(1) Where the competent authority upon a report from any of its officers or other information in its possession is satisfied as respects any slum area that the most satisfactory method of dealing with the conditions in the area is the demolition of all the buildings in the area, the authority shall, by an order notified in the Official Gazette, declare the area to be a clearance area, that is to say, an area to be cleared ofall buildings in accordance with the provisions of this Act:
Provided that the competent authority shall not make any such declaration unless the persons likely to be affected thereby have been given reasonable opportunity of showing cause against the proposed declaration:
Provided further that any building in the area which is not unfit for human habitation and is not dangerous or injurious to health may be excluded from the declaration if the authority considers it necessary.
(2) The competent authority shall forthwith transmit to the State Government a copy of the declaration under this section together with a statement of the number of persons who on a date specified in the statement were occupying buildings comprised in the clearance area.