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5 5 'l STATE OF PUNJAB v. RAMllLAL & ORS. October 12, 1970 [J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.] Punjab Pre-emption Act I of 1913-Notificationdated September 13, 1"62, under s. 8(2) of the Act whetherissued mala fide-Partyalleging m1la fide whether must name officer or officersmisusing authtJrity of State for collateral purpose-Such burdenwould be intolerable. A B SurinderKumar and VirenderKumar (defendantsin the suit) pur- C chasedon M'!)' 9, 1958 a plotof landin DistrictGuriaon. On January 9,1959the plaintiffs filed a suitin the. Civil Courtto pre-emptthe _sale. On November16, 1961the Qovernment of Punjabissued in exercise of the powerconferred by s. 8(2) of thePunjabPre-emptionAct, 1913, anotificationdeclaring "that no rightsof pre-emptionshall exist with. res · pectto urbanof villageimmovableproperty or agriculturalland when purchasedby anypersonfor setting up or expan.sion of anyindustryin theStatewith the permissionof the· Director of Industries,Punjab.'' By D order datedFebruary 16, 1962 the CivilCourtpasseda decreefor pre emptionconditionallyon paymentof theamountfor which the property was sold.The CivilCourtfoundthat the defendantshad failedto es tablishthat theyintendedto establisha factoryon thelandin question. The defendantsappealed to theCourtof theSeniorSubordinateJudge againstthe decreeof theTrialCourt.Thereafterthe Government of Punjabissued anothernotificationon September3,1962, that the Gover- • norof Punjab was pleasedto orderthat "no right of pre-emption shrul existwith respectto thesaleof land.describedin the Schedul~ to this Notificationmade on the9thMay, 1958, · in favourof Messrs. Sunnder Kumarand VirenderKumar, oppositeRailway Station. Faridabadfor theestablishmentof a factoryfor manufaclIre of cork products". In the Schedule was describedthe · prppertyaforesaidpurchased by the defendents.The plaintiffsthen moveda petition in theHigh C9urtchal lengingthe validityof theNotificationdated September 3, 1962 among F otherson thegroundthat in issuing the order the Governmentacted mala fide. The HighCourtheld that the notificationextinguishingthe rightof pre-emptionin theproperty .issued duringthe pendencyof the appealdid not disentitlethe plaintiffsto maintain ·theirclaim of pre emption already exercisedand in respectof . whicha decree was granted tothem.The notification.dated September 3, 1962 was held to have beenissued ma/a fide and on thataccountinvalid though s. 8(2) of the G, PunjabAct I of 1913 was heldnot offendArt. 14 of theConstitution. Withspecialleave the State of Punjabappealedto thisCourt. HELD: TheHigh Court rightly h,eld on thefactsthat the impugned notification was issued ma/a fide. The · plaiI!tiffs who claimedthat they hada rightto pre-emptthe sale filed a suitagainstthe defendantsand obtaineda decree. On thefindingof theHighCourtit was clear that e/ !hem. TheHighCourt also held that s. 8 (2) of Pun.iab Act I of1913 didnot offeildArt. 14 of theConstitution,but the notificationdated September3, 1962,was issued mala fide, and wason thataccount liable to bestruckdown as invalid." With special leave, the State ofPunjab hasappealedto thisCourt. It was urged,that s. 8 (-2) infringesthe guaranteeof equality underArt. 14 of theConstitution. Jn terms, s. 8(2) provides: "TheState Governmentmay declare by notificat10n that in any local area or with respect to any land or propertyor classof land or property or withrespectto anysaleor classof sales,.no rightof pre-emption or only suchlimitedright as the State Governmentmay specify shall exist." TheHighCourt was of the view that s. 8 must be read inthe light E Ji' G oftheschemeof the Ac.t andespecially s. 9 whichexcludesfrom ·the operationof theAct sales madeby or to Government, or byH or to anylocal authority. or to any company underthe provisions of Part VII of theLandAcquisitionAct, 1894,or in respect of anysalesanctionedby theDeputy Commission~r under s. 3(2) of A B c D F G H PUNJAB V. RAMJlLAL (Shah, J.) 5 ~3 the Punjab Alienation of LandAct, 1900. The power conferred by s. 8 ( 2) to declareby notificationthat to certain sales theAct willnot apply is independentof theexemptionwhich is statutorily prescribed bys. 9. Exerciseof thepowerunder s. 82) is appa rentlynot restrictedto transactionsof thenaturespecifiedin s. 9, butforthepurposeof thepresentcase we do notfeelcalledupon todecidewhethersub-s. ( 2) of s. 8 investsthe StateGovernment with "arbitrary, unguidedand uncanalised power" so as to i_nfringe the guaranteeof Art. 14 of theConstitution,for, in our view the pleathat the order was issued ma/a fide raisedby theplaintiffsand upheld by theHighCourtmust be decidedin theirfavour. TheHighCourton a reviewof theevidence found it proved, that,althoughat somestagesreferenceto the pre-emption suitfiled by the plaintiffsappearedin thehistoryof the case, the defendants did no~ disclosethe fact that a decreehad beenpassedin .Eavou1· of the plaintiffs in thesuit,nor didanyauthority(except the Tehsildar)try to find outwhethera decreehad beenpassedin thatsuit;that it wasneverbroughtto thenoticeof any authority by the defendantsthat the finding of the TrialCourtwas agaiillit them and it was becausethey had failed to provethat theyintended to set upa factory,no authorityever trii:d to learnanythingabout thatfinding;that onlya few days afterthe filingof theappealby thedefendants against the decreeof theTrialCourt an affidavit was filed by one of thedefendarltsthat theyintendedto putup a factoryon theland in question;that the DistrictInspectorof Indus trles at Gurgaonmade a report in favour ofthedefendants,only onthebasisthat theyhad startedbuildingthe boundarywall; that theTehsildarmade a reportadverseto thedefendants,and poi11ted out thattheyhad ~nly constructeda smallroomin themiddleof thelandand not a factorybuilding;that the moveof thedefendants "was 'm' stultifyand defeatthat decree;that the Deputy Commis sionerfirst orderedthat a copyof thereportof theTahsildarbe forwardedto theGovernment, but twodayslaterthe Deputy Com missionerchanged his mindwhenthe defendantsapproachedhim andon themerestatementof the defendants thattheyintendedto setupa factoryin thelandin question,he proceededto recommend that "exemption notificationunder s. 8 ( 2) of the Act" beissued infavour of thedefendantsand thatthis was followed up bv the higherauthorities;that the reportof theTahsildarwhich had 111ate riaJ bearing ·on the decision to be taken in thematterof issueof theimpugnednotification was suppressedand for this suppression !here wasno explanation "on thesideof the State"; thatalthough m the notedatedMarch 14, 1962 of the JointDirector of Indus tries,it wasdirectedthat the defendantswere to signan agreement thatthe exettlption to begrantedto themwouldnot be "misutilised" .andthe landwould "not be ksold for money-making",and although m the Revenue Department'l> noteof August 14, I 962,it was 554 SUPREME COURT REPORTS ( l 971J2 S.C.It, statedthat the Directorof Industriesbe askedto obtainsuch aii. A undertakingbefore the issueof thenotification,no suchagreement .. or undertaking was obtainedfrom the defendantsand all thatwas done was that on, November 8, 1962 (a daybeforethe dateof the notificationand somedays before its publication) another affidavit was obtained fromthe defendantsthat the landhad beenpurchased forestablishinga factoryand "they solemnlyundertook no• to B misuse or abusethe land", and declaredand undertookthat the landshallbe usedonly for ind'ustrial purposes,but there was"no mannerof contract by themwherebythey wouldhave to surrender backthe landin theeventof theirnot ·using it torthepurpose of establishinga factory". The HighCourtalso observedthat there was no allegationthat sny superior. officer "in the Revenue Departmentsuch as the Secretaryor theDeputySecretaryhad actedin a ma/a fidt manner in, theissueof theimpugnednotification".But it wa5 pressed beforethe Courtthat the notification was notreallythe act of one singlepersonfinally approvingthat the notificationbe issued: it was the result of a processof formalor irlformal inquiries and· reportsand considerationof variousauthoritiesat variousstages' leadingup to the recommendatiom basedon materi.alcollected whichwent to formthe basisof thejudgmentwhether or notsuch anotificationshould issue in anyparticularcase. Approvingof the pro<;ess, theHighCourtobservedthat on a considerationof all the circumst31!lces theimpugnednotificationmust be h:id to have been i&5ued ma/afide. The High Court concluded: "The reason in thecircumstances of this case is simple. In the firstplace,the reportof theTahsildar was a crucial andvitaldocumentin this case, whichwould substantiallyand materiallyaffect the approachof the higherauthoritiesin theconclusionto issu<> or not, to issuethe mtification. In this respectwhat happened beforethe DeputyCommissioner (Collector)had also thesamebearmg. It shouldhave beendisclosedwhat ordersthe DeputyCommissioner(Collector) passed fi1'6t and what was the orderwhichhe passed two days later.An enpeavour shoµld have been made by some bodyto findout what was the findinggiven by the Trial Courtin thedecisionof thatsuit.This was not done evenafter the matter was pointedout by theTahsi!dar. Lnl otherwords,either deliberately or by sheeravoidance no effort wa§. madeto findout whatfindingthe Trial Court hl!d given inthematter....In spiteof it havingbeen poitited out that before theissue of. the notificationan agreementbe obfainedfrom respondents D E ., G H A B c D E G H PUNJAB v. RAMJILAL (Shah, I.) 555 2 and3 (the defeddants) againstmisuse and mis utilisa tion of the }and forthepurposeother than that for which it was beingexemptedfrom the right'of pre-emptionof thepetitionersand for notmakingit anotherwise profiteeringtransaction,no suchagreement,binding in Jaw, was obtainedfrom theserespondents(the defen dants),but insteadthe matter was slurred over by obtain inga secondaffidavitfrom the tworespondents(the defendants). It is thus apparentthat at the finol stages, I/hen thequestionfor considerationwas whetheror not theimpugnednotificationshould be issued,whether.all .the pircumstances were present which justifiedthe issue of sucha notificationand whetherall theobligations thatwere required to betakenby respondents2 and3 (the delenidants) hadbeentaken befOre its !Hue, were - matters which eithercould not be consideredbecause substantialmaterial collected was withheldor clear directionswere completelyignored.In the circumstancesof thecase, to mymind,the impugned notificationcannot be held'to havebeen issued in good faithand has to beheldto havebeen issued ma/a fide." This is a findingbased on appreciationof evidence,and no case is made on whichmay justify us in interferingwith that finding. It appearsthat the subordinateauthorities withheld very important factswhichhad bearingon theissueof thenotificationby the State Governmentexcluding the landsold unde,io the saledeeddated May9; 1958executedby Khillufrom the operationof the Punjab Pre-emptionAct l of1913even after a decreewas passed by the CivilCourtgrantingpre-emption. Counsel fur the State O>f Punjab contendedthat the plea that the action ofthe State was not bona fide established,cannot be said to' be unlessthe partyallegingthat casenamesthe officer or officersguilty of conductwhich justifies ·run inferencethat the official act was donefor a coUateralpurpose, and sinceno suchattempt was made and the HighCourt .did not findthatany namedofficer or officers was or wereresponsiblefor thatofficialact, the plea thatit was bona fide m11St fail. We do notthinkthat the Jaw casts anY. suchburdenupon the party challengiarg the validity .of the action takenby the State Government.The State Government hasundoubtedlyto actthroughits officers. What matterswere considered,what matterswere placedbefore the final authority, andwhoactedon behalfof the State Governmentin issuingthe orderin thenameof the Governor, areall withinthe knowledge of the State Government,and it wouldbe placingan intolerable burdenin proofof a justclaimsto requirea partyalleging mala {ides oB State actionto aver in hispetitionand to prove by positive -. ·-~ ' 556 SUPREME COURT REPORTS [1971] 2 ~.C.R. evidence that a particular officer was responsible for misusing the authority of the State by taking action for acollateral purpose. The facts in the present case are eloquent. A sale deed was executed in favour of the defendants. The plaintiffs who claimed that th@y hada right to pre-empt the sale filed a suit against the defendants ·and obtained a decree. On the finding of the High Courtit is clear that except disclosing that the defendants intended to constructa factory, nothing more was said. The State Govera ment still proceeded to iss).le, in exercise of the power under s. 8 (2) of the Punjab Pre-emption Act, a notification to exclude from the operatior. of the Act the land so as to defeat the right of pre emption exercised by the plaintiffs in respect of which a decree was passed by the Civil Court.The State Government has filed no affidavit explaining the circumstances in which the order came to be passed : they have merely offered "commemts" on the petition filed by the plaintiffs. In our judgment, the conclusion of the Hi.di Court was borne out by eviden.ce and no ground is· made out cailini for our interference with that conclusion in this appeal with special leave. The appeal therefore fails and is dismissed with costs. G.C. Appeal dismissed. B c D |
