Karnataka High Court Holds Doctrine of Approbate and Reprobate Bars Withdrawal of Undertaking After Availing Benefits Under Court Order

Karnataka High Court delivered a significant ruling on the application of the doctrine of approbate and reprobate in the context of withdrawal of undertakings after availing benefits under a court order. The case arose from a writ petition challenging the rejection of applications in a commercial suit, which was ultimately disposed of based on a memo filed by the petitioners.

The petitioners, landowners, had initially agreed through a memo to open an escrow account and deposit ₹6 crores towards potential GST liability, with an undertaking to make good any additional GST amounts if demanded. This arrangement was recorded by the Court, and the petitioners were permitted to withdraw amounts deposited before the Commercial Court, subject to their contentions being decided in arbitration or the pending suit. The respondents did not object to the memo, except for the mode of deposit, and the Court disposed of the petition accordingly.

Subsequently, the petitioners sought recall of the order, contending that the memo was based on incomplete settlement negotiations, particularly regarding rental payments, which were allegedly left unresolved. The petitioners argued that since the rental aspect was not finalized, the memo and the resulting order should be withdrawn. The respondents opposed the application, asserting that the undertaking to deposit the GST amount was unconditional and independent of rental negotiations, and that the petitioners had already availed the benefit of withdrawing substantial sums pursuant to the order.

Justice M. Nagaprasanna, after reviewing the facts, noted that the petitioners had withdrawn a significant portion of the deposited amount—over ₹26 crores—following the order. The Court held that having accepted the benefits conferred by the order, the petitioners could not now seek to revisit or withdraw the obligations that formed the basis for those benefits. The Court emphasized that the doctrine of approbate and reprobate, rooted in fairness and consistency, precludes a party from accepting and rejecting the same instrument or order to suit their convenience.

In support of its reasoning, the Court cited authoritative Supreme Court judgments, including Karam Kapahi v. Lal Chand Public Charitable Trust and Union of India v. N. Murugesan, which elaborate on the principle that a party cannot blow hot and cold, or affirm a transaction to gain an advantage and then disaffirm it to avoid corresponding obligations. The Court reiterated that the doctrine is a species of estoppel and is integral to the rule of law and equity.

Applying these principles, the Court found the petitioners’ application fundamentally flawed, as it sought to disown obligations after having enjoyed the fruits of the order. The Court concluded that the application was devoid of merit and did not warrant any indulgence, thereby dismissing the application for recall of the order.

This decision reinforces the binding nature of undertakings given to the court and the equitable doctrine that prevents parties from resiling from commitments after having derived benefits, ensuring consistency and integrity in judicial proceedings.