Monday, 14 September 2020

What is distinction between preferential right" under S.22 of Hindu Succession Act and right of Pre-emption?

The term preferential right and pre emption are not the same.
The remedy of "preferential right" under S.22 of Hindu Succession Act  can be exercised before the sale transaction. The section says that when the co-sharer proposes to transfer his share, the other co sharer can apply for purchase of said share. This situation can arise when co sharer enters into oral or written agreement to sale with third party.
Once the sale is complete, the remedy is to apply for right of pre emption. This right is recognized by some state Acts or by custom or byprecedents. In the absence of statutory provision, the right can be exercised as civil right.
If the Court grant decree of pre emption, naturally the earlier sale deed requires to be cancelled. Because, if earlier sale deed remains in existence, it will affect the plaintiffs/pre emptor right in property. The previous vendee will be entitled for consideration amount in lieu of cancellation of his sale deed.

Section 22 in The Hindu Succession Act, 1956
22. Preferential right to acquire property in certain cases.—
(1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one 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.

The right of 'pre-emption' is given to the owner of immovable property to acquire another immovable property that has been sold to some other person. It is the purchase by one person before all others. Therefore, it is a right of substitution and not of re-purchase.
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