JUDGMENT 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 of 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 tile 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 Annexnre-9 and the letter of the Bihar State Financial Corporation, accepting the tender submitted by the petitioner-Company has been annexed as Annexure 4 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. 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 Aanexure-4, the letter written by the Chairman-cum-Managing Director or 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 will be entitled to mortgage the lease hold interest in favour of the financial institution from which it secured loan for setting up the Industry. Consequently, M/S Graduate Engineers mortgaged their lease hold interest in favour of the Bihar State Financial Corporation. Consequently, M/S Graduate Engineers mortgaged their lease hold interest in favour of the Bihar State Financial Corporation. From this it logically followed that the Bihar State Financial Corporation by enforcing the mortgage could have transferred that interest in favour of the purchaser. Such a purchaser stepped into the shoes of the original lessee. 6. It is well-settled that a lease of land creates an interest in the leased land, and the lessee acquires a transferable interest, which he can transfer in favour of a third party, subject however to the other terms and conditions of the lease. In case there are restrictive covenants in the lease deed which have a bearing on the right to transfer the lease hold interest, such restrictive covenants must be given effect. In the absence of any term and condition to the contrary, normally a lessee is entitled to transfer his interest in land in favour of a third party. We have, therefore to examine whether in the instant case the lease hold interest created in favour of M/S Graduate Engineers by the respondent-Authority was a transferable interest and that upon such transfer the purchaser stepped into the shoes of the original lessee, and Was bound by the same terms and conditions without any obligation to pay afresh the price of the land. 7. From a perusal of the lease deed executed in favour of M/S Graduate Engineers by the Governor of Bihar it is apparent that the lease of land was given for 99 years to the lessee, subject to renewal at the option of either party for such period as may be mutually agreed upon. The lessee was obliged to pay to the State Government the proportionate cost of development of land so leased, and such other expenditure as may be decided to be part of the development cost by the State Government. The rate of rent payable annually has also been determined under clause 4 which at so contains a clause for revision of the annual rental. 8. Clause 6 of the lease deed provides that the lessee will not assign, mortgage, under let or part with the possession over the land or any right or interest therein or in respect there to without the previous consent of the lessor or his nominee. 8. Clause 6 of the lease deed provides that the lessee will not assign, mortgage, under let or part with the possession over the land or any right or interest therein or in respect there to without the previous consent of the lessor or his nominee. There is, however, a proviso which provides that in case of registered Small Scale Industries no separate permission will be required to be obtained by the lessee for mortgaging it to any financial institution fop raising Joan for the purpose of the Industry for which the land was allotted. In case such a mortgage is created, the dues of the State Government shall also be a first charge on the property mortgage paripassue with the charged of the financing institution. Sub clause (iii) of clause 6 provides that if the lessee assigns its lease hold interest with the written consent of the lessor in the land described in the Schedule to the agreement, the assignee shall duly get his, its or their name or names registered with the lessor or his nominee within four calendar months after obtaining possession of the holding and will possess and use the land and be bound by all the terms, covenants and conditions herein contained. Sub clause (v) provides that if at any time the said land or any part or parts thereof shall no longer be required by the lessee for the purposes for which it was leased out to him, the lessee while selling or assigning the said land or such parts thereof shall offer the same to the State Government which may accept it in respect of such part or parts of the laud so offered, as it may deem fit and decline it in respect of the remainder. In case the State Government declines the offer, the lessee while selling or assigning the said land or parts thereof as aforesaid to any other party shall do so with the approval of the State Government. 9. From these clauses in the lease deed it cannot be doubted that the interest created in favour of the lessee was a transferable interest. Where the lessee intended to sell or assign his interest in the lease hold land, he was required to seek the prior permission of the respondent-Authority. 9. From these clauses in the lease deed it cannot be doubted that the interest created in favour of the lessee was a transferable interest. Where the lessee intended to sell or assign his interest in the lease hold land, he was required to seek the prior permission of the respondent-Authority. This condition, however, did not apply to a case where the lessee was a registered Small Scale Industry, and a mortgage was sought to be created by the lessee in favour of a financial Institution from which it had taken loan to setup its Industry. In the instant case, it is not disputed that M/S Graduate Engineers was a registered Small Scale Industry, and it had mortgaged its lease hold interest to the Bihar State Financial Corporation in consideration of the loan advanced by the said Corporation to M/S Graduate Engineers. Since it was a mortgage in favour or the financial institution, no separate permission was required in terms of the lease deed itself. Counsel for the Bihar State Financial Corporation is, therefore right in submitting that no prior permission was required in this case. From the other clauses, referred to above, it will also appear that the lease deed envisages cases of transfer, sale or assignment of the lease bold interest. There is no provision in the said lease deed requiring the purchaser of the interest to pay afresh the price of the land in question. It may be that where prior permission is required, the same may not be granted unless the purchaser agrees to pay an additional amount to the lessor. In the instant case, however, no prior permission was required, and the mortgage in favour of the Bihar State Financial Corporation was created by the erstwhile lessee in favour of the Bihar State Financial Corporation in terms of the lease deed itself. It, therefore, logically followed that the mortgagee could enforce the mortgage by bringing to sale the mortgaged assets. If the lease agreement permitted the creation and enforcement of the mortgage, it also logically followed that upon enforcement of the mortgage and sale of the mortgaged assets, the purchaser stepped into the shoes of the original mortgagor and was subject to the same terms and conditions of the lease to which the original lessee/mortgagor was subjected. If the lease agreement permitted the creation and enforcement of the mortgage, it also logically followed that upon enforcement of the mortgage and sale of the mortgaged assets, the purchaser stepped into the shoes of the original mortgagor and was subject to the same terms and conditions of the lease to which the original lessee/mortgagor was subjected. Since the original lessee/mortgagor was not obliged in terms of the lease deed to pay the price of the land over again, such an obligation could not be enforced against the petitioner-Company which stepped into the shoes of the original lessee. 10. We have, therefore, no doubt that the lease deed in favour of M/S Graduate Engineers created a transferable interest in land. It permitted the lessee to mortgage its lease hold interest in favour of financial institutions without seeking separate permission to do so. It was, therefore, open to the financial institution to enforce the mortgage and to bring the lease hold interest to sale. Upon such sale being effected, the purchaser stepped into the shoes of the original lessee, and the respondent Authority was bound by the terms of the lease of substitute his name in place of the original lessee. There is no provision in the lease deed for payment of any amount by way of current market price by the purchaser of the lease hold interest. The imposition of a condition under Annexure–4 requiring the purchaser to pay again the market price of the land in question is, therefore, clearly illegal and must be quashed. 11. In the result, this writ application is allowed, and clause 3 of Annexure–4 to the extent it demands from the petitioner payment of price of land at the new rate is quashed. The Petitioner-Company will, however, be governed by the terms and conditions of the lease deed executed by and between the Governor of Bihar and the original lessee, and shall also be obliged to pay annual rental and other charges, if any, which the original lessee was obliged to pay under the lease deed. 12. This writ application is allowed to the extent indicated above. There will be no order as to costs. Application partly allowed.