IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. ASHA, J.
M. Sundarraj – Appellant
Versus
S. Jayalakshmi and Another – Respondents
A.S. No. 248 of 2021
Decided On : 08-03-2024
Key Points: - The court held that a power of attorney does not confer title and that a sale by a power agent to the agent’s spouse is invalid and constitutes a breach of fiduciary duty. (!) (!) (!) - The suit was allowed to the extent that the plaintiff is the real owner who funded the purchase, and the Benami defense under Section 4(2) of the Act is applicable to bar such a defense. (!) (!) (!) (!) - The plaintiff proved payment of sale consideration for Ex.A.1 and Ex.B.10 through documentary evidence and bank transfers, while the defendants failed to prove payment. (!) (!) (!) (!) (!) - The defendants’ mutually destructive pleas and the defense that the property was purchased by the power agent in the plaintiff’s name were rejected; the plaintiff’s title as owner was upheld. (!) (!) (!) (!) - The appeal set aside the trial court’s dismissal and granted relief in favor of the plaintiff, including setting aside the sale and recognizing the plaintiff as owner. (!)
| Table of Content |
|---|
| 1. plaintiff's property purchase and fraudulent sale. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. defendants' claims about property ownership and legal transactions. (Para 7 , 8 , 9 , 10) |
| 3. trial court's issues and points of consideration. (Para 12 , 35 , 36) |
| 4. arguments regarding power of attorney and its limitations. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 5. power of attorney does not confer ownership. (Para 24) |
| 6. benami transactions are not enforceable. (Para 37 , 52) |
| 7. court's conclusion on fraud and ownership. (Para 44 , 50 , 62 , 63) |
| 8. final judgment to allow first appeal. (Para 68) |
JUDGMENT :
P.T. ASHA, J.
Prayer: First Appeal is filed under Section 96 read with Order 41 Rule 1 of C.P.C. against the Judgment and Decree in O.S. No. 5 of 2016 on the file of the Principal District Judge, Dharmapuri dated 12.03.2021.
1. The plaintiff in the suit O.S. No. 5 of 2016 on the file of the Principal District Judge, Dharmapuri is the appellant before this Court challenging the dismissal of his suit which has been filed for the following reliefs:
(b) Pass a decree for permanent injunction in favour of the plaintiff restraining the defendants 1 and 2 from in any way alienating or encumbering the suit properties.
(c) Pass a decree directing the defendants to pay the cost of the suit.
(d) Pass a decree granting such other relief or reliefs as this Honourable court may deem fit and proper in the circumstances of the case and thus render justice.
The parties are referred to in the same ranking as before the Principal District Court, Dharmapuri.
Plaintiff’s Case:
2. The plaintiff would submit that the 1st defendant is his sister and the 2nd defendant is his brother-in-law. The plaintiff would submit that he had completed his education in 1979 and was employed in India for over 5 years. In the year 1985, he had gone to Kuwait for employment. The plaintiff would submit that thereafter he has been regularly coming to India. In the year 1991, the plaintiff had got married to one, Padmini and they are blessed with 3 children. The plaintiff was desirous of purchasing agricultural lands with a farm house so that he and his family would have a place of their own to stay when they came to India. His brother-in-law, the 2nd defendant has assured him that he would find a suitable property for him. Later, the 2nd defendant had informed the plaintiff that the suit property and its adjacent property was available for sale and the same suited the plaintiff's requirements. The plaintiff therefore proceeded to purchase the suit property and the adjacent property. On 22.11.2004, the plaintiff had purchased the suit property and thereafter the adjacent property was purchased in the name of his wife, Padmini.
3. The plaintiff would submit that since he was away from the country, the 2nd defendant had assured him that he would take care and manage the property. In the light of the above, the plaintiff had permitted him to reside in the farm house as a care taker. The plaintiff having immense trust on his brother-in-law had executed and registered a general power of attorney in favour of the 2nd defendant on 22.11.2004. The 2nd defendant had taken a power of attorney stating that he would collect the original documents from the Sub Registrar's Office, effect mutation of records, transfer electricity service connection and all other things that are required for managing the property in the name of the plaintiff. In view
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The court ruled that a power of attorney does not confer title; fraudulent sales to a power agent's spouse are invalid and do not transfer ownership, reinforcing the principles against benami transac....
A power of attorney does not confer title to property; fraudulent sales executed by an agent without the principal's consent are invalid under the Benami Transactions Act.
Registered Power of Attorney presumed valid under S.114(e) Evidence Act unless fraud specifically pleaded and proved; lack of Tamil literacy and attesting witness ignorance insufficient to invalidate....
Point of law: stoic silence on the part of the plaintiffs for more than 2 years after executing the power of attorney and their own sister being the party to all the subsequent transactions, the thir....
The burden of proving fraud concerning registered instruments rests upon the party alleging it. A principal who authorizes an agent to alienate property cannot invalidate the agent's actions without ....
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.
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