Since both appeals involved the same parties, issues, and challenges, they were heard together and decided by a common judgment. These appeals challenge a Karnataka High Court decision from 16.10.2019, ...
2025 INSC 273 Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3266-3267 OF 2025
(ARISING OUT OF SPECIAL LEAVE PETITION (C) NOS. 13618-13619 OF 2020)
M. S. ANANTHAMURTHY & ANR . …APPELLANT(S)
VERSUS
J. MANJULA ETC …RESPONDENT(S)
J U D G M E N T
SLP (C) Nos. 13618-13619 of 2020 Page 2 of 61
J.B. PARDIWALA, J.
For the convenience of exposition, this judgment is divided into the following parts:-
INDEX
A. FACTUAL MATRIX........................................................................................... 3
B. IMPUGNED JUDGMENT ...............................................................................15
C. SUBMISSIONS ON BEHALF OF THE APPELLANT(S) ...........................21
D. SUBMISSIONS OF BEHALF OF THE RESPONDENT(S) ........................24
E. ISSUES FOR CONSIDERATION ...................................................................26
F. ANALYSIS ..........................................................................................................27
i. Relationship between the Executant and Holder of General Power of Attorney ........... 28
ii. Independent Reading of the General Power of Attorney and the Agreement to Sell ... 32
a. ‘Interest’ in Power of Attorney ..................................................................................... 32
b. Nature of Power of Attorney ......................................................................................... 40
iii. Combined Reading of the General Power of Attorney and the Agreement to Sell ...... 46
iv. Effect of Suit for Injunction simpliciter ........................................................................... 54
G. CONCLUSION .................................................................................................60
SLP (C) Nos. 13618-13619 of 2020 Page 3 of 61
1. Leave granted.
2. Since the issues raised in both the captioned appeals are the same, the parties
are also same and the challenge is also the self-same, hence those were taken
up analogously and are being disposed of by this common judgment and order.
3. These appeals have been filed before this Court from the judgment and order
passed by the High Court of Karnataka at Bengaluru dated 16.10.2019 in
R.F.A. No. 1318/2014 c/w R.F.A. No. 1317/2014 (“impugned judgment”)
whereby the High Court dismissed the appeals and affirmed the common
judgment and decree dated 21.06.2014 passed in O.S. No. 133/2007 and O.S.
No. 4045/2008 by the Court of VIII Additional City Civil & Sessions Judge
at Bengaluru City.
A. FACTUAL MATRIX
4. The description of the parties before this Court, the High Court and before the
Trial Court is tabulated as follows:-
BEFORE THIS
COURT
BEFORE THE
HIGH COURT
BEFORE THE
TRIAL COURT
REMARKS
Muniyappa - - Original Owner
SLP (C) Nos. 13618-13619 of 2020 Page 4 of 61
A. Saraswathi - - Holder of POA
Appellants
Petitioners Plaintiff in
O.S. No.
4045/2008
Defendant in suit
instituted by the
respondent no. 9
Respondent Nos.
1-6
Respondent Nos.
1-6
Defendant
Nos. 1-6
Legal heirs of
original owner
Respondent No. 7 Respondent No. 7 Defendant No.
7
Purchaser
Respondent No. 8 Respondent Nos.
8-10
Defendant No.
8
Purchaser
Respondent No.
9/Answering
Respondent
Respondent No.
11
Plaintiff in
O.S. No.
133/2007
Defendant no. 9
in suit instituted
by the
appellants/Gift
Deed Holder
Appellant no. 2 was represented by his general power of attorney holder i.e.,
appellant no. 1, for the purposes of the appeal before the High Court and this
Court.
5. The dispute arises from a common claim put forward by the appellants and
the answering respondent on property bearing Site No. 10, out of Sy. No. 55/1,
situated at Chunchaghatta Village, Uttarahalli Hobli, Bangalore South Taluk
SLP (C) Nos. 13618-13619 of 2020 Page 5 of 61
(hereinafter referred to as “Suit Property”). The Suit Property originally
formed part of 1 acre 8 guntas of land situated in Chunchaghatta Village,
Uttarahalli Hobli, Bangalore South Taluka within the revenue limits of
Konanakunte Gram Panchayat owned by late Muniyappa @ Ruttappa
(hereinafter referred to as “original owner”). The original owner developed
the said land in the form of individual plots and sold those plots for
consideration to various person. The Suit Property is one of those plots.
6. It is the case of the appellants that on 04.04.1986, the Suit Property was sold
by the original owner one A. Saraswathi (hereinafter referred to as “holder”)
for total sale consideration of Rs.10, 250/- by executing an irrevocable power
of attorney (hereinafter referred to as “POA”) and an unregistered agreement
to sell. The contents of the said POA and agreement to sell are extracted
hereinbelow:-
“GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT, I,
Muniyappa urf Ruttappa Son of Ragallappa, Major,
residing at Vajarahalli village, Uttarahalli Hobli,
Bangalore South Taluk do hereby appoint, nominate and
constitute Smt. A. Saraswathi W/O M. S. Anantha Murthy,
residing at No. 155, 5th Cross, Wilsongarden, Bangalore -
560 027 as my General Power of Attorney holder to do the
following acts, deeds and things on my behalf that is to say:
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1) To look after, maintain, manage the Schedule Property
in the best manner as my attorney deems fit.
2) To enter into any type of agreements in respect of the
Schedule property with any person for any amount, receive
advance amount, issue proper receipts, apply to the
competent authority seeking permission to execute any type
of deeds, in favour of any persons, and to execute such
deeds in favour of such persons, receive full consideration
amount, issue proper discharge thereof, sign all deeds,
forms etc., etc.,
3) To apply for transfer of Khata and to pay all future taxes
and to receive proper receipts.
4) To apply for sanctioned plan for construction of any type
of building on the property and to construct such building,
utilise the same as my attorney deems fit and to get all
profits therefrom.
5) To represent me in respect of the Schedule property in all
Government offices, BDA, BWSSB, KEB, Corporation etc.,
etc., apply for any type of documents, receive the same, and
approach BDA for reconvey of Schedule property, to pay
all betterment charges and to do all connected things.
6) In case of complications to sue such matters in proper
courts, of law by engaging the service of advocates or
advocate, sign all forms, vakalath, suits, petitions, etc,
produce any documents in court, take any documents from
the court, give evidence, obtain decree, execute the sale or
enter into compromise.
7) The Schedule property is in my peaceful possession and
enjoyment thereof as absolute owner thereof.
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8) My Attorney is ge11erally entitled to do all such acts,
deeds and things, in respect of the Schedule property, which
are not specifically written hereunder and I do hereby
agree to ratify confirm all such acts, deeds and things done
by my attorney as the acts, deeds and things done by me in
person and this G.P.A. is irrevocable in nature.
SCHEDULE
Site No. 10, out of Sy. No. 55/1, situated at Chunchaghatta
Village, Uttarahalli Hobli, Bangalore South Taluk,
measuring East to West 30 feet and North to South (40-6”
+ 42-3”)/2 feet and bounded as follows:-
East by: Property No. 11
West by: Property No. 9
North by: Road &
South by: Private Property
In witnesses whereof I the executant above named signed
this General Power of Attorney on this 4th day of April
1986 at Bangalore.
Identified by me
Executant
Execution admitted before me
S.B. Chandrasekhar
Bangalore Metropolitan Area
Notary
Bangalore
Date: 4-4-1986
SALE AGREEMENT
This Deed of Sale Agreement is made on this 4th day of
April, 1986 at Bangalore and executed by Sri. Muniyappa
urf Ruttappa, Son of Ragallappa, residing at
Chunchaghatta village, Uttarahalli Hobli, Bangalore
South Taluk hereinafter called the “VENDOR” (which
term shall mean and include all his heirs, executors,
SLP (C) Nos. 13618-13619 of 2020 Page 8 of 61
administrators and assignees) of the one part and in favour
of Srimathi. A. Saraswathi W/O, Ananthamurthy, residing
at No. 155, 5th Cross, Wilson Garden, Bangalore-560 027
hereinafter called the “PURCHASER” (which term shall
mean and include all heirs, executors, administrators and
assignees) of the other part witnesseth as follows:~
WHEREAS the Vendor is the absolute owner in
peaceful possession and enjoyment of the Schedule
Property more fully described in the Schedule hereunder.
And whereas the Vendor is in need of funds for the
maintenance of his family and other legal necessities he
desired to sell the Schedule Property in favour of the
purchaser for a sum of Rs 10,250/-(Rs. Ten thousand two
hundred fifty only) to which the Purchaser duly agreed to
purchase the same for the said sum of Rs. 10,250/- only. In
pursuance of this Sale agreement the purchaser paid a sum
of Rs. 5,000/- on 20-5-1985 through a Cheque No. 0861556
of Syndicate Bank, Wilsongarden Branch, Bangalore and a
sum of Rs. 5,250/- only Cheque No. 039 529/243 dated
3.4.86 of Syndicate Bank Wilson Garden, Bangalore total
the Vendor received the full sale consideration of
Rs.10,250/- only. This day the Vendor handed over the
vacant possession of the Schedule property to the
purchaser to have and to hold the same as absolute owner.
As there is a prohibition of selling the revenue sites by the
Government of Karnataka the Vendor could not execute the
sale deed. As and when the Government of Karnataka
revokes the fragmentation act the Vendor execute the sale
deed.
This day the Vendor handed over the vacant possession
of the Schedule property to the purchaser, the Vendor have
no objection to construct a dwelling house on the Schedule
property the Vendor have no objection to transfer the Khata
of the Schedule Property to the name of the purchaser.
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The Vendor assures the purchaser that the schedule
property is free from all kinds of encumbrances and it is
free from all taxes.
SCHEDULE:- Site No. 10, out of Sy. No. 55/1, situated at
Chunchaghatta Village, Uttarahalli Hobli, Bangalore
South Taluk, measuring East to West 30 feet and North to
South (40-6” + 42-3”)/2 feet and bounded as follows:-
East by: Property No. 11
West by: Property No. 9
North by: Road &
South by: Private Property
In witnesses whereof both the parties have affixed their
signatures to this sale agreement on the day, month and the
year above first written.
WITNESSES:
1.
2.
3.
VENDOR
PURCHASER”
7. On the same day, the said POA was duly notarized. On 30.01.1997, the
original owner, executant of the POA died. On 01.04.1998, the holder of POA
executed a registered sale deed with respect to the Suit Property in favour of
her son, i.e., the appellant no. 2, in exchange of sale consideration of Rs.
84,000/-.
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8. On the other hand, several years after the death of the original owner, his legal
heirs through a registered sale deed dated 21.03.2003 sold the same Suit
Property to the respondent no. 7 for total sale consideration of Rs. 76,000/-.
Subsequently, respondent no. 7 sold the Suit Property to the respondent no. 8
vide another registered sale deed dated 29.09.2003 for total sale consideration
of Rs. 90,000/-. Then, on 06.12.2004, the respondent no. 8 executed a
registered gift deed in favour of her daughter, i.e., the answering respondent.
9. It is the case of the appellants that after a long period of time, the father of
appellant no. 2, i.e., the appellant no. 1 herein, visited the Suit Property on
02.01.2007. To his shock and surprise, he found strangers in possession of the
Suit Property. He, accordingly, lodged a police complaint with the concerned
police station. The occupants as well as the answering respondent were called
by the police to the police station. However, the police closed the matter
saying that the dispute was civil in nature.
10. Later, the answering respondent filed O.S. No. 133/2007 for permanent
injunction against the appellant no. 2 or anyone else acting under him from
interfering with the peaceful possession and enjoyment of the Suit Property.
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Following this, the appellant no. 2 also filed O.S. No. 4045/2008 against the
legal heirs of the original owner, the subsequent purchasers and the answering
respondent respectively for declaration of sale deeds executed on 21.03.2003
and 29.09.2003 respectively, and the gift deed executed on 06.12.2004 as null
and void. He sought further declaration of absolute ownership and direction
to handover vacant physical possession of the Suit Property. Both the suits
were consolidated and tried together by way of recording common evidence.
11. Upon appreciation of the oral as well as documentary evidence on record, the
Trial Court vide its common judgment and order dated 21.06.2014 decreed the
O.S. No. 133/2007 filed by the answering respondent by granting a decree of
permanent injunction in her favour and dismissed the O.S. No. 4045/2008
filed by the appellant no. 2 herein.
12. The findings recorded by the Trial Court in its judgment and order can be
better understood in four parts:-
(i) First, on the issue of possession the Trial Court recorded that it was an
admitted position that the answering respondent was in possession of
the Suit Property. Further, the registered sale deed dated 29.09.2003
SLP (C) Nos. 13618-13619 of 2020 Page 12 of 61
reflected that the respondent no. 8 had purchased the Suit Property from
the respondent no. 7 for total sale consideration of Rs. 90,000/- and then
respondent no. 8 gifted the property to the answering respondent vide
the registered gift deed dated 06.12.2004. While, evaluating the
evidence adduced by the appellants (defendants therein) the Trial Court
from the cross-examination of appellant no. 1 recorded that two days
prior to 01.04.1998, he had visited the Office of Sub-Registrar and
found that the revenue site was being registered. Further, it was an
admitted position that, though allegedly, a general power of attorney
(“GPA”) and agreement to sell were executed by the original owner in
favour of the holder in the year 1986, yet the appellant no. 2 was not in
possession of the Suit Property as on the date of the institution of the
suit. The Trial Court held that the answering respondent is the donee of
the Suit Property and is in lawful possession and that the appellant no.
2 is not entitled to seek recovery of possession.
(ii) Secondly, on the issue of legality of registered sale deed dated
21.03.2003 that was executed by the respondent nos. 1-6 in favour of
the respondent no. 7, the Trial Court proceeded with the premise that it
SLP (C) Nos. 13618-13619 of 2020 Page 13 of 61
was an admitted position that as on the date of institution of suit, the
appellants were not in possession of the Suit Property. It held that
though, the original owner had executed the GPA and the agreement to
sell, yet the holder of POA failed to get it registered in time. The
contention of the appellants that the GPA and the agreement to sell
respectively were not registered in 1986 due to a prohibition on the
registration of revenue lands was rejected. It was held by the Trial Court
that for transfer of ownership in immovable property, whose value is
more than Rs. 100/-, the conveyance has to be mandatorily registered
as per Section 17 of the Registration Act, 1908 (for short, “Registration
Act”) and sale by GPA is not recognized by law. By placing reliance on
Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, reported in
(2012) 1 SCC 656, the Trial Court held that the sale deed dated
01.04.1998 executed by the holder of POA in favour of the appellant
no. 2 was invalid along with the admitted position that it was executed
after the death of the original owner. Thus, it was held that the registered
sale deed dated 21.03.2003 executed in favour of the respondent no. 7
was legal.
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(iii) Thirdly, on the issue of legality of registered sale deed dated
29.09.2003 which was executed by the respondent no. 7 in favour of
the respondent no. 8, and the registered gift deed dated 06.12.2004
which was executed by the respondent no. 8 in favour of the answering
respondent, the Trial Court held that the appellants failed to prove that
the above-mentioned sale deed and gift deed were illegal, null and void.
At the same time, it held that the respondent no. 8 had a valid title over
the Suit Property so as to execute the gift deed in favour of the
answering respondent.
(iv) Lastly, on the issue of maintainability of the suit instituted by the
appellants, the Trial Court held that the suit instituted by the appellants
was barred by limitation. It held that as per Article 58 of the Limitation
Act, 1963 (for short, “Act of 1963”), for the purpose of challenging the
sale deeds dated 21.03.2003 and 29.09.2003 respectively and the gift
deed dated 06.12.2004, he should have presented the suit within three
years from the date of the alleged sale deed or agreement to sell as he
had come to know about the sale transactions in the year 2003 itself.
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B. IMPUGNED JUDGMENT
13. Being aggrieved by the order of the Trial Court, the appellants/judgment
debtor, preferred First Appeal. The High Court framed the following points
for determination:-
“14. In the light of the above, the points that arise U for my
consideration in this appeal are:-
1] Whether the appellant herein (plaintiff in
O.S.No.4045/2008) proves that he is the absolute owner of
the suit schedule property?
2] Whether the registered Sale Deed dated 01-04-1998 in
favour of the plaintiff in O.S.No.4045/2008 executed by
Smt. A. Saraswathi as a General Power of Attorney holder
would convey a valid title in favour of the plaintiff?
3) Whether the plaintiff in O.S.No.133/2007 would prove
that she is in lawful possession of the property as on the
date of the institution of the suit?
4] Whether the plaintiff ln O.S.No.133/2007 has proved
that there was an interference in her lawful possession of
the suit schedule property by the defendants?
5) Whether the common judgment and the decrees under
appeals deserve interference at the hands of this Court?”
14. The High Court dismissed both the appeals and thereby affirmed the judgment
and decree passed by the Trial Court. The High Court dismissed the appeals
on four grounds:-
(i) First, the High Court held that the appellants had not denied or disputed
the existence of the two registered sale deeds dated 21.03.2003 and
29.09.2003 respectively and the gift deed dated 06.12.2004 in the suit
SLP (C) Nos. 13618-13619 of 2020 Page 16 of 61
preferred by the answering respondent. The said documents made it
amply clear that the Suit Property was sold by the legal representatives
of the original owner in favour of the respondent no. 7, who in turn vide
a registered sale deed then sold the same Suit Property to the respondent
no. 8. The respondent no. 8 thereafter gifted the Suit Property to her
daughter, i.e., the answering respondent by way of a registered gift deed
dated 06.12.2004. Accordingly, answering respondent is the lawful
owner in possession of the Suit Property.
The relevant observations read as under:-
“22. As already observed above, the plaintiff in O.S.No.
4045/2008 has not denied or disputed the documents at
Exs. P-1, P-2, P-3 which are two registered Sale Deeds and
a Gift deed respectively. By virtue of the said documents, it
goes to show that the suit schedule property was sold by the
legal representatives of the deceased Muniyappa @
Ruttappa in favour of one Sri. S. Sreenivasulu on 21-03-
2003 which Sreenivasulu in turn sold the very same suit
scheduled property to one Smt. C. Roopavathi (the mother
of the plaintiff in O.S.No.133/2007) under a registered Sale
Deed dated 29-09-2003. The said Smt. C. Roopavathi, in
turn, has gifted the said property to her daughter – Smt.J.
Manjula (plaintiff in O.S.NO.133/2007) under a registered
Gift Deed dated 06-12-2004. It is based upon these
documents and the subsequent documents like tax paid
receipts, self-declaration of property tax and the water bill
and water tax receipt which have all been produced as
exhibits in ‘P’ series as observed above, the learned
counsel for the plaintiff in O.S.No.133/2007 (Respondent in
R.F.A.No.1318/2014) contends that, it is Smt. J. Manjula -
SLP (C) Nos. 13618-13619 of 2020 Page 17 of 61
the plaintiff in O.S.No.133/2007 has been in lawful
possession of the suit schedule property in her capacity as
the owner of the suit schedule property.”
(ii) Secondly, the High Court observed that the appellant no. 1 in his cross-
examination had admitted that the original owner-executant of POA,
died on 30.01.1997. It is further an admitted position that the registered
sale deed in favour of the appellant no. 2 was executed on 01.04.1998
i.e., after the death of the executant. The said sale deed was executed
by the holder of POA in her capacity as a GPA holder of the original
owner. Therefore, the execution of sale deed dated 01.04.1998 was after
the death of the executant of GPA. The appellants submitted that since
the holder had an interest in the POA, it should be read along with the
agreement to sell which was executed pursuant to sale consideration.
The High Court while addressing the aforesaid submissions of the
appellants held that though the GPA and the agreement to sell were
executed by the same executant on the same day in favour of the same
holder yet they cannot be treated as a single transaction. The detailed
and comprehensive reading of the GPA and the agreement to sell would
indicate that the contents of the GPA do not mention anything about the
SLP (C) Nos. 13618-13619 of 2020 Page 18 of 61
execution or purpose of executing the agreement to sell or vice versa.
The relevant observations read as under:-
“…Even though it is observed that Exs.D-4 and D-5 were
contemporaneous documents executed by Sri. Muniyappa
@ Ruttappa in favour of Smt. A. Saraswathi, by that itself,
it cannot be concluded that, the said Smt. A. Saraswathi
had any interest in the Power of Attorney at Ex.D-4. It is
for the reason that the said document at Ex.D-4 nowhere
expressly mentions as to for what reason the executant was
made to execute the said document and more particularly,
the executant has nowhere whispered in it that the attorney
has acquired any interest in the property mentioned in the
said Power of Attorney. However, the said Power of
Attorney – Smt. A. Saraswathi whether is having any
interest under the said irrevocable Power of Attorney has
to be gathered from the circumstance of the case and the
position of law. If it can be concluded that she had acquired
interest by virtue of Exs.D-4 and D-5, then probably,
Section 202 of the Contract Act may come into picture.
Otherwise, it would be Section 201 of the Contract Act that
may come into operation.”
(iii) Thirdly, the principal contention of the appellants was that since the
holder of POA had an interest in the property which is the subject-
matter of the POA, the POA would not come to an end on the death of
the executant by virtue of Section 202 of the Indian Contract Act, 1872
(for short, “the Contract Act”). The High Court held that executing a
POA, including an irrevocable one or an agreement to sell for
immovable property, does not automatically transfer any right or
SLP (C) Nos. 13618-13619 of 2020 Page 19 of 61
interest to the beneficiary, such as the attorney or agreement holder. By
referring to the decisions of the High Court of Rajasthan in Prahlad &
Ors. v. Laddevi & Ors., reported in 2007 SCC OnLine Raj 19 and the
High Court of Karnataka in Wajid Pasha v. The Chairman, Bangalore
Development Authority, reported in 2013 SCC OnLine Kar 10135,
the High Court held that the purpose for which the GPA was executed
had not been stated either in the GPA or the agreement to sell. It was
observed that indisputably, the holder of POA did not enforce the
agreement to sell against the legal representatives of the executant of
the POA. After the death of the executant, the holder of POA transferred
the Suit Property to her son i.e., the appellant no. 2, for a sale
consideration of Rs. 84,000/- which was considerably higher than the
amount she paid for the Suit Property to the original owner. Thus, the
High Court held that the case of the appellants would not be covered by
Section 202 of the Contract Act and that the POA did not create any
right or interest in the favour of the holder of the POA. The relevant
observations read as under:-
“38. Illustration (a) to Section 202 of the Contract Act is
clear and applicable to those cases where the very purpose
or execution of the Power of Attorney is to enable the
Power of Attorney to get his/her entitlement paid to
SLP (C) Nos. 13618-13619 of 2020 Page 20 of 61
him/her. It is in that case, the attorney holder can be called
as having interest in the General Power of Attorney
executed in his/her favour, whereas, in the case on hand, as
already observed above, the purpose for which the General
Power of Attorney was executed by Sri. Muniyappa @
Ruttappa is nowhere made clear either in Ex.D-4 or Ex.D-
5. Merely because they are contemporaneous documents, it
cannot be inferred that the holder of the said agreement
would get an interest under the General Power of Attorney
so as to over come Section 201 of the Contract Act and fall
within the scope of Section 202 of the same Act. This is
clear in all the three judgments referred above which were
relied upon by the learned counsel for the respondents.
Rather in those situations, where the sale agreement holder
though was put in possession and had already parted with
some consideration, the remedy available to such
agreement holder would be for enforcing the contract,
specifically either as against the executant or his/her legal
representatives.”
(iv) Fourthly, the High Court noted that the answering respondent not only
established her lawful possession over the Suit Property as on the date
of the institution of the suit but was also able to establish that there was
interference with her peaceful possession by the appellants herein. The
High Court held that the suit was not barred by limitation. It held that
the Trial Court erred in holding so, as the suit was one for declaration
and possession of the property. Therefore, as per Article 65 of the Act
of 1963, the period of limitation would be twelve years.
SLP (C) Nos. 13618-13619 of 2020 Page 21 of 61
15. In such circumstances, referred to above, the appellants are here before this
Court with the present appeals.
C. SUBMISSIONS ON BEHALF OF THE APPELLANT(S)
16. Ms. Farhat Jahan Rehmani, the learned counsel appearing for the appellants
submitted that the present case relates to the scope, interpretation and
construction of the POA and the agreement to sell dated 04.04.1986 executed
by the original owner in favour of holder. Hence, the limited question for our
determination is whether the POA, which was coupled with interest is
irrevocable as per Section 202 of the Contract Act or it stood terminated upon
the death of the original owner as per Section 201 of the Contract Act?
17. Ms. Rehmani submitted that the fact of execution of the POA and the
agreement to sell in favour of the holder by the original owner in exchange of
sale consideration is not disputed. Since both the POA and the agreement to
sell are in favour of the same person, they should be read together and
construed harmoniously. The holder of POA executed the registered sale deed
dated 01.04.1998 in favour of the appellant no. 2. Further, there is no
challenge to the validity of the GPA and agreement to sell dated 04.04.1986
SLP (C) Nos. 13618-13619 of 2020 Page 22 of 61
and the registered sale deed dated 01.04.1998. The GPA specifies that it had
been executed for the purpose of the Suit Property. It specifically mentions
that it is ‘irrevocable’ and the schedule to the GPA references the particulars
of the Suit Property. The GPA read with the agreement to sell would indicate
that it had been executed for a valid sale consideration, and possession of the
Suit Property was also delivered to the holder of POA. Thus, she had an
interest in the subject-matter of the agency being irrevocable. By placing
reliance on Section 202 of the Contract Act, he submitted that where the agent
himself has interest in the property which forms a subject-matter of the
agency, the agency cannot be terminated to the prejudice of such interest of
the agent. In the facts of the case, Section 202 of the Contract Act is applicable
and not Section 201.
18. It was further submitted that the High Court erred in holding that the purpose
for which the GPA and the agreement to sell was executed was not mentioned
in either of the documents and therefore, even though the two documents are
contemporaneous yet it cannot be inferred that the holder of the two
documents would derive an interest in the subject-matter of the GPA. Ms.
Rehmani asserted that it has to be inferred that the original owner executed
SLP (C) Nos. 13618-13619 of 2020 Page 23 of 61
the agreement to sell as a consequence of executing the GPA in favour of the
holder, hence, the said POA is not irrevocable merely for the reason that in the
said documents the purpose for executing the GPA and agreement to sell has
not been mentioned.
19. While drawing the Court’s attention to para 26 of Suraj Lamp (supra), she
submitted that the case of Suraj Lamp (supra) will not be applicable to the
facts of the present case as in the present case the holder of GPA executed the
registered sale deed on 01.04.1988 which was much prior in time. She further
distinguished the decision in Prahlad (supra) and Wajid Pasha (supra)
referred to and relied upon by the High Court on facts. Ms. Rehmani submitted
that the High Court failed to consider that there was no challenge to the
validity of the GPA, and the registered sale deed executed in favour of
appellant no. 2. In such circumstances, a suit for injunction simpliciter filed
by the answering respondent would not be maintainable. Further, the
respondent no. 7 had no title in the Suit Property as the title had already been
conveyed under the registered sale deed and there was no challenge to the
same. The suit O.S. No. 4045/2008 filed by the appellants for declaration and
possession ought to have been decreed.
SLP (C) Nos. 13618-13619 of 2020 Page 24 of 61
20. In view of the aforesaid submissions, the counsel prayed that the impugned
judgment passed by the High Court be set aside and appellants be declared to
be the true owner of the Suit Property and grant possession thereof.
D. SUBMISSIONS OF BEHALF OF THE RESPONDENT(S)
21. Mr. Mahesh Thakur, the learned counsel appearing for the answering
respondent submitted that an agreement of sale creates an interest against the
vendor or his legal representatives and to enforce that interest the intended
buyer is required to file a suit for specific performance by virtue of Section 40
of the Transfer of Property Act, 1882 (for short, “the TPA”). In view of
Section 17 of the Registration Act, a property worth Rs. 100 or more cannot
be transferred without registration. In the present case, the value of property
is more than Rs. 100, therefore, the original owner could not have transferred
the property merely by an agreement to sell or GPA or by executing both.
22. To buttress his aforesaid submission that such documents cannot pass on title,
Mr. Thakur relied on the decision in Suraj Lamp (supra) to submit that by
virtue of Section 54 of the TPA, an agreement to sell does not create any
SLP (C) Nos. 13618-13619 of 2020 Page 25 of 61
interest in or charge on such property. Further, a POA is not an instrument of
transfer qua any right, title or interest in any immovable property. A sale by
an agreement to sell or GPA will neither convey any title nor create any
interest in an immoveable property. He relied on Wajid Pasha (supra) to
submit that the contract of agency gets automatically terminated by death of
either of the parties. As soon as the executant of POA dies, the right given to
the agent comes to an end. Once the agency is terminated, the agent cannot
act on the basis of the power granted to him under the GPA. He also placed
reliance on Prahlad (supra) to submit that a POA granted by the donor to the
donee is operative and effective only during the lifetime of the donor. Since
the donor and done are in a relationship of master-agent a POA cannot stand
after the death of the donor. He asserted that the principle of nemo dat quod
non habet would apply meaning thereby that the holder of POA could not have
passed a title that she did not possess.
23. Mr. Thakur further submitted that even if for the sake of argument, it is
presumed that the GPA was coupled with interest and Section 202 of the
Contract Act comes into operation, still it can apply only to an extent that the
buyer can enforce the agreement against the vendor or his legal
SLP (C) Nos. 13618-13619 of 2020 Page 26 of 61
representatives for specific performance or for return of the sale consideration
paid. Lastly, he submitted that it is not the case of the appellants that legal
representatives of the original owner were aware about the transaction
between their father and the holder of POA. Answering respondent now holds
the position of a bona fide purchaser for valuable consideration.
24. In such circumstances referred to above, the counsel prayed that there being
no merit in the present appeals, those may be dismissed.
E. ISSUES FOR CONSIDERATION
25. Having heard the learned counsel appearing for the parties and having gone
through the materials on record, the following questions fall for our
consideration:
a. Whether the agent, A. Saraswathi, by virtue of being a holder of the
General Power of Attorney along with Agreement to Sell had any right,
title or interest in the subject-matter of the agency, to execute the registered
sale deed dated 01.04.1998 in favour of her son i.e., the appellant no. 2,
after the death of the principal, on 30.01.1997?
SLP (C) Nos. 13618-13619 of 2020 Page 27 of 61
b. Whether it was obligatory for the answering respondent to challenge the
execution and validity of the General Power of Attorney and the
Agreement to Sell dated 04.04.1986 and a further prayer to declare that the
registered sale deed dated 01.04.1998 is invalid, non-est or illegal in O.S.
133/2007?
F. ANALYSIS
26. At the cost of repetition, we deem it necessary to state how the property
exchanged hands on both sides. It is the case of the appellants that the original
owner executed a GPA and agreement to sell in favour of the holder.
Thereafter, the holder in her capacity as a holder of POA vide a registered sale
deed sold the Suit Property to her son, appellant no. 2. On the other hand, it is
the case of the respondents that after the death of the original owner, his heirs
(respondent no. 1-6) sold the Suit Property to S. Sreenivasullu (respondent no.
7) vide a registered sale deed, thereafter, S. Sreenivasullu sold the Suit
Property to C. Roopavathi (respondent no. 8) vide another registered sale
deed. Lastly, C. Roopavathi vide a registered gift deed gifted the Suit Property
to her daughter, J. Manjula (answering respondent).
SLP (C) Nos. 13618-13619 of 2020 Page 28 of 61
Appellant’s Version Respondent’s Version
Muniyappa @Ruttapa (Owner)
After Muniyappa’s death
Heirs of the Owner
A. Saraswathi (GPA holder)
S. Sreenivasullu
A. Manohar (appellant no. 2)
C. Roopavathi
J. Manjula (answering respondent)
i. Relationship between the Executant and Holder of General Power of Attorney
27. A power of attorney derives its basic principles from Chapter X of the Contract
Act which provides for “Agency” along with Sections 1A and 2 respectively of
the Powers of Attorney Act, 1882. Agency is a fiduciary relationship between two
persons, where one explicitly or implicitly agrees that the other will act on their
behalf to influence their legal relations with third parties, and the other similarly
agrees to act in this capacity or does so based on an agreement. The relationship
between the executant of a general power of attorney and the holder of the power
is one of principal and agent. A principal is bound by the acts done by an agent
or the contracts made by him on behalf of the principal. Likewise, power of
attorney in the nature of contract of agency authorizes the holder to do acts
specified by the executant, or represent the executant in dealings with third
persons.
SLP (C) Nos. 13618-13619 of 2020 Page 29 of 61
28. In the case of Syed Abdul Khader v. Rami Reddy & Ors., reported in (1979) 2
SCC 601, this Court held that the relation between the donor of the power and
the donee of the power is one of the principal and agent having its genesis in a
contract. It further observed that the term “agency” refers to the relationship in
which one person has the authority or ability to establish legal relations between
a principal and third parties. This relationship arises when a person, known as the
agent, has the authority to act on behalf of another, called the principal, and agrees
to do so. The relevant observations are reproduced hereinbelow:-
“10. The first contention of the appellant is that it was
impermissible in law for three persons to jointly grant a
power of attorney in favour of Defendant 34. Barring the
ipse dixit of the learned counsel nothing was shown to us
to make such a joint power impermissible in law. The
relation between the donor of the power and the donee of
the power is one of the principal and agent and the
expression “agency” is used to connote the relation which
exists where one person has an authority or capacity to
create legal relations between a person occupying the
position of principal and third parties. The relation of
agency arises whenever one person called the agent has
authority to act on behalf of another called the principal
and consents so to act. The relationship has its genesis in a
contract. If agency is the outcome of a contract between the
principal and the agent, in order to show that three
principals jointly constituting an agent by a deed called
“Power of Attorney” was impermissible, provisions of
Contract Act or the general law of contract should have
been shown as having been violated by such a contract.
SLP (C) Nos. 13618-13619 of 2020 Page 30 of 61
Nothing of the kind was pointed out to us. On the contrary,
in Halsbury's Laws of England, Vol. I, 4th Edn., para 726,
the following proposition has been stated:
“Co-principals may jointly appoint an agent to act
for them and in such case become jointly liable to him and
may jointly issue him.”
We are in agreement with this view and, therefore, three
principals could jointly appoint an agent.”
(Emphasis supplied)
29. In State of Rajasthan v. Basant Nahata, reported in (2005) 12 SCC 77, while
dealing with the challenge to the constitutional validity of Section 22A of the
Registration Act, it was held that a deed of power of attorney is a document of
convenience empowering the agent to act for the principal or manage the affairs
of the principal. The relevant observations are reproduced hereinbelow:
“Power of attorney
13. A grant of power of attorney is essentially governed by
Chapter X of the Contract Act. By reason of a deed of
power of attorney, an agent is formally appointed to act for
the principal in one transaction or a series of transactions
or to manage the affairs of the principal generally
conferring necessary authority upon another person. A
deed of power of attorney is executed by the principal in
favour of the agent. The agent derives a right to use his
name and all acts, deeds and things done by him and
subject to the limitations contained in the said deed, the
same shall be read as if done by the donor. A power of
attorney is, as is well known, a document of convenience.
14. Besides the Contract Act, the Powers-of-Attorney Act,
1882 deals with the subject. Section 1-A of the Powers-of-
Attorney Act defines power of attorney to include any
SLP (C) Nos. 13618-13619 of 2020 Page 31 of 61
instruments empowering a specified person to act for and
in the name of the person executing it. Section 2 of the said
Act reads, thus:
“2. Execution under power of attorney.—The donee of
a power of attorney may, if he thinks fit, execute or do any
instrument or thing in and with his own name and
signature, and his own seal, where sealing is required, by
the authority of the donor of the power; and every
instrument and thing so executed and done, shall be as
effectual in law as if it had been executed or done by the
donee of the power in the name, and with the signature and
seal, of the donor thereof.
This section applies to powers of attorney created by
instruments executed either before or after this Act comes
into force.”
Execution of a deed of power of attorney, therefore, is valid
in law and subject to the provisions of the Act is not
compulsorily registerable.”
(Emphasis supplied)
30. From the above exposition of law, it is settled that power of attorney is a creation
of an agency by which the grantor/donor/executant authorizes the
grantee/donee/holder/attorney to do the acts specified on his behalf, which will
be binding on the executant as if the acts were done by him.
31. In the present case, the original owner, executant of the POA, holds the position
of a principal. Whereas, the holder of the POA is an agent. There is no gainsaying
in the fact that the original owner by executing the POA dated 04.04.1986 in
SLP (C) Nos. 13618-13619 of 2020 Page 32 of 61
favour of the holder entered into a principal-agent relationship with each other.
We shall now proceed with an independent as well as combined reading of the
GPA and the agreement to sell.
ii. Independent Reading of the General Power of Attorney and the Agreement
to Sell
a. ‘Interest’ in Power of Attorney
32. It was submitted on behalf of the appellants that the GPA read with the agreement
to sell categorically states that POA was executed for a consideration, and the
possession of the Suit Property was delivered to the holder. It was further
submitted that since both the documents were executed on the same day, in favour
of the same person, they should be read together and construed harmoniously. It
is because of this reason that POA holder (agent) has an interest in the subject-
matter of the agency and the POA is coupled with interest which makes the
agency irrevocable by virtue of Section 202 of the Contract Act.
33. Section 201 of the Contract Act prescribes various ways of revocation of
authority given by the principal to his agent. A principal can terminate the
contract of agency unless such revocation is precluded by Section 202 of the
Contract Act. Section 202 of the Contract Act, as an exception to the general rule
SLP (C) Nos. 13618-13619 of 2020 Page 33 of 61
under Section 201, prescribes that where an agent has himself an interest in the
property which forms the subject-matter of the agency, the agency cannot be
terminated to the prejudice of such interest unless there is an express stipulation
to the contrary.
34. Illustration (a) to Section 202 of the Contract Act states that A (principal) has
given authority to B (agent) to sell A’s land, and to pay himself i.e., the agent,
from the proceeds the debt which is due to him from A. Illustration (b) states that
A (principal) has consigned 1,000 bales of cotton to B (agent), who has given an
advance on the bales of cotton. Now, A wishes B to sell the cotton and recover
his advance from the sale proceeds. In both the cases, A can neither revoke the
authority nor agency will be terminated by his insanity or death. It is important
to take a note that in both the cases, the agent has an interest vested in the subject-
matter of the agency. The factum of interest or security of the agent, in both cases,
does not imply that the agent’s right to remuneration constitutes an interest in the
subject matter of the agency; rather, it extends beyond the mere advancement of
remuneration or commission. Where POA is coupled with an interest, it
metamorphosizes to an irrevocable agency unless expressly stated otherwise.
SLP (C) Nos. 13618-13619 of 2020 Page 34 of 61
There an agent’s right to remuneration is not an interest in the subject-matter of
the agency.
35. Therefore, the essentials of Section 202 of the Contract Act are, first, there shall
be a relationship in the capacity of ‘principal and agent’ between the parties and
secondly, there shall be agent’s interest in the subject-matter of the agency. If both
the conditions are fulfilled the agency becomes irrevocable and cannot be
terminated unilaterally at the behest of the principal. As the first condition is
satisfied in the present case, we shall now proceed to examine whether from the
reading of the GPA, the holder of POA had an interest in the subject matter of the
agency, namely, the Suit Property.
36. We may quote an extract from Bowstead on Agency, 14
th
Edition, page 423 it
stated as under:-
“(i) Where the authority of an agent is given by deed or for
valuable consideration, for the purpose of effectuating any
security, or of protecting or securing any interest of the
agent, it is irrevocable during the subsistence of such
security or interest. But it is not irrevocable merely because
the agent has an interest in the exercise of it or has a special
property in, or lien for advances upon, the subject matter
of it, the authority not being given expressly for the purpose
of securing such interest or advances;
SLP (C) Nos. 13618-13619 of 2020 Page 35 of 61
(ii) Where a power of attorney, whenever created is
expressed to be irrevocable and is given to secure a
proprietary interest of the donee of the power, or the
performance of an obligation owed to the donee, then, so
long as the donee has that interest, or the obligation
remains undischarged, the power is irrevocable;
(iii) Authority expressed by this article to be irrevocable is
not determined by the death, insanity or bankruptcy of the
principal, nor ......where the principal is an incorporated
company, but its winding up or dissolution, and cannot be
revoked by the principal without the consent of the agent.”
37. As far back as 1931, in Dalchand v. Seth Hazarimal & Ors., reported in 1931
SCC OnLine MP 57, the defendant-agent claimed that he had an interest in the
cloth supplied to him by the plaintiff-principal for sale because according to the
agent he was entitled to keep for himself any amount obtained by him as per the
assigned rates. The court held that the agent had no interest in the property being
sold or in the proceeds of sale until sale is complete. The relevant observations
are reproduced hereinbelow:-
“5. For the plaintiff, Vishnucharya v. Ramchandra [[1881]
5 Bom. 253.], has been cited, in which it has been held that
an agent for the collection of rents cannot be regarded as
having an interest in the property merely because he is
authorized to take his salary out of the rents. It is objected
on behalf of the defendants that this decision runs directly
contrary to Illus. (a), S. 202. But I find that a similar view
has been taken in Lakhmiohand v. Chotooram [[1900] 24
Bom. 403.], in which the facts more closely resemble those
of the present case and it was held that the interest which
SLP (C) Nos. 13618-13619 of 2020 Page 36 of 61
an agent has in effecting a sale and the prospect of
remuneration to arise therefrom is not such an interest as
would prevent the termination of the agency.
6. I am in respectful agreement with the decisions in these
two Bombay cases. They and the case before me are clearly
distinguishable from the case stated in Illus. (a), Section
202 of the Contract Act. In the illustration, the principal
was under a liability to the agent quite apart from the
contract of agency, and the authority given to him to sell
the principal’s land was by way of security for the
discharge of that liability. In the present case, the agent had
no interest in the property to be sold or in the sale proceeds
thereof until a sale had been actually effected, and
revocation of the agency, before sale had been effected,
deprived him of nothing that had accrued to him.”
(Emphasis supplied)
38. In the case of Palani Vannan v. Krishnaswami Konar, reported in 1945 SCC
OnLine Mad 119, the decree-holder had executed a POA authorizing the holder
to execute the decree. Later, the executant revoked the POA through a notice. The
question before the court was whether the notice revoking the authority was valid
in law or not. The court held that the POA was not coupled with interest as the
object of the POA was not securing any interest of the agent. It held that the
primary object of the POA was to recover the fruits of the decree on behalf of the
principal despite the fact that the agent’s remuneration was fixed to be drawn
from the proceeds of the decree. The relevant observations are reproduced
hereinbelow:
SLP (C) Nos. 13618-13619 of 2020 Page 37 of 61
“It is only necessary to refer to one further
decision, Frith v. Frith [[1906] A.C. 254.], in which the
Judicial Committee discuss the general position relating to
these matters. Their Lordships point out that in what is
known as Carmichael's case [[1896] 2 Ch. 643.]:
“The donor of the power, for valuable consideration,
conferred upon the donee, authority to do a particular
thing in which the latter had an interest, namely, to apply
for the shares of the Company which the donee was
promoting for the purpose of purchasing his own property
from him, and the donor sought to revoke that authority
before the benefit was reaped.”
The effect of all these cases appears to be stated accurately
in Bowstead on the Law of Agency, Eighth Edition, page
456. It is stated (Article 138):
“Where the authority of an agent is given for the
purpose of effectuating any security, or of protecting or
securing any interest of the agent, it is irrevocable during
the subsistence of such security or interest.”
--xxx--
My view of this document is as follows. I think its primary
object was to recover on behalf of the principal the fruits
of his decree. It contained incidentally a provision for the
employment of the agent, Vedavyasachar, in order to
realize that decree. It provides that his remuneration is to
be one-half of the proceeds. It contains an indemnity clause
against any out-of-pocket expenses which he is entitled also
to recover from the amount of the decree. But the object of
the power-of-attorney is not for the purpose of protecting
or securing any interest of the agent. I think that part of the
agreement is purely incidental. There is, however, another
feature of this document which seems to me to be
conclusive against the appellants. The last words,
SLP (C) Nos. 13618-13619 of 2020 Page 38 of 61
“I shall not for any reason whatever, cancel without
your permission this authority which I have given to you,
without paying the amount expended by you and without
giving the aforesaid relief for your trouble”,
seem to me to make express provision for the revocation of
the above power. It can be done in two ways, (a) by consent,
for that is what I understand “your permission” to mean,
and (b) if that permission is withheld, on payment by the
principal of all out-of-pocket expenses and also
remuneration for his services. With regard to
remuneration, the wording is vague, “without giving the
aforesaid relief for your trouble”.
(Emphasis supplied)
39. To the same effect is the decision of High Court of Delhi in Shri Harbans Singh
v. Smt. Shanti Devi, reported in 1977 SCC OnLine Del 102. The High Court
while dealing with the question of whether the powers of attorney executed by
the appellant were cancelled validly, laid down the conditions of irrevocability of
a contract of agency as, (i) authority to agent given for valuable consideration;
(ii) such valuable consideration was given for the purpose of effectuating a
security or protecting or securing the interest of the agent; (iii) agency not being
irrevocable merely because the agent has some interest in carrying it out or holds
a special right, such as a lien or advance, over its subject matter. Thus, the agency
has to be specifically meant to secure the agent’s benefit or interest. It further
SLP (C) Nos. 13618-13619 of 2020 Page 39 of 61
observed that the interest of the agent can be inferred from the language of the
document or from the course of business between the principal and agent. The
observations are reproduced hereinbelow:-
“All the conditions of irrevocability are satisfied in the
present case. The authority to the agent was given for
valuable consideration which proceeded from the
respondent. It was given for the purpose of effectuating a
security or protecting or securing the interest of the agent.
For, the only purpose of the agency was to ensure and
secure the performance of the contract by the appellant in
favour of the respondent for whom Shri Gulati was acting
as the husband and the nominee and, therefore, a
representative or an agent. Where the performance of the
agency is not to secure the interest or the benefit of the
agent then the agency is not irrevocable merely because the
agent has an interest in the exercise of it or has a special
property in or lien for advances upon the subject-matter of
it.”
(Emphasis supplied)
40. In the present case, it is evident from para 1 of the GPA executed by the original
owner in favor of the holder that the POA was to look after, maintain, manage the
Scheduled Property. Para 2 states that the attorney can enter into any agreement
with any person with respect to the Scheduled Property for any amount, receive
advance amount, to execute deeds in favor of such persons, issue proper
discharge. Para 3 states that attorney has the power to apply for transfer of khata
and to pay all future taxes and receive receipts. Further, para 4 states that the
SLP (C) Nos. 13618-13619 of 2020 Page 40 of 61
attorney can apply for sanctioning of plan for the purpose of construction, utilize
the Scheduled Property as the holder deems fit and receive all profits therefrom.
Para 5 states that the attorney has the power to represent the holder in all
Government Offices and do all things connected. Para 6 states that the attorney
can pursue matters in courts, give evidence, obtain decree, execute the same.
Further, para 7 states that the Scheduled Property is in owner’s peaceful
possession and enjoyment. Lastly, para 8 states that the attorney is generally
entitled to do all acts required in respect of the Suit Property which are not
specifically mentioned and that the GPA is irrevocable.
b. Nature of Power of Attorney
41. It is now appropriate to analyze the nature of the GPA, specifically whether it is
general or special. While construing a document, a reader should not go by the
title to the document or the nomenclature of the document. In such a case, the
court is endowed with a duty to see the contents of the document and intention of
the parties which can be gathered from the terms of the document and/or from
circumstances under which the document was entered into. The intention of the
parties can be ascertained from the language used by the parties. A document has
to be seen as a whole.
SLP (C) Nos. 13618-13619 of 2020 Page 41 of 61
42. The import of the word “general” in a POA refers to the power granted
concerning the subject matter. The test to determine the nature of POA is the
subject matter for which it has been executed. The nomenclature of the POA does
not determine its nature. Even a POA termed as a ‘general power of attorney’ may
confer powers that are special in relation to the subject matter. Likewise, a
‘special power of attorney’ may confer powers that are general in nature
concerning the subject matter. The essence lies in the power and not in the
subject-matter.
43. In Halsbury, Vol. 1, at page 151, the author defines special and general agents,
the definition of general agent has been stated as follows:
“A general agent is one who has authority, arising out of
and in the ordinary course of his business or profession, to
do some act or acts on behalf of his principal in relation
thereto; or one who is authorised to act on behalf of the
principal generally in transactions of a particular kind or
incidental to a particular business.”
44. A three-Judge Bench of this Court settled the rules of interpretation applicable to
power of attorney in Timblo Irmaos Ltd., Margo v. Jorge Anibal Matos
Sequeira, reported in (1977) 3 SCC 474. It was held that words used in a POA
must be interpreted in the context of the whole; the purpose of the powers
SLP (C) Nos. 13618-13619 of 2020 Page 42 of 61
conferred must then be examined through the circumstances in which it was
executed; and finally, necessary powers must be implied. The relevant
observations are reproduced hereinbelow:-
“11. We think that perhaps the most important factor in
interpreting a power of attorney is the purpose for which it
is executed. It is evident that the purpose for which it is
executed must appear primarily from the terms of the
power of attorney itself, and, it is only if there is an
unresolved problem left by the language of the document,
that we need consider the manner in which the words used
could be related to the facts and circumstances of the case
or the nature or course of dealings. We think that the rule
of construction embodied in proviso 6 to Section 92 of the
Evidence Act, which enables the Court to examine the facts
and surrounding circumstances to which the language of
the document may be related, is applicable here, because
we think that the words of the document, taken by
themselves, are not so clear in their meanings as the
learned Judicial Commissioner thought they were.
--xxx--
13. The learned Judicial Commissioner had, in our
opinion, overlooked several well-known rules of
interpretation: firstly, that, a word used in a document has
to be interpreted as a part of or in the context of the whole;
secondly, that, the purpose of the powers conferred by the
power of attorney have to be ascertained having regard to
the need which gave rise to the execution of the document,
the practice of the parties, and the manner in which the
parties themselves understood the purpose of the
document; and, thirdly, that, powers which are absolutely
necessary and incidental to the execution of the ascertained
SLP (C) Nos. 13618-13619 of 2020 Page 43 of 61
objects of the general powers given must be necessarily
implied.”
(Emphasis supplied)
45. Further, a mere use of the word ‘irrevocable’ in a POA does not make the POA
irrevocable. If the POA is not coupled with interest, no extraneous expression can
make it irrevocable. At the same time, even if there is no expression to the effect
that the POA is irrevocable but the reading of the document indicates that it is a
POA coupled with interest, it would be irrevocable. The principles of
construction of a POA termed as ‘irrevocable’ was explained in Manubhai
Prabhudas Patel v. Jayantilal Vadilal Shah, reported in 2011 SCC OnLine Guj
7028. The relevant observations are reproduced below:-
“12. I am of the view that while construing a document, it
is necessary to determine the real intention of the parties.
The mere form in which document is couched is immaterial.
The intention of the parties has to be gathered from the
terms of the documents themselves and from such of the
surrounding circumstances, as later required to show in
what manner the language of the document is related to the
existing fact. It is very difficult task to know the intention of
the parties on the basis of the recital of the document. But,
the Court can rely safely on the language of the document,
the language, which has been used by the parties to
manifest the intention of the parties. If the Court goes on
extraneous evidence, that may lead to more difficulty and
confusion. But, there are certain principles to be borne in
mind. The first principle is, the mere saying that the power
of attorney is an irrevocable power of attorney coupled
with interest is not the end of the matter. The Court, can
SLP (C) Nos. 13618-13619 of 2020 Page 44 of 61
clearly say that the document, though, is styled as an
irrevocable power of attorney is not in substance a power
coupled with interest so as to make it an irrevocable power
of attorney. At the same time, even if there is no title to show
that the power is an irrevocable power, but, the substance
of the entire document would suggest that the same is an
irrevocable power coupled with interest. Therefore, a
document has to be construed as a whole. A stray sentence
here and there cannot be picked out to construe a
document. To understand the tenor of the document and the
intention of the parties, it has to be read as a whole. The
real intention of the parties has to be covered not merely
from what ex-facie is stated in the document, but, from the
totality of the recitals in the document. At this stage, I may
quote with profit a very lucid judgment rendered by learned
Single Judge of Madras High Court explaining the general
principles regarding the construction of power of attorney.
In case of Anantha Pillai v. Ratiinasabapatiiy Mudaliar,
reported in 1968 (2) MLJ 574, Ismail, J. (as he then was),
held thus:
“The general principles regarding the construction of
power of attorney are well settled. Powers of attorney must
be strictly construed as giving only such authority as they
confer expressly or by necessary implication. Where an act
purporting to be done under the power of attorney is
challenged as being in excess of the power, it is necessary
to show that on a fair construction of the whole instrument
the authority in question is to be found within the four
corners of the instrument either by express terms or by
necessary implication. Some of the principles governing
the construction of a power of attorney are:(1) the
operative part of the deed is controlled by the recitals, (2)
where an authority is given to do particular acts, followed
by general words, the general words are restricted to what
is necessary for the performance of the particular acts, (3)
the general words do not confer general powers but are
limited to the purpose for which the authority is given and
are construed as enlarging the special powers only when
SLP (C) Nos. 13618-13619 of 2020 Page 45 of 61
necessary for that purpose; (4) a power of attorney is
construed so as to include all medium powers necessary for
its effective execution. Bearing these general principles in
mind the question for consideration is whether the power
of attorney in this case authorised the first defendant to
enter into an agreement to sell or authorised him to execute
a sale-deed….””
(Emphasis supplied)
46. Applying the above exposition of law in the facts of the present case, it is evident
from the tenor of POA that is not irrevocable as it was not executed to effectuate
security or to secure interest of the agent. The holder of POA could not be said to
have an interest in the subject-matter of the agency and mere use of the word
‘irrevocable’ in a POA would not make the POA irrevocable. The High Court was
right in holding that the holder did not have any interest in the POA. When the
High Court observes that the power of attorney does not explicitly state the reason
for its execution, it implies that its nature is general rather than special.
47. It is a settled law that a transfer of immovable property by way of sale can only
be by a deed of conveyance. An agreement to sell is not a conveyance. It is not a
document of title or a deed of transfer of deed of transfer of property and does
not confer ownership right or title. In Suraj Lamp (supra) this Court had
SLP (C) Nos. 13618-13619 of 2020 Page 46 of 61
reiterated that an agreement to sell does not meet the requirements of Sections 54
and 55 of the TPA to effectuate a ‘transfer’.
48. From the independent reading of the POA and the agreement to sell, the
submissions of the appellants fail on two grounds, first, the POA is general in
nature and does not secure agent’s right in the subject-matter of the agency, and
secondly, an agreement to sell simpliciter does not confer ownership in the
immovable property so as to transfer a better title to anyone else.
iii. Combined Reading of the General Power of Attorney and the Agreement to
Sell
49. The issue at hand may also be looked at from another angle. The appellants have
submitted that that since the GPA and the agreement to sell were executed by the
same person in favour of the same beneficiary, it ought to have been read together.
50. Here, we deem it appropriate to take note of Sections 17 and 49 of the
Registration Act respectively. The provisions have been reproduced
hereinbelow:-
“17. Documents of which registration is compulsory.—(1)
The following documents shall be registered, if the property
to which they relate is situate in a district in which, and if
SLP (C) Nos. 13618-13619 of 2020 Page 47 of 61
they have been executed on or after the date on which, Act
No. XVI of 1864, or the Indian Registration Act, 1866, or
the Indian Registration Act, 1871, or the Indian
Registration Act, 1877, or this Act came or comes into
force, namely:—
(a) instruments of gift of immovable property;
(b) other non-testamentary instruments which purport
or operate to create, declare, assign, limit or
extinguish, whether in present or in future, any right,
title or interest, whether vested or contingent, of the
value of one hundred rupees and upwards, to or in
immovable property;
(c) non-testamentary instruments which acknowledge
the receipt or payment of any consideration on account
of the creation, declaration, assignment, limitation or
extinction of any such right, title or interest; and
(d) leases of immovable property from year to year, or
for any term exceeding one year, or reserving a yearly
rent;
(e) non-testamentary instruments transferring or
assigning any decree or order of a Court or any award
when such decree or order or award purports or
operates to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or
interest, whether vested or contingent, of the value of
one hundred rupees and upwards, to or in immovable
property:
Provided that the [State Government] may, by order
published in the [Official Gazette], exempt from the
operation of this sub-section any lease executed in any
district, or part of a district, the terms granted by which do
not exceed five years and the annual rents reserved by
which do not exceed fifty rupees.
(1A) The documents containing contracts to transfer for
consideration, any immovable property for the purpose of
section 53A of the Transfer of Property Act, 1882 (4 of
1882) shall be registered if they have been executed on or
SLP (C) Nos. 13618-13619 of 2020 Page 48 of 61
after the commencement of the Registration and Other
Related laws (Amendment) Act, 2001 (48 of 2001) and if
such documents are not registered on or after such
commencement, then, they shall have no effect for the
purposes of the said section 53A.
(2) Nothing in clauses (b) and (c) of sub-section (1) applies
to—
(i) any composition deed; or
(ii) any instrument relating to shares in a joint stock
Company, notwithstanding that the assets of such
Company consist in whole or in part of immovable
property; or
(iii) any debenture issued by any such Company and
not creating, declaring, assigning, limiting or
extinguishing any right, title or interest, to or in
immovable property except in so far as it entitles the
holder to the security afforded by a registered
instrument whereby the Company has mortgaged,
conveyed or otherwise transferred the whole or part of
its immovable property or any interest therein to
trustees upon trust for the benefit of the holders of such
debentures; or
(iv) any endorsement upon or transfer of any debenture
issued by any such Company; or
(v) any document other than the documents specified in
sub-section (1A) not itself creating, declaring,
assigning, limiting or extinguishing any right, title or
interest of the value of one hundred rupees and
upwards to or in immovable property, but merely
creating a right to obtain another document which will,
when executed, create, declare, assign, limit or
extinguish any such right, title or interest; or
(vi) any decree or order of a Court [except a decree or
order expressed to be made on a compromise and
comprising immovable property other than that which
is the subject-matter of the suit or proceeding]; or
SLP (C) Nos. 13618-13619 of 2020 Page 49 of 61
(vii) any grant of immovable property by
[Government]; or
(viii) any instrument of partition made by a Revenue-
Officer; or
(ix) any order granting a loan or instrument of
collateral security granted under the Land
Improvement Act, 1871, or the Land Improvement
Loans Act, 1883; or
(x) any order granting a loan under the Agriculturists,
Loans Act, 1884, or instrument for securing the
repayment of a loan made under that Act; or
(xa) any order made under the Charitable Endowments
Act, 1890 (6 of 1890), vesting any property in a
Treasurer of Charitable Endowments or divesting any
such Treasurer of any property; or
(xi) any endorsement on a mortgage -deed
acknowledging the payment of the whole or any part of
the mortgage-money, and any other receipt for
payment of money due under a mortgage when the
receipt does not purport to extinguish the mortgage; or
(xii) any certificate of sale granted to the purchaser of
any property sold by public auction by a Civil or
Revenue-Officer.
Explanation.—A document purporting or operating to
effect a contract for the sale of immovable property shall
not be deemed to require or ever to have required
registration by reason only of the fact that such document
contains a recital of the payment of any earnest money or
of the whole or any part of the purchase money.
(3) Authorities to adopt a son, executed after the 1st day of
January, 1872, and not conferred by a will, shall also be
registered.”
--xxx--
49. Effect of non-registration of documents required to be
registered.—No document required by section 17 [or by
SLP (C) Nos. 13618-13619 of 2020 Page 50 of 61
any provision of the Transfer of Property Act, 1882 (4 of
1882)], to be registered shall—
(a) affect any immovable property comprised therein,
or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting
such property or conferring such power, unless it has
been registered:
[Provided that an unregistered document affecting
immovable property and required by this Act or the
Transfer of Property Act, 1882 (4 of 1882), to be registered
may be received as evidence of a contract in a suit for
specific performance under Chapter II of the Specific Relief
Act, 1877 (3 of 1877) *** or as evidence of any collateral
transaction not required to be effected by registered
instrument.]”
51. Section 17(1)(b) prescribes that any document which purports or intends to
create, declare, assign, limit or extinguish any right, title or interest, whether
vested or contingent, of the value of one hundred rupees and upwards to or in
immovable property is compulsorily registerable. Whereas, Section 49 prescribes
that the documents which are required to be registered under Section 17 will not
affect any immovable property unless it has been registered.
52. The aforesaid has been emphatically laid down by this Court in Shyam Narayan
Prasad v. Krishna Prasad & Ors., reported in (2018) 7 SCC 646. The relevant
observations are reproduced hereinbelow:-
“20. Section 17(1)(b) of the Registration Act mandates that
any document which has the effect of creating and taking
away the rights in respect of an immovable property must
be registered and Section 49 of the Registration Act
imposes bar on the admissibility of an unregistered
SLP (C) Nos. 13618-13619 of 2020 Page 51 of 61
document and deals with the documents that are required
to be registered under Section 17 of the Registration Act.
Since, the deed of exchange has the effect of creating and
taking away the rights in respect of an immovable property,
namely, RCC building, it requires registration under
Section 17. Since the deed of exchange has not been
registered, it cannot be taken into account to the extent of
the transfer of an immovable property.”
(Emphasis supplied)
53. Even from the combined reading of the POA and the agreement to sell, the
submission of the appellants fails as combined reading of the two documents
would mean that by executing the POA along with agreement to sell, the holder
had an interest in the immovable property. If interest had been transferred by way
of a written document, it had to be compulsorily registered as per Section 17(1)(b)
of the Registration Act. The law recognizes two modes of transfer by sale, first,
through a registered instrument, and second, by delivery of property if its value
is less than Rs. 100/-.
54. This principle was recently elaborated by the High Court of Karnataka in
Channegowda & Anr. v. N.S. Vishwanath & Ors., reported in 2023 SCC
OnLine Kar 153. The relevant portion is reproduced as under:-
“14. An attempt is made on behalf of the plaintiffs to
contend that the second plaintiff has sold the property as a
General Power of Attorney Holder and not as a title holder.
SLP (C) Nos. 13618-13619 of 2020 Page 52 of 61
It is argued that the Power of attorney is not compulsorily
registrable. The submission is noted with care. Suffice it to
note that a deed of power of attorney is not one of the
instruments specified under Section 17 of the Registration
Act compulsorily registrable. However, if a power has been
created empowering the attorney to sell the property i.e., if
a document that gives a right to the attorney holder to sell
the immovable property, then it would be a document
creating an interest in immovable property, which would
require compulsory registration. In the present case, the
General Power of Attorney alleged to have been executed
by defendants 1 to 3 in favor of the second plaintiff is
coupled with interest i.e., power of alienation is conferred
but it is not registered. The Apex Court in the SURAJ
LAMP's case has held that the General Power of Attorney
Sale, or Sale Agreements/Will do not convey title and do
not amount to transfer, nor can they be considered valid
modes of transfer of immovable property. Therefore, it can
be safely concluded that the declaration of facts/statement
of facts (affidavit) and General Power of Attorney do not
convey title. They are inadmissible in evidence.”
(Emphasis supplied)
55. The High Court rightly held that even though the GPA and the agreement to sell
were contemporaneous documents executed by the original owner in favour of
the holder, this alone cannot be a factor to reach the conclusion that she had an
interest in the POA. Thus, even though the GPA and the agreement to sell were
contemporaneous documents executed by the original owner in favour of the
same beneficiary, this cannot be the sole factor to conclude that she had an interest
in the subject-matter. Even if such an argument were to persuade this Court, the
SLP (C) Nos. 13618-13619 of 2020 Page 53 of 61
document must have been registered as per Section 17(1)(b) of the Registration
Act. In the absence of such registration, it would not be open for the holder of the
POA to content that she had a valid right, title and interest in the immovable
property to execute the registered sale deed in favour of appellant no. 2.
56. The practice of transferring an immovable property vide a GPA and agreement to
sell has been discouraged by the following observations of this Court in Suraj
Lamp (supra). The relevant observations are reproduced hereinbelow:-
“24. We therefore reiterate that immovable property can be
legally and lawfully transferred/conveyed only by a
registered deed of conveyance. Transactions of the nature
of “GPA sales” or “SA/GPA/will transfers” do not convey
title and do not amount to transfer, nor can they be
recognised or valid mode of transfer of immovable
property. The courts will not treat such transactions as
completed or concluded transfers or as conveyances as
they neither convey title nor create any interest in an
immovable property. They cannot be recognised as deeds
of title, except to the limited extent of Section 53-A of the
TP Act. Such transactions cannot be relied upon or made
the basis for mutations in municipal or revenue records.
What is stated above will apply not only to deeds of
conveyance in regard to freehold property but also to
transfer of leasehold property. A lease can be validly
transferred only under a registered assignment of lease. It
is time that an end is put to the pernicious practice of
SA/GPA/will transactions known as GPA sales.”
(Emphasis supplied)
SLP (C) Nos. 13618-13619 of 2020 Page 54 of 61
iv. Effect of Suit for Injunction simpliciter
57. The appellants submitted that the answering respondent had not challenged the
validity of the GPA and the agreement to sell dated 04.04.1986 executed in favour
of the holder and registered sale deed dated 01.04.1998 executed in favour of
appellant no. 2. The appellants’ submission does not hold good, as the absence of
a separate suit for declaration or even a specific prayer to that effect does not alter
the legal position of either party in the facts of this case. The legal standing of
both parties remains unaffected, for want of a distinct challenge to the instruments
in question.
58. Where the question of title is “directly and substantially” in issue in a suit for
injunction, and where a finding on an issue of title is necessary for granting the
injunction, with a specific issue on title raised and framed, a specific prayer for a
declaration of title is not necessary. As a result, a second suit would be barred
when facts regarding title have been pleaded and decided by the Trial Court. In
the present suit, the findings on possession rest solely on the findings on title. The
Trial Court framed a categorical issue on the ownership of the appellants herein.
To summarize, where a finding on title is necessary for granting an injunction
SLP (C) Nos. 13618-13619 of 2020 Page 55 of 61
and has been substantially dealt with by the Trial Court in a suit for injunction, a
direct and specific prayer for a declaration of title is not a necessity.
59. Where a finding on an issue of title is not necessary for deciding the question of
possession and the grant of an injunction, or where no issue on title has been
framed to decide a suit for injunction, any observation or decision on title would
be incidental and collateral and will not operate as res judicata. However, findings
on an issue of title in an earlier suit will operate as res judicata in a subsequent
suit where the question of title is directly and substantially in issue in a suit for
injunction.
60. In the case of Sajjadanashin Sayed MD. B.E. EDR. (Dead) by LRS. v. Musa
Dadabhai Ummer, reported in (2000) 3 SCC 350, this Court laid down the test
to decide when a case will fall in “directly and substantially in issue” or
“collaterally or incidentally in issue”. The relevant observations are reproduced
hereinbelow:-
“24. Before parting with this point, we would like to refer
to two more rulings. In Sulochana Amma v. Narayanan
Nair [(1994) 2 SCC 14] this Court held that a finding as to
title given in an earlier injunction suit would be res judicata
in a subsequent suit on title. On the other hand, the Madras
High Court, in Vanagiri Sri Selliamman Ayyanar
SLP (C) Nos. 13618-13619 of 2020 Page 56 of 61
Uthirasomasundareswarar Temple v. Rajanga Asari [AIR
1965 Mad 355 : ILR (1965) 1 Mad 232] held (see para 8
therein) that the previous suit was only for injunction
relating to the crops. Maybe, the question of title was
decided, though not raised in the plaint. In the latter suit
on title, the finding in the earlier suit on title would not be
res judicata as the earlier suit was concerned only with a
possessory right. These two decisions, in our opinion,
cannot be treated as being contrary to each other but
should be understood in the context of the tests referred to
above. Each of them can perhaps be treated as correct if
they are understood in the light of the tests stated above. In
the first case decided by this Court, it is to be assumed that
the tests above-referred to were satisfied for holding that
the finding as to possession was substantially rested on title
upon which a finding was felt necessary and in the latter
case decided by the Madras High Court, it must be assumed
that the tests were not satisfied. As stated in Mulla, it all
depends on the facts of each case and whether the finding
as to title was treated as necessary for grant of an
injunction in the earlier suit and was also the substantive
basis for grant of injunction. In this context, we may refer
to Corpus Juris Secundum (Vol. 50, para 735, p. 229) where
a similar aspect in regard to findings on possession and
incidental findings on title were dealt with. It is stated:
“Where title to property is the basis of the right of
possession, a decision on the question of possession is res
judicata on the question of title to the extent that
adjudication of title was essential to the judgment; but
where the question of the right to possession was the only
issue actually or necessarily involved, the judgment is not
conclusive on the question of ownership or title.””
(Emphasis supplied)
61. In Anathula Sudhakar v. P. Buchi Reddy (Dead) by LRs., reported in (2008) 4
SCC 594, this Court expounded upon the question whether a finding regarding
SLP (C) Nos. 13618-13619 of 2020 Page 57 of 61
title could be recorded in a suit for injunction. The relevant observations are being
reproduced below:-
“21. To summarise, the position in regard to suits for
prohibitory injunction relating to immovable property, is as
under:
(a) Where a cloud is raised over the plaintiff's title and he
does not have possession, a suit for declaration and
possession, with or without a consequential injunction, is
the remedy. Where the plaintiff's title is not in dispute or
under a cloud, but he is out of possession, he has to sue for
possession with a consequential injunction. Where there is
merely an interference with the plaintiff's lawful possession
or threat of dispossession, it is sufficient to sue for an
injunction simpliciter.
(b) As a suit for injunction simpliciter is concerned only
with possession, normally the issue of title will not be
directly and substantially in issue. The prayer for
injunction will be decided with reference to the finding on
possession. But in cases where de jure possession has to be
established on the basis of title to the property, as in the
case of vacant sites, the issue of title may directly and
substantially arise for consideration, as without a finding
thereon, it will not be possible to decide the issue of
possession.
(c) But a finding on title cannot be recorded in a suit for
injunction, unless there are necessary pleadings and
appropriate issue regarding title (either specific, or implied
as noticed in Annaimuthu Thevar [Annaimuthu
Thevar v. Alagammal, (2005) 6 SCC 202] ). Where the
averments regarding title are absent in a plaint and where
there is no issue relating to title, the court will not
investigate or examine or render a finding on a question of
title, in a suit for injunction. Even where there are
SLP (C) Nos. 13618-13619 of 2020 Page 58 of 61
necessary pleadings and issue, if the matter involves
complicated questions of fact and law relating to title, the
court will relegate the parties to the remedy by way of
comprehensive suit for declaration of title, instead of
deciding the issue in a suit for mere injunction.
(d) Where there are necessary pleadings regarding title,
and appropriate issue relating to title on which parties lead
evidence, if the matter involved is simple and
straightforward, the court may decide upon the issue
regarding title, even in a suit for injunction. But such cases,
are the exception to the normal rule that question of title
will not be decided in suits for injunction. But persons
having clear title and possession suing for injunction,
should not be driven to the costlier and more cumbersome
remedy of a suit for declaration, merely because some
meddler vexatiously or wrongfully makes a claim or tries
to encroach upon his property. The court should use its
discretion carefully to identify cases where it will enquire
into title and cases where it will refer to the plaintiff to a
more comprehensive declaratory suit, depending upon the
facts of the case.”
(Emphasis supplied)
62. We are conscious of the fact that the holder of POA did not choose to register the
agreement to sell executed by the original owner in her favour. On this, we would
like to underscore the observations of this Court on the objective and advantages
of registration in Suraj Lamp (supra). The relevant excerpt has been reproduced
hereinbelow:-
“Advantages of registration
SLP (C) Nos. 13618-13619 of 2020 Page 59 of 61
15. In the earlier order dated 15-5-2009 [(2009) 7 SCC 363
: (2009) 3 SCC (Civ) 126] , the objects and benefits of
registration were explained and we extract them for ready
reference: (SCC p. 367, paras 15-18)
“15. The Registration Act, 1908 was enacted with the
intention of providing orderliness, discipline and public
notice in regard to transactions relating to immovable
property and protection from fraud and forgery of
documents of transfer. This is achieved by requiring
compulsory registration of certain types of documents and
providing for consequences of non-registration.
16. Section 17 of the Registration Act clearly provides that
any document (other than testamentary instruments) which
purports or operates to create, declare, assign, limit or
extinguish whether in present or in future ‘any right, title
or interest’ whether vested or contingent of the value of Rs
100 and upwards to or in immovable property.
17. Section 49 of the said Act provides that no document
required by Section 17 to be registered shall, affect any
immovable property comprised therein or received as
evidence of any transaction affected such property, unless
it has been registered. Registration of a document gives
notice to the world that such a document has been executed.
18. Registration provides safety and security to
transactions relating to immovable property, even if the
document is lost or destroyed. It gives publicity and public
exposure to documents thereby preventing forgeries and
frauds in regard to transactions and execution of
documents. Registration provides information to people
who may deal with a property, as to the nature and extent
of the rights which persons may have, affecting that
property. In other words, it enables people to find out
whether any particular property with which they are
concerned, has been subjected to any legal obligation or
SLP (C) Nos. 13618-13619 of 2020 Page 60 of 61
liability and who is or are the person(s) presently having
right, title, and interest in the property. It gives solemnity
of form and perpetuate documents which are of legal
importance or relevance by recording them, where people
may see the record and enquire and ascertain what the
particulars are and as far as land is concerned what
obligations exist with regard to them. It ensures that every
person dealing with immovable property can rely with
confidence upon the statements contained in the registers
(maintained under the said Act) as a full and complete
account of all transactions by which the title to the property
may be affected and secure extracts/copies duly certified.”
Registration of documents makes the process of verification
and certification of title easier and simpler. It reduces
disputes and litigations to a large extent.”
(Emphasis supplied)
G. CONCLUSION
63. For all the aforesaid reasons, we have reached the conclusion that no error not to
speak of any error of law could be said to have been committed by the High Court
in passing the impugned judgment.
SLP (C) Nos. 13618-13619 of 2020 Page 61 of 61
64. As a result, the appeals stand dismissed. Parties shall bear their own costs.
Pending application(s), if any, stand disposed of.
…..……………………………J.
(J. B. Pardiwala)
..………………………………J.
(R. Mahadevan)
New Delhi
27
th
February, 2025.
In a significant ruling that reinforces established principles of property law, the Supreme Court of India has meticulously clarified the intricacies surrounding irrevocable Power of Attorney and its implications for immovable property transactions. This judgment, now available on CaseOn, serves as a crucial reference for understanding the limits of agency and the mandatory requirements for conveying title in India.
The heart of this dispute lay in two primary questions:
To resolve these issues, the Supreme Court delved into several foundational legal statutes and precedents:
The dispute involved Site No. 10, originally owned by Muniyappa. In 1986, Muniyappa executed an "irrevocable" General Power of Attorney and an unregistered Agreement to Sell in favor of A. Saraswathi (the holder). The Agreement to Sell stated that full consideration was paid and possession was delivered. Muniyappa died in 1997.
In 1998, Saraswathi, acting as the POA holder, executed a registered sale deed for the property in favor of her son, M.S. Ananthamurthy (Appellant No. 2).
Concurrently, after Muniyappa’s death, his legal heirs sold the same property to S. Sreenivasulu (Respondent No. 7) in 2003 via a registered sale deed. Sreenivasulu then sold it to C. Roopavathi (Respondent No. 8) in 2003, who subsequently gifted it to her daughter, J. Manjula (Answering Respondent), in 2004.
Manjula filed a suit for permanent injunction, claiming lawful possession. Ananthamurthy filed a suit for declaration of ownership, seeking to nullify the sales made by Muniyappa's heirs and their successors.
The appellants argued that because the GPA and the Agreement to Sell were executed on the same day, for the same beneficiary (Saraswathi), and acknowledged full consideration and possession transfer, Saraswathi had an 'interest' in the property, making the POA irrevocable under Section 202 of the Contract Act. Therefore, her sale to her son, even after Muniyappa's death, should be valid.
The Court, however, scrutinized the contents of the GPA. It noted that the POA conferred broad agency powers (managing, selling, constructing, etc.) but did not explicitly state that its purpose was to secure Saraswathi's own proprietary interest. The mere use of the word "irrevocable" in the POA was deemed insufficient. Based on precedents, the Court clarified that an agent's right to remuneration or the prospect of profits from a sale does not constitute an 'interest in the subject-matter' necessary to make an agency irrevocable. The core requirement is that the POA's purpose must be to protect or secure a substantive interest of the agent in the property itself.
A pivotal point in the analysis was the non-registration of the Agreement to Sell. The Court emphasized that for any right, title, or interest in immovable property valued at Rs. 100 or more to be legally conveyed, registration is mandatory under Section 17 of the Registration Act. Even if the GPA and Agreement to Sell were read together, and even if an 'interest' was intended to be created for Saraswathi, that interest would have had to be compulsorily registered to be legally effective. Since it wasn't registered, it failed to convey any legal title or interest to Saraswathi.
Here’s where CaseOn.in 2-minute audio briefs prove invaluable, offering legal professionals and students quick, concise summaries that highlight such critical statutory interpretations and their impact on complex property disputes, allowing for rapid assimilation of key legal reasoning.
Since the Court determined that Saraswathi did not possess an 'interest coupled with agency' as required by Section 202, the General Power of Attorney automatically terminated upon Muniyappa's death in 1997 (Section 201). Consequently, Saraswathi had no legal authority to execute the sale deed in favor of her son in 1998. The principle of nemo dat quod non habet (one cannot give what one does not have) applied, meaning Saraswathi could not transfer a title she herself no longer held the authority to convey.
Conversely, the sales executed by Muniyappa's legal heirs in 2003, and the subsequent transactions culminating in the gift deed to J. Manjula, were based on a valid chain of title derived from the rightful owners after the original owner's demise.
The Court addressed the argument that Manjula's injunction suit should fail because she hadn't explicitly sought a declaration of title. Relying on established jurisprudence, the Court held that where the question of title is "directly and substantially" in issue for deciding an injunction suit, and necessary pleadings and issues regarding title are framed, a specific prayer for declaration might not be necessary. In this case, the Trial Court had framed a direct issue concerning the ownership of the appellants, thus making a finding on title indispensable for the injunction. Since Manjula was found to be in lawful possession based on a valid title chain, her injunction suit was maintainable.
The Supreme Court found no legal error in the High Court's decision. It unequivocally upheld that:
Consequently, the appeals filed by M.S. Ananthamurthy and another were dismissed, affirming the lawful ownership and possession of J. Manjula, the answering respondent.
This Supreme Court judgment serves as an essential guide for anyone dealing with property transactions involving Powers of Attorney. For lawyers, it clarifies the stringent conditions for invoking Section 202 of the Contract Act and reiterates the non-negotiable requirement of registration for conveying immovable property. It underscores that creative structuring of documents like "irrevocable GPAs" and unregistered agreements to sell cannot circumvent the fundamental legal requirements for title transfer. For law students, it provides a comprehensive case study integrating Contract Law, Property Law, and Registration Law, demonstrating how statutory provisions and judicial precedents coalesce to interpret complex factual scenarios in real-world litigation. It’s a perfect illustration of why the substance of a document always outweighs its superficial nomenclature.
All information provided in this article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified legal professional for advice on specific legal issues.
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