A Power of Attorney holder must not act in conflict with the principal's interests; failure to disclose material facts allows the principal to repudiate transactions under Section 215 of the Indian Contract Act.

JUDGMENT :

1. Appellants are the Defendants Nos.2 & 3 in the suit. The Respondent No.1 is the Plaintiff and the Respondent No.2 is the Defendant No.1 in the suit. The Respondent No.1/Plaintiff filed the suit for cancellation of Ext.A2 Sale Deed dated 18.09.2013 and for a mandatory injunction directing the defendants to vacate the building in the plaint schedule property. The plaint schedule property is an extent of 87.40 Ares of land and the building therein, which belonged to the Plaintiff as per Ext.A1 Sale Deed dated 02.06.1975. Ext.A2 is a Sale Deed executed by the Defendant No.2, as the Power of Attorney Holder of the Plaintiff, as per Ext.A4 Power of Attorney dated 26.02.2001 executed by the plaintiff in favour of the Defendant No.2, transferring the plaint schedule property for a sale consideration of Rs.2,50,000/-. The plaintiff is a lady residing in West Germany since the year 1968. The Defendant No.1 is the wife of Defendant No.2. The Defendant No.2 is the son, and the Defendant No.3 is the wife of the brother of the plaintiff, George, who died in an accident on 26.10.2000.

2. The case of the plaintiff is that since the plaintiff had been residing abroad, the plaint schedule property was being looked after by the plaintiff’s brother, George, till his death and thereafter by his son, the Defendant No.2. The plaintiff had certain properties in Vandiperiyar also. After the purchase of the plaint schedule property as per Ext.A1 Sale Deed, the plaintiff permitted the family of her brother to reside in the building on the plaint schedule property. The plaintiff and the family of her brother were having a smooth and cordial relationship. After the death of her brother, the plaintiff planned to dispose of the plaint schedule property and the other properties at Vandiperiyar since it was found that Defendant No.2 would not be able to manage the properties. Ext.A4 Power of Attorney was executed on 26.02.2001 in favour of the Defendant No.2 on account of the close family relationship and mutual confidence since the Defendant No.2 agreed to look after and sell the properties. On the strength of Ext.A4 Power of Attorney, the Defendant No.2 sold the properties at Vandiperiyar as per Exts.A7 & A8 Sale Deeds dated 29.07.2003 and 02.05.2003 respectively. Though the Plaintiff used to enquire with the Defendant No.2 as to the progress of the sale of the plaint schedule property, the Defendant No.2 had been representing that it requires some time, as the land value is very low. Only in February 2013, the Plaintiff came to know, in her enquiry, that the Defendant No.2 executed Ext.A2 Sale Deed in favour of the Defendant No.1 when the Defendant No.3 asked the Plaintiff to leave the plaint schedule property, shouting that the Plaintiff had no right over the said property. Defendant No.2, being an agent of the Plaintiff, obtained an undue advantage by alienating the property to his wife – Defendant No.1, thus directly benefiting himself. The confidence reposed by the Plaintiff in the Defendant No.2 has been misused to obtain gain for himself, which is against the principles of the law of agency. Defendant No.2, bound in a fiduciary character to protect the interest of the Plaintiff by pretending as such, gained for himself huge pecuniary advantages in derogation of the rights of the Plaintiff in the plaint schedule property. The Defendant No.2 has misrepresented and acted fraudulently so as to secure an undue advantage at the cost of the Plaintiff’s interest. Hence, Ext.A2 Sale Deed is liable to be cancelled and the defendants are liable to be vacated from the plaint schedule property.

3. The