IN THE HIGH COURT OF JUDICATURE AT MADRAS
T. Ravindran, J.
Ellammal and Ors. – Appellants
Versus
Shanmugham and Ors. – Respondents
S. A.No.348 of 2015
Decided On : 11-09-2018
Fraudulent Sale Transactions - Property Dispute - Contract Act 1872, Section 208 - Suit for declaration and permanent injunction - Cancellation of power of attorney deed - Sale agreements and deeds executed by power agent - Notice of cancellation of power deed - Passing of sale consideration - Possession and enjoyment of suit property - Failure to establish fraud and foul play - Mandatory notice of cancellation - Termination of agency - Passing of title without payment of price - Failure to establish possession and enjoyment of property
Fact of the Case:
The case involved a dispute over a property, with the plaintiffs claiming ownership and seeking a declaration and permanent injunction. The plaintiffs alleged that the power agent had executed fraudulent sale agreements and deeds without their consent, and sought to cancel the power of attorney deed.
Finding of the Court:
The court found that the plaintiffs failed to establish fraud and foul play by the power agent, as they could not prove the notice of cancellation of the power deed or the passing of sale consideration. The court held that the cancellation of the power deed required mandatory notice to the power agent, and without such notice, the cancellation would not take effect. The court also noted that the passing of title did not depend on the payment of price, and the plaintiffs had failed to establish their continued possession and enjoyment of the property.
Issues: The issues included the validity of the sale transactions executed by the power agent, the requirement of notice for the cancellation of the power deed, and the passing of title without payment of price.
Ratio Decidendi: The court held that the cancellation of the power deed required mandatory notice to the power agent, and without such notice, the cancellation would not take effect. The court also noted that the passing of title did not depend on the payment of price, and the plaintiffs had failed to establish their continued possession and enjoyment of the property.
Final Decision: The second appeal was dismissed, and the court ruled in favor of the defendant, holding that the plaintiffs failed to establish their case and the notice of cancellation of the power deed was mandatory.
In this second appeal, challenge is made to the judgment and decree dated 28.02.2014 passed in A.S.No.16 of 2013 on the file of Subordinate court, Mettur, confirming the judgment and decree dated 11.02.2013 passed in O.S. No.108 of 2008, on the file of District Munsif Court, Mettur.
2. Parties are referred to as per their rankings in the trial Court.
3. Suit for declaration and permanent injunction.
4. The case of the plaintiffs, in brief, is that the plaintiffs 2 and 4 are the daughters and Plaintiffs 3 and 5 are the sons of the first plaintiff. The suit property belongs to the plaintiffs and in respect of the entire extent of 0.0622.0 square metres in suit survey number, based on the possession and title of the first plaintiff's husband Venkata Reddy, patta has been issued in his favour by the revenue authorities and the Plaintiffs 1,3 and 5 sold about 1747.5 square feet of the same to one Mani, wife of Thangavel by way of a registered sale deed dated 21.09.2004 and they are the absolute owners and in possession and enjoyment of the suit property described in the plaint and Venkata Reddy died intestate on 30.10.2004 leaving behind the plaintiffs as his legal heirs and thereby the plaintiffs succeeded to the suit property as the legal heirs of the deceased Venkata Reddy. During his life time, Venkata Reddy and his wife Ellammal, the first plaintiff, his sons Nagarajan and Ravi, the plaintiffs 3 and 5 executed a registered power of attorney in favour of the first defendant on 04.07.2004 and later Venkata Reddy fell ill and was bed ridden and accordingly the plaintiffs 1, 3 and 5 had sold the extent of 1747.5 square feet to one Mani as above stated and from the date of the said sale, it is only Mani who is in possession and enjoyment of the said extent purchased by her. The performance of the first defendant was not satisfactory and so Venkata Reddy, his wife, the first plaintiff and his sons, the plaintiffs 3 and 5 have cancelled the registered power of attorney deed date 04.07.2004 in favour of the first defendant by way of a registered cancellation deed dated 19.10.2004 and in the meanwhile, the first defendant, in order to grab the property of the plaintiffs fraudulently, without the consent and knowledge of the plaintiffs, has falsely executed a registered sale agreement dated 04.10.2004 with his wife, the second defendant, in respect of the same and not informed about any such transaction either to Venkata Reddy or to the plaintiffs and further without any right, the first defendant had also sold about 4065 square feet in the suit survey number to the second defendant by way of a registered sale deed dated 27.10.2004 which has been effected after the cancellation of the registered power of attorney deed and the defendants have no right, title or possession of the suit property at any point of time and the above said document had been created by the defendants fraudulently and without any right. The defendants had never been in the possession of the suit property and the sale deed dated 27.10.2004 was not acted upon. The defendants 1 and 2, in collusion with the third defendant, fraudulently created another sale deed dated 20.03.2008 in favour of the third defendant and further the defendants have no right over the suit property. In fact, the plaintiffs wanted to obtain loan from the bank and while so, they applied for encumbrance certificate from the Sub registrar office and on receiving the same, the plaintiffs came to know that the defendants had fraudulently created the above said sale agreement and the sale deeds executed against the interest of the plaintiffs and without any right and hence according to the plaintiffs, they had been necessitated to lay the suit for appropriate reliefs.
5. The case of the defendants, in brief, after denying all the allegations contained in the plaint put forth the case that the patta had been granted in favour of Venkata Reddy, the first plaintiff's husband, however, denied the
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