26/10/2014
Understanding the Law of Pre-emption(Shuf’ah)
Muqtedir Akhtar Shabir, Advocate Supreme Court of Pakistan: Email:[email protected]
Presently the Punjab Pre-emption Act 1991 is prevalent in the province of Punjab. Earlier pre-emption Act of 1913 was rendered ineffective as from 31st July 1986 by virtue of Supreme Court judgment in the case N.W.F.P. vs. Said Kamal reported in PLD 1986 SC 360 read with the suo moto review reported in PLD 1990 SC 865. In pre-emption Act of 1913 long list of pre-emptors was provided, no requirement of any talab was necessary and time for filing the suit was 1 year. But the present Pre-emption Act of 1991 Act has reduced the number of persons qualified to make talabs and much focus has been placed on performance of Talabs and the limitation for filing the suit for pre-emption has been reduced to 4 months.
Concept of pre-emption is that a stranger should not be allowed to purchase immovable property in preference to person who have the superior right of purchase but at the same time condition of Talb for exercise of right of pre-emption has been provided in law to discourage unnecessary litigation. [2006 SCMR 4]. Pre-emption is a right where person without consent of vendee becomes owner of the property by paying the price of that property to the vendee.[PLD 1986 SC 360].
“pre-emptor” means a person who has the right of pre-emption;
“right of pre-emption” means a right to acquire by purchase an immovable property in preference to other persons by reason of such right;
The right of pre-emption shall arise in case of sale of immovable property.
“sale” means permanent transfer of the ownership of an immovable property in exchange for a valuable consideration and includes transfer of an immovable property by way of ‘hiba bil-iwaz’ or ‘hiba ba-shart-ul-iwaz’, but does not include—
(i) transfer of an immovable property through inheritance or will or gift, other than ‘hiba bil-iwaz’ or ‘hiba ba-shart-ul-iwaz’;
(ii) a sale in ex*****on of a decree for money or of any order of a civil, criminal, revenue or any other court or a Revenue Officer or any local authority;
(iii) exchange of agricultural land; and
(iv) transfer of an immovable property for a consideration other than valuable consideration, such as the transfer of an immovable property by way of dower or composition in a murder or hurt case.
“immovable property” means immovable property situated in any area other than an urban area or within cantonment limits as declared by any law relating to Local Bodies or Cantonments, as the case may be, for the time being in force.
The excluding clause “all properties situated in urban areas or within cantonment limits” in the definition of immovable property has been declared repugnant to injunctions of Islam. [PLD 1994 SC 1].However this judgment has no retrospective effect. [2007 SCMR 336]. Judgment of Shariat Appellate Bench of Supreme Court had to take effect from 31-12-1993 and after target date, sale in respect of immovable property situated in urban area would no longer be exempted from the right of pre-emption [2007 SCMR 336]. Agricultural land from very inception, despite being located in municipal or cantonment area may not be exempted from law of pre-emption as it after becoming part of town may not necessarily lose its agricultural character [2007 SCMR 336].
No right of pre-emption shall exist in respect of sale of (a) waqf property or property used for charitable, religious or public purpose; and (b)property owned by the Federal or a Provincial Government or a local authority. The property acquired by a Federal or a Provincial Government or a local authority in pursuance of any law shall not be pre-emptible.
Now the important question arises that who can pre-empt the property. The right of pre-emption shall vest—firstly, in Shafi Sharik; secondly, in Shafi Khalit; and thirdly, in Shafi Jar.
‘Shafi Sharik’ means a person who is a co-owner in the corpus of the undivided immovable property sold.
‘Shafi Khalit’ means a participator in the special rights attached to the immovable property sold, such as right of passage, right of passage of water or right of irrigation.
‘Shafi Jar’ means a person who has a right of pre-emption because of owning an immovable property adjacent to the immovable property sold.
The right of pre-emption shall be exercisable only in case of ‘Zaroorat’ or to avoid ‘Zarar’. Philosophy of law of pre-emption--- Zaroorat---Zarar---law of pre-emption is not based on Zaroorat. The word Zaroorat is a specific term which is analogous to the word necessity and emergency and refers to a state where a person is under apprehension of instant death or the loss of one of his limbs or organs. If it is held that a right of pre-emption can only be exercised in case of zaroorat, it will mean that a person can exercise this right only in a case where he is able to prove that without claiming the right of pre-emption he will face an instant danger to his life or his organ, and this will be a condition which seems to be absurd on the face of it, and is never warranted by any provision in the Holy Qurran and Sunnah, nor has any of the Muslim jurist ever opined, that the right of pre-emption is subject to the doctrine of necessity or emergency. On the other hand procedure prescribed for the three Talabs is sufficient to establish the right of pre-emption and additional condition to prove the Zarar cannot be imposed on the plaintiff in case of Shuf’ah. The existence of Zarar has been assumed in every case of pre-emption where a plaintiff has to fulfill the basic conditions for the right of pre-emption, such as making of the three Talabs, which will automatically show that he wants to avoid Zarar by laying the claim of pre-emption. [PLD 1994 SC 1].
The exercise of this right is subject to demands which have been prescribed by the prevailing law without which the right to pre-emption cannot succeed. The right of pre-emption of a person shall be extinguished unless such person makes demands of pre-emption in the following order, namely—(a) ‘talb-i-muwathibt’; (b)‘talb-i-ishhad’; and (c) ‘talb-i-khusumat’.
‘Talb-i-muwathibat’ means immediate demand by a pre-emptor, in the sitting or meeting (Majlis) in which he has come to know of the sale, declaring his intention to exercise the right of pre-emption. Any words indicative of intention to exercise the right of pre-emption are sufficient. ‘Talb-i-ishhad’ means demand by establishing evidence. ‘Talb-i-khusumat’ means demand by filing a suit.
When the fact of sale comes within the knowledge of pre-emptor through any source, he shall make talb-i-muwathibat. Where a pre-emptor has made talb-i-muwathibat, he shall as soon thereafter as possible but not later than two weeks from the date of knowledge make talb-i-ishhad by sending a notice in writing attested by two truthful witnesses, under registered cover acknowledgement due, to the vendee, confirming his intention to exercise the right of pre-emption. The areas where owing to lack of post office facilities it is not possible for the pre-emptor to give registered notice, he may make talb-i-ishhad in the presence of two truthful witnesses. Where a pre-emptor satisfies the requirements of talb-i-muwathibat and talb-i-ishhad, he shall make talb-i-khusumat by filing the suit in the court of competent jurisdiction to enforce his right of pre-emption.
Attesting witness of Talb-e-ishhad are required to be produced in court [ 1998 CLC 393]. Non compliance is fatal to the suit [1999 CLC 120]. Witness of pre-emption may not sign the notice of Talab but have to be produced in evidence to prove talabs. [2003 PLJ( SC) 752].
It would be mandatory for the plaintiff in the suit for pre-emption to incorporate in the plaint the details and time and place of performance of Talab-i-Muwathibat and date of issuing the notice of talab-i-ishhad, otherwise pre-emption suit deserves to be dismissed [ 2009 SCMR 673, 2010 MLD 160, 1995 CLC 1209, 1996 SCMR 346, NLR 1998 civil 182, PLD 2007 SC 302]. Other view on the issue: Name of the witness not required to be mentioned in the plaint [ 1999 SCMR 958]. Plaintiff cannot be non- suited merely on the ground that other details of time and place and name of the witness have not been mentioned specifically in the plaint [2000 SCMR 329, 2000 SCMR 314, 2001 SCMR 539,PLD 2007 SC 302, 2006 SCMR 1410].
Right of pre-emption was predatory in nature and grant or refusal of such right might not depend on compliance or non-compliance of technicalities of procedural law but at the same time it being a piratical right, pre-emptor should have established existence of right of pre-emption on the date of sale, on the date of institution of suit ' and on the date of passing decree and had fulfilled essential conditions of Talbs for exercise of right of pre-emption [ 2007 SCMR 336].
Performance of both Talabs (Talab-i- Muwathibat and talab-i-ishhad) successfully is a sine qua non for getting a decree in pre-emption suit. Supreme Court approved a view that a plaint wherein date, place and time of talab-i-ishhad in terms of S 13 of Punjab Pre-emption Act, 1991, was not provided, it would be fatal for the pre-emption suit [PLD 2007 SC 302]. Omission to mention date of notice of Talab-i- Ishhad in the plaint would stand cured by annexing the copies of the notices of Talab-i- Ishhad along with the postal/ acknowledgement receipts. Material facts given in the notices of Talab-i-Ishhad formed part of the plaint [ 2014 SCMR 852 (PLD 2007 SC 302 Distinguished)].
Time within which three Talabs are made is of great significance in pre-emption matter, in order to prove the claim [ PLD 2000 Lah 428]. Talab-i- Muwathibat (jumping demand) has to be made before a group of person and not a single person and at least two persons before whom information about sale was given by informant. [PLD 2012 Lah 1, PLD 2007 SC 302]. Reference to time could not be exclusively tied to time by the clock or watch but might be expressed by other recognized modes, for example, dawn, morning, noon, afternoon evening or night. Statement of pre-emptor with reference to a particular period of the day would therefore meet the requirement of time, as holding otherwise and restricting the mentioning of time with reference to the clock or watch would deprive a pre-emptor from the enforcement of his right, if at the time of receiving information of the transaction no one in the Majlis( gathering) was wearing a watch. 2014 SCCMR 941 ( 2013 SCMR 1087 distinguished)]
Where address of vender was admittedly wrongly inscribed on envelop and the number of clerk was not correctly written on envelop, there is no notice of talab-i-ishhad [ 1995 MLD 1689].
Pre-emptor is obliged to meticulously observe requirement of Talabs and failure in that behalf must prove fatal to pre-emption [ 1993 CLC 2437, 1993 MLD 1958, 1995 SCMR 1510, 2007 SCMR 1086, 2009 SCMR 678, ].
The period of limitation for a suit to enforce a right of pre-emption (talb-i-khusumat) is four months from the date—
(a) of the registration of the sale deed;
(b) of the attestation of the mutation, if the sale is made otherwise than through a registered sale deed;
(c) on which the vendee takes physical possession of the property if the sale is made otherwise than through a registered sale deed or a mutation; or
(d) of knowledge by the pre-emptor, if the sale is not covered under paragraph (a) or paragraph (b) or paragraph.
The Officer registering the sale deed or attesting the mutation of a sale shall, within two weeks of the registration or attestation, as the case may be, give public notice in respect of such registration or attestation. The notice shall be deemed to have been sufficiently given if it is displayed on the main entrance of a mosque and on any other public place of the village or place where the property is situated. The charges for the notice under sub-section (2) shall be recovered from the vendee by the Officer registering the sale or attesting the mutation, as the case may be, at the time of such registration or attestation.
When talb-i-khusumat is made in the court of competent jurisdiction by filing the suit for pre-emption, the Court shall require the plaintiff to deposit in such Court one-third of the sale price of the property in cash within such period as the Court may fix. The period shall not extend beyond thirty days of the filing of the suit.
The right of pre-emption shall be deemed to have been waived if the pre-emptor has acquiesced in the sale or has done any other act of omission or commission which amounts to waiver of the right of pre-emption. Unreasonable delay in exercise of Talabs tantamount to acquiescence and extinguish right of preemption [ 1994 CLC 506]. Where a pre-emptor, before the decree of a Court, alienates the property on the basis of which he claims the right of pre-emption, such right shall abate. And an alienee of the property shall not be entitled to the right of pre-emption.
If no sale price is mentioned in the sale deed or in the mutation, or the price so mentioned appears to be inflated, the Court shall require deposit of one-third of the probable value of the property. Where the parties do not agree to the price at which the pre-emptor shall exercise his right of pre-emption, the Court shall determine whether the price at which the sale purports to have taken place was fixed in good faith or paid, and if it finds that the price was not so fixed or paid, it shall fix the market value of the property as the price to be paid by the pre-emptor. If the Court finds that the price was fixed in good faith or paid, it shall fix such price to be paid by the pre-emptor.
For determining the market value of a property, the Court may consider the following, among other matters, as evidence of such value—
(a) the price or value actually received or to be received by the vendor from the vendee;
(b) the estimated amount of the average annual net profits of the property;
(c) the value of similar property in the neighbourhood;
(d) the value of similar property as shown by previous sales made in the near past.
If the plaintiff fails to make a deposit within the period fixed by the Court, or withdraws the sum so deposited by him, his suit shall be dismissed. The probable value fixed shall not affect the final determination of the price payable by the pre-emptor.
The honorable Supreme Court has settled the law that the court has no jurisdiction to order the deposit Zar-e-Soem beyond the prescribed 30 days period nor does it posses the power to extend such period [ 1992 SCMR 745, 1995 SCMR 135].
Price given in the sale deed / mutation on the basis of which the parties ( to the sale) has paid the stamp duty, taxes and other dues and fees for transfer , should sparingly be interfered with unless the court was convinced on the basis of the material placed before it that the price mentioned in the sale deed/mutation was inconceivably high and most improbable. When material of unimpeachable and most credible nature was not forthcoming from the plaintiff side, it would be safer course to adhere to the price mentioned in the sale deed/ mutation for the purpose of depositing Zar-e-Soem [ PLD 2013 SC 489]. Sale price mentioned in the sale deed/ mutation precludes the trial court from fixing any price other than one so mentioned. Penal consequences of erroneous order passed by the court u/s 24(1) of the Punjab Pre-emption Act, 1991 may be fatal for the suit for pre-emptor if non-compliance is made under S 24(2) of the Punjab Pre-emption act 1991 [ 2002 YLR 1580].
Where no sale price is mentioned in the sale deed / mutation it was mandatory and imperative for the court to determine the probable value of the suit property and pass an order for depositing Zar-e-Soem with the prescribed period of time [ PLD 2013 SC 489].
Where there are more than one participants in the special rights attached to the immovable property sold, the person having a special right shall have precedence over a person having a general right. A garden is irrigated by a water course which opens from a small canal. If this garden is sold, the person having right of irrigation from the water course shall have precedence over a person having right of irrigation from the canal. But if such garden is irrigated from the small canal, the person having right of irrigation from the water course as well as the person having right of irrigation from the canal shall have the right of pre-emption. Where there are more than one pre-emptors and one has right of passage and the other has right of passage of water attached to the immovable property sold, the person having right of passage shall have precedence over the person having right of passage of water. A participator in the special rights having his property, on the basis of which he claims to be the pre-emptor nearer to the immovable property sold, shall have precedence over the pre-emptor having such property not so near to the immovable property sold. Where a right of pre-emption vests in any class or group of persons, the right may be exercised by all the members of such class or group jointly, and if not exercised by them all jointly, by any two or more of them jointly, and if not exercised by any two or more of them jointly, by them severally.
Where more than one persons are found by the Court to be equally entitled to the right of pre-emption, the property shall be distributed among them in equal shares. Where the pre-emptor and the vendee fall within the same class of pre-emptors and have equal right of pre-emption, the property shall be shared by them equally. Where there are more than one pre-emptors having sued jointly or severally and any of them withdraws his claim before the decision of the Court, the remaining pre-emptors shall be entitled to the whole property. Provided that the claim of the remaining pre-emptors was originally made for the whole property. Where a person is unable to make demands, his guardian or agent may make the required demands on his behalf.
The Rule of Sinker or Doctrine of Sinker : The policy of law of pre-emption is to keep out stranger, the doctrine of sinker is fully applicable in pre-emption cases [ PLJ 1981 Lah. 378]. If a purchaser, having an equal right of pre-emption, associates with himself in purchase a person with inferior right to that of the pre-emptor, he is not entitled to resist the claim of such pre-emptor even in respect of his own share of the purchase. The purchase in such case would be deemed to have sunk down to the level of his associates and therefore would not be entitled to resist pre- emption even qua his own share [PLD 1971 Lah. 171, 1986 CLC 1188, 1986 CLC 2830, 1987 CLC 2476, 1986 CLC 490]. Co-vendee not claiming right of preemption but seeking to defeat one asserted by pre-emptor on strength of notification under S 8 (2), Punjab Pre-emption Act, rule of sinker would not apply [ 1986 CLC 490, PLD 1965 SC 690]. Doctrine of sinker is inapplicable in cases where sale to each vendee could be regarded as a separate sale [NLR 1980 SCJ 340].
Where a pre-emptor dies after making any of the demands as mentioned above , the right of pre-emption shall stand transferred to his legal heirs.
Where the vendor has stipulated in the contract of sale that it is subject to revocation by him within a period, not exceeding sixty days, specified in such contract, the right of pre-emption shall not be exercised until such period has expired:
Provided that option of defect in, or inspection of, the property or the stipulation as to the vendee’s right to revoke the contract of sale shall not be a bar to the exercise of the right of pre-emption.
A Muslim and a non-Muslim may exercise the right of pre-emption against each other.
The right of pre-emption shall be non-transferable and indivisible. The claim for pre-emption shall be made on the whole property pre-emptible.
Where a vendee has made any improvements in the immovable property before talb-i-ishhad is made by the pre-emptor, the vendee shall be entitled to the cost of such improvements. Any improvement made in the status of a vendee defendant after the institution of a suit for pre-emption shall not affect the right of pre-emptor-plaintiff.
Where a Court passes a decree in favour of pre-emptor on payment of a price which is in excess of the amount already deposited by the pre-emptor, the Court shall require the pre-emptor to deposit the remaining amount within thirty days of the passing of the decree. Where a decree is passed for a lesser amount than the amount already deposited by the pre-emptor, the Court shall refund the excess amount to such pre-emptor.
The Government may, in the public interest, by a notification in the official Gazette, declare that in any local area or with respect to any sale or class of sale, no right of pre-emption shall exist or only such limited right, as it may specify, shall exist.
In the interpretation and the application of the provisions of this Act, the Court shall seek guidance from the Holy Qur’an and Sunnah. The jurisdiction to strike down law on the ground of repugnancy cannot be examined where a particular law or provision of law be repugnant to any of the different views taken by different Muslims Jurists, unless it is shown that the said law is repugnant to a verse of the Holy Qurran or Hadith of Holy Prophet ( Peace be Upon Him) [PLD 1994 SC 1].
