Friday, 21 August 2020

Whether the court can interpret sale deed as lease deed considering contents of an auction notice?

1) The submission, which has been much pressed by learned Counsel for the writ Petitioner is that, what was sold to writ Petitioner by Sale Deed dated 25.09.1997 was absolute rights with all rights and interests in the property. The sale in favour of writ Petitioner was not sale of leasehold rights rather it was for all rights, title and interests, hence writ Petitioner acquired freehold rights. 

2)  Before we construe the document, we need to first notice the auction notice by which the property was put 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. {Para 18}

3) A perusal of the details of the properties indicate that property in question is included as Item No. 2, which is mentioned as "This is a lease hold residential plot".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 contrary 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 considerations are there. Clause 3 as noted above indicate that the property sold and transferred is in terms of the agreement dated 29.09.1988 between Trilochan Singh Rana and Mrs. Rani Rana to M/s. Ocean Construction Industries Pvt. Ltd. Trilochan Singh Rana and Mrs. Rani Rana were only lease holders. Thus, they could best transfer their right, which was conferred to them by the Indenture dated 18.03.1970.

4) We, thus, find that on true construction of Sale Deed, it is clear that all rights, titles and interests were not conveyed to the Petitioner in the leasehold residential plot, when we read Clauses 1, 2 and 3 together.{Para 25}
IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1533 and 1534 of 2019

Decided On: 12.02.2019

Delhi Development Authority  Vs.  Karamdeep Finance & Investment (I) Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:
Ashok Bhushan and K.M. Joseph, JJ.

Citation: MANU/SC/0183/2019,(2020) 4 SCC 136

Author: Ashok Bhushan, J.
Read full judgment here: Click here
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