Party Cannot Claim Sale After Executing Lease to Defeat Pre-Emption Rights: Punjab & Haryana High Court Refuses Ownership Claim

Case Name: Basau Ram (Deceased) through LRs v. Ram Kumar

Date of Judgment: 17 April 2026

Citation: RSA-1147-1998

Bench: Justice Virinder Aggarwal

Held: The Punjab & Haryana High Court held that a party who consciously executes a lease deed to defeat pre-emption rights cannot later turn around and claim that the document is in substance a sale deed. The Court reaffirmed that parties are bound by their pleadings and cannot approbate and reprobate.

Summary: The appellant-plaintiff claimed ownership over the suit land on the basis of a document styled as a perpetual lease deed dated 20.10.1986, asserting that it was in reality a sale transaction since a substantial amount had been paid and the defendant was left with no subsisting rights.

The plaintiff further pleaded that the arrangement was structured through a lease deed to avoid pre-emption claims and that the defendant had also executed powers of attorney to facilitate transfer. However, the defendant later revoked the same, leading to the filing of a suit for declaration of ownership and injunction.

The Trial Court accepted the plaintiff’s case and held that the lease deed was, in substance, a sale, thereby decreeing the suit. However, the First Appellate Court reversed this finding and held that the document was indeed a perpetual lease and not a sale deed.

Before the High Court, the appellant argued that the document should be construed as a sale in light of its substance and the surrounding circumstances. It was also contended that, by virtue of the Punjab Occupancy Tenants (Vesting of Proprietary Rights) Act, 1953, the plaintiff had acquired ownership rights.

The High Court rejected these submissions. It noted that the plaintiff himself had admitted that the lease deed was executed to defeat pre-emption rights. In such circumstances, permitting the plaintiff to now assert that the same document is a sale would amount to allowing him to take advantage of his own wrong.

The Court also distinguished the precedents relied upon by the appellant, observing that those cases involved challenges by third parties asserting pre-emption rights, whereas in the present case, the challenge was by a party to the document itself.

Further, the plea based on the 1953 Act was rejected on the ground that it had not been pleaded before the courts below and could not be raised for the first time in second appeal.

Decision: The High Court dismissed the second appeal and upheld the findings of the First Appellate Court, holding that the document in question was a perpetual lease and not a sale deed. It ruled that the appellant could not be permitted to change his stand after having executed the document with the intent to defeat pre-emption rights, and no ownership rights could be claimed on that basis.