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Preemption[1]
I. Introduction:-
The right of preemption is also called a Shufaa in the Arabic language. The right of preemption has its origin in Mohammedan law. It became known to the Indian Community during the period of the Mughal. It is essentially a Muslim concept. Therefore, it is applicable among Muslims. The right of pre-preemption is applicable by custom, legislation, and contract between the parties.
II. Definition, Meaning and nature of the Right of preemption:-
1. According to Mulla,:-
The right of preemption is a right-
(i) which the owner of an immovable property possesses
(ii) to acquire by purchase another immovable property
(iii) which has been sold to another person.”
2. According to Mahomed Jung:-
‘Shuffa’ means-
(i) a right to acquire by compulsory purchase,
(ii) some immovable property,
(iii) in preference to all other persons by reason of such right.
For example, if A sells his property to B if, for some reason (mentioned below), C has the right of preemption in that property, C can compulsorily purchase that property from B. The Court will order the compulsory purchase deal due to the existence of the right of preemption in favour of C.
II. Circumstances in which the right of preemption accrues:-
In the following circumstance, a Muslim person can claim the right of preemption-
(a) Under Sunni Law-
(i) a co-owner,
(ii) a person having an easement (such as an easement of way, water, etc.) and
(iii) the adjoining owner
(b) Under Shia Law, the right is available only to a co-owner, and that is also true if there are only two co-owners. This means that rights are very restricted under Shia law.
III. The time at which the right accrues:-
The right of preemption arises only in the case of a sale of immovable property and only when such a sale is complete to the stranger. The holder of a right of preemption then has a right to purchase property at the same price from the buyer (stranger). Thus, we may say the right of preemption is the right to purchase the property already sold to the stranger.
IV. Object of the right:-
The object of the right is to restrict strangers from getting property and cause inconvenience to a coparcener or neighbour of the property. The sale is not considered lawful to the stranger unless the seller offers the property first to the neighbour or coparcener. If a neighbour or coparcener refuses to purchase the property after the offer, the person may sell it to a stranger. But if it is found that he sold the property without its offer to the neighbour or coparcener, such neighbour or coparcener gets the right of compulsory purchase from the Court at the same price the stranger has purchased the property.
Thus, the object seems to restrict strangers from unwarranted interference with the coparcener, adjoining land owner, or easement holder.
IV. Ingredients or Characteristics of the right of preemption:-
Thus, from the above discussion, we may lay down the following ingredients of the right of preemption. Viz.
(i) There are two immovable properties owned by two different owners;
(ii) one of the owners sells the land to a stranger;
(iii) the other owner has a right of preemption.
(iv) the other owner has a right to claim a substitution in place of the stranger;
(v) Such substitution is on the same terms as the one on which the property was sold to the stranger.
VI. Subject matter of preemption:-
As per the saying of Prophet Mohammed, there is shufaa in a house or a garden. It denotes that landed property, including houses and gardens, can only be the subject of the right of preemption. No movable property can be subject to preemption.
VII. Formalities for preemption:-
There are some formalities or procedures to claim the right of preemption. It is necessary to follow these formalities strictly, or else the person loses the right. The right of preemption is considered to be a very loose or feeble right. Therefore, scrupulous completion of formalities is essential.
There are three demands, known as talabs in Arabic, that need to be made. They are as follows-
(i) First or immediate demand:-
It is also called talab-i-mowasibat in Arabic. It is the first demand of his claim of purchasing property as soon as he gets information that the property is sold. Such demand is to be made either to the seller or purchaser. It is also called ‘jumping demand’ because when a person gets the information, he is so startled that he jumps from his seat. There must not be any loss of time between receiving the news and making the demand. Witnesses are not necessary for the first demand.
The right of preemption is considered a very weak right. Therefore, any procedural formality or delay defeats this right. In Ali Muhammand v Taj Muhammad, the Court considered a delay of twelve hours to be too long. Similarly, if a person, upon receiving the news of the sale of the property from his wife, entered his house, took money from his pocket, went to the property, and then made a demand, it was considered too late[2].
(ii) Second demand:-
It is also called Talab-e-Ishhat. With the least practicable delay, the pre-emptor must make a second demand either personally or through an agent. Such demand must be made-
(1) before two witnesses, (2) either before the seller, purchaser, or on the premises, and (3) the pre-emptor must refer to his first demand. Thus, the preemptor may say, “Such a person has bought such a house of which I am the pre-emptor. I have already claimed my privilege of preemption, and now I again claim it; be you witness thereof”’.
(iii) Third demand:-
The third demand is taking legal action. In fact, the third demand is not a demand as such, and, in many cases, it is not necessary if the pre-emption claim is accepted in earlier demands. Only when his earlier demand is not conceded does the pre-emptor enforce his right by bringing a suit. It is called talab-e-tamlik in Arabic.
The suit for preemption must be brought within one year of registering the instrument of sale. The preemptor must claim the whole property sold, not part of it.
VIII. Right of preemption when lost:-
The right of preemption is lost in the following circumstances-
(1) Acquiescence or waiver:-
Pre-emptor loses the right if he expressly or impliedly waives the right or omits to assert his right immediately.
(2) Death of pre-emptor:-
The death of the pre-emptor loses the right of preemption.
(3) Release for consideration:-
The right is lost if the release for consideration is paid to the pre-emptor.
IX. Constitutional validity of the preemption:-
The Bombay, Allahabad and Patna High Courts had earlier upheld the constitutional validity of all three forms of preemption. However, in Razzaque Sajan Bgwan v. Ibrahim Hazi[3] the Supreme Court held that the right of preemption on the grounds of adjoining owners is unconstitutional. However, it upheld the constitutional validity of the right in the other two forms. *****
[1] दुस-याची स्थावर मिळकत खरेदी करण्याचा अग्रहक्क / त्रयस्थास विकलेली मिळकत अग्रहक्कने खरेदी करण्याचा अधिकार [ दूसरे की अचल संपत्ति खरीदने का अधिकार / तीसरे पक्ष को बेची गई अचल संपत्ति खरीदने का अधिकार]
[2] Jarfan Khan v. Jabbar Mia ILR (10) Cal. 383 (1884)
[3] AIR 1999 SC 2043