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Pre-Emption
(SHUFA)
INTRODUCTION
The law of pre-emption is based upon the text of Muslim Law and it is a well founded doctrine in India. It was unknown in India till the advent of Moghal rule. In the words of Mulla, “The right of shufa 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 foundation of the right of pre-emption is the human desire to avoid the inconvenience and disturbance which is likely to be caused by the introduction of a stranger into the land. The Muslim law of pre-emption is to be looked at in the light of the Muslim law of succession. Under Muslim law, death of a person results in the division of his property into fractions. If an heir is allowed to dispose of his share without offering it to other co-heirs, then it is likely to lead to the introduction of strangers into a part of the estate with resultant difficulties and inconveniences. ORIGIN OF "SHUFA" LIES IN THE SAYINGS OF THE PROPHET "A neighbour has a right, superior to that of a stranger, in the lands adjacent to his own." "The right of shufa holds in a partner who has not divided off and taken separately his share." "The neighbour of a house and the neighbour of land has a superior rightto those lands, and if he be absent, the seller must wait for his return;provided, however, that they both (reside) participate in the same road." [All three from Hedaya , p. 548] According to the tradition of the Prophet, it is morally objectionable, though not unlawful t sell property without offering it to the pre-emptor who is either a neighbour, participator in appendages of the property or its co sharer. Muslim jurists differed in interpreting these traditions and evolved different categories of persons who may claim the right of pre-emption.
2. DEFINITION OF "SHUFA" Mulla “The right of Shufa 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.” Mahmood J “… a right which the owner of certain immovable property possesses, as such, for the quiet enjoyment of that immovable property, to obtain, in substitution for the buyer, proprietary possession of certain other immovable property, not his own, on such terms as those on which such latter immovable property is sold to another person.” (Govind Dayal v. Inaytullah, ILR 7 All 775) MEANING OF "SHUFA": HOW IT EMERGES? Shufa means conjunction that is adjacent. It is an Anglo-Muhammedan term which literally means adding. It is a right to acquire by compulsory purchase, in certain cases, immovable property in preference to all other persons. It is a right which the owner of immovable property possess to acquire by purchase another immovable property which has been sold to another person. For example, when A , an owner of land, has B , the owner of the adjacent land, then it is the legal duty of A to offer it first to B if he decides to sell his land. And only when B shows no interest to buying it, then alone can A sell it to an outsider C. Where A sold the land to C without first offering it to B , then B has a right of pre-emption against C and can dispossess him after paying the same price which C paid to A. If the price appears inflated with a motive to defeat or discourage B , the pre-emption right holder, then the court may sit in judgment and may rationalise the price. The idea behind this type of pre-emption is to dislodge a stranger from disturbing the tranquillity of the neighbourhood. In a multi-ethnic society, this right assumes greater importance and relevance. Hanafi law recognises three categories: 1 ) a co-sharer in the property sold,
- a participator in the amenities and appendages of the property, and
- a neighbour owning an adjoining immovable property. Shia law restricts pre-emption to co-owners in the undivided property and that too when their number is two. Shafi'i law recognises pre-emption only among co-sharers. Both Shia and Shafi'i law do not recognise pre-emption on the ground of vicinage or on the ground of participation in appendages.
Calcutta High Court in Sk. Kudratullah v. Mohini Mohan Saha (1869) 4 Beng LR 134 Again, the question whether the sale of the property which is subject to the right of pre-emption passed on full ownership to the purchaser, was answered Justice Mitten in the affirmative. On the basis of these two above stated findings, Justice Mitter concluded that the right of pre-emption is nothing but the mere right of repurchase. Sixteen years after the Calcutta High Court judgment come, Justice Mahmood in an Allahabad high Court judgment - Govind Dayal v. Inaytullah, ILR 7 All 775 clarified the real nature of the right of pre-emption. Since then, his findings form the basis of the law of pre-emption and accepted by the Privy Council and the Supreme Court. Justice Mahmood edited two ahadith (traditions): It is not lawful fir any one lo sell till lie informs his coparcener (neighbour) who may take on leave it as die wishes and if he was sold without such information, the coparcener has a preferential right to the share (Aini). Pre-emption exists in all joint properties, whether land, or house, or grove. It is not proper for him (owner) to sell till he has offered it to his coparcener, who may take it or reject it; and if the vendor Mils to do this, his coparcener has the preferential right to it until he is informed (Muslim). It is perfectly clear from the above traditions that the very concept of pre- emption necessarily involves the existence of the right before sale. Discussing the nature of the right, Justice Mahmood said that on the basis of Hedaya , sale is not the cause of pre-emption, it is the situation of the properties in question; at the same time, the right to enforce the pre-emptor's right comes into being after the sale. This means that neither the sale of every property nor the sale to every other person would give rise to the right. As explained later, the right arises only in certain situations. Any action by pre-emptor before actual sale is premature. Thus, the law of pre-emption creates a legal servitude running with the land. Sale is not the real cause of pre-emption. The real cause is the situation of the properties in question. The right comes into being after the sale which clearly shows the intention to dispose of the property. The right exists, therefore, independently of and antecedent to the sale.
It is a kind of preferential right: The right of pre-emption is a kind of
preferential right which the owner of an immovable property possesses to
acquire by purchase another immovable property adjacent to his own immovable proprty which has been sold to another person for the quiet enjoyment of his immovable property. It is a right of Substitution: The right of pre-emption is not a right to repurchase, but it is a right of substitution, entitling the pre-emptor to stand in the shoes of the purchaser. This view has been adopted by the Supreme Court of India in Bishan Singh v. Khazan Singh , AIR 1959 SC 838 where Justice Subba Rao summarised the rules of pre-emption thus:
- The right of pre-emption is not 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.
- The pre-emptor has a secondary right or a remedial right to follow the thing sold.
- 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.
- It is a right to acquire the whole of the property sold and not a share of the property sold.
- 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.
- 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. The statement that “it is not a right to repurchase” must be understood in its context. It means it is not a case of any repurchase, but a particular subsequent purchase under certain circumstances which compel the fresh buyer to resell. The requisites are:
- The pre-emptor must be the owner of immovable property in the neighbourhood of the property sold;
- There must be a sale of certain property not his own;
- The pre-emptor must stand in certain relationship to the vendor in respect of the property sold. About the nature of this right as to whether it is a personal right or an incident of property, there was a divergence of views between some High
1962 SC 1476 , the Supreme Court held the custom of pre-emption by vicinage, through a liability attached to property, operated as a restriction on the right to dispose of property: not being in public interest, this restriction was not reasonable; moreover, it divided society on the basis of caste and religion which is prohibited by Article 15 of the Constitution. The same view was maintained in Sant Ram v. Labh Singh 1965 SC 314. The decisions affected only the vicinage type, the co-sharer type custom was unaffected; it had already been recognised in AudhBehari Singh v. Gajadhar Jaipuria AIR 1954 SC. After the 44 th Constitutional Amendment Act 1978 The 44th Constitutional Amendment Act 1978 abolished Article 19(1)(f), therefore, after this Amendment right of pre-emption on the ground of vicinage has been revived. By the Constitution (44th Amendment) Act, 1978, the fundamental right to property enshrined in Article 19(1)(f) as well as Article 31 has been taken away from Part III of the Constitution and reduced to a simple constitutional right subject to "law" under Article 300-A. In this changed status, it is only of academic value to discuss the pros and cons of the decisions referred to above. However, the moot point that may still be raised is ― Can a State agency like the judiciary be used to implement customary rule (of pre- emption by vicinage) that requires discrimination on the ground of caste or religion emphatically prohibited by Article 15(1)? Our answer is in the negative. With the heralding of the 21st century, we have surely arrived at a point of time when the Supreme Court's pronouncement relating to pre-emption can be said to be perfectly compatible with the mood of the society. However, the above discussion has lost much of its relevance now: in A. Razzaque Sajunsaheb Bagwan v. Ibrahim Haji Mohd. Husain (1998) 8 SCC 83 , the right of pre-emption was claimed on the ground of being shafi-i-jar (vicinage), having property adjoining to the suit house. The Supreme Court held that the law of pre-emption based on vicinage was void and unconstitutional. The claim was disallowed.
APPLICATION OF THE LAW OF PRE-EMPTION IN INDIA
The Privy Council in Digamber Singh v Amhad (1915) 37 All 129 (PC) held that there are four grounds on which a claim for pre-emption may be based in India. These are: I. By Muslim Law
II. By By Custom III. By Statutes IV. By Contract By Muslim Law: Where there is no custom or statute relation to pre-emption, the right may be claimed under Muslim Law when both vendor and vendee are Muslims. The law of pre-emption is applied to Muslims throughout India as a master of justice, equity and good conscience, except in the State of hat. There the court refused to apply it on the ground that it imposed unwarranted restrictions upon the liberty to transfer property. In Bombay lol, it was held that pre-emption placed a clog upon the freedom of Saleunder the Transfer of Property Act and the Indian Contract Act. By Custom: In the absence of any statutory law of pre-emption, the right may be claimed on the basis of custom, if any. By custom, the law of pre-emption is also applied to Hindus in certain localities, like Bihar. If the custom is in variance with the Muslim law of pre-emption, the custom will prevail. Thus, where a custom does not require strict compliance with the formality of talab-i-ish-had , it would not be obligatory on the pre-emptor to observe it as a condition precedent to the enforcement of such a right. Pre-emption has become the customary law even among the Hindus.Thus, the customary right to pre-emption exists among the Hindus of Bihar (this entire discussion should be taken as regulated by the latest decision of the Supreme Court); Sylhet; parts of Maharashtra and Gujarat, such as Surat, Godhra and Ahmedabad; parts of U.P., such as Banaras, Muzaffarnagar, and Saharanpur; Delhi and Bengal. However, the right of pre-emption is extended to Hindus only after being established. The burden of proving a custom lies on the person who establishes it. Where, however, its existence is generally known and judicially recognised, it need not be proved afresh. A custom to be judicially recognised must be ancient and invariable. By statute : By statute, the law of pre-emption is applied in the following regions:
it is based is that each co-sharer having a right in every particle of the property, one co-sharer selling his share would thereby affect the enjoyment of his share by the other co-owner and this he cannot do without his consent. 19 Similar is the justification for Shafi-i-Khalit. Shafi-i-Khalit Such a pre-emptor is called participator in immunities (for example, exemption from some liability to which others are subject; entitlement to live in a judge's colony where only retired judges are entitled to live) and appendages (a small addition to a larger colony, a privilege to live in some exclusive area of a etc.). The right of way enjoyed since long on the land belonging to play person. There are three ways in which a person may be considered to be a Shafi-i- Khalit :
- he may be the owner of a dominant heritage;
- he may be the owner of a servient heritage:
- the property sold as also the property of the pre-emptor may be a dominant heritage to a third person's property. What is dominant and servient heritage? ― A owns a house which hesells to B. M owns a house towards the north of A 's house and is entitled to a right of way through that house. N owns a house towards the south of A house, separated from A 's house by a partition wall, and having a right of support from that wall. Both M and N claim pre-emption of the house to B. Here M is a participator in the appendages, while N is merely a neighbour, for the right of collateral support is not an appendage. M is, therefore, entitled to pre-emption in preference to N. It is immaterial that M's right of way has not been perfected by prescription under the Easements Act. In the above example, the house owned by M is a dominant heritage and the pre-empted house is a servient heritage, for M has the right of way through it. M would still remain a "participator" in the appendages if the pre-empted property were the dominant heritage and his property the servient heritage. In Bhau Ram v. BaijNath Singh and Sant Ram v. Labh Singh the Supreme Court has held the right of pre-emption valid when based on certain appendages like common staircases, common entrance, etc. Shafi-i-Jaar
The owner or neighbour of adjoining immovable property. (This, however, must now be read subject to the decision of the Supreme Court in the Bhau Ram case 24 holding pre-emption on the ground of vicinage as unconstitutional.) The right of pre-emption on the ground of the vicinage does not extend tothe estate of large magnitude but is confined to houses, gardens, and smallpieces of land. If there is more than one pre-emptor belonging to different categories, the first category or class excludes the second, and the second excludes the third. [See, illustration (1) below]. But if the claim be made by two or more persons belonging to the same class, they are entitled to equal shares of the pre-empted property on tendering their respective quotas of the purchase money. 29 Illustration A mansion is situated in a street which is not a public thoroughfare and belongs to two persons, one of whom sells his share. The right of pre-emption belongs in the first place to the other partner in the mansion. If he surrenders his right, it belongs to the inhabitants of the street equally, without any distinction between those who are contiguous and those who are not so. If they all surrender the right, it belongs to the owner of any house immediately contiguous to the house in question, even though not abutting on the private street. 26 Exceptions. ― There may be cases in which one person is considered to be co-sharer with the vendor in a closer and more intimate sense than another, and is on that ground allowed precedence [See, illustration (1) below]. There may also be cases in which a person who shares with the vendor the whole of a certain easement may have priority over one whose participation is less com plete [See, illustration (2) below]. Illustrations
- A group of houses belonging to different owners are situated on a street. In the same group of houses, there is a house belonging to two persons, one of whom sells his share in it. The right of pre-emption belongs first to the partner in the house, then to the owners of the group of houses, and then to the people in the street, who are all alike. If all these give up their rights, it belongs to the neighbour behind the mansion who has a door opening into another street,
As sale alone gives rise to the right of pre-emption, it is important that the exact point of time when the sale is said to be complete is known. According to an Allahabad decision of 1894, 30 a sale is complete wherethe price is paid and possession is delivered. It is immaterial that it does notamount to sale under the Transfer of Property Act. The Privy Council, however, held in Sitaram Bhaurao Deshmukh v. Jiaul Hasan 1921 SCC Online PC 42 that the intention of the parties must be considered in each case to decide which system of law is to be applied. This view has been rejected by the Supreme Court in Ram Saran Lall v. Domini Kuer AIR 1961 SC. The facts of the case were these― P executed a sale deed of a house on 31 January 1946 in favour of D and presented it for registration on the same day. On hearing of the sale, RS made a talab-e-muwathabat (the first demand) on 2 February 1946. The deed was copied out in the Registrar's books on 9 February 1946. RS filed a suit for pre-emption. D resisted the suit on the ground that the sale was completed only on 9 February 1946, and not earlier. Therefore, the demand was made prematurely. The Supreme Court (by 3 to 2) held that the demand was made prematurely and must fail. 33 Thus, the requirements of the Transfer of Property Act (TP Act), Sections 54 and 61, must be completed where so required. Earlier also, in Radhakishan Laxminarayan Toshniwal v. Shridhar Ramchandra Alshi AIR 1960 , the Supreme Court had held that a transfer of property had to be in compliance with the TP Act only where so required by it, and Muslim law or any other personal law of transfer of property could not override the statute. "The right of pre-emption is a weak right... the courts would not go out of their way to help the pre-emptor. It is neither illegal nor fraudulent for par ties to a transfer to avoid and defeat a claim for pre-emption by all legitimatemeans." Whether transfer in lieu of dower is sale? ― In Fida Ali v. Muzaffar Ali ILR (1883) 5 All 65, the Allahabad High Court held that such a transfer is sale, provided it is in satisfaction of a previous obligation. Later on, in Ghulam Abbas v. Razia Begam AIR 1951 ALL, a Full Bench of the Allahabad High Court took the view that transfer in lieu of dower amounts to sale. On the other hand, the Oudh Chief Court held it to be a hiba- bil-ewaz. Fyzee opines that the Oudh view "appears to be more in consonance with justice".
No right of pre-emption in transfers other than sale. ― The right does not arise in the following types of property transfers, whether for consideration or no consideration.
- Gifts (no consideration)
- Sadaqa (no consideration)
- Waqf (no consideration)
- Inheritance (no consideration)
- Bequest (no consideration)
- Lease, even though in perpetuity (for consideration)
- Mortgage (for consideration)
- Conditional sale (for consideration) The waqif has no right of pre-emption on behalf of the waqf property; nor can God, as the ultimate sovereign and owner of property, claim pre-emption on behalf of the foundation. The conception of God being impleaded as a party in a claim before a Qazi is so foreign to Muslims that Muslim jurists have rarely discussed whether a suit can be filed on behalf of God Almighty. (Girraj Kunwar v. Irfan Ali, AIR 1952 All 686). Sale of leasehold interest in the land does not give rise to the right of pre- emption as held by the Supreme Court in Munni Lal v. Bishwanath Prasad (AIR 1968 SC 450). There must be full ownership in the land pre-empted and the pre-emptor also must have full ownership to maintain a suit for pre-emption, because reciprocity is the basis of the Muslim law of pre-emption. 10. DIFFERENCE OF RELIGION Difference in religion of buyer, seller and pre-emptor. If all parties are Muslims, there is no problem and the law of pre-emption will be applicable. But it cannot be applied in the following cases (consequently, no pre-emption).
- If all the parties are 1lindus, and there is absence of a relevant custom
- If the vendor and vendee are Hindus, but the pre-emptor is a Muslim.
- If the pre-emptor is a Hindu, and the vendor and vender are Muslims
- If the vendee is a Muslim, and the pre-emptor and vendor are Hindus.
- If the vendor is a Muslim, and the pre-emptor and vendee are Hindus. This is so because Muslim law is a personal law and not the commonlaw of the land, and the rights and obligations must be reciprocal.
- If the pre-emptor and vendor are Muslims, but the vendee is a Hindu.
- If the vendor is a Shiite and the pre-emptor a Sunnite, then Shia law shall apply according to Allahabad High Court, and Sunni law according to Calcutta High Court.
- If the vendor is Sunni and pre-emptor Shia, Shia law will apply. This is so because the right of pre-emption must have a reciprocal duty towards the vendor, i.e. if in future the present pre-emptor sells the property, the present vendor may opt to pre-empt―at that time he must be entitled to do so. Now, since with Shia vendor Shia law applies, the Sunni pre- emptor in the above example will lose; thus, there is absence of reciprocity. (Reciprocity means A should be allowed to pre-empt the sale by B only if B could also pre-empt the sale by A .) Illustrations
- A , a Sunni, sells his land to B , a Sunni. His neighbour C , a Shia, sues for pre-emption on the ground of vicinage. Pre-emption will not be allowed. Shia law which is applicable in this case does not recognise pre-emption on the ground of vicinage.
- A , a Shia, sells his land to B. C , a Sunni neighbour, claims pre-emption on the ground of vicinage. In this case, pre-emption should not be allowed according to Allahabad High Court view which recognises Shia school in this case. Pre-emption will be allowed by Calcutta High Court, but this view does not hold good now after the Supreme Court verdict striking down pre-emption on the basis of vicinage as unconstitutional. Can a person be compelled to bear an obligation without a corresponding right? Fyzee approves this principle of Muslim law of reciprocity. ― "In India, all religions are treated with equality, and, therefore, in this branch of the law the principle of reciprocity should be logically applied. Hence, on general principles, it would be unfair to apply the law of pre-emptor and a create rights in favour of persons who would not be subject to corresponding obligations." FORMALITIES TO BE FOLLOWED STRICTLY TO CLAIM “SHUFA” There are three necessary steps known as the three demands, for claiming Shufa. The first demand (“Talab-I-Mowasibat")
On receiving information of the sale, the pre-emptor must immediately delay his intention to assert his right (messiah literally means "to jump"). The idea is of a person jumping from his seat as though startled by news of the sale). The haste in which this demand is to be made is highlighted by the Heday where it says that if a pre-emptor receives the information of sale by letter, and the information is contained in the beginning of the letter, and he reads on v, the end without making his demand, the right is lost, (This, however, www not be taken literally, it is only an example). The law simply requires extreme promptness. A delay of 12 hours was held in an Allahabad case to be too long. So alasa delay of 24 hours was considered too long by the Nagpur High CourtCalcutta case is typical: the pre-emptor, on hearing of the sale, entered thinghouse, opened a chest and took out a sum of money to pay to the buyer), andthen made the first demand, he was denied the right to pre-empt because of delay. No witnesses are necessary, nor any particular language or form, for making this demand. The pre-emptor cannot make a delay by taking the plea that he had reasonto believe the real price should be much lower than that notified to him. Being a feeble right, "as it is the de-seizing of another of his property merely in order to prevent apprehended inconveniences" (Hedaya, p 550), the formalities must be strictly observed. (Mulla). The Allahabad High Court has held that it being a weak right, any legitimate device is sufficient to defeat it. The law is that time demand should be made in a reasonable time. What time is reasonable, is a question which is to be answered on the facts of each case. (Rajendra Kumar v. Rameshwar Das Mittal, AIR 1981 All 391) The requirements of talab were abolished by a government notification of 1927 in the former Jaipur State. The second demand ("Talab-i-ishad") The pre-emptor must, with the least practicable delay, make a second demand. either personally or through an agent. He must 1) refer to his first demand, 2 do so in the presence of two witnesses, and 3) in the presence of either the vendor(if he is in possession) or the purchaser or on the premises.
- As the pre-emptor takes the property from the buyer, and not the seller, the buyer must always be a party to the suit. But after the pre-emptor has taken possession of the land, there is no need of seller. LOSS OF PRE-EMPTION RIGHT The right of pre-emption is lost in the following three ways:
- omission to claim, waiver, or excessive delay in demanding it:
- death of pre-emptor before enforcement; and
- forfeiture of right. 1. Omission to claim or waiver. ― A person entitled to pre-empt loses this right if he expressly or impliedly waived it (for example if he says, “I have made void the shufa ", or, "have caused it to drop"), or omits to assert immediately his right. 2. Death of pre-emptor .― Under Hanafi law, the right of pre-emption is extinguished where the pre-emptor dies before enforcing it by suit, even if he made the two demands. Under Shafi'i and Shiite law, however, the right to pre-empt devolves uponthe pre-emptor's heirs in the proportion of their right of inheritance." 3. Forfeiture of right. ― The right of pre-emption isforfeited if: a) the pre-emptor releases it for a consideration; or b) tries to dispose of the subject of pre-emption to a stranger; or c) partition is made of a property in respect of which the right ofpre-emption can only be claimed by coparceners; or d) there is some statutory disability with the pre-emptor as regards the purchase of land in question is concerned. For example, a Punjabi buys a land in Nagaland where land cannot be purchased by a non-Naga.
