In CIVIL APPEAL NO. 2553 OF 2019, Babu Ram vs Santokh Singh, the issue before the Supreme Court was regarding scope and applicability of Section 22 of the Hindu Succession Act, 1956, and particularly, whether preferential right given to an heir of a Hindu under said Section 22 will be inapplicable if the property in question is an agricultural land.
The Supreme Court observed that Section 22 of the Act says:-
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.
(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application.
(3) If there are two or more heirs specified in class I 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 Gazette, specify in this behalf.”
The Supreme Court said that the matter may considered with following three illustrations:-
a) Three persons, unrelated to each other, had jointly purchased an agricultural holding, whereafter one of them wished to dispose of his interest. The normal principle of pre-emption may apply in the matter and any of the other joint holders could pre-empt the sale in accordance with rights conferred in that behalf by appropriate State legislation.
b) If those three persons were real brothers or sisters and had jointly purchased an agricultural holding, investing their own funds, again like the above scenario, the right of pre-emption will
have to be purely in accordance with the relevant provisions of the State legislation.
c) But, if, the very same three persons in illustration (b) had inherited an agricultural holding and one of them was desirous of disposing of his or her interest in the holding, the principles of Section 22 of the Act would step in.
The reason is clear. The source of title or interest of any of the heirs in the third illustration, is purely through the succession which is recognized in terms of the provisions of the Act. Since the right or interest itself is conferred by the provisions of the Act, the manner in which said right can be
exercised has also been specified in the very same legislation.
Finally observing that the content of preferential right cannot be disassociated in the present case from the principles of succession as they are both part of the same concept, the court concluded that the preferential right given to an heir of a Hindu under Section 22 of the Act is applicable even if the property in question is an agricultural land.
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