaded that not issuing legal notice to her and continuing to accept the monthly license fee, was indicative of the fact that the licensee has become the tenant in respect of the licensed premises. But this argument was not accepted by the Hon'ble High Court which observed that the fact of  acceptance of the monthly compensation by itself would not be sufficient to positively hold that the relationship of the parties that of licensor and licensee was converted into one of landlord and tenant and the fact that licensee instituted the proceedings before the Competent Authority, almost after 11 months from expiry of the license period, would again not by itself indicate that he has waived his statutory right of eviction of the petitioner from the suit premises because there is legal presumption u/s 24 of the Act about conclusive- ness of the contents of the leave and license agreement. It would  merely indicate that the licensor allowed the licensee to overstay the license period and nothing more and the relationship would still remain of licensor and licensee.

The Hon'ble High Court has, therefore, held that the arrangement between the parties was purely one of the leave and license and the relationship created between them on account of the said transaction was that of the licensor and licensee and in view of the legal presump-tion u/s 24 of the Act, it would necessarily follow that the licensee is obliged to vacate the premises on the expiry of the license period in January, 2005.

On the question of payment of damages from 16th January 2005, the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in the revision. 

The Hon'ble High Court observed that the licensor did not call upon the licensee to vacate the suit premises nor informed her that she would be liable to pay damages for continuing possession and he filed the eviction proceedings only 16th December 2005. Therefore, the licensor would be entitled for the damages from the licensee at double the rate of license fee fixed in the Agreement of License only from 16th December 2005, when he initiated the proceedings.

As regards the quantum of the damages, again the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in revision and observed that the license agreement provided for the monthly licensee fee @ Rs. 18,000/- only and the additional agreement to pay charges @ Rs. 10,000/- in respect of furniture and fixtures provided threin cannot be reckoned for purposes of computing damages u/s 24(2) of the said Act. Therefore, the Hon'ble High Court held that licensee would be liable to pay license fees @ Rs. 18,000/- from 16-12-2005 till handing over the possession to the suit premises.

In another case relating to a flat at Carmichaell Road in Bhagawati Bhavan at Mumbai given on leave and license by the owner Manju Singh to Janki Ammanraj, Hon'ble Mr. Justice Anoop Mohta held in January, 2009 that when the licensee, in spite of expiry of the leave and license agreement in November 2006 and issuance of notice did not deliver possession of the premises to the land-lord and continued to be in possession of the licensed premises, the licensee should pay damages at double the rate of license fee with all the arrears till the time the flat is vacated.

Thus, the overstay by a licensee in the licensed premises and acceptance of the monthly licensee fee by the licensor would not mean that the relationship of licensor and licensee has been converted into that of land lord and tenant and the licensee would be liable to pay the damages at double the rate of the license fee fixed in the agreement till it is vacated.

It has been observed that in a good number of cases leave and license agreements are not adequately stamped and registered and two agreements are drawn one towards the license fee for the premises and another towards furniture, fixtures and services etc. as a matter of temptation to save expenses and taxes. But it needs to be kept in view that where a document is required to be necessarily registered (section 55 of the said Act) and if it is not registered, it can not be taken as an evidence and such a situation may create the problem in as much as the relationship may be construed as of land-lord and the tenant and splitting of the agreement may not entitle the licensor to recover the damages at double the rate of the charges fixed in both agreements.

It would, therefore, be advisable that the leave and license agreement should be adequately stamped and registered as per the provisions of law and a notice should be served by the licensor to the licensee in advance before the expiry of the agreement to vacate the premises and in case of failure, besides eviction, the licensee would be liable for the damages at double the rate of monthly com- pensation fixed in the agreement.

A land-lord should also have the police verification of the licensee and obtain NOC from the Society before giving the final shape to this arrangement. If all these legal requirements are taken care of, there need not be any apprehension in mind to give the flats on leave and license basis, if not required for self-occupation.

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Tuesday, 19 May 2015

DETERMINING THE MARKET VALUE OF A PROPERTY


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The guideline value of a property is documented and published by the State Government. This is a public document that indicates the minimum value of the land considered for registration. 

It helps the registering officer to detect prima facie any undervaluation of property. It is left to the buyer or seller to find out through various sources what the market value of a property is. This is difficult task and can become a contentious issue during disputes involving compensation for land acquisition. How does the court view this and what methods they recommend?

Market value, in simple words, is the price that a willing prudent buyer will offer to a willing prudent seller. But in the case of land acquisition, it is not the willing seller but someone who is forced to sell. Hence there is need to have a method to arrive at a market value. 

The value depends on the theory of supply and demand which again depends on various factors like the economy, purchasing capacity and laws of the land.

The Full Bench of the Madras High Court in the case of Sakthi & Co vs Shree Desigachary (2006) 2 CTC, suggested three methods to ascertain the market value of the property. 

(1)Avail the opinion of experts 
(2) The price paid within a reasonable time in bonafide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages. Evidence of bonafide sales between willing prudent vendor and prudent vendee of the lands acquired or situated near about that land possessing same or similar advantageous features would furnish basis to determine the market value.

(3)To arrive at a value based on the number of years passed since the last purchase of the actual or based on immediately prospective profits of the lands acquired. To explain this further one can arrive at the value by multiplying the number of years passed since last purchase with the net annual income.
The other way to arrive at the value by capitalization method
The above excerpts were referred by the court in the case Mis. Greaves Ltd vs V.S. Raghava and another (2007) 4 MLJ 229


The court further added that "It is settled law, as laid down in the judgments referred above that in determining the market value the court has to take into account either one or the other three methods to determine the market value of the lands appropriate on the facts of a given case. According to the Supreme Court, generally, the second method of valuation is accepted as the best."
The courts state that the evaluation of these factors depends on the facts of each case and there cannot be hard and fast rule. 

It also adds that common sense is the best and most reliable guide. The courts stipulate that every case must be dealt on its own set pattern bearing in mind all the factors as a prudent purchaser of land in which position the officer/judge must place himself or herself in.

Defining the phrase "opinion of experts", the Madurai Bench of the Madras High Court in the case A. V. Gopalakrishnan vs. O.L.Y.R. Paramanandam (2007) 4 MLJ 189) observed that the person "should be brought under the definition of expert as required under the Indian Evidence Act".


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