Right Of Pre-Emption Is A 'Very Weak Right'; Cannot Be Exercised Recurringly: SC [Read Judgment]

The right to pre-emption is a "very weak right" and is capable of being defeated by all legitimate methods including the claim of superior or equal right, the Supreme Court has reiterated.

The bench comprising Justices Sanjay Kishan Kaul and Dinesh Maheshwari observed that  right of pre-emption is a right of substitution which cannot be exercised recurringly, but only once.

The question considered in this appeal was whether the limitation shall commence from the first sale deed after coming into force of the Rajasthan Pre-Emption Act, 1966 or from any other subsequent sale on the basis of Article 97 of the Limitation Act, 1963? In this case, the plaintiff sought to enforce such right after three sale transactions had taken place in the past involving the subject immovable property in the years 1945, 1946 and 1966.  A sale deed dated 10.01.1974 was challenged by the plaintiff seeking a decree of pre-emption. The Trial Court noted that even prior to the coming into force of the said Act, laws of pre-emption did exist in Ajmer. The sale deed dated 5.11.1966 came into existence after the said Act came into force. It was finally held that without challenging that sale deed, the suit would not be maintainable and would be barred by limitation. The First Appellate Court upheld this view. The High Court, allowing the appeal, held that the earlier sale deeds would have to be assailed and concluded that each sale of such property gives a fresh cause of action. 

While considering the appeal, the Apex Court bench described the nature and origin of right to pre-emption. Referring to Barasat Eye Hospital & Ors. v. Kaustabh Mondal, it said:

The historical perspective of the right of pre-emption shows that it owes its origination to the advent of the Mohammedan rule, based on customs, which came to be accepted in various courts largely located in the north of India. The pre-emptor has been held by the judicial pronouncements to have two rights. Firstly, the inherent or primary right, which is the right to the offer of a thing about to be sold and the secondary or remedial right to follow the thing sold. It is a secondary right, which is simply a right of substitution in place of the original vendee. The pre-emptor is bound to show that he not only has a right as good as that of the vendee, but it is superior to that of the vendee; And that too at the time when the pre-emptor exercises his right. In our view, it is relevant to note this observation and we once again emphasise that the right is a "very weak right" and is, thus, capable of being defeated by all legitimate methods including the claim of superior or equal right. 

Disagreeing with the High Court, view, the bench observed that such a right is available once - whether to take it or leave it to a person having a right of pre-emption. While upholding the Trial Court order, the bench observed:

We suppose that the aforesaid answers the dilemma, i.e. whether the right of pre-emption can be enforced for an indefinite number of transactions or it is exercisable only the first time. We opine that it is only exercisable for the first time when the cause of such a right arises, in a situation where the plaintiff-pre-emptor chooses to waive such right after the 1966 Act becoming operational. Section 9 of the said Act operates as a bar on his exercising such right on a subsequent transaction relating to the same immovable property. We also wonder what really remains of this right of pre-emption after so many years in the facts of this case when the purchaser has been enjoying it for more than four decades!

Case: RAGHUNATH (D) vs. RADHA MOHAN (D) [CIVIL APPEAL NO. 1442 OF 2016]

Coram: Justices Sanjay Kishan Kaul and Dinesh Maheshwari

Counsel: Adv Irshad Ahmad and Adv Christi Jain 

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