JUDGMENT [ENTITY], J.
1. Whether the Appropriate Authority was justified in passing the impugned order on 25th Feb., 1993 under [SECTION] of the [ACT] (the Act' for short) for purchase of Flat No. 11 (3rd floor) Vatika, Vile Parle Vatika CHS Ltd., Baptista Road, Vile Parle (West), Bombay 400 056 (the said flat' for short) is the question raised in this petition.
2. The relevant facts are that, by an agreement dt. 21st Nov., 1988, the petitioners had agreed to purchase the said flat for consideration of Rs. 17,21,000. On an application made in Form No. 37-1, the Appropriate Authority passed an order under [SECTION] of the Act on 27th Oct., 1989 for purchase of the said flat without giving any opportunity of hearing to the petitioners. On a [CASE NUMBER] filed, this Court by an order dt. 16th Dec., 1992 set aside the order dt. 27th Oct., 989 and directed the Appropriate Authority to decide the matter afresh in the light of the directions given by the apex Court in the case of [PRECEDENT] .
3. Accordingly, a show cause notice was issued to the petitioners on 1st Jan., 1993 seeking to purchase the said flat on the basis of the three sale instances set out therein. The petitioners by their reply dt. 30th Jan., 1993 objected to the purchase of the said flat under [SECTION] of the Act. By the said reply, the Appropriate Authority was called upon to furnish a copy of the report regarding valuation of the property. Admittedly, copy of the valuation report has not been furnished. Thereafter by the impugned order dt. 25th Feb., 1993, the Appropriate Authority once again sought to purchase the said flat under [SECTION] of the Act. Challenging the said order, present petition is filed.
4. Mr. [ENTITY], learned Counsel appearing on behalf of the petitioners submitted that the impugned order suffers from serious infirmities and is liable to be quashed and set aside because, firstly, the Appropriate Authority has not determined the fair market value of the said flat so as to satisfy the test of difference of 15 per cent criteria. Secondly, out of three sale instances referred to in the impugned order, the first sale instance though relatable to the flat in question, the difference in the price variation being less than 15 per cent, the said flat could not be purchased based on the first sale instance. As regards the second and third sale instances are concerned, they pertained to the flats situated at Vile Parle (East) which are not at all comparable with the flat in question and, therefore, the impugned order cannot be sustained based on second and third sale instances set out in the impugned order. Accordingly, Mr. [ENTITY] submitted that the impugned order passed in violation of the dictum laid down by the apex Court in the case of [PRECEDENT] (supra) is liable to be quashed and set aside.
5. Mr. [ENTITY], learned Counsel appearing on behalf of the Revenue, on the other hand supported the order of the Appropriate Authority. He fairly stated that prior to the decision of this Court in the case of [PRECEDENT] , there was no practise of determining the fair market value in respect of property purchased under [SECTION] of the Act. He submitted that in the present case, petitioners have not furnished any sale instance in support of their contention. In these circumstances on the basis of sale instances on record, the Appropriate Authority was justified in passing the impugned order.
6. Relying on the decision of this Court in the case of [PRECEDENT] , Mr. [ENTITY] submitted that the purchase order passed after considering the material on record cannot be interfered with unless the findings of the Appropriate Authority are perverse. In the present case, the impugned order has been passed by the learned Members of the Appropriate Authority after inspecting the flat and after hearing the petitioners. Accordingly, Mr. [ENTITY] submitted that no interference is called for and the petition is liable to be dismissed.
7. On careful consideration of the rival submissions, we find it difficult to sustain the impugned order. In the present case, this Court had remanded the matter back to the Appropriate Authority with a specific direction to decide the matter afresh in the light of the directions given by the apex Court in the case of [PRECEDENT] (supra). In [PRECEDENT]'s case (supra) the apex Court categorically held that [SECTION] can be resorted to only where there is significant under valuation of the property to the extent of 15 per cent or more in the agreement of sale, as evidenced by the apparent consideration being lower than the fair market value by 15 per cent or more. Admittedly, there is no finding recorded in the impugned order to the effect that there is under valuation to the extent of 15 per cent or more of the fair market value. Thus, the impugned order passed in breach of the mandate given by the apex Court in the case of [PRECEDENT] (supra) cannot be sustained.
8. Apart from that, from the impugned order, the Revenue could not demonstrate that there is undervaluation to the extent of 15 per cent or more. As pointed out by Mr. [ENTITY], learned Counsel for the petitioners, the first sale instance referred to in the impugned order is no doubt situated at Vile Parle (West) and it could be considered as an comparable instance. However, difference in sale price between the flat set out in the first sale instance and the flat in question is only about 11 per cent. As held by the apex Court in the case of [PRECEDENT] (supra) [SECTION] can be resorted to only if the undervaluation is 15 per cent or more than the fair market value. Therefore, in the facts of the present case based on the first sale instance set out in the impugned order, where the difference in the sale value is only about 11 per cent, the Appropriate Authority could not have purchased said property under [SECTION] of the Act.
9. As regards second and third sale instances are concerned, those flats are situated at Vile Parle (East) whereas the flat in question is situated at Vile Parle (West) and, therefore, the 2nd and 3rd sale instances referred to in the impugned order cannot be said to be comparable instances. In any event, as held by this Court in the case of [PRECEDENT] (supra), unless the fair market value of the property in question is determined in the light of all the attending circumstances, it is not only difficult but impossible to draw inference of undervaluation. In the present case, there is nothing on record to show as to how the second and third sale instances are comparable with the property in question. Moreover, there is nothing on record to show that after considering the merits and demerits of the sale instances with the property in question, the Appropriate Authority had come to the conclusion that there is undervaluation by 15 per cent or more than the fair market value. Reliance placed by the learned Counsel for the Revenue on the decision of this Court in the case of Smt. [PRECEDENT] (supra) does not support the case of the Revenue, because unlike in [PRECEDENT]'s case (supra), we find that the failure to determine the fair market value before passing the order is in breach of the law laid down by the apex Court. Apart from that, even on the basis of the sale instances set out in the impugned order, the Revenue could not demonstrate that in the present case there is undervaluation by 15 per cent or more than the fair market value;. Thus the decision relied upon by Mr. [ENTITY] is distinguishable on facts.
10. For all the aforesaid reasons, in our opinion, we have no option but I to quash and set aside the impugned order dt. 25th Feb., 1993. Accordingly, the petition succeeds. The impugned order is quashed and set aside. Rule is made absolute in above terms. However, there shall be no order as to costs.