The Supreme Court reaffirmed the principle that under Thesawalamai Law, co-owners enjoy equal pre-emptive rights, as outlined in the Pre-Emption Ordinance.
All Co-Owners Have Equal ‘Pre-Emptive Rights’ Under Thesawalamai Law- SC
The Supreme Court reaffirmed the principle that under Thesawalamai Law, co-owners enjoy equal pre-emptive rights, as outlined in the Pre-Emption Ordinance.
This case involves a prolonged dispute over property rights, specifically a claim to pre-empt a land sale under Sri Lanka’s Thesawalamai law. The case originated when one co-owner of a property decided to sell their share to two other parties back in 1981, under a conditional deed. Another co-owner of the land, seeking to enforce her right to purchase that share herself, argued that the sale circumvented her pre-emptive rights. She believed the sale was structured intentionally to block her from acquiring it and argued that, by law, she should have had the first option to buy.
The sellers and buyers responded by claiming that the entire land plot was technically undivided—meaning it was still one single, shared property among several co-owners and not split into legally recognized parcels. This, they argued, the buyers are in fact also co-owners of the undivided larger land.
The case initially reached the local District Court after the filing in 1982 but faced major delays. After the trial resumed in 2003, a decision was finally issued in 2008, rejecting the claim to pre-emption. Dissatisfied, the claimant appealed to the High Court, but the appellate court upheld the District Court’s decision.
In the Supreme Court the Appellant’s claim to exclusive pre-emptive rights was dismissed on the ground that the disputed land (9 lms 1½ kls) was an undivided portion of a larger extent of 35 lachams, co-owned by the Appellant, the 2nd, 3rd, and 4th Respondents. This finding aligns with the fundamental principle of Thesawalamai Law that all co-owners have equal pre-emptive rights. The Court ruled that the 3rd and 4th Respondents, being co-owners, were legally entitled to purchase the 2nd Respondent’s 1/6th share without violating Section 5.
The Supreme Court emphasized that Section 2 grants co-owners and heirs the right of preference in property transactions, and Section 4 applies specifically to undivided shares of immovable property. The codification under the Pre-Emption Ordinance No. 59 of 1947 ensures formalized procedures, addressing past fraudulent practices.
Under Section 5, the notice of intention to sell must be notarially executed and tendered to the local authority, which is tasked with publishing it. Section 6 allows co-owners or heirs three weeks to exercise their pre-emption rights by tendering the stated amount or entering into an agreement. In cases of non-compliance, Section 7 outlines the recourse available, while Section 8 and Section 9 govern remedies and time limits for actions to enforce pre-emption rights.
The Court highlighted Section 13, which ensures that all co-owners and heirs are deemed to have equal rights to pre-empt, with no preference or hierarchy among them.
The Appellant also challenged the validity of the notice (P3), arguing that it was not displayed on the local authority’s notice board as required under Section 5(4). The Court clarified that while publication on the notice board is the responsibility lies with the local authority, not the vendor. Moreover, the Appellant’s own pleadings acknowledged awareness of the notice, and her letter (P4) was deemed a protest rather than an offer to purchase, as required under Section 6(1). The Court thus rejected the Appellant’s claim.
The Appellant further contended that the deed transferring the 2nd Respondent’s 1/6th share to the 3rd and 4th Respondents was conditional and circumvented the Ordinance. The Court dismissed this argument as irrelevant, noting that the 3rd and 4th Respondents, as co-owners, had an inherent right to purchase the share, regardless of the conditional nature of the deed.
“…The provisions of Section 2 of the Pre-Emptive Ordinance read together with Section 13, categorically state that coowners shall be deemed to have equal right to pre-empt and there shall be no preference or precedence among them. If I may digress, the proviso to Section 13 speaks of a situation, in the event of any competition among such co-owners and heirs, that the court may accept the highest offer made by any co-owner or heir. Admittedly such an occurrence did not take place in the instant case, as the Appellant did not tender the sum and purchase the property or enter into an agreement to purchase, as provided for in Section 6(1) of the Ordinance…” – Chief Justice Murdu N.B. Fernando PC
Case No: SC Appeal No. 29/2013 [Decided on 12.11.2024]
Before: Jayantha Jayasuriya, PC, FCJ. Murdu N.B. Fernando, PC, CJ and A.H.M.D. Nawaz, J.
