Cancellation of construction permission without notice or hearing violates natural justice and is unsustainable.

The petitioners purchased an 842 sq. ft. plot bearing Nazul Sheet No. 20, Plot No. 225/1, situated at Bajariya Ward No. 5, Hoshangabad/Narmadapuram, through a registered sale deed dated 30 December 2020, and subsequently obtained mutation of their names in the revenue records.

The Municipal Council, Narmadapuram granted them permission/NOC for construction on the plot through Annexure-P/3 dated 18 January 2024. Subsequently, by order dated 24 May 2024, the respondent authorities cancelled or treated the construction permission/NOC as deemed cancelled on the ground that a civil suit concerning the property was pending.

The petitioners contended that the cancellation was made without issuing a show-cause notice or granting an opportunity of hearing. Respondent No. 2 had instituted a suit for specific performance against the petitioners, in which the petitioners had filed their written statement.

1. Whether the respondent authority could cancel or treat as cancelled the construction permission/NOC granted to the petitioners without issuing prior notice or providing an opportunity of hearing.

2. Whether the impugned order dated 24 May 2024 was legally sustainable when it merely referred to the pendency of a civil suit and did not provide adequate reasons for cancellation.

The Court applied the principles of natural justice and fair play, particularly the rule that an administrative or quasi-judicial decision prejudicially affecting a person must ordinarily be preceded by notice and an opportunity of hearing.

It further relied on Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496, which holds that administrative and quasi-judicial authorities must record cogent, clear, and succinct reasons; that reasons are an essential component of fair decision-making; and that reasoned orders restrain arbitrariness and facilitate judicial review.

The Court found that Annexure-P/4 only stated that a civil suit concerning the property was pending and communicated the purported deemed cancellation of the NOC previously granted through Annexure-P/3.

The Municipal Council’s reply did not establish that any show-cause notice had been issued or that the petitioners had been heard before the adverse decision was taken.

Since cancellation of the construction permission prejudicially affected the petitioners’ rights and interests, the authority was required to provide notice and an opportunity to respond.

The absence of such procedural safeguards, coupled with the failure to provide adequate reasons, rendered the impugned order inconsistent with the principles of natural justice and the requirement of reasoned decision-making laid down in Kranti Associates.

The order was accordingly quashed. However, liberty was granted to the respondents to pass a fresh order in accordance with law, if required. The writ petition was disposed of accordingly.