Leasehold transfer liabilities: transferee cannot seek refund while avoiding contractual burdens attached to the lease

A transferee of leasehold rights who accepts the transfer memorandum, sale certificate and lease deed cannot seek refund of amounts paid towards the transfer while avoiding the liabilities attached to the lease. The lease covenants, read with the transfer documents, required the transferee to step into the earlier lessee's position and discharge past rent and interest, and insolvency-related auction of the asset did not displace those contractual burdens. Writ jurisdiction was held unsuitable for undoing a concluded contractual arrangement or recovering money paid in performance of it, especially where the underlying instruments were not challenged. The principle of approbation and reprobation barred reliance on the transfer's benefit while rejecting its burdens.

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Issues: (i) Whether the petitioner was entitled to refund of the amount deposited for obtaining transfer of the leasehold rights. (ii) Whether, on the facts and contractual documents, the petitioner was bound to pay the past lease rent and interest notwithstanding the auction under insolvency proceedings. (iii) Whether a writ petition seeking only refund of money paid towards contractual obligations was maintainable and whether the petitioner was barred by approbation and reprobation.

Issue (i): Whether the petitioner was entitled to refund of the amount deposited for obtaining transfer of the leasehold rights.

Analysis: The amount was paid in the context of the transfer arrangement and in the backdrop of the lease deed, the transfer memorandum and the sale certificate. The petitioner accepted the transfer memorandum, which incorporated the liabilities attached to the leasehold interest, and the record did not show any challenge to those instruments. A bare assertion of protest, without impeaching the foundation documents, did not create an independent right to refund.

Conclusion: The petitioner was not entitled to refund of the amount.

Issue (ii): Whether, on the facts and contractual documents, the petitioner was bound to pay the past lease rent and interest notwithstanding the auction under insolvency proceedings.

Analysis: The lease deed reserved the lessor's rights over the leasehold property and made the transferee bound by the existing covenants. The transfer memorandum and the sale certificate reaffirmed that the transferee would step into the shoes of the earlier lessee and comply with the contractual conditions. The auction was on an as-is basis, and the liabilities were treated as part of the transfer of leasehold rights. Insolvency proceedings did not displace the contractual incidents of the leasehold transfer.

Conclusion: The petitioner was liable to discharge the past lease rent and interest.

Issue (iii): Whether a writ petition seeking only refund of money paid towards contractual obligations was maintainable and whether the petitioner was barred by approbation and reprobation.

Analysis: The dispute arose from a concluded contractual arrangement, and the relief sought was a refund of money paid in performance of that arrangement. Writ jurisdiction was held to be inappropriate for enforcing or undoing such contractual obligations in the absence of a challenge to the underlying instruments. The petitioner took benefit under the transfer documents and simultaneously sought to avoid their burdens, which attracted the principle that a party cannot approbate and reprobate.

Conclusion: The writ petition was not maintainable for the claimed refund, and the petitioner was barred by approbation and reprobation.

Final Conclusion: The transfer of the leasehold interest carried the contractual liabilities attached to the property, and the petitioner could not use writ jurisdiction to escape those obligations or recover the amount paid for their discharge.

Ratio Decidendi: A transferee of leasehold rights who accepts the transfer documents and benefits from the transfer cannot, in writ jurisdiction, avoid the contractual burdens attached to the lease and seek refund of money paid toward those burdens unless the underlying instruments are lawfully challenged.

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