'Immovable Property' Sale Not Affected By Govt. Notification That Takes Away Pre-Emption Rights In Haryana Municipal Land Sales: SC

The Supreme Court addressed the nuanced implications of a state notification issued on October 08,1985 regarding the Punjab Pre-emption Act, 1913 (Act, 1913) that excluded pre-emption rights in municipal land sales.

The Court rejected the Appeal contesting the High Court's decision, which upheld the Trial Court's decree. This decree required the payment of INR 50,238 to the buyer, deducting 1/5th of the pre-emption amount initially deposited in court when the lawsuit was filed.

Despite the notification's limitations, the Court noted that it does not apply to the sale of immovable property, preserving tenants' rights beyond mere land ownership.

“As the notification dated 08.10.1985 limits its application for taking away the right of pre-emption only with reference to sale of land falling in the areas of any municipality, the same will not come to the rescue of the appellants. In the case in hand, admittedly it is sale of immovable property, which is more than the land as a rolling mill had already been set up on the land, which was in occupation of the respondents as tenants”, the Bench comprising Justice C.T.Ravikumar and Justice Rajesh Bindal observed.

Advocate Shish Pal Laler appeared for the Appellant/defendants in the Original Suit and Senior Advocate Neeraj Kumar Jain appeared for the Respondent.

The case involved a suit filed by the respondents for pre-emption of a plot in Jagadhri. They claimed tenancy in 1949 and sued when the property was sold to the defendants in 1983. The Trial Court decreed the suit, upheld by the High Court.

The defendants argued that a state notification issued on October 08 1985, under the Act, 1913 rendered the pre-emption right invalid for land within municipal limits. They contended that since the sale fell within Jagadhri's municipality, the pre-emption right ceased to exist.

The Court noted that the respondent's right to the property, established since 1949, was derived from Section 16 of the Act, 1913. The property qualified as urban immovable property under Section 3(3) of the Act, 1913 situated within Jagadhri's municipal area. As per the Act, urban immovable property extends beyond mere land to include constructed areas like buildings.

The Court framed the following issue: “Whether the exemption of pre-emption as granted vide notification dated 08.10.1985 would be available to the property in dispute”.

The Court observed that the notification, issued under Section 8(2) of the Act, 1913 allows the State Government to specify the absence or limitation of pre-emption rights for certain areas or types of land.

“The term ‘urban immovable property’ has been defined in Section 3(3) of the 1913 Act to mean immovable property within the limits of town, other than agricultural land. Section 3(1) defines any agricultural land to mean land as defined in 1900 Act. The term ‘land’ as defined in Section 2(3) of the 1900 Act excludes any site of any building in a town or village. Meaning thereby that the immovable property would be more than the land only or the land on which the construction has already been made”, the Court noted.

In this case, the Bench noted that the notification excluded pre-emption rights for land within municipalities in Haryana. The distinction between "land" and "immovable property" was evident in the language of the Act, 1913 indicating that they have distinct meanings.

“A perusal of the notification shows that it has been issued in exercise of powers conferred under Section 8(2) of the 1913 Act, which enables the State Government to declare by notification either no right of pre-emption or only limited right will exist in any local area or with respect to any land or property or class of land or property. The notification provides that right of pre-emption shall not exist in respect of sale of land falling in the areas of municipalities in Haryana”, the Bench observed.

The Court emphasized that while the Act defines agricultural land, it does not define "land" specifically. This suggests that the exemption from pre-emption applies to land rather than immovable property. Section 15 of the Act, 1913 further highlighted the distinction by addressing pre-emption rights separately for agricultural land and village immovable property. Overall, the Court observed that the provisions of the Act, 1913 make it clear that "land" and "immovable property" are separate concepts, with immovable property encompassing more than just land.

The Bench observed that the notification of October 8, 1985, specifically limits its effect to the exclusion of pre-emption rights concerning the sale of land within municipalities. Since the sale in question pertains to immovable property and not just land, as indicated by the presence of a rolling mill on the property, the appellants cannot benefit from this notification.

Additionally, the Bench noted that the issue of limitation for filing the suit was considered irrelevant given the circumstances of the case, the provisions of the relevant act, and the fact that the appellants did not raise it in the lower courts.

Accordingly, the Court dismissed the Appeal.

Cause Title: Jagmohan And Another v Badri Nath And Others (2024 INSC 86)

Appearance:

Appellant: Hitesh Kumar, Vedant Pradhan, Atul, Kadambini and Ravi Panwar Advocates.

Respondent: Umang Shankar, Aniket Jain, Sanjay Singh and Vidyut Kayarkar, Advocates.

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