Meaning of Pre-emption

The right of shufaa or pre-emption is a right which the owner of an immovable property possesses to acquire by purchase another immovable property which has been sold to another person.

The Procedure of Pre-emption with case example

Nature of Right

Preferential right

A concise but lucid statement of the law is given by Plowden J. in Dhani Nath v. Budhu[1] thus:

“A right to the offer of a thing about to be sold is not identical with a right to the thing itself, and that is the primary right of the pre-emptor. The secondary right is to follow the thing sold, when sold without the proper offer to the pre-emptor, and to acquire it, if he thinks fit, in spite of the sale, made in disregard of his preferential right.”

The aforesaid passage indicates that a pre-emptor has two rights:

(1) inherent or primary right, i.e., a right to the offer of a thing about to be sold and

(2) secondary or remedial right to follow the thing sold.

Mahmood J. in his classic judgment in Gobind Dayal v. Inayatullah[2] explained the scope of the secondary right in the following terms:

“It (right of pre-emption) is simply a right of substitution, entitling the pre-emptor, by means of a legal incident to which sale itself was subject, to stand in the shoes of the vendee in respect of all the rights and obligations arising from the sale, under which lie, derived his title. It is, in effect, as if in a sale deed the vendee’s name were rubbed out and pre-emptor’s name inserted in its place”.

It is well-established that the right of pre-emption is a right to acquire the whole of the property sold in preference to other persons (See Mool Chand v. Ganga Jal (1930) I.L.R. 11 Lah. 258, 273.).

Rival claimant of pre-emption

Sometimes, there are many rival claimant of pre-emption right. For example, upon the transfer of property, a group of pre-emption may claim and exercise the right of pre-emption, but, other group or person, also having the pre-emptor right may also claim the said right.

In that case, the plaintiff is bound to show not only that his right is as good as that of the vendee but that it is superior to that of the vendee. Decided cases have recognized that this superior right must subsist at the time the pre-emptor exercises his right and that that right is lost if by that time another person with equal or superior right has been substituted in place of the original vendee.

Courts have not looked upon this right with great favour, presumably, for the reason that it operates as a clog on the right of the owner to alienate his property. The vendor and the vendee, therefore, permitted to avoid accrual of the right of pre-emption by all lawful means.

The vendee may defeat the right by selling the property to a rival pre- emptor with preferential or equal right.

To summarize:

(1) The right of pre-emption is not a right to the thing sold but a right to the offer of a thing about to be sold. This right is called the primary or inherent right.

(2) The pre-emptor has a secondary right or a remedial right to follow the thing sold.

(3) It is a right of substitution but not of re-purchase, i. e., the pre-emptor takes the entire bargain and steps into the shoes of the original vendee.

(4) It is a right to acquire the whole of the property sold and not a share of the property sold.

(5) Preference being the essence of the right, the plaintiff must have a superior right to that of the vendee or the person substituted in his place.

(6) The right being a very weak right, it can be defeated by all legitimate methods, such as the vendee allowing the claimant of a superior or equal right being substituted in his place.

[1] 136 P. R. 1894

[2] (1885) I.L. R. 7 All. 775, 809.