The word pre-emption is a right of substitution conferred on someone either by statute, custom or contract. The right is to step into the shoes of the vendee preferentially, on the terms of sale already settled between the vendor and vendee. [Vijayalakshmi vs. B. Himantharaja Chetty, (1996) 9 SCC 376] In the words of Mulla, “The right of Shuffa or Pre-emption is a right which the owner of the immovable property possesses to acquire by purchase another immovable property which has been sold to another person.” The Muslim law of pre-emption is to be looked at in the light of the Muslim law of succession.
Under Muslim law, the death of a person results in the division of his property into fractions. If an heir is allowed to dispose of his share without offering it to the co-heirs, then it is likely to lead to the introduction of strangers into a part of the estate with resultant difficulties and inconveniences. In view of this, the law of pre-emption imposes a limitation or disability upon the ownership of the property to the extent that it restricts the owner’s unfettered right to transfer of property and compels him to sell it to his co-heir or neighbor, as the case may be.
The Classification of Pre-emptors
- The shafi-i-sharik or a co-owner in the property.
- The shafi-i-khalit or a participator in appendages. This expression means a person who is entitled to such easements as a right of way, or discharge of water.
- The shafi-i-jar or owner of an adjoining property.
The right of pre-emption arises from full ownership, and it is immaterial that a pre-emptor is not in possession of his property. It is the ownership and not possession which gives rise to the right of pre-emption.
Right of Pre-emption
The right of pre-emption arises only in two types of transfer of property – sale, and exchange. When it arises in respect of a sale, then the sale must be complete, bonafide and valid. [Najam-un-nissa vs. Ajaib Ali, (1900) 22 All 342] Similarly, the right of pre-emption arises in respect of exchange when it is complete, bonafide and valid.
The right of pre-emption does not exist in respect of a gift, sadaqah, wakf, inheritance or lease. It does not apply to a mortgage also, but if a mortgage is foreclosed, then the right of pre-emption arises.
It has been held in various cases that the court should look into the real nature of the transaction. A deed which is called a gift, if it is, in fact, a sale, then the right of pre-emption will arise. [Bhagwan Dutt vs. Brij, 1938 Oudh 27]
The right of Pre-emption when parties belong to different sects or schools and when some of the parties are non-Muslims
Pre-emption involves three parties: the pre-emptor, the vendor, and the vendee. When all of the parties belong to same sect or school no difficulty arises. But difficulties crop up when parties belong to different schools or to different religions. It appears to be established that the right of pre-emption can be claimed only if the law applicable to the vendor recognizes pre-emption. [Pir Khan vs. Fyizaz Hussain, (1914) 36 All 488]
Under Shia law, the right of pre-emption cannot be claimed by a non-Muslim pre-emptor where the vendor and vendee are Muslims. Also, where the law of pre-emption is lex loci, or arises by custom, or is created by contract, then it is immaterial that some of the parties are non-Muslims.
Formalities Necessary for the Exercise of the Right of Pre-emption
The Muhammedan law of pre-emption is a law of technicality, and the existence of the right depends upon the full and complete observance of formalities. Non-observance of any of the formalities will be fatal to the suit of pre-emption. The two essential formalities are called “two demands”. Fyzee says that there are three demands, though admits that the “third demand” is not really a demand.
First demand or talab-i-muwasibat
This requirement lays down that the pre-emptor asserts his claim immediately on hearing of the sale, but not before. This is called talab-i-muwasibat or the first demand. No specific form of asserting this demand has been laid down. It is imperative that the first demand must be made as soon as the fact of sale becomes known to the pre-emptor. Any improper or unreasonable delay will imply an election not to exercise the right of pre-emption. [Baijnath vs. Ramdhari, (1908) 35 Cal 402]
The first demand need not be made in the presence of witnesses. The first demand to be valid must be made when the sale has been completed. If a demand is made before the completion of the sale, it is totally ineffective.
Second demand or talab-i-ishhad
The pre-emptor should, as soon as practicable, affirm the intention of asserting his right by making the second demand wherein he refers to the fact that he had already made the right demand. This is called the second demand. No specific form of asserting this demand has been laid down.
It is imperative that the second demand should be made in the presence of two witnesses and in the presence of the vendor (if he is still in possession of the property), or in the presence of the buyer.
Third demand or talab-i-tamlik
The occasion of talab-i-tamlik will arise only if the claim is not conceded, and, therefore, the pre-emptor files a suit to enforce his right. Thus, the third demand is not an essential formality.
When the right of Pre-emption is lost
The right of pre-emption may be lost in the following cases: a) by acquiescence or waiver, b) by the death of the pre-emptor, c) by misjoinder, and d) by release.
By acquiescence or waiver – Acquiescence takes place when a pre-emptor fails to observe necessary formalities, such as making of demands. The right of pre-emption is also lost when the pre-emptor enters into a compromise with the buyer, such as when he agrees to cultivate the land (subject matter of pre-emption) with the vendee.
By the death of the pre-emptor – If the pre-emptor dies after making both the demands but before the filing of the suit, the right of pre-emption is lost. And his legal representative cannot file the suit.
By misjoinder – If the pre-emptor joins himself as a co-plaintiff with a person who is not entitled to claim pre-emption, then the right is lost and the suit must be dismissed.
By release – The right of pre-emption is lost if the pre-emptor releases the property for consideration to be paid to him. However, the right of pre-emption will not be extinguished, if, before the completion of the sale, the property was offered to the pre-emptor, but he refused to buy it since the right of pre-emption accrues only after the completion of the sale.
Effect of Pre-emption
Once a suit for pre-emption is decreed, the pre-emptor stands the pre-emptor stands in the shoes of the vendee and take the property subject to all existing equities. However, the original vendee is entitled to mesne profits, such as rents and profits, of the property between the date of the first sale and the date of transfer to the pre-emptor.
The right of pre-emption cannot be defeated, or affected by any disposition made by the vendee, nor can it be defeated by the death of the vendee.
A decree of pre-emption cannot be transferred by the pre-emptor. If the pre-emptor transfers the decree, then the transferee of the decree is not entitled to take possession of the pre-empted property. [Mehr Khan vs. Ghulam, 1922 Lah 308]