Right Of Pre-Emption Is A Very Weak, Waivable Right That Can Be Defeated By All Legitimate Methods ; J&K&L High Court Sets Aside Decree Granting Prior Purchase Under J&K Right Of Prior Purchase Act
Safiya Malik
The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Sanjay Dhar has held that pre-emption is an inferior right that can be defeated or be treated as permanently waived. The dispute concerned a purchaser’s acquisition of an un-partitioned house and adjoining land from a co-sharer’s estate, against which the pre-emptor sought substitution and possession, claiming a statutory first-purchase entitlement. The Court decided that the purchaser was entitled to retain ownership and possession, finding that the pre-emptor’s choice to pursue an injunction suit without seeking pre-emption relief, despite knowledge of the sale, constituted waiver by conduct. The Court added that once a pre-emptor waives the right, the entitlement is lost permanently and cannot be revived for later sales. The appeal was allowed, the decree granting possession to the pre-emptor was set aside, and the deposited security was directed to be refunded.
The dispute concerned a claim of pre-emption over a jointly purchased property comprising a house and adjoining vacant land in Poonch Town. The property was originally acquired in 1976 through a shared purchase by two co-owners for a total consideration of Rs. 11,000. After the death of one co-owner, his share devolved on his estate, which later entered negotiations for sale.
Before the sale, the pre-emptor issued a notice in December 1986 expressing interest in purchasing the devolved share. The estate proceeded with the sale in May 1987 through a registered sale deed stating the consideration as Rs. 40,000. The pre-emptor acknowledged that she was aware of this transaction at the time of filing a later suit.
In June 1987, the pre-emptor instituted a suit for injunction before the Sub Judge, seeking to restrain alleged encroachment on her demarcated portion of the house and land. The plaint in the injunction suit referred to the 1987 sale but did not seek substitution as a pre-emptor or raise a claim to restrict or replace the purchaser under a right of first purchase. The injunction suit was later dismissed for non-prosecution, and its contents, including references to partition, were admitted by the pre-emptor.
Both sides led oral evidence in the present proceedings. The pre-emptor appeared as a witness and produced supporting witnesses asserting that the property remained unpartitioned and referenced shared access features. The purchaser appeared as a witness and produced defence witnesses denying the existence of a common staircase or entrance and asserting that two exclusive portions stood demarcated and separately possessed.
The statutory basis discussed for the claim included the Jammu and Kashmir Right of Prior Purchase Act under which notice through counsel was issued and the Evidence Act, 1872 cited on questions concerning estoppel by conduct and acquiescence.
The Court recorded that “the plaintiff through her counsel had issued a notice in terms of Section 19 of the Act… in which she had expressed her intention to purchase his portion of the suit property.” It noted that despite this, “on 03.06.1987, the plaintiff filed a suit… seeking an injunction… In the said suit, the plaintiff did not seek the relief relating to enforcement of her right of pre-emption.” The Court stated that the plaintiff “has admitted having filed the aforesaid suit and has also admitted its contents including… the factum of partition of the property.”
The Court further recorded: “After abandoning the suit for injunction… she filed another suit for enforcement of her right to prior purchase challenging the sale deed… just a few days prior to expiry of limitation.” It noted that the plaintiff “was aware about the sale deed… This finds mention in the plaint filed by the plaintiff in the said suit.” It also recorded that the facts relating to the earlier suit “were brought to the notice of the Court by appellant/defendant No.1.”
On the legal character of pre-emption, the Court quoted the Lahore High Court decision that “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… a very weak right… [that] can be defeated by all legitimate methods.” It further quoted the Supreme Court which held that the right “is a claim which is generally looked upon by courts with certain amount of distaste.” It quoted another decision explaining that pre-emption is a “right of substitution but not of re-purchase.”
The Court cited extensive observations from Indira Bai v. Nand Kishore, including: “Estoppel is a rule of equity… preventing the inducer from taking advantage… having thus persuaded… the purchaser… he somersaulted to grab the property.” It also recorded that “failure to serve notice… does not render the sale… ultra vires” and that the right may be “abnegated either in writing or by conduct.”
Turning to the plaintiff’s conduct, the Court stated: “This conduct of the plaintiff… allowed the appellant to believe that she had waived her right of pre-emption.” It noted that the plaintiff had admitted that the appellant demolished his portion during pendency of the injunction suit and that this “prompted her to abandon her suit.” It observed: “from the aforesaid circumstances… it can safely be concluded that the plaintiff by her conduct had waived her right to pre-emption.”
The Court further stated that the trial court “did not go into the effect of conduct of the plaintiff in omitting to sue for pre-emption… This aspect… had an important bearing… [and] has landed itself into grave error.” It also recorded: “it will be highly inequitable to grant decree of possession… when more than 38 years have elapsed… Asking him to vacate… by paying him a meagre sum… would result in grave injustice.”
The Court allowed the appeal and held: “the present appeal is allowed and the impugned judgment and decree dated 14.01.2001 passed by the learned trial court is set aside. The amount that has been deposited by the plaintiff/respondent No.1 with the trial court shall be refunded to her. Trial court record along with a copy of this judgment be sent back.”
Advocates Representing the Parties:
For the Petitioners: Mr. K. L. Pandita, Advocate
For the Respondents: Ms. Mehrukh Syedan, Advocate
Case Title: Iqbal Singh v. Durga Devi & Others
Case Number: CFA No.19/2001
Bench: Justice Sanjay Dhar
