Valuation - Definition - Law Dictionary Home Dictionary Definition valuation

Definition :

Valuation, is a process which does not end on marks being awarded by an examiner, Sanjay Singh v. U.P. Public Service Commission, (2007) 3 SCC 720.

Means the act or process of valuing, Jensen v. Jensen, 458 NW 2d 391 (1990).

This term is generally applied to the equivalent in money of any kind of property. Thus for the payment of estate duty, a valuation of property of all kinds has to be made. Perhaps the most important and the most difficult valuation is that of land. This has almost invariably to be undertaken whenever land is compulsorily acquired. The difficulties that surround this question were fully considered in the case of Re Lucas and Chesterfield Gas and Water Board, (1909) 1 KB 16, in which Lord Justice Moulton in the course of his judgment said (at p. 29):-

'The principles upon which compensation is assessed when land is taken under compulsory powers are well-settled. The owner receives for the lands he gives up their equivalent-that is, that which they are worth to him in money. His property is, therefore, not diminished in amount, but to that extent it is compulsorily changed in form. But the equivalent is estimated on the value to him, and not on the value to the purchaser, and hence it has from the first been recognized as an absolute rule that this value is to be estimated as it stood before the grant of the compulsory powers. The owner is only to receive compensation based upon the market value of his lands as they stood before the scheme was authorized by which they are put to public uses. Subject to that he is entitled to be paid the full price for his lands, and any and every element of value which they possess must be taken into consideration in so far as they increase the value to him. At a very early date in the history of this branch of the law there arose what is known as the question of 'special adaptability.' The phrase is not a happy one, for special adaptability for some purpose or other is the very basis of the market value of all and, except, perhaps, land that in all respects falls below the average. In agricultural land extra fertility, in town lands advantages of site, are true cases of special adaptability for faring or building purposes. These tend to directly to increase both the value and the market price of lands in the hands of a private owner that to has never been doubted that he could urge them in augmentation of the compensation which he was entitled to receive . . . . No element of that which economists term: 'value in use' can, in my opinion, increase compensation unless it is either a 'value in use' to the seller, or a 'value in use' to persons other than the proposed purchaser so as to introduce the element of competition as a factor in fixing price.'

See (English) Lands Clauses Consolidation Acts and the Acquisition of Land (Assessment of Compensa-tion) Act, 1919, which varies the compensation for land acquired compulsorily under any statute passed either before or after 1919 for public purposes by any local or public authority. s. 2 of the Act provides:

2. In assessing compensation, an official arbitrator shall act in accordance with the following rules:-

(1) No allowance shall be made on account of the acquisition being compulsory:

(2) The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: Provided always that the arbitrator shall be entitled to consider all returns and assessments of capital value for taxation made or acquiesced in by the claimant:

(3) The special suitability of adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any Government Department or any local or public authority: Provided that any bon' fide offer for the purchase of the land made before the passing of this Act which may be brought to the notice of the arbitrator shall be taken into consideration:

(4) Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any Court, or is contrary to law, or is detrimental to the health of the inmates of the premises or to the public health, the amount of that increase shall not be taken into account:

(5) Where the land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the official arbitrator is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement:

(6) The provisions of Rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land.

For the purposes of this section an official arbitrator shall be entitled to be furnished with such returns and assessments as he may require.

The operation of this Act has been restricted under the Housing Acts, 1925 to 1936, and the Small Holdings and Allotments Act, 1926, for the purpose of those Acts.

See VALUE; and consult Cripps or Browne and Allen on Compensation.

1. The process of determining the value of a thing or entity 2. The estimated worth of a thing or entity, Black's Law Dictionary, 7th Edn.