HIGH COURT OF RAJASTHAN
Honble Dalip Singh, J.
NABI KHAN
Versus
ROOJDAR
Civil First Appeal No. 83 of 1992
Decided On : FEBRUARY 18, 2010
Appeal partly allowed.
Argument 1: Agent's transaction creating indirect personal interest without principal's prior consent and knowledge triggers repudiation rights under Section 215.
An agent who enters into a contract benefiting a close family member (e.g., his own father as buyer), thereby inherently advancing his own interests, without obtaining the principal's express consent or disclosing material circumstances, renders the transaction voidable at the principal's option. This upholds the fiduciary duty requiring full disclosure. (!) [17020106240013][17020106240016][17020106240017][17020106240018]
Argument 2: Disadvantageous terms in the transaction, such as undervaluation of property, independently justifies repudiation even without proof of dishonest concealment.
Where the agreed sale price (e.g., Rs. 6,000 per bigha) is substantially below prevailing market value (e.g., Rs. 20,000 per bigha), as admitted by parties, the deal is presumptively harmful to the principal, attracting Section 215 and barring specific performance.[17020106240010][17020106240011][17020106240016]
Argument 3: Absence of evidence showing principal's consent or receipt of consideration by principal invalidates enforcement.
No specific performance can be granted where there is no proof of the agent's payment of consideration to the principal, no receipt from the principal, and the agent (acting for personal gain) fails to demonstrate transmission of funds, reinforcing strict proof requirements in agency disputes.[17020106240002][17020106240019]
Argument 4: Principal's prompt repudiation upon discovery (e.g., via cancellation of power of attorney) perfects the right to avoid the contract.
Discovery of the unauthorized self-interested deal entitles the principal to immediately repudiate, as evidenced by formal cancellation documents, preventing ratification by silence or delay.[17020106240008]
Argument 5: Trial courts cannot grant relief like possession or injunction absent specific counterclaim, pleading, and court fee.
Dismissal of the suit for specific performance does not permit incidental relief to the defendant without a counterclaim, prayer for possession/injunction, or requisite court fee, limiting courts to pleaded issues only.[17020106240005][17020106240022][17020106240023][17020106240024]
( 1 ) THIS is a first appeal filed by the plaintiff-appellant whose suit for specific performance of the agreement dated 17/2/1986 (Exhibit-2) has been dismissed by the learned trial court but while dismissing the suit, the learned trial court has passed an order directing the plaintiff-appellant herein to handover the possession of the land in dispute to the legal representatives of the deceased defendant Chand Mal within a month and not to interfere in the possession and cultivation of the said land by the defendant-respondent. The operative portion of the decree dated 28/3/1992 passed by the learned trial court, A. D. J. , Kishangarh Bas, District Alwar reads as follows:-
( 2 ) THE brief facts of the case are that the present suit was filed by the plaintiffs-appellant on 1/4/1987 against the original defendant Chand Mal son of Med Khan alleging there in that the defendant had entered into an agreement to sell his share of the land (half share) to the plaintiffs who were already the owners of the undivided half share of the land in dispute which the defendant Chand Mal had agreed to sell by means of agreement to sell dated 17/2/1986 entered into on his behalf by Khurshid son of Nabi Khan, the general power of attorney holder of the defendant which was registered on 28/5/1984 with the Sub-Registrar. It was agreed that the defendant would sell his undivided share of the land in dispute to the plaintiffs for an amount of rs. 1,34,000. 00 @ Rs. 6,000. 00 per bigha. It was also alleged that an amount of rs. 1,25,000. 00 had been paid by the plaintiffs to the power of attorney holder khurshid who in turn paid the said amount to Chand Mal, deceased defendant and only an amount of Rs. 9,400. 00 remained due which was to be paid at the time of registration of the sale-deed. It was further averred that the plaintiff approached the defendant several times for getting the sale-deed executed and the defendant and power of attorney holder both collusively avoided to get the sale-deed executed in favour of the plaintiff and, therefore, when the defendant refused to get the sale-deed executed, the plaintiff on 23. 05. 1987 sent a registered notice to the defendant in this behalf which the defendant despite having received the same did not reply nor did he execute the sale-deed and hence, the suit.
( 3 ) THE defendant filed the written statement on 14/9/1987 and interalia submitted that while it was true that the defendant had appointed Khurshid as power of attorney holder but that was only with a view to carry out the necessary proceedings with regard to the partition of the land and for attending the various courts and offices in that behalf. It was stated that khurshid was the son of the plaintiff himself and he, taking advantage of the ignorance of the defendant Chand Mal put the endorsement in the power of attorney for the purpose of selling the land as well without the knowledge of the defendant. It was alleged that the document (agreement to sell) was also fabricated and had never been executed with the consent of the defendant nor had the defendant received any such amount of Rs. 1,25,000/-, as alleged by the plaintiff.
( 4 ) THE learned trial court on the basis of the pleadings framed the following issues:-
( 5 ) IT may be stated here that in the written statement, the defendant never filed any counter claim or made any prayer with regard to the return of possession or for any permanent injunction restraining the plaintiffs after return of possession from interferring in the possession of the defendants.
( 6 ) THE plaintiffs examined as many as ten witnesses including the stamp vendor PW-1 Mahendra Kumar; PW-2 Khurshid, the power of attorney holder, who executed the agreement dated 17. 02. 1986 in favour of the plaintiffs on behalf of the defendant Chand Mal; PW-3 Suraj Mal, who was one of the witnesses to the agreement; PW-4 Aasin, who is also one of the witnesses to the execution of the power of attorney by the defendant
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