Author- Ayusha, B.A.LL.B (HONS.) 8TH SEMESTER,
Abstract:
This case examined the legal doctrine of pre-emption, which grants certain parties the right to purchase property before it is sold to a third party. The plaintiffs, Ram Bharan and his associates, claimed they had a pre-emptive right over a property sold by their co-owner, Ram Mohit, to a third party. The court undertook a close analysis of the legal requirements for exercising pre-emption rights, emphasizing that such rights are narrow exceptions to the general principle of free transferability of property. Ultimately, the court ruled that the plaintiffs had not satisfied the necessary conditions to validly exercise their alleged pre-emption rights over the disputed property sale.
Introduction:
This present case dealt with the important question relating to right of pre-emption and how far it can be exercised by the parties. The Apex court for sure has set Standards as it decided upon matter that dealt with the concept of alienation of the property.
Facts:
In the present case there were two brothers named Tulsidas Chatterjee and Kishore Lal Chatterjee, they owned certain properties and had disputes relating their ownership and eventually ended up in arbitration where the arbitrator in the award divided the properties equally to both of them and also added a clause of pre-emption, that stated that both of the parties to the case will have to prefer the other party to the case in the event of selling the property. To which both of them agreed. When Tulsidas after the award sold the portion of properties in his share to Nagendra Nath Gosh he valued and gave the pre-emption right to Kishorilal to which he refused. But Kishorilal on 22 April, 1942 sold a portion to Rati Raman Mukherjee and further on June 21, 1946 the Mukherjees sold that very portion to the plaintiff. On September 20, 1952 Nagendra Nath Gosh sold his part to the defendant. So, it was on December 2, 1952 this present suit was filed by the plaintiff claiming their right of pre-emption on the properties that were being sold to the present defendants.
The trial court:
The subordinate court after hearing held that the right of pre-emption was to be given and binding on the defendants, who had the knowledge of the same and held that this right can’t be vanished merely because the property has been transferred further.
As the matter was decided in the favour of plaintiffs the defendants took the matter in appeal to the Calcutta High Court which dismissed the appeal and affirmed the judgment and decree of the Subordinate judge.
So, an appeal by Special Leave was taken to the honourable Supreme Court of India:
Where the issue framed was:
Whether the pre-emption agreement was to be followed in the case of successors of the property and do they have the right to enjoy the right to pre-emption in such as case.
Arguments by the appellant, where as they put forward by stating that the pre-emption agreement was merely binding on the parties to the contract and should not pass to the successors. However, it is not mentioned on the agreement but it is something that should find its application only on the assignees of the award.
Decision by the honourable Apex Court:
The court stated that undoubtedly it is unclear that the language of the contract is so that put a complete question mark on the intention of the assignees that whether this right should pass or not but the rest it can be very well made that the other rights can be exercised by the successors too. So, it can be construed that the parties are at their liberty to fill up the empty gaps so it is held that the pre-emption right should be passed to the successors-in-interest.
Conclusion:
The court’s decision in the case of Ram Bharan vs. Ram Mohit established that the right to pre-emption is a narrow and limited legal doctrine that should be interpreted strictly. The plaintiffs failed to demonstrate that the conditions necessary to exercise the right of pre-emption were met in this case. The court emphasized that pre-emption laws are in derogation of the common law right of free transferability of property, and therefore the requirements to invoke this right must be clearly satisfied. Ultimately, the court ruled in favour of the defendant, Ram Mohit, finding that the plaintiffs did had a valid claim of pre-emption over the disputed property.
FAQs
- What is right to pre-emption?
The right of pre-emption is a limited legal doctrine that grants certain parties, usually co-owners or neighbors, the right to purchase a property before it is sold to a third party. It is a narrow exception to the general principle of free transferability of property, and its requirements are interpreted strictly by courts.
- What are the key takeaways from this case that could inform future disputes over pre-emption rights?
The key takeaways from the Ram Bharan vs. Ram Mohit case that could inform future disputes over pre-emption rights are: 1) Strict interpretation of pre-emption laws, 2) Burden of proof on claimant, 3) Narrow scope of pre-emption, 4) Importance of procedural requirements, and 5) Balancing competing property rights.
- How does the right of pre-emption differ from the general principle of free transferability?
The right of pre-emption is a narrow exception to the general principle of free transferability of property. Courts interpret pre-emption laws strictly, placing the burden of proof on the claimant to demonstrate compliance with procedural requirements, unlike the unencumbered free transferability principle.
