The right of pre-emption is a vested right and that it cannot be taken away by a retrospective notification.

Mehar Singh, J.

1. In this reference, arising out of a petition under Articles 226 and 227 of the Constitution, these three questions are for consideration--

(i) Whether a pre-emptor in whose favour a pre-emption decree has been given in the first Court should retain superior right of preemption till the hearing of the appeal by the vendee against the decree, and whether the impugned notification issued during the pendency of the appeal against the decree in the present case, successfully takes away the already exercised right of pre-emption of the petitioners (pre-emptors) so as to defeat their suit in appeal?

(ii) Whether Section 8(2) of Punjab Act 1 of 1913 confers arbitrary, unguided and uncanalised power on the State Government to take away the right of pre-emption, and is on that ground constitutionally invalid; or whether when that provision is read with Section 9 of the very Act, it provides sufficient statement of policy and guidance by the Legislature for the exercise of the power of the State Government under Section 8(2) of that Act and thus that sub-section is not an invalid piece of legislation on the ground already stated above?

(iii) Whether the impugned notification of September 3, 1962, is ultra vires the power of the State Government under Section 8(2) of Punjab Act 1 of 1913 and whether it is invalid because it has been issued mala fide to the injury of the petitioners and to the advantage of respondents 2 and 3?

The facts out of which this reference has arisen are these. On May 9, 1958, Khillu, Mohan Lal, and Radhey Lal, sold 13 Kanals and 19 Marlas (8,440 square yards) land to Surrinder Kumar and Virander Kumar, respondents 2 and 3. The petitioners, Ramji Lal and Khazan, on January 9, 1959, instituted a suit to pre-empt that sale claiming a preferential right of pre-emption in them. The suit was resisted by respondents 2 and 3. During the pendency of the suit on November 16, 1961, was published notification No. 4965-RIV-61/ 7577 of November 9, 1961, under Section 8(2) of the Punjab Pre-emption Act, 1913 (Punjab Act 1 of 1913), hereinafter to be referred to as the Act, in this form--

"In exercise of the powers conferred by Sub-section (2) of Section 8 of the Punjab Pre-emption Act, 1913 , the Governor of Punjab is pleased to declare that no rights of pre-emption shall exist with respect to urban or village immovable property or agricultural land when purchased by any person for setting up or extension of any industry in the State with the permission of the Director of Industries, Punjab."

An issue was settled in the suit after that in regard to the effect of that notification on the right of the petitioners claiming preferential right of pre-emption. Respondents 2 and 3 made efforts to obtain from the Director of Industries permission in the terms of the notification, but they did not succeed during the trial. On April 16, 1962, the learned trial Judge decreed the claim of the petitioners for possession by pre-emption of the land in question with a usual condition in the decree in regard to the payment of the amounts stated in it by a certain date, otherwise directing that the suit shall stand dismissed if the condition was not complied with. The learned trial Judge gave a finding of fact that it was not proved that respondents 2 and 3 intended to establish industry on the land in question.

2. On May 16, 1962, respondents 2 and 3 filed an appeal against the decree, of the trial Court. On May 19, 1962, respondent 2 made an affidavit and delivered it on the same day in the Department of Industries, in which affidavit he affirmed that he would only set up a factory in the land in question and will not use it for any other purpose. There was consideration of the matter in the Industries Department and correspondence between that department and the Revenue Department, to all of which detailed reference will be made later, and in the end on September 4, 1962, the State Government, respondent 1, issued no