Natural justice and fair market value are essential before pre-emptive purchase under Chapter XX-C can be sustained.

Pre-emptive purchase under Chapter XX-C requires a notice that clearly discloses the material and basis for alleging undervaluation, so the affected party has a real opportunity to object; a vague notice lacking supporting material breaches natural justice and is invalid. The authority must also make a reasoned determination of fair market value on comparable and relevant sale data; reliance on an incomparable sale instance, without proof of undervaluation, cannot sustain action under section 269UD(1). On these principles, the impugned notice and consequential pre-emptive purchase action were quashed.

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Issues: (i) Whether the pre-emptive purchase notice and consequential action were vitiated for want of a clear and meaningful disclosure of the material relied upon and for breach of natural justice; (ii) Whether the order under Chapter XX-C could be sustained without a proper determination of fair market value and by relying on an incomparable sale instance.

Issue (i): Whether the pre-emptive purchase notice and consequential action were vitiated for want of a clear and meaningful disclosure of the material relied upon and for breach of natural justice.

Analysis: The notice did not furnish the sale instance or the basis on which undervaluation was alleged. The affected parties were therefore not given an adequate opportunity to meet the case proposed against them. A vague notice without supporting material and reasons fails to disclose even a prima facie basis for the proposed action and deprives the person concerned of a real opportunity of objection.

Conclusion: The notice and the action founded on it were vitiated for breach of natural justice.

Issue (ii): Whether the order under Chapter XX-C could be sustained without a proper determination of fair market value and by relying on an incomparable sale instance.

Analysis: The record showed that the property had been offered publicly, the bid had been accepted earlier, and the transfer had later received sanction under the Bombay Public Trusts Act before the agreement to sell was executed. The sale instance relied upon was of a different year and related to a different locality, and no comparable material for the relevant time and place was produced. In the absence of a reasoned determination of fair market value and proof of undervaluation, pre-emptive purchase under section 269UD(1) could not be sustained.

Conclusion: The order of pre-emptive purchase was unsustainable.

Final Conclusion: The impugned notice and all consequential actions were quashed and the petition was allowed.

Ratio Decidendi: Pre-emptive purchase under Chapter XX-C cannot be invoked unless the affected party is given a fair opportunity on the basis of disclosed material and the authority establishes undervaluation by a reasoned determination of fair market value using comparable and relevant sale data.

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