“Convergences & Divergences Between Section 96 of the SAT Act, 1950 and Section 24 of the NAT Act, 1949: A Critical Analysis” -(Pre-Emption)

 Introduction: If a person sells his share to others, any one has the right to buy it. But if any of the co-sharer of that person wants to buy the share, then co-sharer has the priority to buy the share to others. This priority right is called the right to pre-emption.

Definition: The English term ‘pre-emption’ is derived from the Latin terms ‘prae’ which means ‘before’ and ‘empto’ meaning ‘purchase’. The right to pre-emption means the right to purchase before others.

According to Osborn’s Concise Law Dictionary, “Pre-emption” means the right of purchasing property before or in preference to other persons [1].[1] Oxford Dictionary also defines “pre-emption” in the same way as ‘the right of an opportunity of purchasing land in priority to other people [2].[2]

Is the right of “pre-emption” re-purchase or substitution: According to the definition of D F Mulla, “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 [3].[3] So, according to this definition, the right of pre-emption is nothing but merely the right of re-purchase.

In the case of ‘Govind Dayal V Inayetullah’ [4][4], Justice Mahmood said:

Pre-emption is 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, propriety, 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.

Dissenting with the word ‘re-purchase’ as put forward by Mulla, Justice Mahmood termed pre-emption as a ‘right of substitution’.

 

In the case of ‘Md. Basiruddin Mandal V Annamoni’ [5][5], Chief justice Murshed took the same view of the concept of Justice Mahmood and says:

‘Pre-emption’ is a right of substitution of ownership in respect of the pre-empted property.

Purposes of Pre-emption: The purpose of pre-emption is to prevent the introduction of a stranger and bringing the property under one owner eventually. According to Fayzee, ‘The object of the right of pre-emption is to prevent the intrusion, not of all purchasers in general, but only of such as are objectionable from the pre-emptor’s point of view’. The underlying philosophy behind this law is to ensure the peaceful enjoyment of one’s right to property from the inconvenient introduction of strangers and to protect the lands from being fragmented [6].[6]

Provisions regarding “Pre-emption” in The State Acquisition & Tenancy Act, 1950:  Section 96 of The State Acquisition & Tenancy Act, 1950 [7][7] deals with the right of pre-emption. According to the Section 96, If a person sales his portion of holding to a third person other than his co-sharers of the holding, then the co-sharers (one or more) of the holding may within two months of the service of the notice given by section 89 or, if no notice has been served under section 89, within two months of the date of the knowledge of the sale, apply to the Court for the said portion to be sold to himself or themselves.

For claiming the right of pre-emption-

a)      The applicant must be a  co-sharer tenant in the holding by inheritance;

b)      a person to whom the sale of the holding or the portion or share thereof, as the case may be, can be made under section 90. Provided further that no application under this section shall lie after expiry of three years from the date of registration of the sale deed.

When an application is made, all other co-sharer tenants by inheritance of the holding and the purchaser shall be made parties. This application shall be dismissed unless the applicant or applicants, at the time of making it, deposit in the Court-

(a) The amount of the consideration money of the sold holding or portion or share of the holding as stated in the notice under section 89 or in the deed of sale, as the case may be;

(b) Compensation at the rate of 25% of the amount referred to in clause (a); and

(c) An amount calculated at the rate of 8% simple annual interest upon the amount referred to in clause (a) for the period from the date of the execution of the deed of sale to the date of filing of the application for preemption.

On receipt of such application, the Court shall give notice to all the parties to appear before the court and ask the purchaser to state what other sums he has paid in respect of rent since the date of sale and what expenses he has incurred in annulling encumbrances on, or for making any improvement in respect of the holding, portion or share sold. After hearing all the parties the Court holding an inquiry regarding's rent paid and the expenses incurred by the purchaser as referred in sub-section 4 and directs the applicant or applicants to deposit a further sum, if necessary, within such period as the Court thinks reasonable.

If any of the co-sharer failed to join as a party, he may join as party after the notification given in sub-section 1 or the notice given under sub-section 4 within two months, whichever is earlier. After determining the parties, the court shall fix the deposit payable mentioned above. If the deposit is not made by any such applicant within such period, his application shall be dismissed.

If the applicants are more than one person, who fulfill all the conditions mentioned in Section 96, the Court divide the portion of the holding equitably among the parties and refund money to the applicants if necessary which was deposited by sub-section 3 and 8.

After that, the court will direct the purchaser to execute register deed within two months in the favor of the applicant of applicants, whose application has been allowed and no tax, duty or fee shall be payable for such registration [8].[8] If the purchaser failed to execute the register deed then the Court will execute the register deed or deeds in the favor of the applicants within two months. After completing the register of sale deed or deeds, the right, title and interest in the holding or portion or share thereof accruing to the purchaser from the sale shall be deemed to have vested, free from all encumbrances which have been created after the date of sale, in the co-sharer tenant or tenants whose application or applications to purchase have been allowed under sub-section (9).The Court on further application of such applicant or applicants may place him or them, as the case may be, in possession of the property vested in him or them. An Appeal shall lie to the ordinary Civil Appellate Court from any order of the Court under this section [9].[9]

Nothing in this section shall be deemed to apply to homestead land [10].[10] Nothing in this section shall take away the right of pre-emption conferred on any person by the Mohammadan Law [11].[11]

Provisions regarding “Pre-emption” in The Non-Agricultural Tenancy Act, 1949: Section 24 of The Non-Agricultural Tenancy Act, 1949 [12][12] deals with the right of “pre-emption”. According to Section 24 of the Non- Agricultural Tenancy Act, 1949, If a non-agricultural tenant transferred his portion of non-agricultural land to third party other than co-sharers of the tenancy, then the co-sharers may claim the portion of the non-agricultural land to be transferred to himself or themselves within four months after getting the service of notice under section 23 or after knowing about the transfer of such land without notice within four months.

The applicant or applicants must deposit consideration money to the court. If the applicant or applicants failed to deposit consideration money then the court dismissed the application.

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 [13].[13] 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 6.25% annually. Provided that, If any question is raised for that matter then the court investigate this matter and give the second chance to the transferee and determine the actual amount of money which was used for the above purposes [14].[14]

If any co-sharer does not apply for claiming pre-emption right in sub-section 1, he may apply within 4 months according to the said section or within one month after getting the service of the notice whichever is later. 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. Such application shall be dismissed if the consideration money does not deposit to the court within the period fixed by the court. 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).

If the applicant is more than one person, then the Court distributes the portion equitably. From the date of making of the order under sub-section (5)-

a) 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);

b)      The liability of the transferee for the rent due from him on account of the transfer shall cease, and

c)      The Court, on further application of such applicant, may place him in possession of the property vested in him;

An appeal from any order of a Court under this section shall lie to the Civil Appellate Court having jurisdiction to entertain such appeals. Nothing in this section shall take away the right of pre-emption conferred on any person by Muhammadan Law [15].[15]

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

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) [16] [17] [16]

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.

Convergences between Section 96 of the State Acquisition and Tenancy Act, 1950 & Section 24 of the Non-agricultural Tenancy Act, 1949:

1)      Execution process: The way of execution of the right of ‘pre-emption’ is almost same.

2)      Appellate Jurisdiction:  An appeal from any order of a Court under both of the section shall lie to the Civil Appellate Court having jurisdiction to entertain such appeals.

3)      Pre-emption under Muhammadan Law: Nothing in these two separate sections shall take away the right of pre-emption conferred on any person by Muhammadan Law.

4)      Distribution of Property among the applicants: After the execution of registration of sale deeds, if the applicant is more than one, then the Court distributes the property equitably.

5)      Dismissal of the Applications: If the applicants are failed to deposit the consideration money, then they are not treated as the party anymore.

Divergences between Section 96 of the State Acquisition and Tenancy Act, 1950 & Section 24 of the Non-agricultural Tenancy Act, 1949:

1)      Qualifications for Claiming the Right of Pre-Emption: In the State Acquisition & Tenancy Act, 1950, claimant must be a co-sharer by way of inheritance. On the other hand, In the Non-Agricultural Tenancy Act, 1949, claimant must be a co-sharer in the property or the adjacent owner of an immovable property.

2)      Applicability: The State Acquisition & Tenancy Act, 1950 is applicable for agricultural land. On the other hand, The Non-Agricultural Tenancy Act, 1949 is applicable for non-agricultural land.

3)      Period for Claiming the Right of Pre-emption: In the State Acquisition & Tenancy Act, 1950, period for claiming the right of pre-emption is two months after issuing the service of the notice. On the other hand, In the Non-Agricultural Tenancy Act, 1949, period for claiming the right of pre-emption is four months after issuing the service of the notice.

4)      Compensation Money: 25% money shall be deposited as compensation money according to the State Acquisition & Tenancy Act, 1950. On the other hand, 5% money shall be deposited as compensation money according to the Non-Agricultural Tenancy Act, 1949.

5)      Compensation for making improvement of the Land by purchaser: If the purchaser making any improvement of the land from the time of it’s purchasing to the time of issuing the notice of the service, according to the State Acquisition & Tenancy Act, 1950, additional money for this improvement made by the purchaser shall deposit with additional 8% of compensation. On the other hand, If the purchaser making any improvement of the land, making any building or structure from the time of it’s purchasing to the time of issuing the notice of the service, then according to the Non-Agricultural Tenancy Act, 1949, additional money for this improvement made by the purchaser shall deposit with additional 6.25% of compensation.

Conclusion: Pre-emption is very important for our society because still now we want to enjoy our property peacefully. We don’t allow anybody to interfere our way of enjoyment. It is an important part relating to the transfer of property therefore, this right needs more clarifications and certainty.

References:

[1]	R. Bird, Osborn's Concise Law Dictionary, 7th ed., London: Sweet and Maxwell, 1996, p. 260.
[2]	E. A. M. (ed), A Concise Dictionary of Law, London: OUP, 1983, p. 273.
[3]	D. F. Mulla, Principles of Mohammadan Law, 17 ed., p. 255.
[4]	Govind Dayal v Inayetullah, 1885.
[5]	Md. Basiruddin Mandal v Annamoni.
[6]	M. T. Islam, Land Law (Text, Cases & Materials, 2 ed., Dhaka: Centre for Human Rights and Legal Research, 2018, p. 205.
[7]	The State Acquisition & Tenancy Act, 1950 Section 96.
[8]	The State Acquisition & Tenancy Act, 1950 Section 96(9).
[9]	The State Acquisition & Tenancy Act, 1950 Section 96(15).
[10]	The State Acquisition & Tenancy Act, 1950 Section 96(16).
[11]	The State Acquisition & Tenancy Act, 1950 Section 96(17).
[12]	The Non-Agricultural Tenancy Act, 1949 Section 24.
[13]	The Non-Agricultural Tenancy Act, 1949 Section 24(3).
[14]	The Non-Agricultural Tenancy Act, 1949 Section 24(3).
[15]	The Non-Agricultural Tenancy Act, 1949 Section 24(10).
[16]	The Non-Agricultural Tenancy Act, 1949 Section 24(11,c).
[17]	"http://bdlaws.minlaw.gov.bd/act-232/section-3967.html," [Online].

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[1] Roger Bird, Osborn’s Consice Law Dictionary (7^th Edition, Sweet and Maxwell, London, 1996) 260

[2] Elizabeth A Martin (ed), A Concise Dictionary of Law (OUP, London, 1983) 273.

[3] D F Mulla, Principles of Mohammadan Law (17^th Edition) 255

[4] Govind Dayal v Inayetullah (1885) 7 All. 775.

[5] Md. Basiruddin Mandal v Annamoni 12 DLR 737

[6] Mohammad Towhidul Islam, Land Law ,Text, Cases & Materials (2^nd Edition) 205.

[7] The State Acquisition & Tenancy Act, 1950 Section 96.

[8] The State Acquisition & Tenancy Act, 1950 Section 96(9).

[9] The State Acquisition & Tenancy Act, 1950 Section 96(15)

[10] The State Acquisition & Tenancy Act, 1950 Section 96(16)

[11] The State Acquisition & Tenancy Act, 1950 Section 96(17)

[12]The Non-Agricultural Tenancy Act, 1949 Section 24.

[13] The Non-Agricultural Tenancy Act, 1949 Section 24(3)

[14] The Non-Agricultural Tenancy Act, 1949 Section 24(3)

[15] The Non-Agricultural Tenancy Act, 1949 Section 24(10)

[16] The Non-Agricultural Tenancy Act, 1949 Section 24(11,c) also in http://bdlaws.minlaw.gov.bd/act-232/section-3967.html

Written By---
Md Sajib Ali
Department of Land Management and Law
Jagannath University, Dhaka