Mukherjee Law of Pre- Emption for Land, Building Property and Partition

Law of Pre-emption (Right of First Refusal)

The Law of Pre-emption refers to the legal right that gives certain people priority to purchase immovable property (land, buildings, etc.) before it is sold to an outsider. It's commonly applied in partitioned property or in co-ownership situations. The principle is based on maintaining peaceful possession, preventing strangers from entering close-knit property relationships, and protecting communal or family rights.

1. Pre-emption in Land and Building Property:

Who Can Claim Pre-emption?

• Co-sharers or Co-owners: A person who shares ownership in the property has the primary right to buy it if another co-owner wants to sell.
• Adjacent Property Owners: People owning neighboring land may have the right to buy it before it's sold to an outsider.
• Tenants or Occupants (in some cases): Existing lawful occupants might be given priority in purchasing the property they use.

When Does It Apply?

• When part of jointly owned land or building is being sold to a third party.
• When ancestral property or community property is about to change hands.

Purpose:

• To prevent the entry of strangers into family or communal holdings.
• To preserve social and cultural cohesion within communities.

Conditions for Pre-emption:

• There must be a valid sale or transfer about to happen.
• The pre-emptor must show a genuine interest or existing right (as a co-sharer, neighbor, etc.).
• Must act promptly—any delay can result in losing the right.

2. Pre-emption in Partition:

Partition Context:

• When joint property is partitioned (divided among co-owners or heirs), each party gets a specific portion.
• Pre-emption rights can be invoked if a co-sharer decides to sell their portion after partition.

Post-Partition Sale:

• Even after partition, former co-sharers may have a right of pre-emption, depending on the law of the land (varies by country/state).
• The aim is to prevent outsiders from acquiring a share in what was once joint family property.

3. Key Legal Aspects:

Origin:

• The concept comes from Islamic law, but it has been incorporated into the statutory laws of several countries, including India and Pakistan.
• In India, it was historically recognized under customary law and codified in some states.

Statutes & Acts:

• Some regions have specific Pre-emption Acts (like the Punjab Pre-emption Act, U.P. Pre-emption Act, etc.).
• In many cases, it has been abolished or limited by modern legislation to encourage free market transactions.

4. How It Works (Process):

1. Notification of Sale: The seller must inform eligible pre-emptors about the proposed sale.
2. Exercise of Right: A pre-emptor must formally express interest (often by filing a legal suit) to enforce their right.
3. Payment: The pre-emptor needs to match the sale price offered by the outsider.
4. Court Involvement: If there's a dispute, the matter is settled through the courts.

5. Limitations of Pre-emption Rights:

• Cannot apply to gifts, wills, or inheritance.
• Some laws restrict it only to agricultural land.
• Many jurisdictions have abolished or limited the right for being contrary to modern economic principles.

Example:

Suppose A and B own a piece of land jointly. A decides to sell his share to C, a stranger. Before that happens, B (the co-owner) has a right of pre-emption—he can buy A's share on the same terms and prevent C from acquiring the property.