Court Invalidates Notification Due to Mala Fide Issuance, Emphasizes Good Faith

The court invalidated the impugned notification of September 3, 1962, due to mala fide issuance, ruling in favor of the petitioners. The court emphasized the importance of good faith in such matters, with all judges concurring on this decision. The petition was granted, and each party was instructed to bear their respective costs.

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Issues Involved:

1. Whether a pre-emptor retains the superior right of pre-emption till the hearing of the appeal by the vendee against the decree.
2. Whether Section 8(2) of Punjab Act 1 of 1913 confers arbitrary power on the State Government and is constitutionally invalid.
3. Whether the impugned notification of September 3, 1962, is ultra vires and issued mala fide.

Issue-wise Detailed Analysis:

Issue 1: Right of Pre-emption Retention
The court examined whether a pre-emptor should retain the superior right of pre-emption until the appeal hearing. The established rule in pre-emption law requires a pre-emptor to maintain their qualification to pre-empt up to the date of the decree of the first court. This rule is supported by several precedents, including Hans Nath v. Ragho Prasad Singh, which states that a pre-emptor's claim may be defeated if they lose their preferential qualification before the adjudication of the suit. The court noted that this rule has been consistently upheld in Punjab by multiple Full Bench decisions of the Lahore High Court. The Advocate-General argued that the Federal Court's decision in Lachmeshwar Prasad v. Keshwar Lal, which treats an appeal as a re-hearing, should allow consideration of subsequent events. However, the court found that this argument did not apply as the Federal Court's decision related to retrospective statutory provisions, which were not present in this case. The court concluded that the pre-emptor's qualification must be maintained only up to the date of the first court's decree, and subsequent events do not affect the claim.

Issue 2: Constitutionality of Section 8(2)
The court considered whether Section 8(2) of Punjab Act 1 of 1913 confers arbitrary power on the State Government. The petitioners argued that there was no guidance in the Act's preamble or operative provisions for the exercise of this power. The Advocate-General contended that guidance could be found in various sections of the Act, which exclude certain sales from the right of pre-emption. These exclusions, he argued, provided sufficient guidance for the State Government's exercise of power under Section 8(2). The court found merit in the Advocate-General's argument but did not pronounce a final decision on this issue, as it was rendered unnecessary by the resolution of the third issue.

Issue 3: Ultra Vires and Mala Fide Notification
The court addressed whether the impugned notification of September 3, 1962, was ultra vires and issued mala fide. The petitioners argued that the notification was ultra vires because it was issued after the pre-emptor had established their right to pre-emption at the trial court stage. The court found this argument to be an aspect of the first issue and did not need further elaboration. The more significant aspect was whether the notification was issued mala fide. The petitioners claimed that the notification was issued to benefit respondents 2 and 3, ignoring the trial court's finding that they did not intend to establish an industry on the land. The court examined the sequence of events and found that the Deputy Commissioner's actions, including suppressing a crucial report and changing his recommendation without explanation, indicated bad faith. The court concluded that the entire process leading to the issuance of the notification was tainted by mala fide actions, rendering the notification invalid.

Conclusion:
The court struck down the impugned notification as invalid due to mala fide issuance, allowing the petitioners' claim. Each judge concurred with this conclusion, emphasizing the need for good faith in the issuance of such notifications. The petition was accepted, and the parties were directed to bear their own costs.

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