Barasat Eye Hospital Thr. Its Rep. vs Kaustabh Mondal

 (2019)19SCC767

Corum: Sanjay Kishan Kaul and K.M. Joseph, JJ.

Facts of the case

• In a recent legal case, the respondent invoked his right of pre-emption under Section 8 of the relevant Act, alleging an inflated consideration in a Sale Deed due to collusion between the transferor and transferee (appellants). The trial court ruled in favor of the respondent, prompting the appellants to appeal successfully on the grounds that determining the value of the property was beyond the court’s jurisdiction. Subsequently, the High Court acknowledged the pre-emptor’s right to question the stated consideration, emphasizing the court’s authority to direct the deposit of the balance amount after inquiry. The case reached a resolution as the High Court set aside the impugned order, upholding the decisions of the trial court and the first appellate court.
• The central issue in this legal saga was whether the right of pre-emption could be enforced indefinitely for subsequent transactions or only during the first instance when the right arises. The court, in its thorough examination, traced the historical roots of the right of pre-emption back to the Mohammedan rule, emphasizing its dual nature: an inherent or primary right to the offer of a property about to be sold and a secondary or remedial right to follow the sold property. This secondary right, the court noted, is weak and can be defeated by legitimate means, including a claim of superior or equal right.
• Crucially, the court grappled with the question of whether the right of pre-emption persists through multiple transactions or is limited to its initial exercise. It concluded that this right is not perpetual and should only be exercised when it first arises. Section 9 of the Act played a pivotal role in this determination, as it imposed an absolute bar on the pre-emptor’s right to exercise it in subsequent transactions involving the same property after waiving it in an earlier transaction.
• The court underscored the significance of Section 9 as a legal constraint, preventing the re-emergence of the right of pre-emption after its initial waiver. The judgment emphasized that the loss of this right, mandated by the Act, is absolute, preventing its resurrection in subsequent transactions related to the same immovable property.
• The implications of this decision are profound, marking an end to a legal battle that spanned more than four decades. The court’s ruling serves as a precedent, clarifying that the right of pre-emption is not an enduring claim but must be exercised judiciously when it first arises. The decision brings certainty to the legal landscape, preventing the perpetuation of pre-emption claims over the years.

In conclusion-

the court’s thoughtful consideration of the historical context, legal provisions, and the nature of the right of pre-emption provides clarity on its limitations. By upholding the decisions of lower courts and emphasizing the bar imposed by Section 9, the court has contributed to legal certainty and brought closure to a longstanding legal dispute.