Comparable sale instances and recorded reasons are essential for sustaining pre-emptive purchase based on undervaluation.

Sale instances must be truly comparable in material respects before they can support a finding of undervaluation under Chapter XXC. A frontage property with sitting tenants could not be compared with a different property in a distinct zoning category, so the relied-upon instances could not lawfully ground the valuation exercise. Pre-emptive purchase under section 269UD(1) also requires objective material and recorded reasons establishing undervaluation beyond the statutory threshold; mere rejection of the parties' explanations is insufficient. As those requirements were not met, the pre-emptive purchase order was unsustainable and was set aside, with consequential clearance formalities directed to follow.

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Issues: (i) whether the sale instances relied upon by the appropriate authority were comparable with the property under consideration, and (ii) whether the order of pre-emptive purchase under section 269UD(1) could be sustained without objective material and recorded reasons showing undervaluation by more than 15 per cent.

Issue (i): whether the sale instances relied upon by the appropriate authority were comparable with the property under consideration

Analysis: The property under consideration had seven sitting tenants on the frontage. One relied-upon instance could not be treated as comparable when the authority itself did not proceed against it and when the petitioner was entitled to rely on that instance as supporting his case. The other relied-upon instance was shown, by the local authority certificate and the surrounding material, to be in a local commercial zone, whereas the property under consideration was in a residential zone. A sale instance from a materially different zoning classification could not validly be used as a comparable instance for arriving at undervaluation.

Conclusion: The relied-upon sale instances were not legally comparable with the property under consideration, and the finding based on them could not stand.

Issue (ii): whether the order of pre-emptive purchase under section 269UD(1) could be sustained without objective material and recorded reasons showing undervaluation by more than 15 per cent

Analysis: The power of pre-emptive purchase under Chapter XXC requires objective decision-making based on relevant material. Mere rejection of the explanations offered by the transferor or transferee is insufficient. The authority must reach a positive conclusion, supported by reasons and material, that undervaluation exists to the statutory threshold. Since the order did not rest on legally sustainable comparable instances and did not record the necessary objective satisfaction on material before it, the statutory requirement was not met.

Conclusion: The order under section 269UD(1) was unsustainable and liable to be quashed.

Final Conclusion: The petition succeeded, the pre-emptive purchase order was set aside, and consequential clearance formalities were directed to be completed.

Ratio Decidendi: An order of pre-emptive purchase under Chapter XXC can be made only on the basis of objective material and recorded reasons establishing undervaluation, and sale instances that are not truly comparable in material respects cannot form a lawful foundation for such satisfaction.

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