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High Court Of Delhi
HARBAS SINGH - Appellant
Versus
SHANTI DEVI - Respondent
REGULAR FIRST APPEAL 264 of 1973
Decided On : 09/15/1977
CONTRACT - POWER OF ATTORNEY - REVOCATION - SECTION 202 OF THE CONTRACT ACT - INTEREST - INTERPRETATION - IRREVOCABILITY OF POWER OF ATTORNEY - AGENT'S INTEREST IN SUBJECT-MATTER.
Fact of the Case:
The appellant, Harbans Singh, agreed to sell his shop to the respondent for Rs. 18,000. He executed a general and a special power of attorney in favor of the respondent's husband, Shri Gulati, to facilitate the transaction and payment of government dues. Later, the appellant sent a notice to Shri Gulati revoking the power of attorney. The respondent paid the government dues, obtained permission from the government, and obtained a sale deed of the shop from Shri Gulati. The appellant defended the suit for possession filed by the respondent, claiming that he had validly revoked the power of attorney.
Finding of the Court:
The court held that the appellant could not validly revoke the power of attorney because Shri Gulati had an interest in the property which was the subject-matter of the agency, within the meaning of section 202 of the Contract Act. The court found that Shri Gulati was acting as the agent of the respondent, and that his interest in the transaction was the same as that of his wife. The court also held that the general and special powers of attorney were both irrevocable under section 202 of the Contract Act.
Issues: 1. Whether the appellant validly revoked the power of attorney. 2. Whether Shri Gulati had an interest in the property which was the subject-matter of the agency, within the meaning of section 202 of the Contract Act.
Ratio Decidendi: 1. Section 202 of the Contract Act provides that where the agent has an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. 2. Shri Gulati had an interest in the property which was the subject-matter of the agency, namely, the shop. This interest was not only that of the respondent, but also of Shri Gulati himself, as he was acting as her agent. 3. The general and special powers of attorney were both irrevocable under section 202 of the Contract Act, as they were granted to Shri Gulati for the benefit of the respondent and her nominee Shri Gulati, and not for the benefit of the principal, the appellant.
Final Decision: The appeal was dismissed with costs. The cross-objection was allowed with costs, and the judgment of the trial court was modified by the deletion of the direction for the payment of interest by the respondent to the appellant therefrom.
( 1 ) THE only question argued by the learned counsel for the appellant in support of the appeal is whether both the general and the special powers of attorney or either of them which had been executed by the appellant in favour of Shri H. K. Gulati, husband of the respondent, on 11th January 1964 were or was cancelled validly by the appellant by his lawyer s letter dated 8th February 1965. The answer to this question in its turn depends on the construction of section 202 of the Contract Act and particularly on the meaning of the word "interest" used therein.
( 2 ) THE appellant Harbans Singh was an allottee of shop No. 90, Bhagat Singh Market by the Government of India, Ministry of Rehabilitation, for a consideration of Rs. 5890-60. As he was not in a position to pay the aforesaid dues to the Government, he agreed to sell his right, title and interest in the said shop to the respondent for Rs. 18,000. 00 by the agreement dated 11-1-1964 Exhibit P-3. Ra. 3200. 00 were paid in cash as earnest money. The seller was to pay four instalments of the Government dues while the rest of the Government dues were to be paid by the buyer. The balance of the consideration was to be paid by the buyer to the seller at the time of the registration of the sale deed. The important part of the agreement contained in para 3 stated that "in order to facilitate the transaction" the seller has appointed Shri Gulati "a nominee and husband of" the buyer as his general as well as special attorney who will perform all acts, deeds and things which are stated to be done by the seller "in connection with the management and payment ot the said dues of the Government in respect of the said property". And the seller shall not be responsible for any negligence of the said attorney "who is the nominee of the second party (buyer)". On the same day, the general and the special powers of attorney mentioned above were executed by the seller in favour of Shri Gulati. The special power of attorney Exhibit P-7 enabled the attorney to make payment of the Government dues. The general power of attorney Exhibit P-8 authorised the attorney to sell the appellant s shop to any purchaser and to get the sale deed executed and registered and to receive and acknowledge the receipt of the consideration and to give a receipt for the same and to get the property mutated in favour of the purchaser and to do all other things in connection with the management and sale of the said shop as fully as could be done by the seller himself. The general power of attorney stated that it was to be irrevocable while the special power of attorney did not have any such stipulation.
( 3 ) DUE to differences between the parties, the appellant s lawyer sent to the respondent a notice Exhibit D-l on 8-2-1965 cancelling the agreement to sell dated 11-1-1964 and all other documents executed by the appellant in favour of the respondent and in favour of the husband of the respondent. The appellant s lawyer also wrote on 8-2-1965 Exhibit D-2 to Shri Gulati atating as follows :--
"that Power of attorney dated 11-1-1964 executed in your favour is hereby revoked and cancelled with effect from the date of issue of this letter and you are no longer entitled to work or do any act on the basis of the said power of attorney. That anything done on the basis of the said power of attorney shall be illegal and shall not be binding on my client. "the respondent sent a reply to the appellant that he could not escape the obligation under the agreement. Shri Gulati sent a reply to the appellant referring to the two powers of attorney dated 11-1-1964 and staling that they were irrevocable. The respondent paid the Government dues, obtained permission from the Government and on failure of the appellant to honour the agreement of sale obtained a sale deed of the shop on 16-6-1967 (Exhibit F-20) from Shri Gulati acting as the agent of the appellant. She then filed a suit for possession against the appellant. T
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