D.P.Wadhwa, J.

1. By this petition under Articles 226 and 227 of the Constitution, the petitioner, the owner of certain property, seeks to challenge the order dated February 22, 1995, of the appropriate authority passed under Sec. 269UD(1) of the Income-tax Act, 1961 (for short, "the Act"), under which the property of the petitioner was ordered to be acquired by the Central Government and subsequently possession was taken over.

2. Before we examine the provisions of law and consider the arguments we may briefly note the salient terms of the agreement which led to the passing of the order under Sec. 269UD of the Act.

3. This agreement is dated January 28, 1994, and is described as a development agreement, The petitioner is the party of the first part and Mahendra Developers Pvt. Ltd., respondent No. 3, of the second part. The petitioner is referred to as the land owner and the second party as the developer. The property which is the subject-matter of acquisition has been described as including "a pucca residential house of the owner with sheds and structures and land appertaining thereto" measuring more or less four kathas and fifteen dhoors of land with buildings and structures constructed thereon as more particularly given in the Schedule to the agreement. It has also been stated that the said property under the agreement also includes residential house and land and garden appertaining thereto belonging to the land owner, i.e., the petitioner. It is then stated that "the developer approached the land owner to develop the said property at costs, risks and responsibility of the developer". For the purpose of development, the owner is to deliver vacant possession of the property to the developer within a period of one month from the date of sanction of plans by the Patna Regional Development Authority and permission by the income-tax authorities in Form No. 37-1 as prescribed under Rule 48L of the Income-tax Rules per requirement of Sec. 269UC of the Act.

4. The agreement runs into numerous details but it would suffice for our purpose if we cull out those terms which are relevant for our purpose. These are :

(1) That the developer shall hand over vacant possession of its flat No. 203 fully described in Schedule II to the agreement in the building named Mahendra Lok near Rajendra Nagar Railway overbridge, Kankarbagh, Patna, to the land owner as security at the time of signing of this agreement. The value of the said flat No. 203 is Rs. 3,00,000 (rupees three lakhs) only. The land owner, meaning the petitioner, will have the right to transfer the said flat No. 203 in any manner he likes and the developer will execute all documents in respect of such transfer as desired by the land owner. The said security of rupees three lakhs shall on the completion of the building complex be returned by the owner to the developer without any interest, In case of non-payment of the said security of Rs. 3,00,000 (rupees three lakhs) only by the owner to the developer, the developer shall be entitled to allot the owners area of the built up space equivalent to Rs. 3,00,000 (rupees three lakhs) only calculated as such market rate or rates prevailing at the time of completion of the intended building complex.

Besides security the developer shall pay a sum of Rs. 2,500 (rupees two thousand and five hundred) only per month to the land owner as cost of living from the date of handing over of possession of the property in question to the developer till possession of the land owners share of 40 per cent. of built up area is handed over to the land owner. The aforesaid amount is also a consideration of the said property besides 40 per cent. of the total built up area of the building.

(2) The developer is to demolish the existing structures on the property and is to build thereon a building complex having a covered area of 13,742 sq. feet consisting of dwelling units, flats, shops, car parking spaces and other tenements as per the approved building