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2013 Supreme(Kar) 855
High Court of Karnataka
JAWAD RAHIM, J.
Munithayappa
Versus
R. Krishna Murthy & Another
R.F.A. No. 516 of 2011
Decided on: 15-01-2013
Advocate Appeared:
For the Appellant:H.S. Dwarkanath, Advocate.
For the Respondents:Ramesh P Kulkarni, Advocate.
Headnote:INDIAN CONTRACT ACT, 1872 - Section 196: [Dr. Jawad Rahim, J] Applicability - Acts done by agent - Section 196 is attracted which adumbrates, ’where acts are done by one person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratifies them, the same effects will follow as if they had been performed by his authority.’ Therefore, even if the agent has acted bona fide presuming he had authority under the document which otherwise did not expressly or impliedly spell out, them the principal has the option to ratify or disown such acts of the agent. Only if he ratifies such acts of the agent, it will follow as if they had been performed by his authority. RFA allowed.
SPECIFIC RELIEF ACT, 1963 - Section 16(c): [Dr. Jawad Rahim, J] Suit for specific performance - Agreement of sale executed by Defendant-1 as duly appointed attorney of Defendant-2 - Property was under equitable mortgage - Permission under Section 238 of IT Act to be obtained for completing the transaction-Balance to be obtained for completing the notice for performance issued - 2nd Defendant denied execution of agreement of sale contenting that power of attorney was given only for management and maintenance of property and not for alienation - First defendant, despite summons neither filed written statement nor stepped into witness box leading to inference that there may be collusion between her and plaintiff - Trial Court decreed the suit - Held, Even of we presume she did so under the notion that she had authority to sell, it was incumbent on the plaintiff to establish that the sum of Rs. 2,00,000/- paid to her was for and on behalf of the appellant. In a case like this where transaction is by the agent, it is not enough if it is shown that the document was executed by the agent. It must be shown that the transaction was under authorization by the principal and to establish it, the best evidence would be that of the executed of the documents viz., Ex. P1. Plaintiff did not summon her or secure her presence nor established through any independent evidence that she transacted with him under authorization of the principal (2nd defendant).
On facts, held, Had the plaintiff examined the 1st defendant, the decree could have been passed against her directing her to refund the amount of Rs.2,00,000/- which even if it was not passed on to the 2nd defendant, the decree could have been taken as liability of the 1st defendant to discharge it. But the plaintiff on his own volition, did not seek that relief or prove payment. In this view, when execution of the agreement itself has not been proved by acceptable evidence, the question of enforcing it would not arise. Judgment and Decree of Trial Court was set aside. Any amount deposited in pursuance of the decree was ordered to be refunded to plaintiff.
1. The 2nd defendant is in appeal against the judgment and decree in O.S.7350/99 on the file of City Civil Judge, Bangalore City, decreeing the suit for specific performance of an agreement in favour of the 1st respondent herein.
2. Heard learned counsel, Sri Dwarkanath for the appellant and Sri Ramesh P.Kulkarni for the 1st respondent. Perused records in supplementation thereto. It reveals:
a) The 1st respondent-R. Krishnamurthy sought decree for specific performance in the suit, O.S.7350/99 on the assertive contention that H.M. Hamsadevi arrayed as 1st defendant in the suit had, as the duty appointed attorney of Munithayappa-2nd defendant, entered into a transaction in the nature of a binding agreement to sell the property bearing No.1236, 3rd Cross, I Block, HAL III Stage, Bangalore, more fully described in the plaint, for a total consideration of Rs. 10,00,000/- (rupees ten lakhs only) and towards part payment of the sale consideration, received Rs.2,00,000/- (rupees two lakhs only). The terms and conditions were incorporated into an agreement of sale dated 5.3 2.1996 and in furtherance of it, parties proceeded further. Despite his willingness and readiness, it is alleged defendants did not complete the sale transaction.
b) Plaintiff also averred he was informed a sum of Rs.3,00,000/- was borrowed by the owner-Nanjundaiah in equitable mortgage which was subsisting and all title deeds were deposited with the mortgagee. Permission from the Income Tax authorities as envisaged under Section 23S of the Income Tax Act was to be obtained and then the transaction had to be completed by he paying Rs.8,00,000/- being balance sale consideration and sale deed had to be registered. The time stipulated to redeem the mortgage was 31.7.1997, but they defaulted, it is contended, plaintiff did his best approaching them several times with fervent appeals to complete the sale transaction which was of no avail. The intention of the defendants became obvious and hence, he was compelled to issue a notice on 2.9.1997 calling upon them to complete the transaction which the defendants received and to his shock and surprise, the 2nd defendant sent an untenable reply on 10.9.1997, denying execution and even knowledge of the agreement of sale dated 5.12.1996 in his favour executed by the 1st defendant.
c) He further averred, his attempts to reason out with them, was of no avail and it necessitated filing of the suit.
d) Thus it could be seen, he based his claim on the agreement of sale executed in his favour by the 1st defendant as duly constituted attorney of the 2nd defendant.
e) Responding to summons, both the defendants entered appearance, but 1st defendant-Hamsadevi did not file written statement though she was represented by a counsel.
f) The 2nd defendant-owner of the property in question resisted the suit claim traversing all averments in the plaint and vehemently denied he had entered into any transaction of sale through the 1st defendant with the plaintiff. As could be seen from the averments in various paragraphs of the written statement, he admitted having appointed the 1st defendant as his attorney by virtue of the power of attorney dated 12.4.1984, but assertively contended it was only for management, maintenance of the property with no authority to alienate or encumber the property. He also denied he had put the 1st defendant in possession of the property in question or created any interest in her or had permitted her to deal with the property. He denied he had authorized or permitted her to put up construction or to deal with it without fetters.
g) As regards the agreement of sale dated 5.12.1996, Ex.PI, he described it as sham, created and concocted by the plaintiff in collusion with the 1st defendant. Besides he would contend, noticing her conduct which was detrimental to his interest, he cancelled her appointment as his attorney. In short, his defence is, he had not entered into any transaction of sale nor conferred any authority
