In applying the Article 97, the subject-matter of the suit must be related to a right of pre-emption and to sales.
The right to pre-emption arises only when the sale becomes complete. Therefore, no right of pre-emption can arise on a mortgage by conditional sale, so long as the right of redemption remains with the mortgagor. In order to apply the Art. 97, there must be foreclosure Of the mortgage by conditional sale. The word ‘pre-emption’ is derived from “prae emptio” and is defined as the act of buying before another. Pre-emption is the right of first buying of a thing.
It is a right to purchase property before or in preference to other person. Even though a co-owner has no inherent right to acquire the share of other co-owners, but in case of transfer by one co-owner of his share of the common property sometimes a preferential right is conferred upon the co-sharer or a right of pre-emption is given to the other co-owners. Such rights are conferred on the ground of public policy and avoidance of an inconvenience which might be caused to the non-alienating co-owners by the introduction of a stranger. This right is also conferred on others by custom or by statute. In Ratan Lai v. Ramanuj Das, (AIR 1944 Nag. 187), it has been held that apart from the statute or custom, a right of pre-emption as prior right of purchase is sometimes agreed to amongst the co-owners for their mutual benefit and such an agreement is valid and binding. A pre-emption clause in an award making partition is binding on the legal representatives, assignees and transferees of the original parties.
Sections 3 and 4 of the Partition Act, 1893 confer upon the co-owners the right to purchase the share of the other co-owners in certain circumstances. According to the Order XXI, Rule 88 of the C.P.C. where a co-owner and a stranger bid the same sum in sale of a share of any immovable property, the co-owner’s bid is entitled to preference.
Section 22 of the Hindu Succession Act has also conferred upon certain co-sharers a preferential right to acquire the interest proposed to be transferred by one of the co-heirs when the property devolves upon two or more heirs specified in Class I of the Schedule to the Hindu Succession Act. Under the Mohammedan Law, the right of pre-emption arises only out of valid, complete and bona fide sale. The right of pre-emption is one of the cardinal feature of Hanafi school of Mohamedan Law and the following three classes of persons can claim pre-emption, namely, (i) cosharers in the properties; (ii) participators in immunities and appendages, such as a right of way, etc.; and (iii) owners of adjacent immovable property. However, by Shia Law the only persons entitled to the right of pre-emption are co-sharers.
In Oudh Behari v. Gajadhar Jaipuria, [(1955) 1 SCR 17], it has been held that the statutory law of pre-emption imposes a limitation or disability upon the ownership the property to the extent that it restricts the owner’s unfettered right to sale and compels him to sell the property to his co-sharer, that the crux of the whole thing, that is, the benefit as well as the burden of the right of pre-emption run with the land and can be enforced by and against the owner of the land for the time being although, the right of pre-emption does not amount to the interest in the land itself. In a suit for enforcement of pre-emption starting point of limitation is the date when the purchaser takes physical possession, of the immovable property either whole or in part. The expression ‘physical possession’ means physical control visible to others which gives notice of change in possession. In order to attract Article 97 there must be a sale by registered sale deed. In view of the provisions of Section 61 read with Section 60 of the Registration Act, registration is complete only after the certificate of registration is signed, sealed and dated by the registering office and the document has been copied into the margin of the register holder as required in Section 61(1) of the Registration Act. When neither the whole or part of the property was capable of physical possession and there was no registered deed of sale, Article 97 does not apply and the Art. 113 may be invoked.
Where the suit is prima facie within the time, it will be for the defendant to prove that he had taken possession for more than one year prior to the filing of the suit or when the property was not capable of physical possession that the sale was registered for more than one year prior to the filing of the suit, in order to resist the plaintiffs suit for preemption on the plea of limitation. Art. 97 constitutes of two parts relating to the commencement of limitation.
Under the first part the limitation starts from the date of taking of delivery of possession when the whole or part of the property sold is capable of physical possession. Under the second part, the limitation starts from the date when the instrument of sale is registered when the subject- matter of sale does not admit of physical possession of the whole or part of the property.