Pre-emption

Introduction

Topics as per the Syllabus:

1. Meaning
2. Special Acts
3. Pre-emption among Hindus
4. Pre-emption by contract
5. Who may claim pre-emption
6. Sale alone gives rise to pre-emption
1. Meaning:

The right of pre-emption is known as Shufaa.

The right of pre-emption has been imported in India by Muslim Law. Before the time of
Mughal rulers, such concept was unknown in India. Different villages adopted the
concept of pre-emption with some variations, which also became a part of their
respective customs and usages. At that time, the objective of such concept was to
prevent strangers from becoming sharers in the village property. 1 The legal concept of
pre-emption is essentially a part of Muslim Jurisprudence as introduced by Muslim
judges.

In simple words, pre-emption or shufaa is a right which the owner of an immoveable

property possesses to acquire, by purchase, another immoveable property which had
been sold to another person. It can also be understood by the saying that, “a neighbour
has a right, superior to that of a stranger, in the land-adjacent to his own.”

Gobind Dayal v. Inayatullah 1885: meaning of pre-emption by J. Mahmood

“a right which the owner of certain immoveable property possesses, as such, for the
quiet enjoyment of that immoveable property, to obtain, in substitution for the buyer,

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Digamhar Singh v. Ahmad Said Khan (1914) 42 IA 10.

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proprietary possession of certain other immoveable property, not his own, on such
terms as those on which such latter immoveable property is sold to another person.”

1.1 Essentials of this Right:

i) The pre-emptor must be the owner of immoveable property

ii) There must be a sale of certain property not his own
iii) The pre-emptor must stand in a certain relationship to the vendor(seller) in
respect of the property sold.

If these conditions are satisfied, pre-emptor has the right to be substituted for the
purchaser.

2. Who May Claim the right of Pre-emption?

According to Hanafi Law, only three classes of persons are entitled to claim pre-
emption:

a) Shafi-e-sharik- A co-sharer in the property : A co-sharer is an owner of an undivided

share in the property. There must be full ownership in the land pre-empted.
Example: X has two sons, A and B. A & B are joint owners of a landed property

If A sells his portion of land to Y or B

sells his portion of land to Z, Y and Z being strangers to the property. Then both, A
and B, have the right to pre-empt i.e. they get the first preference to buy the other
half of share in such a sale over some strangers such as Y or Z.
b) Shafi-e-khalit- a participator in immunities and appendages : a person who is
entitled to easement rights such as a right of way or right to water over some
immoveable property. Such person will have the first preference to buy the

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 immoveable property over which he exercises the easement rights, as against any
other buyer.

Example: in order to reach the main road from his house, A has to cross B’s garden
every day. A has a right of way over B’s land and shall have the first preference in case B
decides to sell his land.

c) Shafi-e-jar- a neighbor, the owner of an adjoining property: ground of vicinage

(persons living in vicinity of the sold land): the ground of vicinage is void as per
Indian courts and is not constitutional. So, this ground is not applied in India.

2.1 Rules of Exercising Right of Pre-emption:

1. The first class excludes the second, and the second excludes the third.
2. But when there are two or more pre-emptors belonging to the same class, they are
entitled to equal share of the property.
3. Exception- the right of pre-emption on the third ground mentioned above i.e. right
of vicinage, has been declared to be unconstitutional by the Supreme Court of India.

2.2 Shia Law: According to Shia Law,

a) the only persons entitled to the right of pre-emption are co-sharers in the property
and that too if the number of co-sharers does not exceed two.
b) The right of pre-emption is not recognized for the owner of an adjoining property
i.e. on ground of vicinage or for a Shafi-e-khalit- a participator in immunities and
appendages
2.3 Constitutional Validity of Pre-emption

The law of pre-emption is applied to Muslims in India as matter of justice, equity and
good conscience.

There was a lot of controversy regarding the constitutional validity of the right of pre-
emption in view of Article 19 (1) (f) of the Indian Constitution. Article 19(1) (f) provided
for the fundamental right to acquire, hold and dispose of property. Thus, in view of
Article 19(1) (f) it was seen that right of pre-emption restricts a person’s right to dispose

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of his property to anyone as he pleases. This Article was repealed in 1978 by 44th
Amendment of the Constitution.

Different High Courts gave conflicting views, which were subsequently resolved by the
Supreme Court in the case of Bhau Ram v. Baij Nath 1962.

Held: The Supreme Court held that reasonableness of any custom creating the right of
pre-emption has to judged on the basis of previous decisions as well as relevant
enactments. After the enactment of Indian Constitution in 1950, the reasonableness of
such customs of pre-emption needs to be judged as per the fundamental rights
provided therein. Reasonableness of a custom is not a constant factor and what is
considered reasonable at one stage may not be considered so at another stage in the
progress of society. Accordingly, the Supreme Court laid down that:-

a) Vicinage (vicinity or neighborhood) is not a ground for pre-emption.

b) Pre-emption is allowed for co-sharers
c) The right of a participator in certain appendages such as of a person having a
common entrance to the property or common staircase (easement rights) is
enforceable.

In Razzafue Sajansaheb v. Ibrahim Haji 1998 Supreme Court: the Court again reiterated
that pre-emption on the ground of vicinage is void and unconstitutional.

3. Demands for Pre-emption

Three demands for Pre-emption: no person is entitled to pre-empt unless he takes

proper steps at the proper time and conforms strictly to the necessary formalities. There
are three formalities which are known as three demands for pre-emption.

First Demand (talab-e-muwasabat)- the pre-emptor must assert his claim immediately
on hearing of the sale, but not before. This demand is to be made after the sale is
completed. It is of no effect if it is made before the completion of sale.

Second Demand (talab-e-ishhad)- the pre-emptor must make a second demand without
any practicable delay. He must :

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 i) Refer to his first demand
ii) And do so in presence of two witnesses, and
iii) In the presence of either the seller or the buyer or on the premises which are
subject to sale.

A common form of demand is where the pre-emptor says, ‘B has bought a house of
which I am the pre-emptor. I have already claimed my privilege of pre-emption and and
now I again claim it: be ye witnesses thereof.

Explanations for the two Demands:-

a) The property must be clearly specified by the pre-emptor

b) If the pre-emptor is a distance and can not be personally present, the second
demand may be made by an agent or even by a letter.
c) If the pre-emptor is a minor, demand can be made through his guardian.
d) The first and the second demand can be combined by the pre-emptor.
e) Where there are two or more pre-emptors, each one of them should make the
demand.
f) Where there are several buyers of the property, the demand must be made to all
of them unless it is made on the premises or in the presence of the vendor.
g) It is not necessary for the pre-emptor to pay the price at the time of second
demand; it is sufficient that he should declare his readiness and willingness to pay
the price stated in the sale-deed.

Third Demand: Suit for Pre-emption: this is not really a demand but taking legal action
and is not always necessary. It is only when the claim of pre-emptor is not heard, that
the pre-emptor enforces his right by bringing a suit. Such an action is called talab-e-
tamlik. A suit to enforce the right of pre-emption, must be instituted within One Year
from the date when the purchaser takes physical possession of the property or when the
instrument of sale is registered. (Limitation Act, Sch 1 Art 10).

4. Legal Effects of Pre-emption:

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When the claim of pre-emptor is enforced, he stands in the shoes of the buyer and
takes the property.

If the sale has already been completed in its entirety, the original buyer becomes the
new vendor and the pre-emptor the new purchaser. As, the pre-emptor takes the
property from the buyer, buyer should always be made a party to the suit for pre-
emption.

5. Right of Pre-emption When Lost?

It can be lost by following means:

a) Acquiescence or Waiver:
Illustration- S sells land to B. P has a right to pre-empt. On receiving information of
sale, P omits to claim his right of pre-emption.
b) Death of Pre-emptor:
If the pre-emptor dies after the first two demands but before filing the suit, then his
right to pre-emption is lost.
However, if the pre-emptor dies pending the suit for pre-emption, the suit may be
continued by his legal representatives.
c) Release:
The right may be destroyed if there is a release for consideration to be paid to the
pre-emptor.

6. Sale Alone gives Rise to Pre-emption

 The right of pre-emption arises only out of a valid, complete and bona-fide sale.
 It does not arise on a transfer without consideration such as gift, sadaqah, wakf
 It does not arise on a transfer by operation of law such as inheritance.

Till now we know that right of pre-emption arises only after the sale is made to the
buyer. It is on the reception of this information that a pre-emptor raises his demand. A
question which needs to be decided before the pre-emptor raises his demand is that,
When do we consider the sale to be complete?
Do we decide the completion of sale according to Muslim Law?

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As per Muslim Law, a sale is an exchange of property with the mutual consent of the
parties. The exchange consisting in payment of price by the purchaser to the vendor and
delivery of possession by the vendor to the purchaser. The execution of any legal
instrument is not necessary here.
OR
Do we Deicide the completion of sale according to Indian Law on sale of immoveable
property?
According to Transfer of Property Act Section 54, a sale of property of the value of Rs.
100 and more requires registration of sale deed. The sale won’t be complete without a
registered instrument as per this law. Also, See Section 47 of Registration Act.
In Radhakrishan Laxminarayan v. Shridhar 1960 Supreme Court:
Held: the sale will be considered to be complete as per the provisions of Transfer of
Property Act, 1882 only and or Muslim Law any other personal law cannot override the
statute. Therefore, no right to pre-emption arises until the sale deed is not registered as
per Transfer of Property Act. It is only upon such registration that the sale is completed
and the pre-emptor can raise his demand.
Ram Saran Lall v. Mst Domimi Kuer 1962 Supreme Court:
Facts: P executed a sale deed of a house on January 31, 1946 in favour of D and
presented it for registration the same day. On hearing of the sale, RS made the first
demand for pre-emption on February 2. The sale deed was entered in the Registrar’s
books on February 9 only. RS filed a suit for pre-emption. D resisted the suit on the
ground that sale was completed on 9 th February only and not on February 2 nd. Thus, the
demand for pre-emption was premature.
Held: the Supreme Court, by a majority of 3 judges, held that such demand for pre-
emption was mature as it was made before the completion of sale.
7. Special Acts for Pre-emption:
The law pf pre-emption is regulated by Acts in some states eg, Punjab Pre-emption Act
of 1913, Agra Pre-emption Act 1922. These Acts were enacted to control the pre-
emptions in those areas and supersede the Muslim Law on pre-emption.
8. Pre-emption Among Hindus:
The right of pre-emption is recognised by custom among Hindus who are either natives
of Bihar, Syllhet and certain parts of Gujarat such as Surat, Broach and Godhra, and it is
governed by the rules of Muslim Law of pre-emption. Such rules may have been
modified in these areas.
The law of pre-emption even came to adopted by Hindus as a customary practice in
some places.

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9. Pre-emption by Contract:
 Rights of pre-emotion can even be created by contract between the sharers in a
village.
 A Muslim vendor may agree with a Hindu buyer that the Muslim law of pre-
emption, as applicable to vendor and his co-sharer (pre-emptor), will also be
applicable to the buyer.

Right of Pre-emption in Crux