JUDGMENT
H.L. Gokhale, J.
1. Heard Mr. J.D. Mistri for the petitioners, Mr. Asokan appears for respondent Nos. 1 to 4 and Mr. Murlidharan appears for respondent No. 5.
2. This writ petition filed under Article 226 of the Constitution of India seeks to challenge the order dt. 28th Jan., 1993, directing compulsory purchase of the property owned by the petitioners by passing necessary order under Chapter XX-C of the IT Act, 1961.
3. The short facts leading to this petition are as follows:
The petitioners were the owners of flat No. 11-A of carpet area of 875 sq. ft. situated on the 11th floor of a building known as “Diamond Court” situated at 40, Laxmibai Jagmohandas Marg (formerly known as “Nepean Sea Road”). The petitioners entered into an agreement of sale with the respondent No. 5 herein on 3rd Nov., 1992. As per the terms of that agreement, the petitioners were to receive Rs. 5,00,000 as earnest money and the remaining amount of Rs. 70,00,000 within 30 days after the NOC was issued by the appropriate authority. The respondent Nos. 1 to 3 were the members of the Appropriate Authority at the relevant time and the respondent No. 4 to the petition is Union of India.
4. The petitioners filed requisite Form No. 37-I after signing of the agreement and on 8th Jan., 1993, they received a notice from the Appropriate Authority to show cause as to why the property should not be acquired compulsorily. The petitioners were called for hearing. Apart from the notice of hearing, no other documents were made available to the petitioners. At the time of hearing, the petitioners themselves relied upon a few comparable instances and pointed out that there was no undervaluation of the flat concerned. As against this submission of the petitioners, the respondents relied upon five sale instances. The petitioners were not informed about the reliance of these instances at any time before the date of hearing. It was only at the time of hearing that the respondent Nos. 1 to 3 relied upon some five sale instances. They were concerned with one flat in building known as Jal Darshan, second, in a building known as Laxmi Nivas, third, in a building known as Jehangir Tower, fourth, in a building known as Kshitij and fifth, in a building known as Petit Hall, all situated in the nearby area.
5. These five sale instances were during the period from 30th Sept., 1992 to 20th Nov., 1992 and the rate was supposed to be Rs. 8,891 to Rs. 12,677. It was, therefore, submitted that when compared with these instances, the petitioners had resorted to undervaluation of more than 15 per cent. Based on these instances, the respondent Nos. 1 to 3 passed an order directing compulsory purchase of these flats under Section 269UD(1) of the IT Act, 1961, by the impugned order passed on 28th Jan., 1993.
6. The present petition is filed to challenge this order. The petition was admitted on 22nd Jan., 1993 and an interim stay has been granted on the condition that the petitioners will not sell or transfer the flat to anybody in the meanwhile.
7. Mr. Mistri, learned Counsel for the petitioners, principally submitted that there has been a gross violation of the principles of natural justice in the manner in which the Appropriate Authority proceeded to pass the order. He relied upon the judgment of the apex Court in the case of C.B. Gautam v. Union of India where the apex Court has laid down that in all such cases, the party whose property has been acquired ought to get an adequate opportunity to defend. This opportunity to defend implies knowledge about the comparable instances with whom the property under question is to be compared to arrive at, as to whether there is any undervaluation or not. This judgment has been followed in different decisions of this Court in Jagdish Electronics (India) (P) Ltd. and Anr. v. Appropriate Authority and Ors. and Madankumar Babulal Sanghvi and Ors. v. Union of India and Ors. (Writ Petn. No. 833 of 1994) decided on 3rd Oct., 2006 by this Bench.
8. In fact, it is necessary that the show-cause notice itself must refer to and mention the comparable instances which are to be relied upon so that the party concerned gets an appropriate opportunity. In the instant case, it is at the time of hearing only that the instances were relied upon by the respondents. Even on merits, there is no discussion whatsoever about the merits and demerits of the five flats which have been relied upon. For the appropriate comparison one must have the data, such as, the date of construction of the building, on which floor the flat is situated, whether the flat is furnished, whether any parking space is available, what kind of view is available from the flat concerned and what are the surroundings. It is only when all these factors are considered, that one could arrive at somewhat approximate value of a property. In the absence of furnishing any such information, it is totally unfair to just refer to some cases at the time of hearing and then to say that there is undervaluation without referring to the particular characteristics of the property concerned. The order arrived at by such a method, apart from it being in violation of principles of natural justice, is unjustified on merits also. In the circumstances, the impugned order suffers from serious infirmity.
9. Mr. Asokan, learned Counsel for the Union of India, tried to defend the order and alternatively submitted that if the order is found to be defective, the Appropriate Authority may be directed to hear the parties once again. In our view no purpose would be sewed by doing this exercise. Now, more than (13) years have passed after the original order was passed in the year 1993. It is material to note that the order passed by the Appropriate Authority refers to the judgment of the apex Court in C.B. Gautam’s case (supra) in the last para of the judgment. Thus, the members of the competent authority were aware of the decision of the apex Court and yet they proceeded to pass an order in gross violation thereof. In this view of the matter, it will not be fair to continue these proceedings further and to make the petitioners face the Appropriate Authority once again.
10. For the reasons stated above, we allow this petition. The impugned order of compulsory purchase is hereby quashed and set aside. The Appropriate Authority is directed to issue NOC in favour of the petitioners.
11. Rule is made absolute in terms of prayers (a) and (b) with no order as to costs.