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2022 Supreme(SC) 64

SUPREME COURT OF INDIA
(From the High Court of Himachal Pradesh at Shimla)
K.M. JOSEPH, PAMIDIGHANTAM SRI NARASIMHA, JJ.
Amar Nath – Appellants
Versus
Gian Chand And Anr. - Respondents
Civil Appeal No. 5797 of 2009
Decided on : 28-01-2022

Advocates appeared:
For the Appellant(s) : Mr. Rajesh Gupta, Adv. Mr. Harpreet Singh, Adv. M/s. K J John and Co, AOR
For the Respondent(s): Mr. V. Giri, Sr. Adv. Mr. Devendra Singh, AOR Mr. Anant Kumar Vatsya, Adv. Mr. Sameer Singh, Adv. Ms. Neelam Singh, Adv. Mr. Vatsya Krishnaiya, Adv. Mr. Vijay Kumar Singh, Adv. Mr. Sahil Lochab, Adv. Mr. Vivek Mishra, Adv.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Indian Registration Act, 1908 - Sections 32, 33, 34, and 18A - Oral sale agreement and execution of sale deed - Dispute regarding authority of agent to execute sale deed under power of attorney - Court emphasized that a power of attorney can only be revoked in a legally recognized manner and must be communicated to third parties to be effective (Paras 1-3, 60-62).

(B) Legal principles - A legally recognized power of attorney holder can present a sale deed for registration without the original being present, as long as the holder acts within the authority given (Paras 20, 19).

(C) The sale deed executed despite claims of cancellation of the power of attorney does not automatically invalidate the transaction unless the cancellation was legally communicated and recognized (Paras 59-62).

Facts of the case:
The plaintiff claimed ownership over property described in an oral agreement and a subsequent sale deed executed by an agent. The agent failed to notify of the power of attorney’s alleged cancellation, leading to a disputed sale price of Rs.30,000.

Findings of Court:
The High Court erroneously set aside the First Appellate Court's findings based on the misinterpretation of the authority under which the sale deed was executed. It determined that the plaintiff could not effectively cancel the power of attorney as the cancellation was not communicated properly.

Issues: Whether the power of attorney was validly cancelled before the execution of the sale deed, and whether the execution of the sale deed was legitimate without the original power present.

Ratio Decidendi: The court determined that for a power of attorney to be effectively cancelled, the termination must be communicated to relevant parties; hence, the sale deed remained valid as the cancelation was not properly executed or recognized.

Result: Appeal allowed, and the judgment was set aside.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  1. Validity of Power of Attorney and Its Cancellation:
  2. A power of attorney can only be revoked through a legally recognized process, which must include proper communication to relevant parties to be effective (!) (!) .
  3. The mere act of writing ‘cancelled’ on the original power of attorney does not automatically cancel the authority unless the cancellation is properly registered and communicated (!) (!) .
  4. Evidence such as correspondence and witness testimony indicated that the power of attorney was not effectively canceled before the execution of the sale deed, undermining the plaintiff’s claim that the authority was withdrawn (!) (!) (!) .

  5. Authority to Execute and Present Sale Deed:

  6. A registered power of attorney, when valid, authorizes the holder to present a sale deed for registration without the original document, provided the power of attorney was not canceled and was properly recognized (!) (!) (!) .
  7. The presentation and registration of the sale deed by the agent, who was authorized under a valid power of attorney, are legally permissible, even if the original power of attorney was not physically produced at the time, as long as the copy was certified and duly registered (!) (!) (!) .

  8. Effect of Cancellation and Communication:

  9. Cancellation of a registered power of attorney must be executed through a registered document and properly communicated to third parties, including the agent and the other involved parties, to be effective (!) (!) .
  10. Evidence such as correspondence between the parties and witness testimonies indicated that the alleged cancellation was not properly communicated or registered, thus the authority of the agent remained in effect at the time of sale (!) (!) .

  11. Validity of Sale and Legal Procedures:

  12. The sale deed executed by the agent holding a valid, unrevoked power of attorney is legally binding and confers valid title, unless the cancellation was legally recognized and communicated (!) (!) .
  13. The registration process, including compliance with relevant registration provisions and proper identification of the parties, was properly conducted, supporting the legitimacy of the sale (!) (!) (!) .

  14. Role of Evidence and Court Findings:

  15. Evidence such as letters, witness testimonies, and official records demonstrated that the power of attorney was not properly canceled before the sale, and the sale was executed within the scope of the agent’s authority (!) (!) (!) .
  16. The courts emphasized that the cancellation of a registered power of attorney requires proper legal procedures, including registration and clear communication, which were not satisfied in this case (!) (!) .

  17. Court’s Conclusion:

  18. The sale executed by the agent under a valid, unrevoked power of attorney is valid, and the alleged cancellation did not have legal effect due to procedural deficiencies (!) (!) .
  19. The appeal was allowed, and the earlier judgment declaring the sale invalid was set aside, affirming the validity of the transaction based on the evidence and legal principles discussed (!) .

These points collectively highlight that the legal validity of the sale depended on the proper execution, recognition, and communication of the cancellation of the power of attorney, which, in this case, was not established according to legal requirements.


Table of Content
1. existence of conflicting claims regarding property sale. (Para 2 , 3 , 4)
2. trial court's issues framed in property dispute. (Para 5 , 6 , 7)
3. high court's framing of substantial questions of law. (Para 8 , 9)
4. understanding of registration act provisions. (Para 12 , 18)
5. agent's authority and proper execution under the law. (Para 24 , 25 , 33)
6. effectiveness of revocation of agency and its communication. (Para 36 , 51 , 53)
7. final decision overturning lower court's judgment. (Para 63)

JUDGMENT :

K.M. JOSEPH, J.

1. By the impugned judgment the High Court in a second appeal has reversed the concurrent findings rendered in a suit filed by the first respondent and the appellant who is the second defendant in the suit has filed the present appeal. The second respondent who is the second defendant in the suit though served has chosen not to appear. The parties shall be referred to by their status in the Trial Court.

THE SUIT

2. The plaint schedule property hereinafter referred to as the ‘property’ consists of 2 Kanals, 10 Marlas and odd land belonged to the plaintiff and was in his possession. He was serving as a junior engineer. He entered into an oral agreement for the sale of the property for a consideration of Rs. 55,000/-. It is the plaintiff’s case that when the plaintiff came on leave, the first defendant could not arrange the money and asked for further time. The plaintiff bonafide executed a special power of attorney in favour of the IInd defendant for selling the property for the amount of Rs. 55,000/-. As the negotiation fell through in view of the first defendant not being able to arrange the money, the second defendant to whom the power of attorney was executed, surrendered the original to the plaintiff, and the plaintiff told the first defendant that the same stood cancelled. The second defendant is alleged to be a deed writer and a clever person. He applied for the copy of the power of attorney, and fraudulently in collusion with the first defendant, executed the sale deed on 28.04.1987 for Rs. 30,000/. The second defendant, according to the plaintiff, could not execute the sale deed in the absence of the original power of attorney, and the sub registrar was supposed to verify the aspect from the second defendant under Sections 32 , 33 and 34 of the REGISTRATION ACT . The sale deed was without authority. The second defendant ‘was not competent to transfer the possession’. The special power of attorney is deemed to have been cancelled in the eye of law since it was handed over to the plaintiff. When the plaintiff came from his service and enquired with the officials of the revenue staff or the consolidation authority, and got the copies, then he came to know about the sale and that the mutation has been sanctioned. It is on this case that the plaintiff filed a suit for declaration by way of permanent injunction that he is the owner in possession of that property and the mutation showing the sale in favour of the first defendant, by the second defendant, was null and void, and that the second defendant was not having any authority to sell the land owned by the plaintiff, and hence the defendant be restrained from interfering with the ownership and possession of the plaintiff. It was further prayed that in case it was proved that the second defendant was an agent of plaintiff then in that case, the suit for rendition of accounts be decreed.

3. The first defendant (appellant) in his written statement inter alia pleaded that he while admitting that the plaintiff is a junior engineer, his actual place of posting was not known to him. It is also admitted that the first defendant entered into an agreement orally to get the property purchased for Rs.30,000/- and not Rs.55,000/-. It is denied that the first defendant could not arrange for the money. The plaintiff received Rs.10,000/- as part price. The re

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