SC: The right of pre-emption is only exercisable for the first time



The Hon’ble Supreme Court, on 13th October 2020, in the matter of Raghunath (D) By LRs. v. Radha Mohan (D) Thr. LRs & Ors. pronounced that the right of pre-emption is only exercisable for the first time when the cause of such a right arises. If such person finds it is not worth once, it is not an open right available for all times to come to that person.

The Hon’ble Supreme Court observed that:

The historical perspective of the right of pre-emption shows that it owes its originination to the advent of the Mohammedan rule, based on customs, which came to be accepted in various courts largely located in the north of India. The pre-emptor has been held by the judicial pronouncements to have two rights. Firstly, the inherent or primary right, which is the right to the offer of a thing about to be sold and the secondary or remedial right to follow the thing sold. It is a secondary right, which is simply a right of substitution in place of the original vendee. The pre-emptor is bound to show that he not only has a right as good as that of the vendee, but it is superior to that of the vendee; And that too at the time when the pre-emptor exercises his right. The right is a “very weak right” and is, thus, capable of being defeated by all legitimate methods including the claim of superior or equal right.(Para 12)

The right of substitution is capable of being invoked only at the first instance and does not continue. Substitution is capable of being invoked only at the first instance and does not continue to permeate for an indefinite period of time for each sale transaction. (Para 13)

It would not be appropriate or permissible 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. (Para 18)

Such a right is available once – whether to take it or leave it to a person having a right of pre-emption. If such person finds it is not worth once, it is not an open right available for all times to come to that person. The aforesaid being the position, this would itself be an impediment in exercise of the right of pre- emption in a subsequent transaction. (Para 19)

The question is whether this right of substitution can be exercised recurringly or only once. Our answer to the query is ‘only once’. (Para 20)

The right of pre-emption is only exercisable for the first time when the cause of such a right arises. (Para 22)

Copy of judgement: Judgement_13-Oct-2020

-Adv. Tushar Kaushik

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