TMI Blog2022 (6) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... to refund the amount so deposited by the petitioner along with 18% per annum. The judgment in the case of Suganmal [ 1964 (11) TMI 7 - SUPREME COURT] and Salonah Tea Company Ltd. [ 1987 (12) TMI 3 - SUPREME COURT ] are squarely applicable in the facts of the present case particularly when refund is being sought on the basis of certain deposits so made by the petitioner for discharging the contractual obligation. This Court is of the firm opinion that the present writ petition so instituted, seeking the solitary relief of mandamus without assailing any order, is not maintainable. Meticulously, analyzing the facts of the case in hand from the four corners of law this Court cannot subscribe to the argument of the learned Senior Counsel who appears for the petitioner as the controversy sought to raked up by the petitioner devolves around factual issues relating to the contractual obligation so embodied in the underline instruments be that the lease deed so executed from time to time or the Transfer Memorandum so executed between the parties. More so, the sale certificate itself has been issued after noticing the fact that the petitioner transferee (auction purchaser) is bound by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so embodied therein. (g). A writ petition containing solitary relief of refund of the amount deposited for fulfilling contractual obligation, is not maintainable. (h). Even otherwise, in absence of any challenge being made to the covenants of the Transfer Memorandum dated 24.12.2020 and the Sale Certificate dated 30.07.2021, the petitioner is not entitled to refund of the amount so deposited by him claiming it to be under protest. The writ petition is devoid of merit and thus, liable to be dismissed. It is, therefore, dismissed. - Civil Misc. Writ (C) Petition No. - 10123 of 2021 - - - Dated:- 27-5-2022 - Hon ble Surya Prakash Kesarwani And Hon'ble Vikas Budhwar JJ. For the Petitioner : Manu Khare For the Respondent : C.S.C.,Anjali Upadhya,Ramendra Pratap Singh ORDER (PER HON BLE VIKAS BUDHWAR, J.) 1. Heard Sri Navin Sinha, learned Senior Counsel assisted by Sri Manu Khare, learned counsel for the petitioner, Sri Ramendra Pratap Singh, learned counsel for the respondent no. 2 (Greater Noida Industrial Development Authority) and Smt. Subhash Rathi, learned Standing Counsel who appears for the State. EPILOGUE The extent and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idator wherein not only details and description of the assets including the land and the buildings was mentioned which was put to auction but reserve price of auction being bieng 145.67 crores and the earnest money to be deposited being 14.57 crores was also reflected. The petitioner as per its own showing, participated in the auction so conducted and the bid of the petitioner was found to be commensurate to the expectation of the Liquidator. Consequently, the NCLT accepted the offer of the petitioner on 16.07.2019 and the petitioner thereafter received the acceptance letter dated 16.07.2019 of the Liquidator. According to the petitioner, full and final payment of Rs. 145.75 crores was made by it and on 11.09.2019 and a Certificate of Sale under Regulation 33 of 2016 Regulation was issued in favour of the petitioner. Consequent to the issuence of the sale certificate on 11.09.2019 the petitioner approached GNIDA on 30.01.2020 followed on 11.09.2020 for issuance of Transfer Memorandum. It has come on record that on 11.09.2020 GNIDA corresponded with the Liquidator claming arrears of past lease rentals of Rs. 4,71,40,620/- as principal dues and interest towards lease rentals of Rs. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moser Baer should have informed the Aurthority that they have become bankrupt and they cannot pay the lease rent of the plot allotted to them. No information has been given to the Greater Noida Authority by the M/s Moser Baer. Moreover lease rent has not been paid and the Greater Noida Authority will charge transfer charges as per policy of the Greater Noida Authority from the petitioner company, then only name of the company can be recorded in the Authority s record. 13. That the contents of para 11, 12 and 13 of the writpetition are not admitted hence specifically denied. As per the liquidation of the company of M/s Moser Baer and petitioner compoany that was between them and not with the Greater Noida Authority. In case, any amount due against the plot, the Greater Noida Authority is liable to realize it from the lesee/allottee/purchaser. The Greater Noida Authority has nothing to do with the letter dated 30.09.2020. The company has to pay the transfer charges and all the dues including lease rent of the plot. It is further stated that the dues which are pending against, the Greater Noida Authority is laible to realize from the allottee/purchaser. Moreover, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner on 10.2.2022 seeking impleadment on M/s Moser Baer India Private Limited Company in Liquadation for making him as a party respondent no. 4. A supplementary affidavit and compilation of judgments have been filed by petitioner. RELEVANT EXTRACT OF DOCUMENTS AND INSTRUMENTS EXECUTED BETWEEN THE PARTIES:- 11. THE LEASE DEED MADE on the 26th day of June in the year TWO THOUSAND ONE between Greater Noida Industrial Development Authority, a body corporate constituted under Section 3 read with Section 2(d) of the U.P. Industrial Area Development Act, 1976 (U.P. Act 6 of 1976) (hereinafter called the Lessor which expression shall, unless the context does not so admit, include its successor and assigns) of the one part AND 1.Sri .aged ..Years .. S/o ...R/ o .. 2. Sri .aged ..Years .. S/o ...R/ o .. 3. Sri .aged ..Years .. S/o ...R/ o .. 4.Sri .aged ..Years .. S/o ...R/ o .. 5.Sri .aged ..Years .. S/o ...R/ o .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtgage or subletting as referred to above shall be subject to and the beneficiary thereof shall be bound by all the covenants and conditions contained in this deed and be answerable to the lessor in all respect in the same manner as the original lessee. 10 (a) Whenever the title of the Lessee in the demised premises is transferred in any manner whatsoever the transferor and the transferee shall within one month of such transfer, give notice of such transfer in writing to the Lessor. (b) In the event of the death of the Lessee the person on whom thetitles of the deceased devolves shall within three months of such devolution give notice of such devolution to the Lessor. (c) The transferee or the person on whom the titles devolves as thecase may be shall supply to the Lessor certified copies or the document evidencing the transfer or devolution. 15 . The Lessor may require the successor in interest of the Lessee to abide by and faithful carry out the terms, conditions, stipulations provisions and agreements herein contained. IV. AND IT IS HEREBY FURTHER AGREED AND DECLARED BY AND BETWEEN THE PARTIES TO THESE PRESENTS AS FOLLOWS (A) Upon the happening of any on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uire the same for the sale consideration of Rs. 1,45,75,00,000/-(Rupees One Hundred Forty Five Crores and Seventy Five Lakh Only). AND WHEREAS the Transferor has already applied and obtained the TRANSFER MEMORANDUM from the Greater Noida Industrial Development Authority, vide TRANSFER MEMORANDUM No. GNIDA/2020/1750dated 24-12-2020 in favour of the Transferee, in respect of the lease hold rights for the said property l.e. Plot No. 66, Greater Noida, U.P. having total area admeasuring 2,70,201 Sq. Mtrs. 4. That the Transferor has assured and undertakes the Transferee that the said property is free from all sorts of encumbrances such as mortgage, sale, gift, lien, agreement, dispute, tigation injunctions, banks or private loans, securities, guarantees, attachment with any decree of any Hon'ble court of law from lower to higher jurisdiction in the all over India or abroad being sale as per the provisions of the IBC Codeand NCLT Orders. 7. That the Transferee shall be bound by the terms and conditions of the earlier Lease Deeds executed between the Transferor and the Greater Noida specifically the original lease deeds in respect of the said property and the supplementary le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners bid had been approved and it had deposited the entire amount, then the petitioner is not liable to clear the arrears of the lease rentals and the interest thereon which is being claimed by the GNIDA. Sri Sinha, has further invited the attention towards correspondence of the Liquidator to the GNIDA wherein it has been recited that despite due publication of invitation of the claims relatable to the dues owed to the Corporate Debtor, GNIDA did not either lodge or got registered its claim and thus, according to learned Senior Counsel GNIDA has forgone its right to claim the said amount as once the proceedings under the Code came to an end and the Corporate Debtor got liquidated then the dues so sought to be claimed by the GNIDA is not only unjustified besides being not backed by any of the provision of law. 14. Sri Navin Sinha, learned Senior Counsel in order to buttress his submission has relied to and referred to the several judgments so as to contened that the condition mentioned in the Certificate of Sale dated 11.09.2019 being AS IS WHERE IS , AS IS WHAT IS , WHATEVER THERE IS AND NO RECOURSE cannot be stretched so far as to include within its encompass a situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rotest. According to learned Senior Counsel even if assuming that the amount in question has been deposited voluntarily then to GNIDA being the instrumentality of the State, had no occassion or justification to retain the said amont on the guise that the petitioner has deposited the said amount for executation of Transfer Memorandum. The argument of the learned Senior Counsel is that once the amount is not liable to be paid and the GNIDA has received the same without any legal justification then in that contingency the amount is liable to paid back to the person who had extended the same. ARGUMENT OF RESPONDENTS (ANSWERERS) 17. Sri Ramendra Pratap Singh, who appears for GNIDA has countered the submission of learned Senior Counsel while arguing that the petitioner is not entitled to any relief particularly in view of the fact that, might be the petitioner claims itself to be a bonafide auction purchaser but in view of the fact that the present case relates to auction of an immovable property being a lease land of which the GNIDA is the lessor then without there being any communication about the bankruptcy of the Creditor Debtor and the fact that insolvency proceeding got i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition of the argument, made at the time of arguing the petition. QUESTION OF DETERMINATION (i) Whether under the the facts and circumstances of the case, the petitioner has any lawful right to claim refund of Rs. 05,80,28,025/- along with interest @ 18% per annum, deposited by him to get the lease of the disputed plot transferred in its name as per Transfer Memorandum dated 24.12.2020? (ii) Whether payment of the dues attached to the disputedproperty can be questioned by the petitioner when as per sale certificate dated 11.09.2012, the disputed plot was sold on AS IS WHERE IS , AS IS WHAT IS , WHATEVER THERE IS , AND NO RECOURSE basis and accepting the conditions, and the petitioner deposited the amount to get the lease transferred in its name? (iii) Whether the claim of refund of the disputed amount is hitby the principle of approbate and reprobate? (iv) Whether under the IBC, the petitioner as an auctionpurchaser of lease hold rights of the disputed plot, has protection under the IBC from payment of lease rent and other dues attached to the property, particularly when the right of the liquidated company in the disputed property was purchased by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its interest in the demise premises or building constructed thereon or both, however, the same is subject to prior permission/concurrence to be given by lessor by GNIDA. Clause 15 itself stipulates that the GNIDA being the lessor may require successor in the interest of the lessee to abide by and faithfully carry out the terms and conditions, stipulation, provisions and agreements therein contained. 25. Clause (a),(b) of Clause 3 under heading no. (IV) commencing with the word AND IT IS HERE BY FURTHER AGREED AND DECLARED BY AND BETWEEN THE PARTIES TO THESE PRESENTS AND FOLLOWS itself stipulates that lessee agrees that the sums dues under the deed on account of premium, rent interest or damage for use and occupation shall be paid by the lessee and the lessor shall have first charge upon the demise premises for the amount of unpaid lease rent and interest. Conjoint reading of the said covenants itself shows that the expression lessee itself encompasses to it the legal heirs, assignee, representative etc and the land being the lease land can only be transferred with prior permission to be accorded by the lessor for transfer. Nonetheless, by virtue of the lease deed the lessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and undertook that the demised land is free from all sorts of encumbrances land as mortgage, sale, gift, lien, agreement, dispute, litigation, injunctions, banks or private loans, securities, guarantees, attachment with any decree of court of law. 27. In the light of the abovenoted instrument so executed from time to time, the present case is to be decided. The words as is where is basis has been subject matter of interpretation and consideration before the Hon ble Apex Court umpty number of times in following decision:- 28. The Hon ble Apex Court in the case of U.T. Chandigarh Administration And Another Vs. Amarjeet Singh And Others reported in 2009 (4) SCC 660 in paragraph nos. 19 and 20 observed as under:- 19. In Lucknow Development Authority, it was held that where a developer carries on the activity of development of land and invites applications for allotment of sites in a developed layout, it will amount to `service', that when possession of the allotted site is not delivered within the stipulated period, the delay may amount to a deficiency or denial of service, and that any claim in regard to such delay is not in regard to the immovable property but in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or may not participate in the auction. Once with open eyes, a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided. 29. Following the said judgment the Hon be Apex Court in the case of Punjab Urban Planning and Development Authority And Others Vs. Raghu Nath Gupta And Others reported in 2012 (8) SCC 197 in para 14 observed as under:- 14. We notice that the respondents had accepted the commercial plots with the open eyes, subject to the above mentioned conditions. Evidently, the commercial plots were allotted on as is where is basis. The allottees would have ascertained the facilities available at the time of auction and after having accepted the commercial plots on as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the purchaser had the notice of defects, if any. 32. Section 3 of the Transfer of Property Act 1882 incorporates the doctrine of constructive notice under Section 3 which is read as under:- A person is said to have notice of a fact when he actually knows that fact, or when, but for willful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have know it. Explanation II: Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. 33. Nonetheless the Transfer of Property Act, 1882, also envisages the duty of the seller to disclose to the buyer any material defect in the property or in the seller s title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover. This is, however, subject to the presence of contract to contrary between the parties. 34. Now, another facet needs to be examined as to what are the types of defects which a buyer is expected to inquire into before purchasing the property. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been done at the end of the petitioner. Moreover, an additional fact to be noticed at the stage is that the petitioner on 24.12.2020 itself became a signatory to the Transfer Memorandum clearly accepting the terms and conditions/covenant of lease deed in question which was executed on 26.06.2021 along with subsequent lease deeds and also the supplementary lease deed executed between the GNIDA and Corporate Debtor while stepping into the shoes of the Corporate Debtor. Transfer Memorandum dated 24.12.2020 as discussed above in particular clause 4, 5, 7 and 11 itself depicts that the petitioner is liable to pay the arrears of lease rentals and interest thereon. The terms and conditions of the Transfer Memorandum dated 24.12.2020 itself became a basis of the sale certificate executed between corporate debtor and the petitioner on 30.07.2021 as internal page 3 itself shows that the sale certificate was being issued in pursuance of the Transfer Memorandum dated 24.12.2020. Moreover, clause 4 of the sale certificate dated 30.07.2021 which is internal page 4 shows that after execution of the transfer memorandum dated 24.12.2020 the transferee being the corporate debtor has assured and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C Code 2016 only grants limited protection to the petitioner to be inducted by mode of stepping into the shoes of Corporate Debtor, however, in order to be a lessee the conditions so provided in the lease deed and the Transfer Memorandum are to be adhered to. This Court has also to bear in mind the fact that the petitioner rights as a lessee has not been created by any fiction of law, however, the same is to be governed by the obligation so contained in the lease deed. Thus, this Court is of the firm opinion that IBC Code-2016 does not grant any protection to the petitioner for possessing the status of an auction purchaser in such a manner so as to wriggle out from the contractual obligation of nonpayment of lease rents in the light of doctrine of AS IS WHERE IS , AS IS WHAT IS , WHATEVER THERE IS AND NO RECOURSE 39. The Hon ble Apex Court in the case of Union Bank Of India Vs. Official Liquidator and Others reported in 1994 (1) SCC 575 had the occasion to consider the aspect relating to the guarantee or warranty of the official liquidator with regard to the title and encumbrances of the immovable property which are put to auction. The Hon ble Apex Court in paragraph no. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hanuman Silks Vs. Karnataka Industrial Areas Development Board, AIR 1997 Kar 134. It, therefore, becomes necessary to discuss these two judgments in the first instance. 32. In Karnataka State Electronics Development Corpn. Ltd. v. Official Liquidator OSA No. 31 of 2004, decided on 21.06.2005 (KAR) there was an allotment of industrial plot in favour of Anco by the Karnataka State Electronics Development Corporation (Corporation) on lease-cum-sale basis for which an agreement was executed. As per the said agreement, the Company was to establish its manufacturing unit within two years from the date of allotment of the Industrial Plot. In the meantime, the said Anco went into liquidation and winding up orders dated 8.6.2000 were passed. Much after the winding up orders, the corporation cancelled the lease-cum- sale deed on 28.6.2003 and took paper possession of the industrial plot. Thereafter, the Corporation filed the application in the Company Petition requesting the Company Judge to declare the Cancellation Order passed by the Corporation to be valid and direct the O.L. not to interfere with its paper possession. The Company Judge rejected the said application keeping in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accordingly. 33. Though the aforesaid observations give the impression thatthere cannot even be a cancellation of the allotment of industrial plot in respect of a Company in liquidation without the prior permission of the Company court, we are of the view that these observations are to be read in the factual context of the aforesaid case. As noted above, the Corporation had not only cancelled the lease but had even resumed the land by taking paper possession . Further, in the application filed before the Company Court, it did not pray for permission to take possession. On the contrary, the Corporation took up the stand that it already had the possession which should be declared as validly taken and the prayer made was to direct the Official Liquidator not to interfere with the possession. It is in this context that the High Court held that same could not be done without the leave of the court. We are of the opinion that the observations are to be read giving restricted meaning that possession could not be taken without the prior leave of the court. It may not be correct to hold that the law requires that prior permission of the Company Judge is mandated even for cancella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; that is reserved by the Board in the lease-cum-sale agreement, does not authorize the Board to directly or forcibly resume possession of the leased land, on termination of the lease. It only authorizes the Board to take possession of the leased land in accordance with law. It could be either by having recourse to the provisions of the Public Premises Act or by filing a Civil Suit for possession and not otherwise. 36. It, thus, becomes clear that even though order of re-entry orresumption can be passed by the Board, but for taking possession the Board is supposed to have recourse to legal proceedings act in accordance with law. However, this was a case where the Company had not gone into liquidation and, therefore, the question of applicability of Section 537 of the Companies Act could not arise. 37. In the present case, we are confronted with a situation whereCompany is in liquidation. Thereafter, we have to understand the implication of the provisions of Section 537, which reads as under: 537. Avoidance of certain attachments, executions, etc., in winding up by Tribunal. (i) Where any Company is being wound up by Tribunal- (a) any attachment, di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with settled law. 13. There can be no dispute, nor was it contended that a donee or a grantee (as the status of the lessee company in liquidation as in this case) can have no rights in excess of that possessed by the donor or the grantor. The mortgagee (whose shoes SASF has stepped into) of the lessee (Wellman) can have no right greater or better than that of the lessee in terms of the deed of lease. The observations in Phatu Rochiram Mulchandani apply to the facts of this case. The appeal, therefore fails and is dismissed, without order as to costs. 42. The Hon ble Apex Court in case of State of Uttar Pradesh Vs. Union Bank of India reported in 2016 (2) SCC 757 in paragraph no. 23 has observed as under:- 23. It is pertinent to mention here that the land in dispute being a Government property, the appellant-Bank cannot get any right over it. Moreover, neither the appellant-Bank is a lessee of the land in question nor any lease has ever been sanctioned by the Govt, of U.P. in its favour. Hence, the appellant is not entitled to get any right or to keep possession of the properties in question situated at 19, Clive Road and 10, Edmoston Road. 43. Applying the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.1988 to transfer the rights for a of Rs.76,00,000/-. Exercising power under Section 269UD of Income Tax Act, 1961, appropriate authority passed a purchase order dated 13.12.1988 of the property in question. After the aforesaid purchase order an amount of Rs.17,86,240/- towards payment of unearned increase was paid to the DDA by Income Tax Department. After the aforesaid purchase order, auction notice dated 20.03.1989 was issued giving details of the properties, which included the property in question. 15. In pursuance of the auction notice, the writ petitioner gavehighest bid and was declared auction purchaser for an amount of Rs.1,08,05,000/-. The writ petitioner paid the full amount and was delivered the possession on 25.04.1989. Sale Deed was also executed in favour of writ petitioner on 25.09.1997. The petitioner made an application to the DDA for grant of freehold rights and also deposited amount of Rs.3,45,729/-. While processing the application for conversion of leasehold rights to free hold rights, DDA made a demand of Rs.1,43,90,348/- towards unearned increase, which was challenged by the writ petitioner. Whether writ petitioner was liable to pay unearned increa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reading of the above clauses does give impression thatwhat was sold to the writ petitioner was all rights, titles, interests and appurtenances but when we read Clause 3 of the same Sale Deed, the said clause gives a different impression. Clause 3 of the Sale Deed is as follows:- 3. That the Vendor hereby represents and assures to the Vendee that his right in the property hereby sold, transferred and conveyed is in terms of agreement for transfer dated 29-9-1988 between Mr. Trilochan Singh Rana and Mis, Rani Rana transferor and M/s. Ocean Construction Industries Pvt. Ltd. (through its Director Shri Jugal Kishore Malhan) transferee. 22. The principles of construction of documents are well settled.While construing the documents/intention of the parties have to be ascertained. In this context, reference is made to judgment of this Court in Sahebzada Mohammad Kamgarh Shah Vs. Jagdish Chandra Deo Dhabal Deb and Others, AIR 1960 SC 953. In Paragraph Nos. 12 and 13, following was laid down:- 12. In his attempt to establish that by this later lease the lessor granted a lease even of these minerals which had been excluded specifically by Clause 16 of the earlier leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended by the parties. In Paragraph No. 14, following was laid down:- 14. In cases of ambiguity it is necessary and proper that the court whose task is to construe the document should examine the several parts of the document in order to ascertain what was really intended by the parties. In this much assistance can be derived from the fourth condition of the conditions which were imposed by the lease as regards the grant of sub-leases. This condition provided inter alia that all such under- leases to be granted by the lessee shall be subject to the provisions of Clause 16 of the principal lease 24. Before we construe the document, we need to first notice theauction notice by which the property was to auction. Auction notice, which has been brought on the record as Annexure-R1 indicate that details of four properties were given in the auction notice. It is useful to look into the details given as follows:- Details of Properties Reserve Price 1. Property No. B-6, Friends Colony Mathura Road, New Delhi. This is a lease hold residential plot measuring 195.097 sq. Mt. tog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as properties at Sl. Nos. 1, 2 and 3, the words mentioned are leasehold residential plots whereas with regard to property details given at Sl. No.4, it has been mentioned that all rights, titles and interests in the dwelling unit , which, if contrasted with details of properties given at Sl. Nos. 1, 2 and 3 contains the intendment. Thus, there cannot be any doubt that property in question, which was put in auction was a property as lease hold rights residential plots. When property is auctioned, the terms and conditions of auction are binding on both the parties. When petitioner submitted his bid in pursuance of the auction notice, he was bidding for lease hold residential plot with a double storied building. While interpreting the Sale Deed, the auction notice has to be looked into to find out the nature of transaction. The Sale Deed cannot be read divorced to the auction notice or to auction notice. Auction of a leasehold residential plot and auction of freehold residential plot carries different connotations. Leasehold rights are limited rights, which are subservient to freehold rights of a property. In giving bid for leasehold rights and freehold rights, different consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge all encumbrances on the property then existing. The determining factors are the words employed in Section 55 of the Transfer of Property Act being in absence of a contract to the contrary . 48. Applying the said provision in the facts of the present case, this Court finds that there exist not only lease deed but also a Transfer Memorandum and sale certificate which excludes the general principle as enshrined in section 55 1(g) of the Transfer of Property Act. 49. The High Court of Madras in the case of K. Madhu and Ors. Vs. Dugar Finance India Ltd. and Ors. reported in (2008) 145 CompCase 277 (Mad) in paragraph no. 33 has observed as under:- 23. A reading of the above judgments clearly shows that Section 55 (1) (g) of the Transfer of Property Act is absolute in its character, where there exists a covenant guaranteeing the non-existence of encumbrances irrespective of the fact that the same was discovered after the sale, the liability is that of the seller only. The purchaser making the payment on behalf of the vendor is entitled to the recoupment of the same. However, where there existed no such covenant to the contrary, there could arise no automatic invoking o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery talks of statutory liabilities arising out of the land or statutory liabilities arising out of the said properties (i.e. the machinery). Thus, it is only that statutory liability which arises out of the land and building or out of plant and machinery which is to be discharged by the purchaser. Excise dues are not the statutory liabilities which arise out of the land and building or the plant and machinery. Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture. This fine distinction is not taken note at all by the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) was akin to the position that was available in the case on hand in view of the Haryana Government Electrical Undertakings (Dues Recovery) Act, 1970. There was no insertion of a clause like Clause 21A as in the present case, in the Terms and Conditions of Supply involved in that case. The decision proceeded on the basis that the contract for supply was only with the previous consumer and the obligation or liability was enforceable only against that consumer and since there was no contractual relationship with the subsequent purchaser and he was not a consumer within the meaning of the Electricity Act, the dues of the previous consumer could not be recovered from the purchaser. This Court had no occasion to consider the effect of clause like Clause 21A in the Terms and Conditions of Supply. We are therefore of the view that the decision in Isha Marbles (supra) cannot be applied to strike down the condition imposed and the first respondent has to make out a case independent on the ratio of Isha Marbles (supra), though it can rely on its ratio if it is helpful, for attacking the insertion of such a condition for supply of electrical energy. This Court was essentially dealing wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is restored or a new connection is given to a premises, cannot be termed as unreasonable or arbitrary. In the absence of such a stipulation, an unscrupulous consumer may commit defaults with impunity, and when the electricity supply is disconnected for non-payment, may sell away the property and move on to another property, thereby making it difficult, if not impossible for the distributor to recover the dues. Provisions similar to Clause 4.3(g) and (h) of Electricity Supply Code are necessary to safeguard the interests of the distributor. 12. The position therefore can may be summarized thus : (i) Electricity arrears do not constitute a charge overthe property. Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/occupier. (ii) Where the statutory rules or terms and conditionsof supply which are statutory in character, authorize the supplier of electricity, to demand from the purchaser of a property claiming re-connection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Respondent would be liable to pay all property taxes, other taxes, electricity bills, water taxes and rents from the date of the agreement (i.e. 12.8.1992). For the first time, by letter dated 8.1.1993 of the Second Appellant to the Mandal Panchayath, Aloor Taluk, the issue of sales tax dues of the Defaulting Company was brought to the surface. This is further borne out by the correspondence between the First Respondent and the Corporation. Thus, it is evident that the First Respondent had no actual notice of the charge prior to the transfer. As to whether the First Respondent had constructive notice of the charge, no substantive argument on this issue was made, either before the High Court or at any rate before us. Hence, we cannot hold that the First Appellant had constructive notice of the charge. 55. Similarly, so far as the case of Telangana State Southern Power Distribution Company Ltd. (supra) the Hon ble Apex Court in paragraph nos. 16, 16.1, 16.2 has observed as under:- 16. We have gone into the aforesaid judgments as it was urged before us that there is some ambiguity on the aspect of liability of dues of the past owners who had obtained the connection. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt so deposited under protest the petitioner has to place relevant facts before the court as to how and by which manner it had been pressurized to deposit the amount and it deposited the same under protest. The Court finds that the petitioner himself was a signatory of Transfer Memorandum dated 24.12.2020 and the same became a basis of issuance of sale certificate on 30.07.2021. Further the petitioner stepped into the shoes of the Creditor Debtor and also got itself bound to honor the contractual obligation. Barring the allegations made in paragraph no. 14 of the writ petition and a letter so appended marked to the GNIDA dated 27.10.2020, there is nothing on record to show that any challenge/protest was made to the Transfer Memorandum dated 24.12.2020. As already noticed the petitioner was bound to honor the commitments as laid down in the lease deed and the petitioner paid the arrears of lease rentals and interest and thereafter, it became the lessee. More so, the conduct of the petitioner itself shows that it approbated and reprobated at the same time as though it on the basis of the Transfer Memorandum dated 24.12.2020 it, became a lessee while holding interest over the leased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. MR. P. Firm Maur, AIR 1965 SC 1216; Maharashtra State Road Transport Corporation v. Balwant Regular Motor Service, Amravati Ors., AIR 1969 SC 329; P.R. Deshpande v. Maruti Balaram Haibatti, AIR 1998 SC 2979; Babu Ram v. Indrapal Singh, AIR 1998 SC 3021; Chairman and MD, NTPC Ltd. v. Reshmi Constructions, Builders Contractors, AIR 2004 SC 1330; Ramesh Chandra Sankla Ors. v. Vikram Cement Ors., AIR 2009 SC 713; and Pradeep Oil Corporation v. Municipal Corporation of Delhi Anr., (2011) 5 SCC 270). 35. Thus, it is evident that the doctrine of election is based on the rule of estoppel- the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity. By that law, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. 64. The Hon ble Apex Court in the case of Sri Gangai Vinayagar Temple and another vs. Meenakshi Ammal and others, reported in (2015) 3 SCC 624 has observed as under: 16.2. Secondly, on a proper perusal of the plaint, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, with the approval of the Development Authority, also contained similar clauses and also provided that the terms and conditions imposed by Development Authority from time to time shall be binding on the transferee. Clause 15 of the transfer deed stipulated that the transferee shall put the property to use exclusively for residential purpose and shall not use it for any purpose other than residential. After raising the construction on the plot in question, admittedly, the appellants have put the property to a different use other than residential. The property was rented out to two different commercial undertakings, i.e., Andhra Bank and a company by the name `Akariti Infotech'. It is not even the case of the appellants before us that the Development Authority had granted any specific permission to them to use the property for any purpose other than residential. 67. Perusal of the above noted paragraph of the judgment itself shows that the transfer deed is an instrument which is normally executed in case of transfer of lease land in favour of any third party which sets out with the terms and conditions of the transfer. Applying the said judgment this Court finds that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the State are as much bound as private individual are to carry out obligations incurred by them because parties seeking to bind the authorities have altered their position to their disadvantage or have acted to their detriment on the strength of the representations made by these authorities. The High Court thought that in such cases the obligation could sometimes be appropriately enforced on a Writ Petition even though the obligation was equitable only. We do not propose to express an opinion here on the question whether such an obligation could be enforced in proceedings under Article 226 of the Constitution now. It. is enough to observe that the cases before us do not belong to this category. 14. The Patna High Court also distinguished cases whichbelong to the second category, such as K.N. Guruswami v. The State of Mysore;(4) ' D.F. South Kheri v. Ram Sanehi Singh;(5) and M/s. Shree Krishna Gyanoday Sugar Ltd. v. The State of Bihar,(6) where the breach complained of was of a statutory obligation. It correctly pointed out that the cases before us do not belong to this class either. 15. It then, very rightly, held that the cases now before usshould be placed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and particularly the price payable. They offered to purchase the flats at the price on which the Authority offered to sell the same. After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete. There is no suggestion that there was a mis-statement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the Authority on the strength of which they applied and obtained flats. How the seller works out his price is a matter of his own choice unless it is subject to statutory control. Price of property is in the realm of contract between a seller and buyer. There is no obligation on the purchaser to purchase the flat at the price offered. Even afar registration the registered applicants may opt for other schemes. His light to enter into-other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn. With this background the petitioners now contend that the Authority has collected surch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to get back a part of the purchase price and thus trying to re-open and wriggle out of a concluded contract only partially. In a similar and identical situation a Constitution Bench of this Court in Har Shankar ors. etc. etc. v. The Dy. Excise Taxation Commr. ors. has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this Court under Art. 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained. However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined. 72. In the case of Divisional Forest Officer vs. Bishwanath Tea Co. Ltd. reported in 1981 (3) SCC 238 the Hon ble Apex Court in paragraph nos. 8 and 9 has observed as under:- 8. It is undoubtedly true that High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contract along with its benefits. The powers of the Financial Commissioner to grant liquor licences by auction and to collect licence fees through the medium of auctions cannot by writ petitions be questioned by those who, had their venture succeeded, would have relied upon those very powers to found a legal claim. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract could ever have a binding force. Again at page 265 there is a pertinent observation which may be extracted. Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations. This apart, it also appears that in a later decision, the Assam High Court itself took an exactly opposite view in almost identical circumstances. In Woodcrafts Assam v. Chief Conservator of Forests, Assam, a writ petition was filed challenging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructed by it and the rate of monthly instalments to be paid, the 'authority' or its agent after entering into the field of ordinary contract acts purely in its executive capacity. Thereafter the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter-se. In this sphere, they can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority (i.e. B.D.A. in this case) in the said contractual field. 22. There is a line of decisions where the contract enteredinto between the State and the persons aggrieved is nonstatutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple Radhakrishna Agarwal Ors. v. State of Bihar Ors., [1977] 3 SCR 249; Premji Bhai Parmar Ors. etc. v. Delhi Development Authority Ors, [1980] 2 SCR 704 and D.F.O. v. Biswanath Tea Company Ltd., [1981] 3 SCR 662. 74. In Noida Entrep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in Har Shankar and Jageram that the writ petitioners, having entered into agreements voluntarily,containing the conditions aforesaid and having done the business under the licences obtained by them, cannot be allowed to either wriggle out of the agreements nor can they be allowed to challenge the validity of the Rules which constitute the terms of the contract. The High Court should not have exercised its extra-ordinary discretionary jurisdiction under Article 226 of the Constitution in aid of such licencees. 77. Orissa State Financial Corporation vs. Narsingh Ch. Nayak And Others reported in 2003 (10) SCC 261 the Hon ble Apex Court in paragraph no. 6 has observed as under:- 6. The said order is under challenge in this appeal. On a plain reading of the impugned order it is manifest that the High Court, while considering the writ petition filed by the owner of the vehicle for quashing of the notice of auction sale and for other consequential reliefs, has passed order drawing up a fresh contract between the parties and has issued certain further directions in the matter; the corporation has been directed to advance a fresh loan to the writ petitioner to enable him to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract . The contractor should have relegated to other remedies. 21. It is evident from the above, that generally the courtshould not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus, is to protect and establish rights and to impose a corresponding imperative duty existing in law. It is designed to promote justice (ex debito justiceiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter-alia, the facts of the case, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be interpreted without giving any outside aid. The terms of the contract have to be construed strictly without altering the nature of the contract, as it may affect the interest of either of the parties adversely. (Vide: United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, AIR 2004 SC 4794; Polymat India P. Ltd. Anr. v. National Insurance Co. Ltd. Ors., AIR 2005 SC 286). 24. In DLF Universal Ltd. Anr. v. Director, T. and C. Planning Department Haryana Ors., AIR 2011 SC 1463, this court held: It is a settled principle in law that a contract is interpreted according to its purpose. The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualise. ?It comprises joint intent of the parties. Every such contract expresses the autonomy of the contractual parties private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretation, the court is required to determine the ultimate purpose of a contract primarily by the joint intent of the parties at the time the contract so formed. It is not the intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax illgally collected. We have not been referred to any case in which the courts were moved by a petition under article 226 simply for the purpose of obtaining refund of money due from the State on account of its having made illegal exactions. We do not consider it proper to extend the principle justifying the consequential order directing the refund of amounts illegally realised, when the order under which the amounts had been collected has been set aside, to cases in which only orders for the refund of money are sought. The parties had the right to question the illegal assessment orders on the ground of their illegality or unconstitutionality and, therefore, could take action under Art. 226 for the protection of their fundamental right and the Courts, on setting aside the assessment orders exercised their jurisdiction in proper circumstances to order the consequential relief for the refund of the tax illegally realised. We do not find any good reason to extend this principle and, therefore, hold that no petition for the issue of a writ of mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claims a right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have power to pass any appropriate order in the exercise of the powers conferred on them under Article 226 of the Constitution. A petition solely praying for the issue of a writ of mandamus directing the State to refund the money alleged to have been illegally collected by the State as tax was not ordinarily maintainable for the simple reason that a claim for such refund can always be made in a suit against the authority which had illegally collected the money as a tax and in such a suit it was open to the State to raise all possible defences to the claim, defences which cannot in most cases,, be appropriately raised and considered in the exercise of writ jurisdiction. It appears that Section 23 of the Act deals with refund. In the facts of this case, the case did not come within section 23 of the Act. But in the instant appeal, it is clear as the High Court found in our opinion rightly that the claim for refund was a consequential relief. 82. In the case in hand the Court finds that only a solitary relief has been sought in the nature of mandamus directing the GNIDA to refund the amount so deposited by the petitioner along with 18% per annum. The judgment in the case of Suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the factual issue as to whether pressure/coercion so adopted was practiced upon the petitioner. Nonetheless, to put the nail in the coffin the above noted instruments being sale deed certificate, Transfer Memorandum had not been put to challenge before any Court of law. More so, the conduct of the petitioner itself explicitly makes it clear that the petitioner has approbated and reprobated at the same time just in order to get the benefits and to wriggle out from obligations. 85. An impleadment application for impleading M/s Moser Baer India Private Limited Company in Liquadation for making it as fourth respondent, is not required to be allowed in view of the judgment/order so passed today. SUMMATION 86. In summation of the discussion made herein above, we hold: - (a). Merely because the petitioner is a bonafide auction purchaser who had purchased assets Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon. (b). The Insolvency Bankruptcy Code- 2016 grants limited protection to the petitioner (auction purchaser) while allowing it to step into the shoes of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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