Previous sanctions of competent authority

(1) Notwithstanding anything contained in any other law for the time being in force but subject to provisions of sub-section (3), no immovable property situated in a disturbed area shall, during the period of subsistence of the notification issued under section 3 declaring such area to be the disturbed area, be transferred except with the previous sanction of the competent authority.

(2) Any transfer of immovable property made in contravention of sub-section (1) shall be null and void.

(3) (A) Any person intending to transfer immovable property situated in a disturbed area may, in the prescribed form, make an application to the competent authority for obtaining previous sanction under sub-section (1).

(B) On receipt of such application, the competent authority shall hold a formal inquiry, after giving an opportunity to the applicant to be heard and after considering any evidence produced, decide whether-

(i) the immovable property is sought to be transferred in terms of clause (k) of section 2;

(ii) there is free consent as defined in section 14 of the Indian Contract Act, 1872 (Central Act No.9 of 1872) of person(s) intending to be the transferor and the transferee;

(iii) the transfer is for a fair value of immovable property proposed to be transferred;

(iv) there is likelihood of improper clustering of persons of one community as defined in clause (f) of section 2 causing disturbance in demographical equilibrium of the person(s) with different communities residing in that area in a manner that mutual and peaceful coherence amongst different communities may go haywire in that area in which the immovable property is proposed to be transferred and accordingly-

(a) reject the application; or

(b) by an order in writing, give previous sanction to the proposed transfer of immovable property.

(C) The competent authority shall decide the application made under sub-section (3) preferably within a period of three months from the date of receipt of application:

Provided that the competent authority may extend the said period by recording reasons which necessitated extension of the said period.