Pre-emption rights remain protected after first-court decree; mala fide notification excluding those rights was struck down.

A pre-emptor who had secured a decree from the first court retained the benefit of pre-emption during the vendee's appeal, and a later notification could not defeat that vested right merely because it was issued at the appellate stage. The court also found the notification excluding pre-emption rights in favour of the purchasers to be mala fide, relying on the adverse inquiry material, suppression of facts, absence of a binding undertaking against misuse, and the unexplained shift in departmental position. The notification was therefore invalid and struck down.

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Issues: (i) Whether a pre-emptor who has obtained a decree from the first court retains the right of pre-emption during the vendee's appeal, so that a notification issued during the appeal can defeat the suit. (ii) Whether the impugned notification excluding pre-emption rights in favour of the purchasers was invalid as having been issued mala fide.

Issue (i): Whether a pre-emptor who has obtained a decree from the first court retains the right of pre-emption during the vendee's appeal, so that a notification issued during the appeal can defeat the suit.

Analysis: The governing pre-emption rule discussed was that the pre-emptor must possess the necessary qualification at the date of sale, the date of the suit, and up to the decree of the first court. Loss of that qualification after the first court's adjudication was treated as not affecting the claim, and the later appellate stage was not treated as enlarging the period during which the vendee could defeat a vested pre-emption right. The reasoning also distinguished authorities relied upon for the proposition that appellate proceedings are a rehearing, noting that those authorities were based on retrospective statutory changes and did not control the present situation.

Conclusion: The right of pre-emption, once established up to the first court's decree, was treated as not being defeasible merely by events occurring during the appeal.

Issue (ii): Whether the impugned notification excluding pre-emption rights in favour of the purchasers was invalid as having been issued mala fide.

Analysis: The materials leading to the notification were scrutinised as a whole. The adverse report of the Tehsildar, the trial court's finding against the purchasers' alleged industrial purpose, the suppression of material facts, the failure to obtain a legally binding undertaking against misuse, and the change in the departmental approach on the basis of a bare affidavit were treated as showing that the decisive process lacked good faith. The validity of the notification was therefore tested not only by the final approval but by the entire chain of inquiry, recommendation, and decision that produced it.

Conclusion: The notification was held to have been issued mala fide and was invalid.

Final Conclusion: The writ petition succeeded, the impugned notification was struck down, and the petitioners obtained relief.

Ratio Decidendi: A governmental notification withdrawing pre-emption rights is liable to be invalidated where the decision-making process is vitiated by mala fide conduct and suppression of material facts, and a pre-emptor's right, once established up to the first court's decree, is not defeated merely by subsequent appellate-stage events.

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