Pre-emption Rights in Property Disputes: Supreme Court Verdict Explained

The Supreme Court recently delivered its judgment in the case of Jagmohan and Another v. Badri Nath and Others, which revolves around the exercise of pre-emption rights under the Punjab Pre-emption Act, 1913. The case involved a dispute over a plot measuring 719 square yards situated in Light Railway Bazar, Jagadhri, Haryana.

The respondents (plaintiffs) had filed a suit for possession by pre-emption of the property in question, claiming that they had been tenants in the property since 1949 and had the preferential right to purchase it as per the provisions of the 1913 Act.

Background of the Case

The property in dispute was originally owned by Anarkali and others and was sold to the appellants (defendants) through a registered sale deed dated January 25, 1983, for ₹43,000. The respondents, exercising their pre-emption rights, filed a suit on January 25, 1984, offering to pay the same sale consideration.

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Legal Arguments by the Appellants

The appellants raised several arguments challenging the pre-emption claim:

• The Haryana government had issued a notification on October 8, 1985, under Section 8(2) of the 1913 Act, which removed pre-emption rights for properties falling within municipal areas. Since the property was located in the municipal limits of Jagadhri, the respondents could not claim pre-emption.
• In the landmark case of Shyam Sunder v. Ram Kumar, the Supreme Court had ruled that pre-emption rights must exist on the date of sale, the date of filing of the suit, and on the date of the first court’s decree. Since the suit was decreed after the notification was issued, it should have been dismissed.
• The suit was time-barred because the limitation period for pre-emption suits was one year. The sale deed was registered on January 25, 1983, and the suit was filed on January 25, 1984, which was beyond the limitation period.

Legal Arguments by the Respondents

The respondents countered these arguments as follows:

• The notification of October 8, 1985, only applied to sales of land and not to immovable properties with structures. Since the property in question was a rolling mill, it did not fall within the purview of the notification.
• The respondents relied on Section 16 of the 1913 Act, which granted tenants pre-emption rights for urban immovable properties. They contended that their tenancy, which began in 1949, entitled them to claim the property.
• Regarding limitation, they cited the Limitation Act, 1963, which allowed for the exclusion of the date of registration. By this calculation, their suit was filed within time.

Supreme Court’s Analysis

The Court examined the legal provisions and upheld the respondents’ right of pre-emption. Key observations included:

• The Punjab Pre-emption Act, 1913, differentiated between agricultural land and urban immovable property. The Court ruled that the term ‘land’ in the notification of October 8, 1985, referred only to vacant land, and not to properties with built-up structures.
• The notification issued under Section 8(2) of the 1913 Act exempted only sales of land from pre-emption. Since the property in question was a constructed rolling mill, the notification did not apply.
• Based on the Limitation Act, 1963, the Court found that the suit was filed within the prescribed period and was not time-barred.

Final Judgment

The Supreme Court upheld the pre-emption rights of the respondents and dismissed the appeal filed by the appellants. The Court ruled that the notification did not apply to the sale of constructed properties and that the suit was filed within the limitation period.

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This case reaffirms the significance of tenancy rights in pre-emption claims and clarifies the scope of governmental exemptions under pre-emption laws.

Petitioner Name: Jagmohan and Another.
Respondent Name: Badri Nath and Others.
Judgment By: Justice Rajesh Bindal, Justice C.T. Ravikumar.
Place Of Incident: Jagadhri, Haryana.
Judgment Date: 06-02-2024.

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