IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
Sakthi Durga Builders and Developers, Rep. by its Managing Partner – Appellant
Versus
P.S. Raman – Respondent
Appeal Suit No. 92 of 2014
Decided On : 23-02-2022
Civil Procedure Code,1908 – Section 96 - Contract Act, 1856 – Section 202 -Flats – Loan – Construction - As per terms of MoU, plaintiff handed over possession of his land to defendants and handed over title documents in original - Asbestos sheet shed and 5 feet compound wall was demolished to put up apartment consisting of 7 flats - As consideration, defendants agreed to pay certain sum and hand over 2 flats constructed at the estimated costs - A general power of attorney was executed by plaintiff in favor of first defendant - Defendants orally agreed to pay sum as security deposit and sum to T.I.I.C. towards discharge of loan availed by plaintiff which was to be adjusted towards consideration referred in Memorandum of Understanding - A cheque for a sum given by defendants in favor of TIIC returned for want of funds - Later, as against the agreed sum defendants paid sum to TIIC on behalf of plaintiff and balance not paid - Defendants had no wherewithal to complete project within 24 months as agreed and they extended work for three years causing hardship to plaintiff- Whether this Hon’ble Court has jurisdiction to entertain the suit for the reliefs sought for in the plaint – Held, On a cumulative assessment of evidence, trial Court has rightly rejected claim of plaintiff for additional of land since it does not form part of memorandum of understanding - However, granted the relief of mandatory injunction to deliver square feet build up area - Similarly, the money decree was also based on documents - Converse plea taken by defendants that plaintiff is liable to pay lakhs are not supported by any documentary evidence - Looking from all angle, trial Court judgment and decree does not warrant any interference - Learned counsel appearing for appellants would submit that due to interim order and other litigations appellants were not able to sell the third flat - It is made clear that the respondent/plaintiff shall have no claim over third flat and his right shall be confined only to two flats - On payment of the decree amount inclusive of interest - Appellants are at liberty to sell third flat without getting any consent from the plaintiff - Appeal is dismissed.
JUDGMENT :
G. JAYACHANDRAN, J.
Prayer: This Appeal Suit is filed under Section 96 of the Code of Civil Procedure, against the Judgment and decree of the learned Second Additional District Judge, Thiruvallur at Poonamallee dated 25.07.2013 passed in O.S. No. 141 of 2009.
1. Plaint averment in short:
2. As per the terms of the MoU, the plaintiff handed over possession of 5625 sq. ft. of his land to the defendants and handed over the title documents in original. The asbestos sheet shed and the 5 feet compound wall was demolished to put up the apartment consisting of 7 flats. As consideration, the defendants agreed to pay Rs. 1,50,000/- and hand over 2 flats constructed in 1,650 sq. ft. at the estimated costs of Rs. 8.25 lakhs. A general power of attorney dated 08.06.1994 was executed by the plaintiff in favour of the first defendant. Further, the defendants orally agreed to pay Rs. 2,50,000/- as security deposit and Rs. 1,00,000/- to T.I.I.C. towards discharge of the loan availed by the plaintiff which was to be adjusted towards the consideration of Rs. 1,50,000/- referred in the Memorandum of Understanding.
3. A cheque for a sum of Rs. 1,00,000/- given by the defendants in favour of TIIC returned for want of funds. Later, as against the agreed sum of Rs. 1,50,000/- the defendants paid only Rs. 75,000/- to TIIC on behalf of the plaintiff and the balance Rs. 75,000/- not paid. The defendants had no wherewithal to complete the project within 24 months as agreed and they extended the work for three years causing hardship to the plaintiff. The defendants pledged the entire extend of land measuring 10,450 sq. ft. by misusing the original document handed over to them and the power of attorney given to them. Learning about this, criminal prosecution was initiated against the defendants and the power of attorney deed was cancelled on 26.03.1996. Despite due notice of the cancellation of power of attorney, the defendant continue to construct and sell the flats without any authority. Contrary to the agreement, the defendant instead of ground plus 2 floors had constructed an additional floor without plaintiff’s consent and permission. Also had put up an additional flat measuring 725 sq. ft. in the ground floor in violation of the planning development rules.
4. After an inordinate delay of 3 years, the defendant completed the construction and without any valid authorisation had sold 10 flats out of 13 flats. Claiming that the act of the defendants had caused huge monetary loss, the suit is filed for the following reliefs:
(b) Consequently directing the defendants to hand over the original sale deed dated 14.07.1978 registered as document No. 1409/78 pertaining to the plaintiff s property at Door No. A1, Thiruvengada Nagar, Ambathur, Chennai-53.
(c) Directing the defendants to pay a sum of Rs. 1,33,500/- with interest at 24% on Rs. 75.000/- from date of plaintiff till date of realization.
(d) Directing the defendants to pay damages of Rs. 1,56,000/- to the plaintiff, with interest at the 24% from date of plaint till date of realization.
(e) Directing the defendant to pay Rs. 1,45,000/- to the plaintiff in lieu the 290 sq. ft. the plaintiff is entitled in the additional flat measuring 825 sq. ft. constructed by the defendants.
5. The defendants contention in the written statement:
Unilateral cancellation of the Development Agreement-cum-GPA by one party to the detriment of another party is not permissible under the Indian Contract Act.
A power of attorney can only be revoked by a registered document.
A registered Agreement of Sale-cum-GPA cannot be unilaterally cancelled.
The main legal point established in the judgment is that the Power of Attorney was executed as a security for a loan and the sale deed was executed without consideration, making it void.
Power of attorney must be strictly construed according to its purpose; sale exceeding limited authority conferred is voidable and purchasers with knowledge of restrictions cannot claim protection.
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