Case Note & Summary
The dispute arose from a sale of land in District Gurgaon. On May 9, 1958, Khillu and two others sold a plot of land to Surinder Kumar and Virender Kumar, referred to as the defendants. Ramjilal and Khazan, referred to as the plaintiffs, filed a suit in the civil court on January 9, 1959 to pre-empt the sale under the Punjab Pre-emption Act, 1913. While the suit was pending, the Government of Punjab issued a general notification on November 16, 1961 under Section 8(2) of the Act, exempting purchases for setting up or expansion of industry from pre-emption. The civil court, by order dated February 16, 1962, passed a decree for pre-emption conditionally on payment of the sale amount, after finding that the defendants failed to establish their intention to establish a factory on the land. The defendants appealed to the Court of the Senior Subordinate Judge. During the pendency of that appeal, the Government of Punjab issued another notification on September 3, 1962 specifically exempting the sale of the land in question from pre-emption, stating it was for the establishment of a factory for manufacture of cork products. The plaintiffs then moved a petition in the Punjab High Court challenging the validity of this notification on the ground that the Government acted mala fide. A Division Bench of the High Court referred the case to a Full Bench. The Full Bench held that a notification extinguishing the right of pre-emption issued during the pendency of an appeal did not disentitle the plaintiffs from maintaining their claim of pre-emption already exercised and decreed. It also held that Section 8(2) of the Punjab Pre-emption Act did not offend Article 14 of the Constitution, but found that the notification dated September 3, 1962 was issued mala fide and was therefore invalid. The State of Punjab appealed to the Supreme Court by special leave. In the Supreme Court, the State contended that a party alleging mala fide State action must name the specific officer or officers responsible for misusing authority for a collateral purpose. The Supreme Court, per Shah, J., rejected this contention, stating that requiring a party to aver and prove by positive evidence that a particular officer was responsible would place an intolerable burden. Mala fides could be inferred from the facts and circumstances. The Court reviewed the evidence and found that the State Government had proceeded to exclude the land from pre-emption when a decree had already been passed in favour of the plaintiffs, and the State had not satisfactorily explained the circumstances. Consequently, the High Court's finding of mala fides was upheld. The Supreme Court did not decide whether Section 8(2) conferred arbitrary, unguided and uncanalised power violating Article 14, because the impugned notification was already held invalid on mala fide grounds. The appeal was dismissed, and the High Court's judgment declaring the notification dated September 3, 1962 mala fide and invalid was affirmed.
Headnote
A) Administrative Law - Mala Fides - Burden of Proof - State Action - No Requirement to Name Specific Officer - Punjab Pre-emption Act, 1913, Section 8(2) - The State contended that a party alleging mala fide State action must name the officer or officers who misused authority for a collateral purpose. The Supreme Court rejected this, holding that such a requirement would place an intolerable burden on a party seeking to prove a just claim; mala fides may be inferred from facts and circumstances without positive identification of the officer responsible. Held that the High Court rightly found the impugned notification mala fide based on the surrounding evidence and the State's failure to explain its action (Pages 555-556). B) Constitutional Law - Article 14 - Arbitrary Power - Punjab Pre-emption Act, 1913, Section 8(2) - The High Court had held that Section 8(2) did not offend Article 14, but the Supreme Court declined to decide whether the provision conferred arbitrary, unguided and uncanalised power violating Article 14. Since the notification was already held mala fide and invalid, the constitutional question did not survive for consideration (Page 553). C) Civil Procedure - Pre-emption Decree - Effect of Subsequent Notification - Punjab Pre-emption Act, 1913, Section 8(2) - The High Court held that a notification extinguishing the right of pre-emption issued during the pendency of an appeal against the trial court's decree did not disentitle the plaintiffs from maintaining their pre-emption claim already decreed. The Supreme Court's decision affirmed the High Court's finding of mala fide, thereby invalidating the notification without disturbing this procedural aspect (Pages 552-553).
Issue of Consideration
Whether the notification dated September 3, 1962 under s.8(2) of the Punjab Pre-emption Act, 1913 was issued mala fide and hence invalid; whether a party alleging mala fides must name the officer responsible; whether s.8(2) violated Article 14.
Final Decision
Appeal dismissed; the High Court's finding that the notification dated September 3, 1962 was mala fide and invalid upheld; State's contention about naming officers rejected; question of vires of Section 8(2) under Article 14 left open.
Law Points
- Mala fides of State action can be inferred without naming specific officer
- burden to prove mala fides not intolerable
- notification issued under s.8(2) Punjab Pre-emption Act to defeat decree for pre-emption is invalid
- Article 14 question left open.
