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2022 (6) TMI 990 - HC - Insolvency and BankruptcyRight of Auction purchaser - Seeking refunds of certain amount which have deposited under protest for discharge the contractual obligation - Extent and the scope of judicial intervention in writ jurisdiction - contractual obligation embodied in the commercial contract - recovery of arrears of the lease rentals and interest thereon, once the petitioner stepped into the shoes of the Corporate Debtor lessee - case of petitioner is that petitioner being a bonafide auction purchaser, purchased immovable asscets consequent to the auction/sale held in pursuance of the orders of NCLT after paying the bid amount cannot be fastened with any monetory liability which was attached with Corporare Debtor under Liquidation - whether this Court can in exercise of the jurisdiction under Article 226 of the Constitution of India by virtue of judicial fiat grant relief to the petitioner which tantamount to resiling and wriggling away from a contractual obligation? HELD THAT - 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 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 the covenants contained in the lease deed as well as the Transfer Memorandum. Writ jurisdiction cannot be expanded in an elastic manner so as to stretch it to such a position which tantamounts to giving its judicial seal while delving into the factual issue as to whether pressure/coercion so adopted was practiced upon the petitioner. It is thus concluded and held as under - (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 Corporate Debtor but in order to the lessee of the principle lessor (GNIDA) the petitioner has to honor the commitments and discharge its contractual obligation as embodied in the lease deeds, Transfer Memorandum and Sale Certificate. (c). The conduct of the petitioner also dis-entitles it to be granted relief under the equitable jurisdiction as the petitioner has approbated and reprobated at the same time as on one hand it seeks to become a lessee while being put in possession for enjoying the immovable assets of Corporate Debtor but on the other hand it wriggles and resiles from the contractual obligation. (d). The words so employed in the Certificate of Sale Deed dated 11.09.2019 being AS IS WHERE IS , AS IS WHAT IS , WHATEVER THERE IS AND NO RECOURSE read with the Transfer Memorandum dated 24.12.2020 so executed between the petitioner (auction purchaser) and GNIDA as well as the Sale Certificate dated 30.07.2021 itself creates contractual obligation upon the petitioner to honor the commitments and to discharge the obligations so embodied in the lease deed dated 26.06.2021 and the subsequent lease deeds for the payment of past lease rentals and interest thereon. (e). GNIDA being the principal lessor has paramount interest over the demised land put to auction and it has legal as well as contractual right to raise demand of out standing arrears of lease rentals and interest thereon. (f). High Court under Article 226 of the Constitution of India cannot by a judicial fiat creates a podium to facilitate avoidance of agreements while wriggling out from contractual obligations 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.
Issues Involved:
1. Whether the petitioner has a lawful right to claim a refund of Rs. 5,80,28,025/- along with interest. 2. Whether payment of the dues attached to the disputed property can be questioned by the petitioner. 3. Whether the claim of refund is hit by the principle of approbate and reprobate. 4. Whether the petitioner has protection under the IBC from payment of lease rent and other dues attached to the property. Issue-Wise Detailed Analysis: 1. Lawful Right to Claim Refund: The petitioner, an auction purchaser of the leasehold rights of the Corporate Debtor, claims a refund of Rs. 5,80,28,025/- deposited under protest for the transfer of the lease. The court held that the petitioner is bound by the terms of the lease deed and the Transfer Memorandum dated 24.12.2020, which required the payment of past lease rentals and interest. The court emphasized that a writ petition solely for refund is not maintainable as per the precedent set in Suganmal v. State of Madhya Pradesh. The petitioner’s claim for refund without challenging the underlying contractual obligations is not tenable. 2. Payment of Dues Attached to the Property: The court examined the terms of the lease deed, the Transfer Memorandum, and the Sale Certificate, which stipulated that the petitioner, as the auction purchaser, is liable for past dues. The phrases "AS IS WHERE IS," "AS IS WHAT IS," "WHATEVER THERE IS," and "NO RECOURSE" were interpreted to include the obligation to pay outstanding lease rentals and interest. The court held that the petitioner, having accepted these terms, cannot now dispute the payment of these dues. 3. Principle of Approbate and Reprobate: The court found that the petitioner cannot approbate and reprobate, i.e., accept the benefits of the Transfer Memorandum and Sale Certificate while rejecting the obligations. The petitioner’s conduct of accepting the lease transfer and then seeking to avoid the associated dues was seen as inconsistent and inequitable. The court cited precedents such as R.N. Gosain v. Yashpal Dhir, emphasizing that a party cannot accept and reject the same instrument. 4. Protection under IBC: The court clarified that while the IBC provides certain protections to auction purchasers, it does not absolve them from honoring existing contractual obligations, including the payment of past lease rentals and interest. The court noted that the petitioner’s status as an auction purchaser under the IBC does not override the terms of the lease deed and the Transfer Memorandum, which explicitly required the payment of these dues. Conclusion: The court dismissed the writ petition, holding that the petitioner is bound by the contractual obligations set out in the lease deed, Transfer Memorandum, and Sale Certificate. The petitioner’s claim for a refund was not maintainable, and the petitioner was not entitled to relief under Article 226 of the Constitution to avoid these obligations. The court emphasized the principle that parties must adhere to their contractual commitments and cannot seek judicial intervention to avoid them.
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