Judgment (S.J. Vazifdar, J.) 1. The petitioner seeks a writ of certiorari to quash and set aside an order dated 21st October, 2009, passed by the respondent No.2 – Municipal Commissioner for Greater Mumbai, and to expunge the prejudicial remarks made against it therein. The petitioner has also sought a declaration that an assignment of a property by it in favour of respondent No.3 – I-Ven Realty Limited, by a deed of assignment cum-conveyance dated 20th November, 2004, is valid, subsisting & binding. 2. For convenience, we will refer to respondent Nos.1 and 2 the Municipal Commissioner, as the respondents. Respondent No.3 was impleaded pursuant to an amendment. 3. The petitioner has challenged the order on the ground that it was passed admittedly without affording it an opportunity of being heard and also on merits. By an order dated 20th March, 2012, the Division Bench granted the Corporation an opportunity of filing an additional affidavit in reply on merits and listed the matter for final hearing. 4. The order was admittedly passed without granting the petitioner an opportunity of being heard. We are clearly of the view that in this case the petitioner ought to have been heard and permitted to produce evidence, oral as well as documentary, in respect of the show cause notice which was issued by respondent Nos.1 and 2. The impugned order is, therefore, liable to be set aside on this ground alone with a direction to respondent Nos.1 and 2 to decide the matter afresh, without being influenced in any manner or to any extent by the impugned order, after affording the petitioner an opportunity of being heard. It is not necessary, therefore, to consider the merits of the case which are kept open in all respects. We, therefore, did not permit Mr. Chinoy to address us on the merits. 5. The consequences of the order are, as we shall demonstrate, drastic and the observations passed therein against the petitioner are equally, if not more drastic. The order re-opened transactions which stood concluded several years ago. 6. Mr. Sakhare, the learned senior counsel appearing on behalf of respondent Nos.1 and 2, contended that it was not necessary to hear the petitioner as respondent No.3 had been heard and respondent Nos.1 and 2 had considered the reply filed by the petitioner. 7. The order re-opened transactions which stood concluded several years ago. 6. Mr. Sakhare, the learned senior counsel appearing on behalf of respondent Nos.1 and 2, contended that it was not necessary to hear the petitioner as respondent No.3 had been heard and respondent Nos.1 and 2 had considered the reply filed by the petitioner. 7. As it was contended that it was not necessary for the petitioner to have been heard in this case, it is necessary to set out the facts that preceded the issuance of the show cause notice pursuant to which the impugned order was passed. (A). Respondent No.1 is the owner of plots of land bearing Nos.217, 217A and 252. (B). By a deed dated 4th October, 1944, respondent No.1 granted a lease in perpetuity with retrospective effect from 27th December, 1942 to one S.M. Dahanukar in respect of plot No.252. On 1st August, 1947, the said Dahanukar assigned the lease to a third party which, in turn, on 1st October, 1958, assigned the same to Madhu Canning Limited. On 1st October, 1958, Madhu Canning Limited assigned the lease to the petitioner. (C). On 8th November, 1967, the first respondent granted the petitioner a lease in perpetuity with retrospective effect from 28th April, 1938, in respect of plot Nos.217 and 217A. (D). The petitioner thus became the lessee in respect of the said plots of land. 8. On 17th October, 1989, respondent No.1 approved the petitioner's proposal to amalgamate the plots. On 3rd March, 1990, respondent No.1 conveyed its no objection to the petitioner putting up additional construction pursuant to the amalgamation. 9. In October, 2003, the petitioner invited bids to transfer/assign one of the plots. The petitioner accepted the bid of respondent No.3 of Rs.107.60 crores. 10. On 31st March, 2004, the petitioner sought the respondents permission to mortgage the leasehold rights in favour of a consortium of banks to secure a loan advanced by it to respondent No.3. By a letter dated 30th August, 2000, the Assistant Commissioner (Estate Department) issued the necessary permission for the creation of an equitable mortgage. 11. In the meantime, the petitioner by an agreement dated 23rd April, 2004, agreed to transfer in favour of respondent No.3, its leasehold rights in respect of the plots subject to approval being granted by the respondents. By a letter dated 30th August, 2000, the Assistant Commissioner (Estate Department) issued the necessary permission for the creation of an equitable mortgage. 11. In the meantime, the petitioner by an agreement dated 23rd April, 2004, agreed to transfer in favour of respondent No.3, its leasehold rights in respect of the plots subject to approval being granted by the respondents. On 31st August, 2004, the petitioner applied to the first respondent's Estate Department for permission to assign its leasehold rights. By a letter dated 15th September, 2004, the Assistant Commissioner (Estate Department) stated that there was no objection to the assignment subject to the payment of 7% of the total consideration in accordance with the then prevailing policy. Pursuant to the above, the petitioner, by a registered deed of assignment-cum-conveyance dated 20th September, 2004, assigned its leasehold rights in the plot to respondent No.3. The petitioner admittedly paid an amount of Rs.7,53,20,000/-i.e. 7% of the total consideration. The respondents issued a receipt dated 10th November, 2004, acknowledging the receipt of the said amount. 12. Thus, as on 20th September, 2004, the petitioners leasehold rights stood transferred to respondent No.3, pursuant to and in accordance with the permission granted by the respondents. Thereafter, all the parties, including the respondents acted pursuant to the assignment. For instance, on 20th November, 2004, the respondents issued permission for sub-division of the amalgamated plots and the Deputy Municipal Commissioner (Estates) issued a letter dated 23rd December, 2004, the stating that the assignment and the mortgage had been duly registered and noted in the Estate Register of respondent No.1 and that the said plots “vested in the third respondent's name”. In the year 2005, respondent No.3 was granted change of user in respect of the plots and in the year 2007, respondent No.3 was granted an IOD for construction thereon. 13. In the year 2008, the first respondent's policy regarding the assignment of plots leased by it was altered. Under the 2008 Policy, assignees were required to pay 50% of the market value of the plot as per the ready reckoner. There was thus an increase from 7% to 50% to be paid in respect of the assignment of plots leased by the first respondent. Normally, the above transactions having been concluded several years prior to the coming into force of the new policy in the year 2008, would not be affected by it. 14. There was thus an increase from 7% to 50% to be paid in respect of the assignment of plots leased by the first respondent. Normally, the above transactions having been concluded several years prior to the coming into force of the new policy in the year 2008, would not be affected by it. 14. It is not the respondents case that the policy was introduced with retrospective effect. It is at this stage that the disputes between the petitioner, respondent Nos.1 and 2 and respondent No.3 commenced. They commenced with respondent No.1 issuing a notice dated 24th March, 2008, to respondent No.3 calling upon respondent No.3 to show cause why the permission to mortgage dated 30th August, 2004 and the permission to assign dated 15th September, 2004, should not be cancelled. It was alleged that there was a failure to obtain prior permission before the assignment by the petitioner to respondent No.3. The respondents contended that the agreement to assign, although subject to obtaining permission from the respondents, itself constituted an assignment and that the same had been suppressed from the respondents. 15. Respondent No.3 replied to the show cause notice. By an order dated 2nd July, 2008, respondent No.2 / Municipal Commissioner cancelled the permission for assignment. Respondent No.1, however, recorded that it would be willing to reconsider the case if the petitioner was willing to pay Rs.134.74 crores as charges for the transfer as per the present policy i.e. 2008 Policy requiring the payment of 50% of the market value of the plot as per the ready reckoner. 16. Respondent No.3 challenged this order by filing Writ Petition No.1797 of 2008. A Division Bench of this Court, by an interim order dated 13th August, 2008, granted interim reliefs staying the notice dated 2nd July, 2008. It is not necessary to refer to the strong observations made by the Division Bench against the respondents as we do not intend dealing with the merits of the case. 17. Writ Petition No.1797 of 2008 was disposed of by an order dated 28th April, 2009. The Division Bench recorded the statement on behalf of the respondents that the order dated 2nd July, 2008, impugned in the writ petition, was withdrawn. Accordingly, the Rule was made absolute in terms of prayer (b). 18. 17. Writ Petition No.1797 of 2008 was disposed of by an order dated 28th April, 2009. The Division Bench recorded the statement on behalf of the respondents that the order dated 2nd July, 2008, impugned in the writ petition, was withdrawn. Accordingly, the Rule was made absolute in terms of prayer (b). 18. In the meantime, on 19th December, 2008, a further notice was issued to the petitioner and respondent No.3 calling upon the petitioner and respondent No.3 to show cause why the permission for sub-division dated 20th November, 2004, the approval for change of user, the IOD dated 24th April, 2007 and the approval for sub-division granted on 23rd December, 2004, should not be declared void. That the order dated 23rd December, 2004, had only confirmed the assignment and that this was not impugned in the show cause notice is another matter. 19. The petitioner, by its advocate's letter dated 4th February, 2009, replied to the notice and specifically sought a personal hearing. The second show cause notice dated 19th December, 2008, was replied to by the third respondent by its letter dated 2nd July, 2009 and by the petitioner by a further reply dated 11th August, 2009. The petitioner once again specifically sought a hearing in the matter. 20. The impugned order dated 21st October, 2009, was passed without giving the petitioner an opportunity of being heard. The respondent granted only respondent No.3 a personal hearing. 21. The show cause notice was not issued pursuant to any particular statutory provision. Having granted permission to the petitioner to assign its rights to respondent No.3, it would have been necessary for the other respondents to adopt proceedings for the cancellation of the same. The respondents, however, did so by issuing the show cause notice, hearing only the third respondent and passing the impugned order. The observations made in the impugned order and the nature of the operative part of the order leave no room for doubt that this was a case where a personal hearing ought to have been granted to the petitioner. 22. The observations, as we noted earlier are as, if not more, drastic than the effect of the order. Adverse remarks and seriously prejudicial comments have been made against the petitioner throughout the order. It is sufficient to refer to only a few of them. 22. The observations, as we noted earlier are as, if not more, drastic than the effect of the order. Adverse remarks and seriously prejudicial comments have been made against the petitioner throughout the order. It is sufficient to refer to only a few of them. The order alleges that the petitioner knowingly pleaded ignorance about crucial facts, conveniently ignored various provisions, kept the corporation totally in the dark, proceeded to invite bids in breach of the indenture of lease and granted rights to respondent No.3 without the consent or knowledge of the corporation. The order records that the officers who had passed the previous orders and granted the permissions had no authority to do so and that the same were, therefore, void ab-initio. Consequently, the entire transaction between the petitioner & respondent No.3 were held null and void. In paragraph 31, the Municipal Commissioner observed that the petitioner was in the habit of playing with figures and had been misrepresenting and misquoting figures at different points of time to suit their needs and requirements. This, it was stated, was on account of balancing FSI of both the plots on the basis of the sub-division thereof. It was held that the petitioner had inflated the built up area mala-fide, illegally and fraudulently. In conclusion, it was observed that the petitioner was guilty of deliberate manipulation to derive unlawfully, benefit with mala-fide intentions. 23. It hardly requires any detailed consideration of authorities to come to the conclusion that before making such observations & arriving at such conclusion, the authority must afford a party, a reasonable opportunity of being heard. Mr. Sakhare was unable to invite our attention to any provision of law that excluded the applicability of any of the essential principles of natural justice in such a case. 24. This brings us to the operative part of the order which involves civil consequences not merely against respondent No.3, but also against the petitioner of the most severe and drastic nature. The Municipal Commissioner revoked the permission to mortgage dated 30th August, 2004, the permission to assign the land dated 23rd December, 2004, the permission to sub-divide the plots dated 20th November, 2004, the permission to change the user granted on 21st October, 2005 and the IOD issued to respondent No.3 on 2nd April, 2007. The Municipal Commissioner revoked the permission to mortgage dated 30th August, 2004, the permission to assign the land dated 23rd December, 2004, the permission to sub-divide the plots dated 20th November, 2004, the permission to change the user granted on 21st October, 2005 and the IOD issued to respondent No.3 on 2nd April, 2007. The order also declared invalid, the articles of agreement dated 23rd April, 2004, between the petitioner and respondent No.3 and the transfer of the lease by the petitioner to respondent No.3. It hardly requires any elaboration to demonstrate the civil consequences that fall not merely upon respondent No.3, but also upon the petitioner as a result of the said order. The suggestion that the order affects only respondent No.3 requires merely to be stated to be rejected. There are several adverse consequences upon the petitioner as well. Firstly, the order reflects adversely upon the petitioner's reputation. Secondly, there is every possibility of respondent No.3 making a claim against the petitioner for a refund of the consideration of Rs.170.60 crores with or without interest from October, 2003. Whether the claim would be sustainable or not is another matter altogether. The possibility is sufficient to hold that the petitioner is likely to suffer several consequences as a result of the impugned order. Indeed, there is a possibility in that event of respondent No.3 claiming more than just a refund of the amount paid by it with interest. 25. Mr. Sakhare submitted that it was not necessary to hear the petitioner as respondent No.3 had been heard by the Municipal Commissioner. The submission is totally unfounded for several reasons. At the cost of repetition, serious adverse observations have been made against the petitioner itself. Secondly, the petitioner is likely to face adverse consequences as a result of the impugned order, independent of the consequences faced by respondent No.3 on account thereof. 26. Mr. Sakhare then submitted that the Municipal Commissioner considered the petitioner's reply in detail. It was not, therefore, necessary for him to have heard the petitioners. This submission is equally unfounded. Questions of fraud, misrepresentation, cheating etc. cannot be decided in such a superficial or summary manner. 27. It is necessary, therefore, to set aside the impugned order and to direct the Municipal Commissioner to decide the matter de novo. It was not, therefore, necessary for him to have heard the petitioners. This submission is equally unfounded. Questions of fraud, misrepresentation, cheating etc. cannot be decided in such a superficial or summary manner. 27. It is necessary, therefore, to set aside the impugned order and to direct the Municipal Commissioner to decide the matter de novo. The interests of the petitioner and respondent No.3 are not mutually exclusive, they do not fall within separate compartments. Respondent No.3 has filed a Writ Petition (Lodg) No.951 of 2012 against the impugned order. It would, however be improper to direct a personal hearing to be given only to the petitioner and not to respondent No.3 though respondent No.3 had been heard by the Municipal Commissioner. The nature of the transaction is such that it would be necessary in a de novo hearing for the petitioner and the respondent No.3 to be heard by the Municipal Commissioner. While they were both parties to the transaction they may well have different things to say. If we were to prevent respondent No.3 from being heard by the Municipal Commissioner in the fresh hearing, our order would suffer from the same error as the impugned order. 28. In the circumstances, Rule is made absolute in terms of prayers (a) and (c). It is not necessary in this writ petition to consider the reliefs sought in terms of prayer (b). The petitioner's rights in that regard are kept open. The Municipal Commissioner shall hear the matter de novo, without being influenced to any extent whatsoever by the impugned order, including the observations made therein.