2020 Supreme(Mad) 1498

IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
P. Shanthi & Others – Appellants
Versus
D. Dhinakaran – Respondent
C.S. No. 652 of 2016
Decided on : 15-10-2020

A sale deed executed by a power of attorney agent in violation of the terms of the power of attorney is null and void and unenforceable.

Headnote:

The plaintiffs, who were the owners of a property, entered into a Development Agreement with the first defendant, a reputed builder, wherein the first defendant agreed to construct eight flats on the property and hand over four flats to the plaintiffs. The first defendant was also granted a power of attorney to deal with the property. However, the first defendant failed to construct the flats and instead sold 50% of the undivided share of the land to the second defendant. The plaintiffs filed a suit seeking cancellation of the sale deed executed by the first defendant in favor of the second defendant and for a permanent injunction restraining the second defendant from alienating or encumbering the property.

Fact of the Case:

The plaintiffs, who were the owners of a property, entered into a Development Agreement with the first defendant, a reputed builder, wherein the first defendant agreed to construct eight flats on the property and hand over four flats to the plaintiffs. The first defendant was also granted a power of attorney to deal with the property. However, the first defendant failed to construct the flats and instead sold 50% of the undivided share of the land to the second defendant. The plaintiffs filed a suit seeking cancellation of the sale deed executed by the first defendant in favor of the second defendant and for a permanent injunction restraining the second defendant from alienating or encumbering the property.

Finding of the Court:

The court held that the sale deed executed by the first defendant in favor of the second defendant was null and void and unenforceable. The court also granted a permanent injunction restraining the second defendant from alienating or encumbering the property. The court further held that the second defendant was not entitled to seek partition and separate possession of the property.

Issues: 1. Whether the plaintiffs are entitled to a Decree of declaration that the Sale Deed dated 20.01.2015 is null and void and unenforceable? 2. Whether the plaintiffs are entitled for the relief of permanent injunction against the second defendant from alienating and encumbering the suit property? 3. Whether the plaintiffs are entitled to a decree for permanent injunction against the second defendant, who is the co-owner of the suit property? 4. Whether the second defendant is entitled to the relief of partition by metes and bounds and for allotment of half-share of the suit property as prayed for in the counter claim? 5. Whether the plaintiffs are entitled for the relief of declaration that the Sale Deed dated 20.01.2015 executed by the first defendant in favour of the second defendant vide Doc.No.198 of 2015, as null and void and unenforceable in law? 6. Whether the first defendant is entitled to convey his 50% undivided share in the suit schedule property before he complies with the conditions of Joint Development Agreement dated 14.12.2011? 7. Whether the Sale Deed executed by the 1st defendant in favour of the second defendant before complying with the conditions of the Joint Development Agreement under clauses 1 to 3 and 5, is valid in law? 8. Whether the act of the first defendant in conveying his 50% undivided share of land before paying the entire free money of Rs.65,00,000/- agreed to be paid under Clause 10 of the Joint Development Agreement, is valid in law? 9. Whether the counter claim of the second defendant seeking partition and allotment of his half share in the suit schedule property is maintainable in law? 10. To what other relief, the parties are entitled to?

Ratio Decidendi: The court held that the sale deed executed by the first defendant in favor of the second defendant was null and void and unenforceable because the first defendant had failed to comply with the terms of the Development Agreement. The court also held that the second defendant was not entitled to seek partition and separate possession of the property because he was not a bona fide purchaser.

Final Decision: The court decreed the suit as prayed for with costs as against the first defendant and without costs as against the second defendant. The court also dismissed the counter claim of the second defendant without costs.