Punjab & Haryana HC Invalidates Neighbour's 'First Right' to Buy Property

Facts

A legal dispute reached the Punjab & Haryana High Court concerning the customary right of pre-emption known as 'Shafi-i-Jar'. This long-standing custom gives a person the first right to purchase an adjacent property simply because they are a neighbour, allowing them to step in and take over a sale made to an outsider. The core issue was whether this ancient practice, which restricts a property owner's freedom to sell, is compatible with modern constitutional principles.

Holding

A Division Bench of the High Court held that the customary right of pre-emption based on neighbourhood ('Shafi-i-Jar') is unconstitutional and therefore unenforceable. The Court specified that the only form of pre-emption that remains valid is the right of a co-sharer ('Shafi-i-Sharik') to purchase another co-sharer's interest in a joint property.

Reasoning

The Court reasoned that the right of 'Shafi-i-Jar' imposes an unreasonable and arbitrary restriction on a property owner's right to dispose of their property as they see fit. Granting a special privilege to a neighbour over all other potential buyers, without any other underlying interest in the property itself, creates a discriminatory classification. This violates the fundamental right to equality guaranteed under Article 14 of the Constitution of India. The Court distinguished this from a co-sharer's right, which is seen as a reasonable means to prevent fragmentation of property and avoid introducing strangers into a shared ownership structure.

Practical Impact

This judgment significantly simplifies property transactions for owners in Punjab, Haryana, and the Union Territory of Chandigarh. Property owners are no longer obligated to offer their property to a neighbour first, nor can a neighbour challenge a sale to a third party based on this custom. This removes a major potential hurdle and source of litigation in real estate deals, providing greater certainty to both buyers and sellers.

Sources

• Punjab & Haryana HC RFA 2287/2024
• Constitution of India, Article 14