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1995 Supreme(Del) 571

High Court Of Delhi
RADHE KRISHAN AGGARWAL - Appellant
Versus
CHANDRAWATI - Respondent
Interim Application 10025 of 1993
Decided On : 08/01/1995

Advocates Appeared:
R.K.GUPTA, R.M.Bagai

An agreement to sell executed by an attorney is not binding on the principal if the attorney did not have the authority to enter into such an agreement.

Headnote:

SPECIFIC PERFORMANCE - AGREEMENT TO SELL - INJUNCTION - POWER OF ATTORNEY - CONSTRUCTION - WHETHER AGREEMENT TO SELL EXECUTED BY ATTORNEY IS BINDING ON PRINCIPAL - WHETHER PLAINTIFF ENTITLED TO INJUNCTION RESTRAINING DEFENDANTS FROM TRANSFERRING PROPERTY - TRANSFER OF PROPERTIES ACT, 1882, SECTION 52.

Fact of the Case:

Plaintiff sought specific performance of an agreement to sell executed by defendant No. 2, acting as attorney of defendant No. 1, for the sale of a factory premises. Plaintiff also sought an injunction restraining the defendants from transferring or alienating the said factory premises. Defendant No. 2 was authorized to manage the property and appear before authorities and courts on behalf of defendant No. 1, but had no power to enter into an agreement to sell or sell the property.

Finding of the Court:

The court held that the agreement to sell executed by defendant No. 2 was not binding on defendant No. 1 as defendant No. 2 did not have the authority to enter into such an agreement. The court also held that the plaintiff was not entitled to an injunction restraining the defendants from transferring or alienating the factory premises as the plaintiff had not established that defendant No. 1 was bound by the agreement to sell.

Issues: 1. Whether the agreement to sell executed by defendant No. 2 was binding on defendant No. 1? 2. Whether the plaintiff was entitled to an injunction restraining the defendants from transferring or alienating the factory premises?

Ratio Decidendi: 1. The court held that the agreement to sell executed by defendant No. 2 was not binding on defendant No. 1 as defendant No. 2 did not have the authority to enter into such an agreement. The court relied on the fact that the power of attorney granted to defendant No. 2 only authorized him to manage the property and appear before authorities and courts on behalf of defendant No. 1, and did not give him the power to enter into an agreement to sell or sell the property. 2. The court held that the plaintiff was not entitled to an injunction restraining the defendants from transferring or alienating the factory premises as the plaintiff had not established that defendant No. 1 was bound by the agreement to sell. The court noted that the plaintiff's rights could be protected by Section 52 of the Transfer of Properties Act, 1882, which provides that a person who contracts to transfer property, but is unable to do so, is liable to pay compensation.

Final Decision: The court dismissed the plaintiff's application for an interim injunction restraining the defendants from transferring, alienating or encumbering the factory premises.

S. K. Mahajan

( 1 ) THIS order will dispose of the application of the plaintiff for interim injunction for restraining the defendants from in any manner transferring, disposing or alientating the suit property. Facts of the case is short are that the plaintiff is seeking specific performance of the contract dated 30th June, 1993 alleged to have been executed in his favour by the defendants for sale of the factory premises constructed on 400 sq. yards in Khatoni No. 66, Khasra No. 28 /10/ 3 in the extended lal dora of village Barwala, Delhi - 110 039. Injunction has also been sought restraining the defendants from transferring or alienating the said factory premises. The case as set up in the plaint is that M/s. Delhi Wire Industries, which was a partnership-firm, were tenants in respect of the aforesaid factory premises at a rent of Rs. 850. 00 p. m. under defendant No. 1. Defendant No. 2 is the husband of defendant No. 1 and is also stated to be her general attorney. As attorney of defendant No. 1, the said defendant No. 2 had been conducting litigation on her behalf and had been appearing in various Courts from time to time. In a suit bearing No. 84/91 entitled Smt. Chandrawati v. Delhi Wire Industries, the Additional District Judge was pleased to pass adecree on 24th April, 1993 in favour of Mrs. Chandrawati for Rs. 80,000. 00 with cost. An appeal. is stated to have been filed by the said M/s. Delhi Wire Industries against the judgment and decree of learned Additional District Judge and by an order dated 8th July, 1993 the execution of the decree has been stated to have been stayed subject to the said M/s. Delhi Wire Industries depositing 50% of the decretal amount. It is alleged that while the said litigation was continuiance, defendant No. 2 acting as an attorney of defendant No. 1 agreed to sell the aforesaid factory premises on 30th June, 1993 for a total amount of Rs. 5,74,000. 00. By way of earnest money a sum of Rs. 20,000. 00 is stated to have been paid to defendant No. 2. In the said agreement dated 30th June, 1993, according to the plaintiff, it was stated that a formal agreement will be executed on a non-judicial stamp paper of Rs. 2. 00 on 5th July, 1993 from some deed writer at the office of the Sub-Registrar, Kashmere Gate, Delhi. It is alleged that though the plaintiff reached the office of the Sub-Registrar on the appointed date and purchased a non-judicial stamp paper of Rs. 2. 00 however, defendant No. 2 demanded payment of the arrears of rent before signing a formal agreement and as such the time is alleged to have been extended to 8th July, 1993 and the same was duly incorporated in the agreement dated 30th June, 1993. The plaintiff is stated to have got prepared a bank draft for Rs. 43,600. 00 being up-to-date arrears of rent favouring defendant No. 1 and reached the office of the Sub-Registrar at the appointed place and time alongwith a non-judicial stamp paper of Rs. 2. 00 and waited for the defendants but none of the defendants came there and ultimately he is alleged to have left the Office of the Sub-Registrar at 1. 00 p. m. A legal notice dated 21st July, 1993 was then served upon the defendants to which a reply was sent by defendant No. 1 on 6th August, 1993. It is stated that as the defendant had failed and were avoiding to perform their obligations under the aforesaid agreement dated 30th June, 1993, while the plaintiff all along was ready and willing to perform his obligations under the agreement, the plaintiff is entitled to get the said agreement specifically performed and has thus filed the present suit.

( 2 ) WRITTEN statement has been filed by the defendants. The defendants stated that there is no agreement to sell between the parties and, therefore, no question of specific performance of the same. It is stated that defendant No. 2 though was empowered to appear in Courts and conduct cases on behalf of defendant No. 1, had not been given any authority by means of any power of attorney or ot






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