Natural justice and fair market value review required disclosure of valuation material before compulsory purchase could stand

Compulsory purchase under Chapter XX-C could not be sustained where the valuation report and relied-upon sale instances were not supplied to the affected party, because effective rebuttal required access to the material forming the basis of the notice. The authority was also required to meaningfully examine comparability, including locality, infrastructure, facilities and instances in the same building, before determining fair market value. Failure to address those objections and to undertake a proper valuation exercise amounted to breach of natural justice and non-application of mind; the compulsory purchase order was therefore set aside.

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Issues: (i) Whether the order directing compulsory purchase under Chapter XX-C was vitiated for failure to furnish the valuation report and the sale instances relied upon by the appropriate authority, and (ii) whether the impugned order could be sustained when fair market value was not properly determined and the objections to the comparable instances were not dealt with.

Issue (i): Whether the order directing compulsory purchase under Chapter XX-C was vitiated for failure to furnish the valuation report and the sale instances relied upon by the appropriate authority.

Analysis: The valuation report formed the basis of the show-cause notice and was necessary for an effective reply. The sale instances relied upon by the authority were also required to be supplied so that the petitioners could meet them on the questions of locality, infrastructure, facilities, and comparability. Since the order entailed civil consequences, a meaningful opportunity of hearing was essential.

Conclusion: The non-supply of the valuation report and the sale instances amounted to breach of natural justice and fair play, rendering the order unsustainable.

Issue (ii): Whether the impugned order could be sustained when fair market value was not properly determined and the objections to the comparable instances were not dealt with.

Analysis: The authority relied on comparative instances from other localities while rejecting the petitioners' own instances in the same building without adequate examination. The objections to comparability were not properly addressed, and the exercise necessary to reach a fair market value was not undertaken. The order therefore disclosed non-application of mind.

Conclusion: The order could not be sustained because fair market value was not properly determined and the reasoning suffered from non-application of mind.

Final Conclusion: The writ petition succeeded and the compulsory purchase order was set aside.

Ratio Decidendi: An order under Chapter XX-C affecting property rights cannot stand unless the affected party is furnished the material relied upon and the authority meaningfully considers comparability of sale instances before arriving at fair market value.

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