PRE-EMPTION

Origin of Pre-emption
• The concept of ‘Pre-emption’ originated from Islamic law and was not known in India until
the emergence of Mughal rule. This is implemented as a general land law and applies to
Hindus and Muslims.
• In India, there are four sources of pre-emption rights, including Muslim personal laws,
customs, regulations, and contracts. For Muslims, the right of Pre-emption is a part of their
personal laws.
• Law of pre-emption in some areas was regulated by statutes such as the Punjab Pre-
emption Act of 1913, Agra Pre-emption Act of 1922, Bhopal Land Pre-emption Act, of
1934, Rewa Pre-emption Act, 1946 and Rajasthan Pre-emption Act, 1956. Lastly, the right
of pre-emption was also created by contract.
Justice Syed Mahmood in the case of Gobind Dayalv. Inayatullah(1885) 7 All 775
The pre-emption has been defined as a right given to the owners of an immovable property
for low amusement of that immovable property to obtain in exchange for the buyer,
possession of certain other immovable property, on such term that as those on which such
latter immovable property is sold to any other person.
ORIGIN OF "SHUFA" LIES IN THE SAYINGS OF THE PROPHET
• "A neighbour has a right, superior to that of a stranger, in the lands
adjacent to his own."
• "The right of shufa holds in a partner who has not divided off and taken
separately his share."
• "The neighbour of a house and the neighbour of land has a superior
• Right to those lands, and if he is absent, the seller must wait for his
• Return; provided, however, that they both (reside) participate in the same
road."
Illustration:
A and B live adjacent to each other. X is the owner of land A and Y is the
owner of land B. When X decides to sell land A, it is the legal duty of X
to first offer it to Y. Only when Y shows no interest in buying the
property X can sell land to any other person(z). And if X sells his land to
Z without offering to Y, then Y has a right of pre-emption against Z and
can dispossess him after paying the same price that Z paid to X. If the
price appears inflated with a motive to defeat or discourage Y, the pre-
emption right holder, the court will interfere and rationalize the price.
The main motive behind this law is to dislodge a stranger from
disturbing the tranquility of the neighborhood. that
 Categories of Pre-emption
The idea behind this type of pre-emption is to dislodge a stranger from
disturbing the tranquillity of the neighbourhood. In a multi-ethnic society, this
right assumes greater importance and relevance.
Hanafi law recognizes three categories:
• 1) a co-sharer in the property sold,
• 2) a participator in the amenities and appendages of the property, and
• 3) a neighbor owning an adjoining immovable property. Shia law
restricts pre-emption to co-owners in the undivided property and that too when
their number is two. Shafi'i law recognizes pre-emption only among co-sharers.
• Both Shia and Shafi'i law do not recognize pre-emption on the ground of
• According to Hanafi law, when a property is sold there is a co-sharer, a participant
in the amenities and appendages of the property, and a neighbour owning an
adjoining immovable property.
• Shia law confines pre-emption to co-owners in the undivided property.
• Shafei law recognizes pre-emption only among the co-sharers

Parties

• Vendor: the person who owns the property and is willing to sell the property.
From the illustration, X is the owner of the property and he decides to sell it.
• Vendee: the stranger to the property and who buys it. From the illustration, Z is
the stranger to the property. The third person was involved.
• Pre-emptor: the neighbour, the co-sharer or heir, from the illustration Y has land
adjacent to X. Therefore, neighbour – pre-emption right holder.
 Development through cases

• Justice Mitter dealt with the case of Sk. Kudratullah v. Mahini (1869), in 2 folds;
firstly, whether the right of pre-emption exists before the actual sale of the
property. and secondly, whether the property which is subjected to the right of pre-
emption is passed on full ownership to the purchaser?

• Justice Mitter’s response to both questions was negative and affirmative

respectively. And concluded that the right to pre-emption is nothing but the mere
right to repurchase.

• After 16 years the case of Gobind Dayal v. Inayatullah explained the real nature of
the right of pre-emption. It was observed that, first, it is unlawful to sell a property
without informing the neighbour. It is up to the neighbour either to take it or leave
it. Second, the concept of pre-emption exists in all joint properties. And preferential
right arises if the vendor fails to inform the coparcener (neighbour). Hence, right
Bishan Singh v. Khazan (1958), the Supreme Court summarized the rules and
nature of pre-emption:

a. The right of pre-emption is the right to offer the property to be sold. It is the
inherent right or the primary right of the adjacent property’s owner.
b. It is the remedial right of the pre-emptor to follow the thing sold.
c. It is not the right to repurchase; it is the right of substitution.
d. It is right to acquire the whole property, not the part of it.
e. Preference is the essence of the right.
f. The right provided is weak and can be defeated by appropriate methods
 When does right arise
1 . In cases of Sale
The right to claim pre-emption arises when the property is subjected to a valid sale.
Merely an intention to sell can’t be grounds for claiming the right of pre-emption. The
sale excludes inheritance, gift, waqf, and bequest of a lease in perpetuity and the sale
includes exchange. The sale must be bonafide.
2. When the Sale is Completed
Mere intention to sell can’t give rise to the right to claim. The right to make a claim
arises when the sale is completed. According to Muslim law, a sale is considered to be
completed when the purchaser pays the vendor and the possession is transferred/
delivered by the vendor. It might not be necessary that the execution of an instrument
of sale is according to the Transfer of Property Act 1882. Section 54 of TPA states that,
the sale of property of the value of Rs. 100 and upwards is not complete unless made
through a registered instrument. Further, the High Court of Patna and Calcutta stated
that the right of pre-emption doesn’t arise until registration is completed as per TPA
A
• In Sitaram vs. Ziaul Hasan . The privy council held that the intention
of the parties should be looked at in determining what system of law
was to be taken as applying the date of completion of the sale.

• Supreme Court Held in Radha Krishnan laxminarain vs. Shridhar. The

transfer of property where TPA is applied has to be under the
provisions of that Act only and Mohammaden law or any other
personal law of transfer of property cannot override the statute.
Therefore, unless the title has passed in accordance with the Act, no
right to enforce pre-emption arises.
When right does not arise?
1. Gift
2. Sadaqa
3. Waqf
4. Inheritance
5. Bequest
6. Lease
 When right is lost
The right of pre-emption is lost in the following manner:

1. Omission to claim or waiver; or excessive delay in demanding it: when the person entitled to this
right, either expressly or impliedly waived it or omits to assert immediately his right.
2. Death of pre-emptor: the right to pre-emption dies with the death of the pre-emptor, where the
pre-emptor dies before enforcing it, under the Hanafi law. Under Shafi’s and Shiite law, the right
to pre-empt delegates upon the pre-emptor’s heirs is in proportion to their right of inheritance.
3. Forfeiture of right: the right of pre-emption is forfeited in the following conditions:
4. Where the pre-emptor releases it for consideration,
5. Tries to dispose of the subject of pre-emption to a stranger,
6. Partition is made of a property in respect of which the right of pre-emption can only be claimed
by coparceners,
7. There is some statutory disability with the pre-emptor as regards the purchase of the land in
question concerned.
 Types
• The right of pre-emption is available to owners of pre-emptive tenements
only, that is, any of the following three types of ownerships:
1. Shafi-i-Sharik
2. Shafi-i-Khalit
3. Shafi-i-Jaar

1. Pre-emption on the basis of co-sharers (Shafi-i-Sharik)

• The owner of an undivided share in the immovable property previously
inherited from a deceased person. In the case where the other co-owner
sells his share to someone without first offering it to his co-sharer, then the
co-owner has a right to claim it back from the outsider. Nothing except the
sale will bring to life the right of pre-emption. The right of pre-emption can’t
2. Pre-emption on the basis of a participator in immunities and
appendages (Shafi-i-Khalit)
The pre-emptor is known as a participator in immunities and
appendages
There are three ways in which a person may be considered to be a
Shafi-i-Khalit:
1. he may be the owner of a dominant heritage;
2. he may be the owner of a servient heritage:
3. the property sold, also the property of the pre-emptor may be a
dominant heritage to a third person’s property.
3. Pre-emption on the basis of neighborhood or vicinage
(Shafi-i-Jaar)
• The owner of adjoining immovable property, which is a
neighbor. The right of pre-emption on the ground of the
vicinage doesn’t extend to the estate of large magnitude; it is
confined to houses, gardens, and small pieces of land. Where
more than one pre-emptor belongs to different categories,
the first category or class excludes the second, and the
second excludes the third.
 Who can pre-empt
Pre-emption arises from the following categories of persons. The following three persons
may be pre-emption:

• Co-sharer by Inheritance (Shafi-i-Sharik)

• Participator in Immunities & Appendages (Shafi-i-Khalit)
• Owner of Adjoining Property (Shafi-i-Jar)
• Pre-emption enforcement requisites; There are three formalities or necessary steps that
are to be followed strictly for claiming Shufa, they are known as three demands:

• The First demand- Talab-i-Mowasibat

• The second demand- Talab-i-ishad
• The third demand- Talab-i-tamlik pre-emption
 Application of pre-emption in India
• In the case of Dig amber Singh v. Amhad (1941), the Privy Council held that there are four grounds on
which a claim for pre-emption may be based in India.

• Muslim law
• The right of pre-emption might be claimed under Muslim law when pre-emption is not related to customs
or statutes.. It applies to Muslims throughout India and it is part of the personal law. In the case of
Ibrahim Saib v. Muni-mi-ud-din and Mohd. Beg v. Narayan Megha Ji Patil the court observed and held
that pre-emption restricts the freedom of sale/ transfer property under the Transfer of Property Act,
1882, and the Indian Contract Act.

• By custom
• The right may be claimed on the basis of custom, in the absence of statutory law of pre-emption.
Whenever there is any inconsistency between the customs and the Muslim law of pre-emption, the
customs will prevail. The right of pre-emption based on custom is even applicable to Hindus, only in
definite localities. For example, parts of the U.P, Bihar, Maharashtra, and Gujarat. Even among Hindus, the
law of pre-emption has become customary law. The right of pre-emption is extended to Hindus but only
after being established. And the burden of proving custom lies on the person who establishes it.
By statute
• The law of pre-emption is applicable under the following statutes:

a. Oudh Laws Act, 1876

b. Punjab pre-emption Act, 1913
c. Agra Pre-emption Act, 1922
d. C.P. Land Revenue Act, 1917
e. Berar Land Revenue Code, 1928
By contract
• There are certain cases where the right of pre-emption arises by contract between the
sharers. In the wajib-ul-arz of various villages, especially in Uttar Pradesh, contacts of
pre-emption were founded. It is governed by the terms of the contract only. It is
irrelevant whether the terms of the contract align with the provisions of the Muslim
law of pre-emption. The terms of the contract will have an overriding effect.
 Constitutional Validity

Before the 44th Constitutional Amendment Act, 1978

• The law of pre-emption infringes the fundamental right to hold and dispose of property,
guaranteed under Article 19(1)(f) of the Constitution?

• Article 19(1)(f) of the Constitution of India states that all citizens have the fundamental right to
acquire, hold and dispose of the property. Also, as per clause 5, reasonable restrictions can be
imposed, in the interest of the general public.

• Several High courts held that pre-emption on the ground of vicinage is void, being an
unreasonable restriction under Article 19(1)(f), but pre-emption between co-sharers (she-i-
Sharik) or owners of dominant and Shafi-i-khalif, is protected by clause (5) i.e., reasonable
restriction.
• In Bhau Ram v. Baij Nath Singh (1961), the Supreme Court held that pre-emption by vicinage,
restricts the right to dispose of property and not in the public interest, the restriction imposed
was not reasonable. Additionally, it divided society based on caste and religion which is
• After the 44th Constitutional Amendment Act, 1978
• After the amendment of Article 19(1)(f)- right to property and Article 31 was
taken away from the Constitution and it was subjected to Article 300A. The
question was raised whether the judiciary can be used to implement
customary rule (by vicinage) on the grounds of caste and religion prohibited
under Article 15 of the Constitution.

• In the case of Razzaque Sanjansaheb Bagwan v. Ibrahim Haji Mohd (1998),

the right of pre-emption was claimed on the ground by the vicinage, having
property adjacent to the suit house. The Supreme Court observed and held
that the law of pre-emption constructed on vicinage is void and
unconstitutional, hence, the claim was dismissed.
Problems
1. The owner of the plot of land X is entitled to irrigate X by drawing
water from the channel running over plot Y, which adjoins another
plot Z which however is not irrigated by the channel. Y is sold. The
owner of X and Z claim pre-emption. Who is entitled to a decree?

2. A owns a house that he sells to B. M owns a house north of A’s house

and is entitled to the right of way through that house. N owns a house
towards the south of A’s house, separated from A’s house by a partition
wall and having a right of support from that wall. Both M and N claimed
pre-emption of the house sold by A to B. Who will succeed?
3. K, a Muslim, offers to sell his share of a house to D, a shafee (pre-emptor).
D refuses to buy it. K thereupon sells it to E, a stranger. Can D claim pre-
emption?

4. One of the co-owners of a house transfers his share to his wife instead of
her dower. Can the co-sharer claim pre-emption?
 SUBJECT-MATTER OF PRE-EMPTION
Only landed property, including houses, land or garden, may be pre-empted. A
zamindari may also be pre-empted by a co-sharer holding a demarcated share at
the zamindari.
Musha (undivided share in joint property capable of
division)may be pre-empted by a co-owner.
LEGAL EFFECTS OF PRE-EMPTION
1. When the claim of pre-emption is complete, the pre-emptor steps in the
shoes of the buyer.
2. If the sale has been completed when the claim to the right of pre-emption
is enforced, the original buyer becomes the new seller, and the preemptor, the new buyer.
3. The pre-emptor does not become liable for any contingent charges incurred by the buyer, such as
brokerage or agency.
4. The buyer is entitled to receive or retain the rents and profits of the land
during the interval between the date of its sale to himself and its transfer
 LOSS OF PRE-EMPTION RIGHT
• The right of pre-emption is lost in the following three ways:
• 1. omission to claim, waiver, or excessive delay in demanding it:
• 2. death of pre-emptor before enforcement; and
• 3. forfeiture of right.
• 1. Omission to claim or waiver. ― A person entitled to pre-empt loses this
• right if he expressly or impliedly waived it (for example if he says, “I have
• made void the shufa", or, "have caused it to drop"), or omits to assert
• immediately his right.
2. Death of pre-emptor.― Under Hanafi law, the right of pre-emption is
extinguished when the pre-emptor dies before enforcing it by suit, even if he
made the two demands. Under Shafi'i and Shiite law, however, the right to pre-
empt devolves Upon the pre-emptor's heirs in the proportion of their right of
inheritance.“

3. Forfeiture of right. ― The right of pre-emption is forfeited if:

a) the pre-emptor releases it for consideration; or
b) tries to dispose of the subject of pre-emption to a stranger; or
c) partition is made of a property in respect of which the right of pre-emption
can only be claimed by coparceners; or
d) there is some statutory disability with the pre-emptor as far as the purchase of
land in question is concerned.
For example, a Punjabi buys land in Nagaland where land cannot be