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Issues:
1. Validity of the notification issued by the Government of Punjab extinguishing the right of pre-emption. 2. Allegation of mala fide action by the Government in issuing the notification. 3. Constitutional validity of Section 8(2) of the Punjab Pre-emption Act, 1913 in light of Article 14 of the Constitution. Analysis: 1. Validity of Notification: The case involved a dispute where the plaintiffs sought to pre-empt a sale of land, which was challenged by the defendants. The Government of Punjab issued a notification extinguishing the right of pre-emption in favor of the defendants for setting up a factory. The High Court held that the notification was issued mala fide, as crucial facts were withheld, and the process leading to the notification was not conducted in good faith. The Supreme Court upheld this finding, emphasizing that the State Government failed to provide any explanation for the circumstances leading to the issuance of the order, thereby supporting the High Court's conclusion. 2. Allegation of Mala Fide Action: The plaintiffs alleged that the Government acted mala fide in issuing the notification to exclude the land from the operation of the pre-emption law. The High Court found that important facts were withheld by the authorities, and the notification was not issued in good faith. The Supreme Court concurred with this finding, stating that the State Government did not provide any justifiable reasons for the exclusion of the land from pre-emption, despite a decree in favor of the plaintiffs. 3. Constitutional Validity of Section 8(2) of Punjab Pre-emption Act: The constitutional validity of Section 8(2) of the Punjab Pre-emption Act, 1913 was also challenged on the grounds of infringing Article 14 of the Constitution, which guarantees equality. The provision allowed the State Government to declare by notification the exclusion of certain sales from the pre-emption law. The High Court observed that while the provision may not necessarily infringe Article 14, the specific notification issued in this case was deemed mala fide. The Supreme Court did not delve into the constitutional aspect but upheld the finding of mala fide action by the State Government. In conclusion, the Supreme Court dismissed the appeal by the State of Punjab, affirming the High Court's decision that the notification excluding the land from pre-emption was issued mala fide. The Court emphasized the importance of acting in good faith and providing justifiable reasons for official actions, especially when fundamental rights are at stake.
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