( 1 ) THIS petition under Article 226 read with Article 227 of the Constitution of India is for issuance of an appropriate writ or direction for quashing the order dated 22-3-1980 (An-nexure P-2), rejecting the application submitted by the petitioners claiming exemption under Section 19 and Section 20 of the Urban Land (Ceiling and Regulation) Act No. 33 of 1976, passed by the Dy. Commissioner, Land Records and Settlement, Govt. of Madhya Pradesh, in pursuance of an order passed by the Government of Madhya Pradesh in Land Records and Settlement department and conveyed vide letter No. 5-103/891/79-Bhopal, dated 23-1-1980 (Annexure R/5 ).

( 2 ) BRIEFLY stated the facts giving rise to the present petition are as under : The petitioners allege that they are Bhumiswamis of the land comprised in survey No. 1354/1/1, in area 1. 996 hectares, situated in village Nizatpura, Uj-jain. The petitioners further allege that a Ginning and Pressing Factory, called 'new Cotton Ginning and Pressing Factory' is situated on the aforesaid land and that factory building, factory office, godown, sheds and servant quarters are also built thereon. The area on which the various buildings are standing comes to 35830 square feet. The rest of the open land is being used for the purposes of the factory, for example, for storing Kapas, Kapasia and cotton by the factory, the cultivators and businessmen. Although the factory was running up to 1972, but thereafter it is not running due to financial reasons and the petitioners intend to run the factory in future and all formalities for obtaining the licence for the year, 1980-81 have been completed by the petitioners. The petitioners submitted an application (Ex. P/1) dated 6-4-1977 to the State Government under Sections 19 and 20 of the Urban Land (Ceiling and Regulation) Act No. 33 of 1976 (for short, the Act) for exempting the land comprised in survey No. 1354/1/1 from the operation of the provisions of the Act. The petitioners have been informed of the fac-tum of rejection of this application, vide order dated 22-3-1980, by the Deputy Commissioner of Land Records and Settlement, Govt. of Madhya Pradesh (An-nexure P/2), Aggrieved by this order the petitioners have submitted this petition.

( 3 ) THE petition is resisted by the respondent State on the grounds that the petitioners were heard prior to passing of the order dated 22-3-1980; that the petitioners were given opportunity to lead evidence, but they had failed to lead evidence in support of their claim. As such the petition is liable to be dismissed.

( 4 ) SHRI L. P. Bhargava, learned counsel for the petitioners contended that the State Government before rejecting their application claiming exemption did not hear the petitioners; that in view of the provisions of Section 20 (1) (b) of the Act, which are applicable to the situation, hearing of the petitioner was necessary and that the impugned order is illpgal because it is not based on considerations, which are relevant. Shri Kulshrestha, Dy. Government Advocate for the State submitted that there is no force in the aforesaid contentions and contended that the satisfaction postulated by Section 20 (1) (b) of the Act is subjec-tive satisfaction and that it was not obligatory on the State Government to have heard the petitioners before rejecting their application for exemption. Having heard the learned counsel for the parties, we have come to the conclusion that the petition deserves to be allowed to the extent indicated hereinafter.

( 5 ) THE controversy between the parties centres round the question with regard to the nature of the power conferred on the State Government by Section 20 of the Act. Section 20 of the Act reads as under: "section 20. Power to exempt.-- (1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter, - (a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied, either on its own motion