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IN THE HIGH COURT OF KARNATAKA
N. Kumar and B. Manohar, JJ.
U. Vijaya Kumar and Another - Appellants
Versus
Smt. Malini V. Rao - Respondent
R.F.A. No. 813 of 2012
Decided On : 30-05-2016
null - null - null - The plaintiff, the owner of 'A' schedule property, executed a General Power of Attorney in favor of her brother, the first defendant. The first defendant, as the GPA holder, sold a portion of the 'A' schedule property to his wife, the second defendant, for a nominal amount without the plaintiff's knowledge and consent. The court held that the sale-deed was null and void and not binding on the plaintiff. The defendants were also held liable to pay damages for the wrongful use and occupation of the property.
Fact of the Case:
The plaintiff, the owner of 'A' schedule property, executed a General Power of Attorney in favor of her brother, the first defendant. The first defendant, as the GPA holder, sold a portion of the 'A' schedule property to his wife, the second defendant, for a nominal amount without the plaintiff's knowledge and consent.
Finding of the Court:
The court held that the sale-deed was null and void and not binding on the plaintiff. The defendants were also held liable to pay damages for the wrongful use and occupation of the property.
Issues: The issues included whether the plaintiff proved her ownership of the property, whether the GPA was executed in favor of the first defendant, and whether the sale-deed executed by the first defendant in favor of the second defendant was binding on the plaintiff.
Ratio Decidendi: The court applied Section 215 of the Indian Contract Act, which allows the principal to repudiate a transaction if the agent deals on his own account in the business of the agency without the principal's consent and if the dealing of the agent has been disadvantageous to the principal. The court also considered the principle that an agent should not place himself in a position where his interest might be adverse to that of the principal.
Final Decision: The court dismissed the appeal and upheld the trial court's decision that the sale-deed was null and void and not binding on the plaintiff. The defendants were also held liable to pay damages for the wrongful use and occupation of the property.
This is the defendants' regular first appeal challenging the judgment and decree dated 24.02.2012 in O.S.No.2405/2010 passed by the XII Addl. City Civil Judge, Bangalore, decreeing the plaintiff's suit by declaring that the sale-deed dated 17.2.2009 in respect of 'B' schedule property, executed by the 1st defendant as the GPA holder of M/s. Tex X International in favour of the 2nd defendant is null and void and not binding on the plaintiff etc. and for damages at the rate of Rs.50,000/- p.m.
2. For the sake of convenience, the parties are referred as per their original rank before the trial court.
3. The subject matter of the suit is 'B' schedule property measuring 12070 Sq. feet forming the western portion of 'A' schedule property, an industrial shed measuring 2074 Sq. meters.
4. The plaintiff's case is that she is the proprietress of M/s. Tex X International, Bangalore: Karnataka Industrial Area Development Board (for short 'KIADB') allotted and sold 'A' schedule property in favour of the said Firm under registered sale-deed dated 04.05.1995. The 1st defendant is her brother and the 2nd defendant is his wife. When the 1st defendant lost his job and was unemployed for nearly an year in 1988, she arranged for rent free accommodation for him and his family at her sister-in-law's house bearing No. 42, P&T Colony, 2nd Cross, R.T. Nagar, Bangalore; the defendants resided there for a period of six years. In 1989 she constructed an industrial shed on the 'A' schedule property, entrusted its management to the 1st defendant with the intention of generating income to help him. The 1st defendant let out the said property and utilised the entire income derived there from: and he has not spent any money from his pocket towards managing the said property.
5. On 27.5.2005, she and the 1st defendant entered into a memorandum of understanding that the 1st defendant should pay her a sum of Rs.5,00,000/- towards the past usage of 'A' schedule property and the rental income; a sum of Rs.2,00,000/- towards rental income for 2005-06 and 2006-07 and a sum of Rs.6,00.000/- from May 2005 till March 2007. It was further agreed that the 1st defendant should pay enhanced rent at the rate of 107c on Rs.2,00,000/- from the end of 2006 till March 2010 towards the rental income. The said rental income of Rs.2,00,000/- is also a meager amount compared to the prevailing rent in that area. The 1st defendant had sent a number of e-mails to her about the difficult times and that he is depending on the rental income derived from the 'A' schedule property.
6. She and her husband were carrying on business in the USA. So while going to USA. she handed over all the original records pertaining to the 'A' schedule property to the 1st defendant. Their business in the USA suffered as her husband was down with bone cancer for seven years and she had to manage the business in the USA single handed and also look after him. On account of this, they decided to wind up the business in the USA and settle down in Bangalore; they also purchased a villa in Bangalore with that intention. The rental income from 'A' schedule property was sufficient to lead a decent and comfortable life.
7. During January 2009, when she requested the 1st defendant to send the original title deeds of 'A' schedule property and the khata extract, the 1st defendant postponed it on one pretext or the other. On 08.01.2009 and 27.01.2009, the 1st defendant had sent e-mails advising her to wait for two years, not to go for distress sale of the property as the real estate market had hit a low and to permit him to run the industry for 5 more years. She grew suspicious of the said conduct and got applied for the khata extract of 'A' schedule property through a friend at Bangalore in August 2009 and came to know that while the original Khata No. 37 stood in the Firm's name, khata No. 37/A pertaining to 'B' schedule property was mutated in the name of the 2nd defendant on the basis of a sale-deed dated 17.02.2
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