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Preferential Right to Acquire Property in Certain Cases under Hindu Law

(1) Where, after the commencement of this Act, an interest in any immovable property of an interstate or in any business carried on by him or her, whether solely or in conjunction with others, devolve upon two or more heirs specified in class I of the Schedule, and are of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.

(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in absence of any agreement between the parties, be determined by the court on the application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for consideration so determined, such person shall be liable to pay all costs of or incidental to the application.

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(3) If there are two or more heirs specified in class 1 of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.

Explanation:

In this section, ‘court’ means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other Court which the State Government may, by notification in the official gazettee, specify in this behalf.

Section 22 represents the rule of pre-emption which raises clogs on the full sale and purchase of the property. The provisions of the section were absolutely necessary to safeguard the interests of the co-heirs; otherwise the very sanctity of Hindu family would be shaken. The preferential right to acquire the property under the above section is limited to those cases where the property has devolved upon two or more heirs specified in class I of the Schedule.

There is no mention of right of pre-emption in ancient Hindu law. Both the Smritis and commentaries are silent over it. In certain parts of the country it was prevalent by virtue of customs. In certain provinces it was codified and was available to all persons irrespective of their religious faiths.

Before the preferential right is decreed under the section, the conditions laid down there under must be satisfied. The right is personal and not attached to land. The conditions are as under:

(1) The right is available to heirs of class I:

The right is available to the heirs of class I of the Schedule of the Act, who arc co-heirs. The right is not extended to class II heirs, agnates or cognates or their descendants or transferees.

(2) The right is available at the time of transfer:

It is only when one co-heir proposes to transfer his or her interest in the property or business inherited, that other co-heir acquires the preferential right to get it transferred in his favour. It is thus intended to avoid any stranger becoming the owner of that property. The word “transfer” is wide enough to include transfer by sale, gift, exchange or any other mode by which an interest in the property or business is capable of being transferred.

(3) Consideration:

Prior to transfer of the property agreement between the parties over consideration is necessary. In case of disagreement about the consideration, it shall be determined by the Court on an application made to it under this section. Application may be made by cither party.

(4) The Court to which application lies:

An application as stated above could be moved to—

(1) The Court within the limits of whose jurisdiction—

(a) The immovable property is situated, or

(b) The business is carried on.

(2) The Court specified by the State Government in the notification.

(5) Preference to the heir offering highest consideration:

In sub-section (3) of Section 22, it is laid down that the rule of preference between two or more offers made by two or more co-heirs, entitled to claim preference will go in favour of one, whose offer is highest. The preference is not to be made on the ground of priority of offers, sequence of time, nearness of relationship or on any other ground. The offer of a stranger is no offer under this sub-section.

The Section suffers from certain anomalies. It is not clearly stated as to how and when the right of preference is to be exercised. The expression “transfer” itself has not been adequately explained. It is loosely worded. Does the word “transfer” include gift etc. and if it is so, the provision relating to consideration becomes redundant. “Moreover” in the words of D.F. Mulla, “there is danger of subtle devices being resorted to for defeating the object underlying the section.” The section needs to be redrafted.

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