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SUPREME COURT OF INDIA
K. S. RADHAKRISHNAN, VIKRAMAJIT SEN, JJ.
Maya Devi – Appellant
Versus
Lalta Prasad – Respondent
CIVIL APPEAL NO. 2458 OF 2014 [Arising out of SLP (C) No.23069 of 2012)
Decided On : 19-02-2014
Facts of the Case-
A. An Objection Petition was filed by appellant when the decree obtained by respondent in Civil Suit No.407 of 2007 was sought to be executed. Suit was filed for the recovery of an amount of Rs.3,40,000/- with interest, which was sought to be realized, on the property covered by an agreement for sale between the judgment debtor and decree holder. Appellant claimed that she became absolute owner of the suit property by virtue of a registered General Power of Attorney and that she has been in actual physical possession of the suit property. The Petition was contested by the decree holder/respondent stating that the applicant/objector had no legal right, title or interest and that the execution of the General Power of Attorney and its registration would not confer any ownership right in favour of the appellant/objector. Executing Court dismissed the Objection Petition. Appeal thereagainst was Dismissed by High Court.
B.Present appeal has been filed against said order of High Court.
Findings of the Court-
In Suraj Lamp and Industries Private Limited (2) , it had been stated that observations made by the Court were not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. Power of Attorney executed on 12.5.2006 in favour of the Appellant by the wife of P was a genuine transaction executed years before the judgment of this Court. Facts clearly indicated that Agreement for Sale dated 3.11.2003 was created by none other than the husband of N , who had executed the General Power of Attorney and possession was handed over to Appellant. That being the fact situation, Objection filed by Appellant held to be allowed. Impugned orders were set aside. Appeal was allowed.
Result- Appeal allowed
As per VIKRAMAJIT SEN, J.
Civil Procedure Code,1908-Order 21 Rule 58-Objection Petition filed by appellant when the decree obtained by respondent in Civil Suit No.407 of 2007 was sought to be executed- Suit was filed for the recovery of an amount of Rs.3,40,000/- with interest, which was sought to be realized, on the property covered by an agreement for sale between the judgment debtor and decree holder- Appellant claimed that she became absolute owner of the suit property by virtue of a registered General Power of Attorney and that she has been in actual physical possession of the suit property- The Petition was contested by the decree holder/respondent stating that the applicant/objector had no legal right, title or interest and that the execution of the General Power of Attorney and its registration would not confer any ownership right in favour of the appellant/objector- Executing Court dismissed the Objection Petition – Appeal-Dismissed by High Court - Appeal -Since General Power of Attorney (GPA) in favour of Appellant was executed and registered on 12.05.2006, it could not be impacted or affected by the Suraj Lamp dicta- A reading of the order of the Executing Court as well as of the High Court made it palpably clear that both Courts had applied the disqualification and illegality imposed upon GPAs by Suraj Lamp, without keeping in mind that the operation of that judgment was pointedly and poignantly prospective-Appeal allowed(para1)
Facts of the Case-
An Objection Petition was filed by appellant when the decree obtained by respondent in Civil Suit No.407 of 2007 was sought to be executed. Suit was filed for the recovery of an amount of Rs.3,40,000/- with interest, which was sought to be realized, on the property covered by an agreement for sale between the judgment debtor and decree holder. Appellant claimed that she became absolute owner of the suit property by virtue of a registered General Power of Attorney and that she has been in actual physical possession of the suit property. The Petition was contested by the decree holder/respondent stating that the applicant/objector had no legal right, title or interest and that the execution of the General Power of Attorney and its registration would not confer any ownership right in favour of the appellant/objector. Executing Court dismissed the Objection Petition. Appeal thereagainst was Dismissed by High Court.
B.Present appeal has been filed against said order of High Court.
Findings of the Court-
Since General Power of Attorney (GPA) in favour of Appellant was executed and registered on 12.05.2006, it could not be impacted or affected by the Suraj Lamp dicta. A reading of the order of the Executing Court as well as of the High Court made it palpably clear that both Courts had applied the disqualification and illegality imposed upon GPAs by Suraj Lamp, without keeping in mind that the operation of that judgment was pointedly and poignantly prospective.
Result-Appeal allowed
This judgment addresses the legal validity of a General Power of Attorney (GPA) executed in genuine transactions and its impact on the execution of a decree. The Court clarifies that the observations made in certain judgments regarding the invalidity of GPA and sale agreements do not apply to authentic and bona fide transactions executed well before those rulings. The case revolves around a dispute where the appellant claimed ownership and possession of a property based on a registered GPA, which was challenged by the decree holder on the grounds that it did not confer ownership rights. The Court emphasizes that registered documents, when executed in genuine transactions, hold significant probative value and should not be disregarded solely because of recent judicial dicta that restrict the validity of such documents.
Furthermore, the Court highlights that the operation of certain judgments is prospective, and their legal effect should not be applied retroactively to transactions that predate those rulings. It underscores the importance of thoroughly examining the facts, especially when there is evidence of collusion or fraud, and recognizes the need to protect bona fide third-party purchasers who have acted in good faith and have valid registered documents. The Court ultimately allows the appeal, sets aside the previous orders dismissing the objections, and clarifies that the execution of a decree can proceed without affecting the rights of a genuine purchaser through a valid GPA executed prior to the restrictive judgments.
JUDGMENT
K. S. RADHAKRISHNAN, J. –
1. Leave granted.
2. The appellant herein filed an Objection Petition under Order 21 Rule 58 CPC, when the decree obtained by the respondent in Civil Suit No.407 of 2007 was sought to be executed. Suit was filed for the recovery of an amount of Rs.3,40,000/- with interest, which was sought to be realized, on the property covered by an agreement for sale dated 3.11.2003 between the judgment debtor and decree holder. The appellant claimed that she became the absolute owner of the suit property by virtue of a registered General Power of Attorney dated 12.5.2006 and that she has been in actual physical possession of the suit property. The Petition was contested by the decree holder/respondent stating that the applicant/objector had no legal right, title or interest and that the execution of the General Power of Attorney and its registration would not confer any ownership right in favour of the appellant/objector.
Reliance was also placed on the judgment of this Court in Suraj Lamp and Industries Private Limited Through Director v. State of Haryana & Anr. (2009) 7 SCC 363. The Executing Court vide its order dated 23.7.2010 dismissed the Objection Petition filed by the appellant. Aggrieved by the same, the appellant preferred Execution First Appeal No.23 of 2010 before the High Court of Delhi at New Delhi. The High Court also placed reliance on the judgment of this Court in Suraj Lamp and Industries Private Limited (supra) and dismissed the appeal holding that the documents relied upon by the appellant would not confer ownership or possession over the property in her favour. The High Court also vide its order dated 24.1.2011 upheld the order of the Executing Court. Aggrieved by the same, this appeal has been preferred by the appellant.
3. Shri Rajesh Kumar, learned counsel appearing for the appellant submitted that the ratio laid down by this Court in Suraj Lamp and Industries Private Limited (supra) was wrongly applied by the Executing Court as well as the High Court. Learned counsel submitted that in the final judgment which is reported in Suraj Lamp and Industries Private Limited (2) Through Director v. State of Haryana & Anr. (2012) 1 SCC 656, this Court has clarified the position that the judgment would not affect the validity of sale agreements and powers of attorney executed in genuine transactions and that the judgment would operate only prospectively.
Learned counsel also submitted that the alleged agreement executed between the respondent and one Prem Chand Verma on 3.11.2003 was a collusive one, subsequently created, to get over the registered Power of Attorney executed on 3.6.1982 between the appellant and wife of Prem Chand Verma, viz. Nirmal Verma. Learned counsel also pointed out that Civil Suit No.407 of 2007 was preferred by the respondent herein against Prem Chand Verma based on the deed of agreement dated 3.11.2003 created for the said purpose.
Referring to the above-mentioned judgment, learned counsel further pointed out that Prem Chand Verma did not contest the Suit and he was declared ex-parte and a decree was passed in favour of the respondent. Learned counsel pointed out that the decree was obtained by collusion and practicing fraud on the Court and the Executing Court has committed an error in rejecting the Objection filed by the appellant herein, so also by the High Court by not appreciating the facts in the correct perspective.
4. Shri K. Krishna Kumar, learned counsel for the respondent, submitted that both the Executing Court and High Court have correctly applied the principles laid down in Suraj Lamp and Industries Private Limited (supra). Learned counsel pointed out that any process which interferes with regular transfers under deeds of conveyance properly stamped, registered and recorded in the registers of the Registration Department, is to be discouraged and deprecated and the Executing Court has rightly declined to give its seal of approval to General Power of Attorney, A
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