Law of Pre-emption

Pankaj Kumar
Asst. Prof (Law)

It is the right of an owner of immovable property to acquire by purchase another immovable

property which has been sold to another person. In other words, under this right owner of an
immovable property is entitled to repurchase an adjacent property which has been sold to
someone else.

Definition of pre-emption is also given by Mohmood, J., in Gobind Dayal case in which he
observation as, ‘Pre-emption is a right which the owner of immovable property possesses, as
such, for the quiet enjoyment of that immovable property, to obtain, in substitution for the buyer,
proprietary possession of certain other immovable property, not his own, on such terms as those
on which such latter immovable property is sold to another person.’

We can understand pre-emption with this illustration: A and B is owners of their houses which
are adjacent to each other. B sells his house to C, who may be a stranger for A. Under this pre-
emption right, A who is a pre-emptor can legally repurchase that house from C at the same price
at which B sold it to C. In this manner, the right of pre-emption would enable A to avoid C from
being his permanent neighbour. As a matter of fact, an apprehended inconvenience which may
be caused by a stranger has been the very basis of this right.

The law of pre-emption was not a part of the personal law of Muslim. Before the advent of
Moghul Rule in India, there was nothing akin to the law of pre-emption. It was only during the
Moghul rule, that the law of pre-emption was introduced and made applicable as rule of general
law of the land for all communities. According to the Hedaya :

A Muslim and Zimmee (non-Muslim) being equally affected by principles on which Pre-emption
is established, and equally concerned in its operation, are, therefore, on an equal footing in all
cases regarding the principle of preemption. With the result pre-emption was adopted by Hindus
as a custom.

Object of the right of Pre-emption :

The law is based on the principle of convenience. According to the Hedaya, ‘Besides, according
to our tenets the grand principle of Pre-emption is the conjunction of property, and its object
is...... to prevent the vexation arising from a disagreeable neighbour.......’

The right of Pre-emption and Its Constitutional Validity :

As far as constitutional validity of right of pre-emption is concerned, it can look into the
Preemption after dividing two stages, (i) before 44th Constitutional Amendment, and (ii) after
44th Constitutional Amendment.

(i) Before 44 th Constitutional Amendment, 1978 : Article 19(1) (f) of the Indian Constitution
provides all citizens had a fundamental right to acquire, hold and dispose off property. Article
19 (5) provided that reasonable restrictions may be imposed on this right of a person to acquire,
hold and dispose off a property yet it was protected under Clause (5) of Article 19. With the help
of power exercise under this Clause, this right on the ground of vicinage or on ground of
consanguinity or on ground of participation of some immunity was held Constitutional. Further,
the right held Constitutional whether it was exercised under some enactment or under Muslim
personal law. But in 1962, in the case of Bhau Ram v. Baij Nath, the Supreme Court overruled
this view and held that Pre-emption only on the ground of vicinage was unconstitutional and
cannot be enforced. The court held that unless the Preemptor and the vendor are co-sharer or
participators in some immunity, the right cannot be protected. Accordingly, claim of Pre-emption
on ground of being co-sharer or participator in immunity was constitutional but Pre-emption only
on ground of vicinity was unconstitutional. The Supreme Court reaffirmed this view in Sant Ram
v. Labh Singh.

(ii) After 44 th Constitutional Amendment : Article 19(1) (f) has now been repealed by the 44th
Amendment Act, 1978. The result is that now there is no fundamental right of acquiring, holding
and disposing off a property. Thus, right to acquire, hold and dispose off, is neither a
fundamental right nor a mere constitutional right. However, Pre-emption still continues to be a
legal right. It is therefore, submitted that the reasonableness of the right of pre-emption can still
be examined under Article 14 and 15 of the Constitution. In Atma Prakash v. State of Haryana,
the Supreme Court held that claim of Pre-emption on ground of consanguinity is ultra vires. The
court observed that the reasons which justified Pre-emption in the past namely, the preservation
of the integrity of rural society, the unity of family life and the agnatic theory of succession, are
totally irrelevant. The court held that the claim for possession by way of Pre-emption only on
ground that claimant had superior rights being father’s brother’s son of the owner, cannot be
sustained. Accordingly, Section 15 of Punjab Pre-emption Act, 1923 (which provided Pre-
emption to co-sharer for kinsfolk of a vendor) was held to be unconstitutional by the Supreme
Court because there was no reasonable classification of the co-sharer entitled to claim Pre-
emption.

CLASSIFICATION OF PRE-EMPTORS OR WHO MAY PRE-EMPT

Only three classes of persons may claim the exercise of the right under Muslim law. Under
Muslim law, pre-emptor are classified into three categories :
i. The Co-sharers or Shafi-i-Sharik
ii. The Participators in Immunities or Shafi-i-Khalit, and
iii. The Owners of Adjacent Properties or Shafi-i-Jar

i. The Co-sharers or Shafi-i-Sharik

The persons who are entitled to inherit the properties of a common ancestor are called co sharers.
The co-sharers have the preferential right of pre-emption against any other class of pre-emptors.
For example, brothers or two sisters are the co-sharers. If one of them sells his/her house, the
other is entitled to claim pre-emption. Co-sharers are given preference against other categories of
pre-emptors because they are common blood-relations

ii. The Participators in Immunities or Shafi-i-Khalit

In the absence of a co-sharer, Shafi-i-Khalit is entitled to pre-empt in the following cases :

In Bhau Ram v. Baij Nath, the Supreme Court has held that pre-emption on the basis of
participation exists only in the easements of way and water on private land. It does not extend to
any other easement such as easements of air and light. It may be noted here that for claiming the
right of pre-emption on the basis of being a Shafi-i-Khalit, is that the right to way and right to
discharge water must be a private right. The right to use common thoroughfare such as common
village roads will not give rise to the right of pre-emption.
A person cannot said to be the Shafi-i-Khalit and would not be entitled to the right of preemption
in the following cases :

a. The right of pre-emption cannot be claimed on the basis of easement of light or air.
b. The mere fact that the owners of land have the right to draw water from a Government water
course does not give them any right of pre-emption.
c. On the basis that the branches of his tree project over the land of a neighbour, the owner of the
tree cannot claim the right of pre-emption as Shafi-i-Khalit on the sale of that land.
d. The right to use common thoroughfares, such as village roads, big canals, etc. does not give
rise to the right of pre-emption.

iii. Owners of Adjacent Properties or Shafi-i-Jar :

Shafi-i-Jar is the owner of an adjoining property or in other words it is mere neighbour who can
be a pre-emptor i.e., there is vicinage if two properties are adjacent to each other, but only in the
absence of Shafi-i-Sharik and Shafi-i-Khalit. The right on the basis of neighborhood arises only
in favour of the owner of the adjoining immovable property. So, the right does not belong to a
tenant or to a person who is in possession of property but does not have any ownership in it.
However, as discussed earlier, after the Bhau Ram’s case n 1962, the claim of pre-emption only
on the ground of vicinage has now been declared to be unconstitutional.

There are some differences between Sunni and Shia law on pre-emption
These are of the following :

i. Shia law recognises co-sharers as the only class of pre-emptors. The other two categories,
namely, the Participators in Immunities and Owners of Adjacent Properties cannot become pre-
emptors.
ii. Under Shia law, the co-sharers too are entitled to pre-empt only where their number does not
exceed two. If there are more than two co-sharers, the right is not available to any one of them.
iii. Under the Shia law, if there are two co-sharers, they are entitled to pre-empt only in
proportion of their respective shares. Their right of pre-emption is simultaneous but not equal in
magnitude. For example, A and B are the two Shia co-sharers having 2/3 and 1/3 shares
respectively. Upon the sale of pre-empted property, A is entitled to repurchase 2/3 of the
property whereas B is entitled to re-purchase only 1/3 of it.
FORMALITIES FOR PRE-EMPTION

The formality for the claim of this right consists of three demands. The demand must be
made by pre-emptor step by step and at proper time.

1. The First Demand (Talab-i-Mowasibat) : The Arabic expression ‘Talab-i-Mowasibat’ means

‘Demand of Jumping’ which shows that it must be made immediately. It is essential that the first
demand must be made immediately on the hearing of the completion of sale. Every class of pre-
emptor must demand immediately, meaning thereby that pre-emptor belonging to inferior class
should not wait till a pre-emptor belonging to superior class waives his right for exercise of his
right.

The Second Demand (Talab-i-Ishhad) : The expression, Talab-i-ishhad means a demand with
the invocation of witnesses. After making the first demand, it is the second demand. The second
demand is repetition of the first demand, therefore, it is also called as the confirmatory demand.
The pre-emptor must, as soon as he can, affirm the intention of asserting his right by making the
second demand in which he refers to the fact that he had already made the first demand. It is
must and indispensable. No particular forms are prescribed. For the validity of the second
demand, the following requirements must be fulfilled :

i. The Second demand must be made in the presence of at least two witnesses expressly called to
bear witness to the second demand,
ii. The Second demand is effective only when the first demand was lawfully made at an earlier
date.
iii. The pre-emptor must mention that he has already placed his first demand and now he is
asserting the claim for the second time.

The Third Demand (Talab-i-Tamlik)

If the pre-emptor fails to get the desire result after making first two demands, he may take legal
action. Therefore, if the purchaser sells the property to him, then no further formality is required
and the pre-emptor is substituted in place of vendee. But, if after the first two demands, the pre-
emptor fails to re-purchase the property, then he has to take legal action. In other words, the third
and the last step are to maintain an action in a court of law. Filing of a suit for the claim of pre-
emption is known as the Third Demand. This is also termed as ‘demand of possession’.

First and Second Demands may be Clubbed: The pre-emptor may combine both the demands.
If at the time of the first demand, the pre-emptor invokes the witnesses in the presence of the
Vendor or the Vendee or on13 the property it will suffice for both the demands. If once both the
demands have been combined and made, there would be no need to make the second demand
subsequently, and if made it would be superfluous.

Shia Law :

As far as all the demands are concerned, the law is the same as Hanafi law. Under Shia law while
Talab-i-Ishhad (second demand) is made, reference to first demand is absolutely necessary. If
this reference is not made the second demand would become defective.

RIGHT OF PRE-EMPTION WHEN LOST :

The right of pre-emption may be lost in the following cases :

1. By acquiescence or estoppel or waiver or forfeiture: When the pre-emptor fails to observe

necessary formalities prescribes i.e., making three demand. There may be other circumstances
also from which acquiescence on the part of pre-emptor may be observed:
i. A pre-emptor may waive his right by acquiescence i.e., by not asserting his claim. Upon the
sale of the pre-empted property, a pre-emptor may either assert his right by making demands or
may willingly forego his claim by not making any demand.
ii. The right of pre-empt is lost when the pre-emptor enters into a compromise with the vendee,
not to claim the right of pre-emption.
iii. The right is lost when the pre-emptor permits a sale to be made to another person. However,
in the following circumstances acquiescence or estoppel or waiver will not be inferred:

i. A mere offer by a pre-emptor to purchase from the vendee the property at the sale price with a
view to avoiding litigation, does not amount to acquiescence.
ii. When the pre-emptor had previous notice of the sale or of the fact that negotiations for the
sale were going on and did not offer to buy the property, then also no acquiescence will be
inferred.
2. By death of the pre-emptor : When the pre-emptor dies after making the two demands but
before the filing of the suit19 i.e., third demand then also the right of preemption is lost, his legal
representatives have no right to file the suit. However, under the Shia and Shafi law, if a pre-
emptor dies during pendency of the suit, the right is not lost.

3. By misjoinder of plaintifs : When the pre-emptor joins himself as a co-plaintiff with a person
who is not entitled to claim the right of pre-emption then also the right to pre-empt is lost. But if
he joins with himself as co-plaintiff a person who could have filed a suit for pre-emption, but for
the reason that he did not make the two demands the right to pre-empt will not be lost.

4. By release : The pre-emptor would lose his right if there is a release for consideration to be
paid to the pre-emptor.

5. Loss of right before final decree: If the pre-emptor loses his right before the final decree is
passed, he would lose his right. Therefore, his right must exist till the date when final decree is
passed by trial court.

6. By statutory disability: The right of pre-emption may be forfeited if there is any statutory
disability on the part of pre-emptor to repurchase the pre-empted property. In such a
circumstance a pre-emptor who may otherwise be competent to enforce the right, is unable to
claim the right because of statutory disability.