Pre-Emptive Rights From Company Law And Family Law Perspective: A Detailed Overview

Drishti Banerjee, Amity Law School, Amity University, Kolkata

ABSTRACT

The rights of pre-emption have twofold significance in law. The concept is prevalent in both Company Law and Family Law, bestowing somewhat a similar preferential right upon the beneficiary by offering him or her the first option to acquire a certain property. The Sociological theories on property rights propose the concept of property to be a social institution which ensures that wider societal interests are upheld. The Natural Law theory on the other hand proposes that the right over a certain property is derived from capturing it first, i.e., the first occupier becomes the owner. The jurisprudence of pre- emptive rights can be argued to have been derived from these ideas. This article examines the current legal position pertaining to pre-emptive rights in light of landmark judgments. The Companies Act, 2013 and the latest SEBI Guidelines are also discussed. Further, this study sheds insight on the legal and constitutional validity of the act of offering shares to the existing shareholders first and offering an immovable property for sale first to the neighbours. The article concludes with the argument that while customary pre-emptive rights in Family Law stand against the lofty ideal of enforcement of the constitutional goal of a Uniform Civil Code, the right shall continue to exist in Company Law.