An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949” 1 Section 24 of the Non-Agricultural Tenancy Act, 1949 Provides- “ (1) If a portion or share of the non-agricultural land held by a non- agricultural tenant is transferred, one or more co-sharer tenants of such land may, within four months of the service of notice issued under section 23 and, in case no notice had been issued or served, then within four months from the date of knowledge of such transfer, apply to the court for such portion or share to be transferred to himself or to themselves, as the case may be. (2) The application under sub-section (1) shall be dismissed unless the applicant at the time of making it deposits in Court the amount of the consideration money or the value of the portion or share of the property transferred as stated in the notice served on the applicant under section 23 together with compensation at the rate of five per centum of such amount. (3) If such deposit is made, the Court shall give notice to the transferee to appear within such period as it may fix and to state what other sums he has paid in respect of rent for the period after the date of transfer or in annulling encumbrances on the property and also what other amounts, if any, have been spent by him, between the date of the transfer and the date of service of the notice of the application, in erecting any building or structure or in making any other improvement in the portion or share of the property transferred. The Court shall then direct the applicant, including any person whose application under sub-section (4) is granted, to deposit within such period as the Court thinks reasonable such amount as the transferee has paid or spent on these accounts together with interest at the rate of six and a quarter per centum per annum with effect from the date on which the transferee made such payments or spent such amounts:
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An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Section 24 of the Non-Agricultural Tenancy Act, 1949 Provides-
“ (1) If a portion or share of the non-agricultural land held by a non-
agricultural tenant is transferred, one or more co-sharer tenants of such
land may, within four months of the service of notice issued under section
23 and, in case no notice had been issued or served, then within four
months from the date of knowledge of such transfer, apply to the court
for such portion or share to be transferred to himself or to themselves, as
the case may be.
(2) The application under sub-section (1) shall be dismissed unless the
applicant at the time of making it deposits in Court the amount of the
consideration money or the value of the portion or share of the property
transferred as stated in the notice served on the applicant under section 23
together with compensation at the rate of five per centum of such amount.
(3) If such deposit is made, the Court shall give notice to the transferee to
appear within such period as it may fix and to state what other sums he
has paid in respect of rent for the period after the date of transfer or in
annulling encumbrances on the property and also what other amounts, if
any, have been spent by him, between the date of the transfer and the date
of service of the notice of the application, in erecting any building or
structure or in making any other improvement in the portion or share of
the property transferred. The Court shall then direct the applicant,
including any person whose application under sub-section (4) is granted,
to deposit within such period as the Court thinks reasonable
such amount as the transferee has paid or spent on these accounts
together with interest at the rate of six and a quarter per centum per
annum with effect from the date on which the transferee made such
payments or spent such amounts:
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Provided that if the correctness of any amount claimed to have been paid
or spent by the transferee on any such account is disputed by any
applicant the Court shall enquire into such dispute and, after giving the
transferee an opportunity of being heard, determine the amount actually
paid or spent by the transferee on any such account and shall then direct
the applicant to deposit the amount so determined with interest at the rate
of six and quarter per centum per annum as aforesaid within such period
as the Court thinks reasonable.
(4) (a) When an application has been made by one or more co-sharer
tenants under sub-section (1) any of the remaining co-sharer tenants
including the transferee, if one of them, may within the period of four
months referred to in the said sub-section or within one month of the
service of notice of the application, whichever is later, apply to join in the
said application, and any co-sharer tenant who has not applied under sub-
section (1) or has not applied to join under this sub-section, shall not have
any further right to purchase under this section.
(b) Such application to join as a co-applicant shall be dismissed unless
within such period as the Court may fix, the applicant deposits in Court
for payment to the applicant under sub-section (1), such sum, as the
Court shall determine as the share to be paid by him for the purposes of
sub-section (2).
(c) If such deposit is made, the Court shall grant the application to
join and thereafter such applicant shall be deemed to be an applicant
under sub-section (1).
(5) If the deposits required under sub-section (2) or clause (b) of sub-
section (4), as the case may be, and under sub-section (3) are made, the
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Court shall make an order allowing the application and directing that the
deposits made under sub-sections (2) and (3) shall be paid to the
transferee or to such persons as the Court thinks fit.
(6) Notwithstanding anything contained in any other law for the time
being in force the Court shall, if the applicant under sub-section (1) or
any person whose application under sub-section (4) is granted disputes the
correctness of the amount of the consideration money as stated in the
notice issued under section 23, inquire into such dispute before making an
order under sub-section (5) and after giving the transferee an opportunity
of being heard determine for the purposes of this section the amount of
the consideration money which the transferee has actually paid for the
transfer of the portion or share of the property and the amount so
determined shall be deemed to be the consideration money referred to in
sub-section (2) and where the amount of the consideration money has
been so determined the deposit made under that sub-section shall for the
purposes of sub-section (5) be the amount so determined together with
the compensation at the rate of five per centum of such amount.
(7) In making an order under sub-section (5) in favour of more than one
co-sharer tenant, the Court may apportion the property comprised in the
portion or share transferred among the applicants in such manner as it
deems equitable after taking existing possession into consideration; the
Court shall so apportion the said property or portion thereof on the
request of any applicant and, in this case, may require the applicant who
makes such request to deposit, within such period as the Court may fix,
such further sums as the Court considers necessary for equitable
distribution among the remaining applicants:
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Provided that no apportionment order under this sub-section shall operate
as a division of the tenancy.
(8) From the date of making of the order under sub-section (5)-
(i) the right, title and interest in the share or portion of the non-
agricultural land accruing to the transferee from the transfer shall, subject
to any order passed under sub-section (7), vest free from all
encumbrances, which have been created after the date of transfer, in the
co-sharer tenant whose application to purchase has been allowed under
sub-section (5),
(ii) the liability of the transferee for the rent due from him on account of
the transfer shall cease, and
(iii) the Court, on further application of such applicant, may place him in
possession of the property vested in him.
(9) An appeal from any order of a Court under this section shall lie to the
Civil Appellate Court having jurisdiction to entertain such appeals. (10)
Nothing in this section shall take away the right of pre-emption conferred
on any person by Muhammadan Law.
(11) Nothing in this section shall apply to-
(a) a transfer to a co-sharer in the tenancy whose existing interest has
accrued otherwise than by purchase, or
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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(b) a transfer by exchange, or partition, or
(c) a transfer by bequest or gift (including heba but excluding heba-bil-
ewaz for any pecuniary consideration) in favour of the husband or wife of
the testator or the donor or of any relation by consanguinity within three
degrees of the testator or donor, or
(d) a wakf in accordance with the provisions of the Muhammadan Law, or
(e) a debottor or any other dedication for religious or charitable purposes
without any reservation of pecuniary benefit for any individual.
Explanation.- A relation by consanguinity shall for the purposes of this
sub-section, include a son adopted under the Hindu Law.”
INTRODUCTORY EVOLUTION OF PREEMPTORY
RIGHTS
Evolution of preemptory rights; Historical Development of Law of Pre-
emption from ancient time to date:
History of Origin: The law of preemption has a long historical
background behind it, which was traced from Roman law, as the right of
preemption was exercised in a contract of sale.1
Judicial opinions on the point whether preemption had been prevalent
in British India from before the advent of Muslims are not uniform. It was
observed by their Lordships of Allahabad High Court that the right of 1 6 Mad. 26
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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preemption as prevalent in British India was borrowed from Mohammedan
Law. 2
There is no indication of any such conception in the Hindu law and the
subject was not noticed or discussed either in the writings of Smite writers or
in those of later commentaries. Sir William Macknaghton in his Principles and
Precedents of Mohammedan law referred to a passage in the “Mahanirvana
Tantra” which, according to the learned author implies that rights of
Preemption was recognized as a legal provision according to the notions of
Hindus.
But in case law reported, his Lordship B. K. Mukherjee J. criticized the view
expressed by Sir William Macknaghton as incorrect on the ground that the
treatise of Mahanirvana Tantra is one on mythology, not on law and
admittedly a recent publication3. So relying on two Privy Council decisions
reported4 his Lordship Mukharjee observed that the law of Preemption was
introduced in this country by the Mohammedans. There was no Foundation for
Preemption in Hindu law.5
During the period of Muslim rulers the law of Preemption was administered as
a rule of common law of land in those parts of the Indian Sub-continent which
came under the domination of the Mohammedan rulers and it was applied
alike to Mohammedans and Zimmees (which included Hindus and Christians).
2 Govinda Dayal Vs. Inanayetullah; 37 Al 129 3 A. I. R. 1954 S. C. 41 4 L. R. 39 I. A. 101 & L. R. 42. I-A10 5 (39.1.A101; 35 Cal 915); 80; 44. 1.A 44 Cal 675
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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In course of time the Hindus came to adapt preemption as a customs for reasons of convenience.6
It is to be observed that the right of preemption was absolutely unknown in Bengal school of Hindi law and it has been said that there has been an influence of Islamic law in Bengal School of Hindu Law.7
From the history of the law of preemption, it appears that the preemption in village community has its origin in the Mohammedan law. It was unknown in Indian sub-continent before the Muslim Rule.8 So it will not be out of place to point out that since the days of Muslim rulers, the law of preemption was being administered by British India as a part of Mohammedan law and it in 1928 that it was first introduced in Bengal as part of general law relating to agricultural tenancy.9 So the history of law of preemption in Indian sub-continent was traced by John Edgeir.
During Muslim rules it was administered as a rule of general law of the land both for the Muslims and non-muslims and with the advent British in India, it was administered even to Muslims only on the ground of equity justice and good conscience. In the course of times customs of preemption grew up and were adopted among the village communities. In some cases the sharers in the village adopted or followed the rules of Muslim law of Preemption and in some cases the customs of village follows the rules of Mohammedan law of preemption. So the conception of preemption was unknown to Hindu law. In course of time Hindus in certain areas of Indian sub-continent adopter the law of preemption by custom. But the customary law was not universally applicable to all Hindus throughout Indian Peninsula.10
6 A. I. R. 1952 S. C. 1476 7 Dr. B. N. Datta’s Hindu Law of Inheritance, Page 137 8 39. 1. A 101; 1954 S. C. 417 9 In Bengal Tenancy Act, 1885, the provision regarding preemption was first introduced. 10 1954 S. C. 417
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Growth of the law of preemption by Custom amongst the non-muslims: From
the above we know that the law of preemption is essentially a part of
Mohammedan jurisprudence. It was introduced in Indian sub-continent by
Mohammedan judges who administered Mohammedan law. Under their
administration the Mohammedan law of the country was applied universally to
Mohammedans and non-muslims. In course of time preemption became
adopted by the Hindus as a custom.11 So the law of preemption as applies to
Hindus in those parts of Indian sub-continent where it was adapted as
accustom, was the Hanafi law, because Mohammedan sovereigns of India
were Sunnis of the Hanafi sects.12
The right of preemption was setup by the non-muslims on the basis of
custom. When a Hindu set up the rights of preemption on the basis custom, he
usually claims to have the same right of preemption as Mohammedan. It is to
be pointed out that there is a custom of preemption among the non-muslims
in the city of Benares of U. P, in Behar, certain part of Gujrat and districts of
Sylhet and it is governed by the rules of Muslim law of preemption except in so
far as such rules are modified by such customs.13 So where a custom of
preemption is found to prevail amongst the non-muslims in any particular
locality, it is presumably founded on a co-extensive with the Mohammedan
law. But there may be instances where the custom of preemption is prevailing
among the Hindus does not go the whole length of the Mohammedan law of
preemption. The court may in such cases administer a modified form of law as
11 I. L. R. 7 All 775 at 790 12 Mulla’s Mohammedan law, 15th edition, at page 204 13 60 Calcutta 694; 45 All 50
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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between Hindus. But the assertion of right by it must always be proceeded by
an observance of the preliminary formalities prescribes in Mohammedan law.14
When a right of preemption rests upon customs, it becomes the Lex Loci or the
law of the place and affects all lands situated in that place irrespective of the
religion, nationality or domicile of the owners of the lands except where such
incidents are proved to be a part of the customs itself.
It will not be out of place to point that customs mf preemption grew up
or were adopted among the village communities. In some cases the shares in
village adopted or followed the rules of Mohammedan law of preemption.
In other cases, where a custom of preemption exists, each village
community has a custom of its own which varies from the Mohammedan law
of preemption and is peculiar to the village in its provisions and incidents. A
custom of preemption was doubtless in all cases the result of agreement
amongst the share-holders of the particular village. Right of preemption has
also been created by contracts between the shares in a village.15
It is to be observed that the law of preemption is a personal law, it is not
territorial law, and it is not merely personal right but an incident annexed to
the land.16
Codification: It’s worthy to mention that the law of preemption in
some provinces of erstwhile British India, were embodied in statutes. Among
those statutes may be mentioned—
The Oudh Law Act (Act 18 of 1876)
The Punjab Laws Act (Act IV of 1872)
The Punjab Preemption Act ( Act II of 1905)
The Preemption Act (Act I of 1913)
14 1954, S. C. 417 15 Fyzee on Mohammedan law 3rd Edition, Page 330 16 1954 S. C. 417
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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The Agra Preemption Act (Act XI of 1922)
So in other parts of India, other than Oudh, Punjab and Agra, the operation of
law of preemption depended upon the customs. When the law is customary
the right is enforceable irrespective of the religious persuasion of the parties
concerned. When there is neither territorial nor customary, it is applicable only
between Mohammedans as part of their personal law unless the judiciary of
the place considers such law to be opposed to the principles of justice equity
and good conscience.
Latest Development of the Law of Preemption:
During the British rule the courts in British India took the view that a
stranger purchaser other than a member of joint family should not be entitled
to be placed in physical possession in any part of the family dwelling house
purchased by him. Some judges opined that it was inequitable with reference
to hindu customs and prejudices to permit a stranger to intrude himself upon
the privacy to a joint Hindu family residence, more practically, as happens in
many cases, a stranger is actuated by motives of enmity.
In case law reported I.L.R 5 Bom 499his Lordship Westropp C.J of
Bombay High court observed as follows:
“We also deem it a far safer practice, and less likely to lead to
serious breaches of the peace, to leave a purchaser to a suit for
partition, than to place him by force in joint possession with
members of a joint family which may not only be of different cast
but also of different race or religion.”
The second paragraph of 44 of T.P. Act takes away the right of stranger
purchaser of share of an undivided family dwelling house to ask for joint
possession thereof or to obtain such possession through court. It also gives
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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right to other co-shares of the family to prevent the stranger purchaser by
injunction from forcing an entry into the family residence, exercising any act of
joint possession along with them. But the said provision creates no positive
right so that if the stranger purchaser has somehow obtained possession, he
cannot be evicted, nor will a suit for perpetual injunction lie. In any case, the
stranger purchaser has the remedy of a partition suit open to him having
recourse to which he can get possession of the share purchased by him.
To meet the situation, “the partition Act(Act IV 1893) was enacted,
section 4 whereof confers on the co-sharer members of the undivided family a
right of preemption of the share transferred to a stranger- a right to buy the
same and prevent a partition of the family dwelling house with the stranger
purchaser. So, section 4 of the Partition Act, 1893is a logical sequel to section
44 of the Transfer of Property Act, 1882 and it is also a corollary of section 4 &
carries forward the law from which the latter provisions leaves it. Furthermore,
the partition Act is a Central Act and applies to all citizens of British India
irrespective of cast, religion and creed. So the section 44 of T.P. Act provides
no relief to the members of undivided family in such contingency but section 4
of the Partition Act comes to the rescue of the members of the undivided
family and gives them the right to purchase the share obtained by stranger.17
And there by to prevent the transferee, from a member of a joint family who is
an outsider from forcing his way in to a dwelling house in which the other
members of transferor’s family have the right to live. In other words a
member of a family is entitled to claim that the transferee of a share, who is a
stranger, shall accept the money valuation of his share and not the share. So
where a cash-rarer owner of the house under takes to purchase the share of
17 49 C.L.J 136; 1929 CAL 269.
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the transferor, the court shall make valuation of such share and direct the sale
of the share to such member.
In the early twenties, the Royal commission on Agriculture appointed by
the British government reports its view that subdivision and fragmentation of
agricultural holdings, were among the causes of the agricultural backwardness
of the then India. As a measure of checking fragmentation of agricultural
holdings, right of preemption was introduced in Bengal tenancy Act, 1885 by
the amendment Act IV of 1928. So section 26F of the amendment Act of 1928
conferred right of a holding if a holding or a share or portion thereof was
transferred by the tenant to person who is not a co-sharer tenant.
It is to be noted that the landlords right of preemption was abolished by
Bengal Tenancy Amendment Act VI of 1938 and the amended section 26F
conferred right of preemption on the co-sharer tenant instead.
Then came the East Bengal State Acquisition and Tenancy Act, 1950 (Act
XXVIII of 1951) the object of which is the abolition of zamindaries i.e. rent
receiving interests. So, in the context of new setup, the Bengal Tenancy Act
1885 with a gradation of tenants and complicated system of tenancy laws
became unnecessary and was replaced by the provisions of part V of The State
Acquisition and Tenancy Act, 1950. So the part V of the SAT Act has provided
for the right of preemption which contains in section 96 of SAT Act and the
said section confers the right of preemption on a co-sharer riyats as well as
contagious raiyats and applies to all agricultural holdings. So right of
preemption under section 96 of SAT Act is confined to agricultural land only.18
18 20 D. L. R. 1197; 21 D. L. R. 633
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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Meaning of Preemption :
The word “preemption” literally means right of purchasing in
preference to others.19 Preemption equates – “pre” means “before” and
“emption” means “purchase”, both being derived from the Latin “prae” and
“emption respectively.20
So legally it means – before purchase, and this is the legal right of buying
a thing before all others. This is a right which the adjacent owner of an
immovable property possesses to acquire by purchase another immovable
property sold to another person.21
It is to be mentioned that legally the preemption means before
purchase but statutorily or according to legislature it becomes after purchaser.
Anyhow, in the field of law, the word “preemption” means a valuable right. It is
really a right of post preemption rather than preemption.
So in case law reported in 32 DLR 54 AD, their lordships of the Appellate
Division of the Supreme court have rightly observed- ‘A citizen’s right to deal
with his property freely, in view of the special statutory provision, bears a clog
i.e. subject to the right of preemption, The statutory provision providing such a
right curtailing owner’s right to deal with his property must be construed very
strictly. The right is allowed to claim in consideration of his necessity and not
as a matter of luxury. This principle always be kept in view while determining
the claim of preemption.’
As to the origin of the right of preemption their lordships of Privy Council
in case jaw reported in 42 I.A. observes “Preemption in village communities in
British India had its origin in the Mohammedan law as to preemption and was
19 Chamber’s Twenteenth Century Dictionary. AIYAR’S Judicial Dictionary. 20 The Oxford Dictionary 21 A.I.R 1962
An assignment on “preemption under section 24 of the Non-agricultural Tenancy Act,1949”
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apparently unknown in India before the time of Mughal Rules. In course of
time custom of preemption grow up and were adopted among the village
communities........... The object is as far as possible to prevent stranger to a
village from becoming sharers in the village.
The having had its origin in Muslim law, the system of preemption was
introduced into British India by Muslim Rulers and has subsequently taken over
in toto by their successor, the British Administrator, Since then, the law has
undergone a great changes and it is now an important branch of the land laws
which are in force in this country.
Nature of the Right of Preemption:
The right of preemption was a right of repurchase from the buyer22. In a
case law it has been observed that the right of preemption is not a right of
repurchase either from the vendor or from vendee, involving a new contract of
sale, but simply a right of substitution entitling the preemptor, by reason of a
legal incident, to which the sale was subject, to stand in the shoes of the
vendor in respect of all the right and obligation arising from the sale under
which he derived hi title. So right of preemption arises from ownership. It is a
ownership and not possession that gives rise to the right. The right cannot be
resisted on the ground that the preemptor is not in possession of his own
property. But the right of preemption is not a right of repurchase, on ht other
hand it is right of substitution in place of vendee23.
The right of preemption is an incident of property attached to the land itself.
The benefit as well as the burden of the right of preemption run with the land
can be enforced by or against the owner of the land for the time being,
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although the right of the preemptor does not amount to an interest in the land
itself.24
The Calcutta High Court was of the view that it was a mere personal
right. The right of preemption is a personal right if cannot be transferred. But
the view taken by Allahabad, Patna and the Bombay High courts was that the
right of preemption is an incident of property. So before the decision of the
case law reported in 1954 S. C 417, there was divergence of judicial opinions as
to whether the right of preemption is a mere personal right or an incident of
property. So the above mentioned case law settled the controversy and
affirmed the view that the right of preemption is not a mere personal right
alone, but an incident annexed to the land. Again the Supreme Court of India in
case law reported in A.I.R 1958 S. C 838, pointed out that a right to offer at
thing about to be sold this being the primary or inherent right and that
preemptor, has a secondary right or a remedial right to follow the thing sold. It
is simply a right of substitution in place of original vendee and is not a right of
transfer. The ordinary law of preemption under which the preemptor has the
right to follow the land is the subject matter of the sale deed, becomes
expanded and the land allotted to the vendee in lieu of the land which may
have been subject to preemption, also becomes subject to preemption in the
same way as the original holding or tenancy. The right of preemption is
convented with the property and is not repurchase.25
It is to be pointed out that the right of preemption is a clog to transfer
and this is an extraordinary right. The entire land is clogged with an
encumbrance in the shape of the right of preemption. The vendor possesses
the property not absolutely but subject to the right of preemption. The vendee
24 A.I.R 1954 S. C417 25 22D.L.R 275 S.C
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purchases the property not as whole free from all liabilities but as one
unpossessed with particular quality or incident.
So preemptor steps into shoes of the preemptee transferee and the
order5 of preemption can only be exercised against such transferee or his
successor-in-interest alone and not against anybody.26
It is to be noted that after the introduction of the right of preemption in
section 26F of B.T. Act, it is called a statutory right. The right is statutory and is
to be exercised within the scope of the statute itself.27 The right of preemption
is connected within property and it is not a right of repurchase from the
vendee. The right of preemption is the essence of a right of substitution.28
Preemption implies involuntary transfer
In such a transfer, the rufe is that the transferee takes the transfer at his
own risk. There is no question of any contract and there is thus no scope for
the claim for refund of the preemption money owing to a defect in the
preemptee’s title.
Now question arises whether the right of preemption is a preventive
right or predatory or Felconic right:
In case law reported in 19 D.L.R. 136 S.C 1967 P.L.D. 153 S.C. there
lordships of the than Supreme Court of Pakistan, described the fight of
preemption as a predatory or Felonic right. But with great respect a for there
Lordships, preemption cannot be called a predatory or falconic right. There is a
gulf of deference between the preventive right and predatory right. The one is 26 28D.L.R 61 AD. 27 22 D.L.R 535 Dac. 298 Dac. 30 D.L.R 75 H; 28 22D.L.R 275 S.C; P.L.D. 1970 S.C 229
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employed to save the right and the other is employed to grab the lands of
others. The rightful owner tries to save the land by preventing the stranger
purchaser to intrude in. So he cannot be called a felcon or a bird of prey as
sweeping over the right to land of others. The co-sharer who protects the land
by preemption is not a stranger like felcon. The one co-sharer saves the land
from the hand of stranger purchase. So his action cannot be called a felconic
action. Rather the stranger purchaser has been trying to sweep over the co-
sharer; and the co-sharer derives away the stranger felcon by deposit of
consideration money. So the right of preemption is not predatory or felconic
action of the co-sharer who deposits. It is the preventive right against the
felconic action of the stranger purchaser.
So a co sharer’s right of preemption is an overriding right and once that
right is exercised, the other rights would vanish. The vendor is not deberred
from preempting a sale made by his transferee or purchaser. The vendor is
only debarred from preempting a sale made by him. The right of preemption is
a preferential right. So the law of preemption imposes a limitation or disability
upon the ownership of property to the extent that it restricts the owner’s
unfettered right to sell and compel him to sell the property to his co-sharer or
neighbor as the cases may be and the said law imposes a restriction upon the
right to acquire, hold and dispose of property. So, the right of Purchase created
by the statutory provision of preemption, attaches an obligation to a particular
status which binds the purchaser to hand over property purchase to the oblige
on receiving the price paid by him with compensation. The right of preemption
is not based on contract or custom. It is to be noted that a covenant of
preemption in a sale deed is purely personal contract but it does not create
any interest in immoveable property. The rule of perpetuity did not apply to
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contract for preemption. A covenant for preemption which binds the parties
and their heir is void.29
So subject of preemption must be strictly construed as it operates as
clog on a citizen’s right todeal with his property in the way he likes.30
Classification of preemptory right:
The law of preemption as is applied in this country my in the first
instance be classified into:
1. Statutory law and
2. Customary law
Customary law has govern by adoption by the people from long continued
usage and convenience; Status law either (a) codification of customary law
already in existence or(b) a creation of the legislature out of the policy of
government from time to time.
Besides above, there is a third class, namely personal law such as the
Mohammeden law of preemption, which applies mainly to Muslims as a
matter of justice ,equity and good conscience .
Basically the law of preemption is of two kinds according to the ground
on which the right is founded, namely
1. right to preemption on the ground of co-shareship and
2. Right to preemption on the ground of vicinage.
Here is also a third ground, namely participation is common easement
right or relation of dominant and servient tenants, which is peculiar only to the
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Application made under sub - section (1)of the section 24 of the N.A.T
Act:
If a portion or share of any non –Agricultural land is transferred, a co-
sharer tenant of such land may apply for transfer of that portion or share of
land to him. The co-sharer tenant must apply within 4 months of the service of
the notice issued under S-23 of that Act and in case no notice has been issued
or served he may apply within 4 months of the date of knowledge of the
transfer. There is also a condition that an application for pre-emption must be
accompanied by a deposit of the entire consideration money or the value of
the property transferred as stated in the notice served, together with
compensation at the rate of 5 per centum thereon. Its non fulfillment will
render the application liable to be summarily dismissed.
Application made under sub –section (4)of the section 24 of the N.A.T
Act:
Sub-section 4 gives the remaining co-sharer tenants an opportunity to
join as a co applicants in the pre-emption proceeding. It provides that when an
application has been made under sub-section 1 any of the remaining co-sharer
tenants including the transferee, if one of them, may within the period of 4
months as referred to sub –section 1 or within one month of the service of
notice of the application, whichever is later, apply to join in the application for
pre-emption.
The time for making the application can be taken to mean the time of
actual moving of the application in court and not the time filing the
application.74
74 1955, 08 DLR, 22.
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Any co- sharer tenant who will not apply either under sub-section 1 or under
sub –section 4 shall have not any further right to exercise the right of pre-
emption. Failure on part of a co-sharer to avail oneself of the remedy
prescribed by sub-section 4 does not deprive him of his remedy under sub –
section 1, the two remedies being alternative and independent.75A co-sharer
after service of notice on him may either join in the original case for pre-
emption or may bring a separate and independent case within time limit76.
One the several co-sharer tenants is entitled to pre-empt to the extent of his
own share in the pre-emption case77.
An application filed under sub-section 1 gives the right to the other co-
share tenants to join as co- applicant and once they file an application to join
as such and make the deposit, they shall be deemed to be co-applicants under
sub -section 1 and this right cannot be defected by subsequent withdrawal of
the original application.78
When the original application for pre-emption under subsection 01 fails
on the ground of limitation the co-applicants prayer for ratable pre-emption
under subsection 04 though made in time cannot be sustained79
No case for pre-emption under section 24 of the Act would lie when the
sole recorded tenant in a Khanda Khatian, sells his land80. Similarly in the case
of Nishkar Pan Vs Mahadeb Ghosh, it was held that where the finally published
record of rights indicates splitting up of the tenancies and separation of the
interest of the co-sharers, the co-sharers must be held to have ceased to be a 75 58 CWN975. 76 1967,20 DLR 480. 77 1969, 21 DLR, 647. 78 1964, 17 DLR, 565 79 1970, 24, DLR, 170. 80 1968, 73, CWN, 742.
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co-sharer of the land. Hence when one of them transfers his share the other
has no right of pre-emption.
Further , it is to pointed out that if a deed of sale is accompanied by
simultaneous agreement for re-conveyance , the right of that has arisen upon
the sale will not be suspend . The existence of a contemporaneous agreement
for resale will not preclude the other co-sharer from enforcing their right of
pre-emption81. Even a re-conveyance, if actually effected in pursuance of such
agreement would not bar the pre-emption proceeding.82 But the pre-emptor
will take the pre-empted property subject to the agreement for resale which
can be enforced against him if he had notice of agreement.83So a sale with a
condition of transfer does not exclude the operation ofpre-emption right.84
Again, no pre-emption can be claimed in case of deed of release, as deed of
release cannot confer title on any party.85 Further, where the transfer is simply
Benami no question of the right of preemption hereunder arises. So, transfer
occurring in section 24 of the said Act contemplates a transfer for
consideration of money and not transfer for any other consideration.
Essentiality of applicant’s interest in the property to file an application:
The right of pre-emption is not an indefeasible right. If during the
pendency of the proceeding of the pre-emptor ceases to be a co-sharer the
right is lost. In order to maintain a claim for pre-emption the pre-emptor
should have an interest in the holdings as a co-sharer tenant not only at the
time of filing of the application for preemption but also throughout the
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apply the same notwithstanding the misdescription of law in the cause title of
application.156
NAT Act is not affected by SAT Act as the right of preemption under
NAT Act is a vested right.157 Whether section 90 of the SAT Act and section 4
of Land Reforms Ordinance controls the Preemption proceeding under
section 24 of the NAT Act or not?
It is common knowledge that the government is the paramount title
holder of all lands in Bangladesh and as such the ultimate controller of the
quantity of land to be held by the tenants. So after the promulgation of SAT
Act only two kinds of permanent tenants, one for agricultural lands and
another for the non-agricultural lands, have been created, each holding land
directly under the government by virtue of the statutory gift as provisions in
the section 20 of SAT Act. The right of retention of retainable land on payment
of new rate of rent is the creature of statue and as such statutory right,
established between the government and the people of this country. Each
family is allowed to hold 60 standard bighas. 158\
With the emergence of Bangladesh, the government of the People’s
Republic of Bangladesh has made the new laws by amending the previous laws
for ameliorating the condition of the raiyats and tenants of this country as well
as to provide lands to the landless peasantry. By the promulgation of P.O. 98 of
1972 the land ceiling had been reduced from 375 standard bighas to 100
standard bighas. By ordinance No. 10 of 1984 it has been reduced to 60
standard bighas. The creation of this limitation in the quantity of land is
156 1967 PLR 305 Dac 157 16 DLR 77 158 Section 4 of the Land Reforms Ordinance, 1984
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absolutely in the hands of the Government, as the Government is the
paramount title holder of all lands in Bangladesh.159
It will not be out of place to observe that section 90 of SAT Act controls
the provisions of sections 7,8,9 and 21 of the NAT Act;160 but there is no
specific provisions in the section 24 of NAT Act and section 7 has pointed out
that section 24 will be guided by section 90 of SAT Act; though section 96 of
SAT Act lays down that before a preemptor is entitled to get preemption, he is
to show that the area of land in his possession does not exceed the maximum
limit he is entitled to retain under section 90 of SAT Act.161
So in each case of these cases (preemption U/S 24 of NAT Act and U/S 96
of the SAT Act) the quantity of land held by tenant or raiyat should not exceed
60 standard bighas. As it may be called the yardstick for determination of
capacity of tenant or raiyat to hold lands. So any attempt to take away and
settled land is not in excess of 60 standard bighas will be unauthorized in law.
The right of preemption is a statutory right and is a creature of statute.162 As
the preemption is in a manner of transfer by sale through the order of the
court, this certainly be hit by section 90 of the SAT Act and section 4 of the
Ordinance No. 10 of 1984.163
So from the above discussion it can be said without semi, demi,hemi on
a sting in the aplomb of the heart that the preemption proceeding under
159 48 DLR 93 AD 160 Vide Ordinance No.9 of 1967 161 21 DLR 599 162 30 DLR 75 163 1981 BCR 17 (AD)
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section 24 of the NAT Act will be controlled by section 90 of the SAT Act and
section 4 of the Land Reforms Ordinance, 1984.164
Pre-emption under section 24 of the NAT Act and pre-emption under
Muslim Law:
If a co-tenant files an application under section 24 and another bring a
suit under Muslim Law and either of them joins the other in his case, what will
be the position. Either the application under section 24 should not be
disposed of without hearing the suit under Muslim Law or both should be
heard together; in such case if the suit of the later succeeds on merits, the
application under the provision of the statute should be dismissed.165
Section 24(10) saves the right of preemption under Muslim Law. If
transferee is preempted under Muslim Law, no application for preemption
under this section will lie.166 This subsection lays down the provision in which
cases there cannot be any preemption. So preemption under Muslim Law
demanded formalities to be followed. The formality Talabi Moasibat is to be
carried out on the execution of sale deed. Under the Muslim Law there is no
obligatory provision for execution and registration of document for the
purpose of sale of immovable property.167
Important features of the right of pre-emption under section 24 of NAT
Act at a glance:
(1)The right of preemption is a statutory right and is a creature of a
statute.
(2) Section 24 gives the right of preemption to a co-sharer only. 164 35 DLR 79 165 21 DLR 211 Dac 166 Nalinaksha v. Abdul Jalil, AIR 1936 Cal. 398 167 1 BLD 34 (HD)
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(3)The right of preemption under section 24 has to be enforced by
application and not by suit.
(4)The right of preemption is to be exercised within four months from
the date of service of notice under section 23 or if no notice had been
served, then within four months from the date of knowledge of transfer.
(5)Right of preemption accrues on the transfer of non-agricultural land
which is not extinguished by subsequent reconveyance.
(6)Sale with a condition of retransfer does not exclude the operation of
preemption right.
(7)Partial preemption is not allowed under section 24 of the NAT Act.
(8)The right of preemption under section 24 of the NAT Act is a vested
right.
(9)Right of preemption under section 24 of the NAT Act is not affected
by section 96 of the SAT Act.
(10)In case of conflict between preemption under section 24 of the NAT
Act and under Muslim Law; preemption under Muslim law will prevail.
Procedural matters:
The section 24 further prescribes the procedure how the application for
preemption should be dealt with and disposed of.
who can apply for preemption: Co- sharers of a holding, when a portion
of share of non-agricultural land is transferred. Where a co-sharer by
inheritance or a co-sharer by purchase both apply for preemption , the
former’s right will prevail over the latter’s so long his right of
preemption in respect of tatter’s purchase survives.168 A co- sharer by
purchase to preempt a transfer of a share or portion of a holding
168 (37 dlr 138h, 33 dlr 113 ad 269ad 1983 bld 103 ad 35 dlr 54 ad 230 ad 34 dlr 225 h)
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although his own purchase is subject to right of preemption of other co-
sharer tenants. A person who claims to preemption the basis of himself
being a co-sharer by recent purchase, can do so only if his own deed of
purchase was registered before the registration of the transfer sought
to be preempted,169 So, as soon as transfer of share or portion of a
holding takes place right of preemption accrues to the co-sharer tenants
and by subsequent transferee of transferee takes the property subject
to that right whether the subsequent transfer is in effect against the
original transferee170 such subsequent transferee may be preempted.
Each party entitled to the right may apply separately and
independently171 a co-share tenant may either make an independent.
Application under sub-section (4) of section 24.172 so, a transferee who is
a co-sharer of the tenancy, may apply under sub-section (4) of section 24
to join as a co-applicant, but being the transferee he can’t make an
independent application under sub-section(1).173 Any co-sharer who fails
to apply either under sub-section(1) or under (4) of section 24 shall have
no further right of preemption. So, one of the several co-sharer tenants
is entitled to preempt to the extent of his own share.174 it is to be noted
here that co-sharer tenant includes the benamder of such tenant and
such benamder can apply further a purchaser subsequent to the transfer
sought to be preempted is entitle to the file a petition175 when a minor
sues, through his natural guardian being mother as a next friend , the
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24.193 So the deposit is to be made at the time of filling petition. (10 DLR 54; 17
DLR566;1969DLC 144).
Whether proportionate deposit can be made:
The answer is in affirmative we know that co-sharer tenant can join as
applicant under subsection (4) for rateable preemption. (1963 pld 364 DAC
1960 PLD ) claim for rateable compensation money or the value of the share of
the holding had not been separately stated in the document or notice, the
jurisdiction to make such an ascertainment to determine such value must be
held to be inherent in the court trying applying as being as an incident of
trial.194
Notice:
Subsection (3) of section 21 provides that notice of the proceeding
should be issued only after the deposit under subsection (2) of section 24 of
N.A.T Act, and served upon the transferee inviting him to file written
objection of whether sum he has paid since his purchase towards rent, taxes
etc and for annualing any encumberences. So the transferee is required to
appear and state what other sums besides the consideration mention in the
document, he has paid on account of property in respect of rent and for
annulling encumbrances on the property. Where no notice is served on the co-
sharer tenant, onus of proving the date of transfer does not lie on the co-
sharer.195 The court shall then direct the original applicant as well as the co-
applicants who have joined, to deposit the amount paid by the transferee on
the aforesaid accounts, with six and a quarter per cent per annum interest
calculated from the date of payment to the date of deposit. 193 (1981 BCR 293H, 1981 BLD 328AD, 30 DLR 88 AD, 1986BLD 32H) 194 17BLd 618 DAC 195 35 DLR 238 HD.
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Where the value of improvement can be claimed by transferee-
preemptee:
The same can be claimed in the preemption proceeding.196 But in case
law reported in 30 DLR 75H, it has been held that improvement made by the
preemtee does not create a clog to the right of preemption and does not alter
the nature of transfer.
From the sub-section 3 of section 24 it is apparent that the transferee
preemptee is entitled to be re-imbursed in respect of amount legitimately
spent by him in paying off or discharging the encumbrances created before the
transfer; but he cannot claim compensation for encumbrances created by him
after the date of transfer.197
Building constructed by the transferee on the property after his
purchase are encumbrances created by him and he is not entitled to get the
costs of the building from the preemptor under sub-section (3)198 the
transferee is not entitled to claim compensation for improvements done since
his purchase, where preemption right is upheld.199 On the contrary, the
transferee is liable for damages if he has committed any act of waste or
caused deterioration of the value of the property by cutting trees and digging
earth etc, during the pendency of the preemption proceeding.200
196 Vide subsection (3) of section 24 (DLR 312 Dac;19 DLR 318 Dac, 13 DLR 889 contra 1961 PLR 626 Dac; 47 CWN 184) 197 1985 BCR 430 AD. 198 1930 Cal 547; 1934 Cal 749. 199 74 CWN 897 200 39 CWN 459,!985 BCR 430 AD.
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Rateable preemption :
Claim of rateable preemption by the transfaree can be made even in his
written objection which he files in travesting preemtion application.201 It is to
be noted that remaining cosharers may join as co-applicant. Subsection (4) of
section 24 makes provision for co-sharer served with notice under subsection
(3) apply to be joined as party. It also provides that co-sharers who are not
original applicant or applicants under subsection (4) are not entitled to get
preemption.202 Subsection (4) empowers the court to fix the share of the
applicants for preemption, they may be allowed to preemption in equal shares
proportionate to their original share. The condition precedent to being allowed
to join as co-applicants is deposit of money. Rateable preemption cannot be
given in absence of positive finding on the issue.203 So transfer of portion or
share of non-agricultural land to a stranger opens right of preemption to the
co-sharers.204 But i the transaction is a colourable one or mere paper
transaction then there has been no real retransfer and the right of preemption
will prevail.205
Time Limit for co-applicant:
Four months from the date of service of notice of transfer or one month
from the date of application by a co-sharer, whichever is later. It also provides
that co-sharers who are original applicants or applicants under the section
24(1) are ineligible to get preemption. As to the time limit of one month of
application for preemption, there may be cases in which the notice of co-
sharer’s application for preemption may be served before the expiry of one