Punjab Pre-Emption Act | Supreme Court Explains Difference Between 'Land' & 'Immoveable Property'

The Supreme Court held that a tenant can claim the right to pre-emption in the 'urban immovable property' under the Punjab Pre-Emption Act, 1913, and the claim of the tenant cannot be discarded by the subsequent purchaser of the urban immovable property on the ground that the notification issued by the state government bars the tenants right to file a suit for pre-emption for the land situated in the municipal limits.

In the present case, the immovable property claimed by the tenants was situated in the urban area on which certain construction has been made. It was contended by the subsequent purchasers that the tenants could not file a pre-emption suit because the disputed property being land falls under the municipal limits and was barred by the government's notification.

The Bench of Justices C.T. Ravikumar and Rajesh Bindal affirmed the tenant's right to file a pre-emption suit by noting a difference between the term 'land' and 'immovable property'. Concurring with the findings of the High Court and the Trial Court, the court observed that the property in possession of the tenant being an urban immoveable property, the right to pre-emption would not be taken away from the tenant based on the notification which limits taking away the right of pre-emption only concerning sale of land falling in the areas of any municipality. According to the court, immovable property is more than the land on which certain construction has been made. 

"As we have already noticed above, the term 'land' as such has not been defined in the 1913 Act as it is only the agricultural land which is defined. If the aforesaid notification is read with reference to the powers available with the State Government to grant exemption from pre-emption, it is evident that the same has been granted with reference to land only and not the immovable property. The fact that Section 8(2) of the 1913 Act uses two terms independently, clearly suggests that the land and the immovable property have different meanings....From the aforesaid provisions of the 1913 Act, if read Scheme of the Act, it is abundantly clear that the land and the immovable property are two different terms. The immovable property is more than the land on which certain construction has been made."

Briefly put, the tenants (herein respondents) filed a suit for pre-emption before the Trial Court claiming the preferential right to purchase the property when they came to know that the owner of the property has sold the property to the subsequent owner (herein appellant). The tenants' claim was based on the fact that they had been in continuous possession of the property since 1949, therefore, they should have the preferential right to purchase the property.

The trial court decreed the suit in favor of the tenants, which was subsequently upheld by the High Court.

Assailing the impugned order/judgment of the High Court, the subsequent owner preferred the civil appeal before the Supreme Court.

The gist of the dispute revolves around the notification dated 08.10.1985 issued by the Haryana Government in the exercise of powers conferred under Section 8(2) of the Punjab Pre-Emption Act, 1913 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 dated 08.10.1985 provides that the right of pre-emption shall not exist in respect of the sale of land falling in the areas of municipalities in Haryana.

The appellants contended that the tenants could not exercise the right to pre-emption to claim the preferential right in the urban immovable property because the right of pre-emption did not exist for the sale of land falling in the areas of any municipality in Haryana as per the notification.

The Supreme Court, after perusing the notification and provisions of the Punjab Pre-Emption Act, 1913, observed that the property in dispute on which the right of pre-emption was sought to be exercised by the tenants was an urban immovable property.

Thus, the only issue that appeared before the Court was whether the exemption of pre-emption as granted vide notification dated 08.10.1985 would be available to the property in dispute.

Rejecting the appellant's contention, the Court explained the distinction between the term 'land' and 'immoveable property' to come to the finding that the notification dated 08.10.1985 only takes away the right to pre-emption of the land falling within the municipal limit but not the immoveable property, on which the tenants claimed right to pre-emption.

“The right of the respondents/tenants in the property flows from Section 16 of the 1913 Act. It is not a matter of dispute that the respondents were tenants in the property from the year 1949 onwards where the rolling mill had been set up. 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.”

“As we have already noticed above, the term 'land' as such has not been defined in the 1913 Act as it is only the agricultural land which is defined. If the aforesaid notification is read with reference to the powers available with the State Government to grant exemption from pre-emption, it is evident that the same has been granted with reference to land only and not the immovable property.”, the Court further observed.

According to the court, the land and the immovable property are two different terms. The immovable property is more than the land on which certain construction has been made.

“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 court also rejected the contention of the appellants that the tenant's suit for pre-emption was barred by limitation with a note that the same was not raised by the appellants before the lower Appellate Court or the High Court.

Accordingly, not finding any merit, the court dismissed the instant Civil Appeal.

Head Notes:

Urban Immoveable Land under the Punjab Pre-Emption Act, 1913- The term 'urban immovable property' has been defined 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. (para 12)

Section 8(2) of the Punjab Pre-Emption Act, 1913- 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. (para 14)

Punjab Pre-Emption Act, 1913- From the aforesaid provisions of the 1913 Act, if read Scheme of the Act, it is abundantly clear that the land and the immovable property are two different terms. The immovable property is more than the land on which certain construction has been made. Guidance can also be taken from the definition of immovable property, as provided in Section 3(26) of the 1897 Act, which includes land, means something more than the land. (para 16)

For Petitioner(s) Mr. Shish Pal Laler, Adv. Mr. Hitesh Kumar, Adv. Mr. Vedant Pradhan, Adv. Mr. Atul, Adv. Mrs. Kadambini, Adv. Mr. Ravi Panwar, AOR

For Respondent(s) Mr. Neeraj Kumar Jain, Sr. Adv. Mr. Umang Shankar, AOR Mr. Aniket Jain, Adv. Mr. Sanjay Singh, Adv. Mr. Vidyut Kayarkar, Adv.

Case Details: JAGMOHAN AND ANOTHER VERSUS BADRI NATH AND OTHERS | CIVIL APPEAL NO. OF 2024 (Arising out of SLP(C)No.18612 of 2015)

Citation : 2024 LiveLaw (SC) 95

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