A purchaser of a leasehold interest steps into the shoes of the original lessee and is bound by the same terms and conditions of the lease, without any obligation to pay afresh the price of the land.

B. P. Singh & R. N. Prasad, JJ.- The petitioner-Company, M/s Vikramshila Transformers (pvt.) Ltd, has filed the instant writ application through its Managing Director challenging a condition imposed by the Patna Industrial Area Development Authority for transfer or the lease hold in favour of the petitioner-Company, whereby the petitioner-Company has been called upon to pay the price of the land in question at the new rate. It is the case of the petitioner-Company that the respondent-Authority is bound to transfer the lease hold interest in its favour without insisting for payment of price thereof, since the petitioner-Company has stepped into the shoes of the erstwhile lessee whose rights in the lease hold have been sold and have been purchased by the petitioner-Company.

2. A few facts, which are not in dispute, may be noticed. One M/s Graduate Engineers was registered as' a Small Scale Industry. It took a loan from the Bihar State Financial Corporation to set up an Industry for the manufacture of transformers. By a lease deed executed on 4th May, 1977 by the Governor of Bihar, a lease was granted in favour of M/s Graduate Engineers for a period of 99 years subject to certain terms and conditions. The said M/s Graduate Engineers defaulted in the payment of its dues to the Bihar State Financial Corporation, and this led the Bihar State Financial Corporation to auction the mortgaged assets of M/s Graduate Engineers. Tenders were invited, and the tender submitted by the petitioner firm was ultimately accepted. The lease deed has been annexed as Anncxure-9, and the letter of the Bihar State Financial Corporation accepting the tender submitted by the petitioner-Company has been annexed as Annexure-1 dated 31st March, 1987. It is also not in dispute that the lease hold right in the plot in question was one of the assets mortgaged by M/s Graduate Engineers in favour of the Bihar State Financial Corporation. After all formalities, a sale deed was executed by the Bihar State Financial Corporation in favour of the petitioner-Company. Schedule-A to the sale deed describes the property sold to the petitioner-Company, and from a reading of the sale deed it is quite apparent that by the sale deed the Bihar State Financial Corporation intended to sell, transfer and assign lease hold interest in respect of the land and property together with the buildings and structures thereon fully described in the Schedules to the sale deed. It cannot, therefore, be disputed that the Bihar State Financial Corporation sold to the petitioner-Company the lease hold rights over the land in question.

3. The petitioner-Company thereafter applied for registration as a Small Scale Industry, and for transfer of the lease deed in favour of the petitioner-Company. It is not necessary to refer to other facts, but it is important to notice Annexure-4, the letter written by the Chairman-cum- Managing Director of the respondent-Authority granting permission to transfer the lease hold interest in favour of the petitioner-Company subject to certain conditions. The petitioner in this writ application has not challenged the other conditions imposed by the said letter, but has challenged Condition no. 3, whereunder the petitioner-Company has been required to pay the price of the land in question at the new rate.

4. The question, which arises for consideration in the instant writ application, is whether the said condition imposed by the respondent-Authority is justified. The petitioner has characterised the condition as arbitrary and unreasonable, whereas the respondent-Authority has justified the condition on the ground that the price of land has risen many times and, therefore, the respondent-Authority is justified in demanding from the new purchaser the price of the land at the current rate.

5. Learned counsel appearing on behalf of the Bihar State Financial Corporation submitted that the lease deed in favour of M/s Graduate Engineers itself provided that the lessee wi