The right of pre-emption is not a recurring right, it is only exercisable for the first time the cause of such a right arises: SC

Raghunath (D) by LRs. V. Radha Mohan (D) Thr. LRs & Ors.

Civil Appeal No. 1442 of 2016 decided on 13.10.2020

 

BENCH: S K Kaul, Aniruddha Bose, Krishna Murari, JJ

FACTS:

The suit was filed by predecessor-in-interest of respondent (original plaintiff) seeking a decree of pre-emption against the predecessor-in-interest of the appellant (original defendant).

The original plaintiff sought to enforce the right of pre-emption after three sale transactions had already taken place involving the subject immovable property in the years 1945, 1946 and 1966. After the last sale transaction the Rajasthan Pre-Emption Act, 1966 became operational. In the suit out of which this appeal arises, the plaintiff’s suit for pre-emption over a transaction effected in 1974 was resisted on the ground of being barred by limitation.

Trial Court decreed the suit of the plaintiff. The first appellate court also agreed with the finding of the trial court. Appeal was filed in the High Court which concluded that each sale of property gives fresh cause of action and the suit was filed by the plaintiff well within the limitation period. Hence, the present appeal in the Supreme Court.

Supreme Court allowed the appeal.

ISSUES:

1.      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?

Held: The court held that the loss of right mandated under Section 9 of the 1966 Act is absolute and the plain reading of the provision does not reveal that such right can re-arise to the person who waives his right of pre-emption in an earlier transaction.

The period of limitation has to be as per Article 97 of the Limitation Act which states that it is one year from the date when the sale is registered.  The period of limitation shall commence from the first sale deed.

2.      Whether the right of pre-emption can be enforced for an indefinite number of transactions or it is exercisable only the first time?

Held: The court held that the right of pre-emption 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 right on a subsequent transaction relating to the same immovable property.

    Such a right is only available once- whether to take it or leave it to a person having a right of pre-emption. If such a person finds it is not worth once, it is not an open right available for all times to come to that person.

3.      Whether the right of pre-emption is a recurring right, i.e., every time the property is sold, the right would rearise, in a case the pre-empting plaintiff himself has chosen not to exercise such right over the subject immovable property when sold to another purchaser earlier?

Held: At this point the Court held that it would not be appropriate to adopt legal reasoning making such a weak right, some kind of a right in perpetuity arising to a plaintiff every time there is a subsequent transaction or sale once the plaintiff has waived his right or pre-emption over the subject immovable property. The right of pre-emption is not a recurring right.

 

[ORIGIN, NATURE AND MEANING OF RIGHT TO PRE-EMPTION:

The court also threw light on the origin, nature and meaning of the right to pre-emption. The right of pre-emption holds its origin to the advent of the Mohammedan rule based on customs.

The pre-emptor has two rights, firstly, the inherent right or primary right, i.e., right for the offer of a thing about to be sold and secondly, the remedial right or the secondary right to follow the thing sold. The secondary right of pre-emption is simply a right of substitution, in place of the original vendee and the pre-emptor 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 and such superior right subsists at the time when pre-emptor exercises his right.

The right of the pre-emptor is a very weak right and is capable of being defeated by all legitimate methods including the claim of superior or equal right.]