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2025 Supreme(Mad) 3860

IN THE HIGH COURT OF JUDICATURE AT MADRAS 
R.Sakthivel, J.
J.Padmavathi - Appellant
Versus
T.R.Muthuswami and Ors. - Respondents
S.A.No.155 of 2017 and CMP No.3236 of 2017
Decided On : 20-01-2025


Advocates:
Advocate Appeared:
For the Appellant : Mr.S.Parthasarathy, Senior Counsel for Mr.V.S.Kesavan
For the Respondent: Mr.T.M.Hariharan, Mrs. R.Anitha, Special Government Pleader

A sale of immovable property is incomplete without registration, making an unregistered sale deed invalid, particularly when a power of attorney is cancelled.

Headnote:(A) Registration Act, 1908 - Section 54 - Indian Contract Act, 1872 - Sections 204, 203, 206, 207 - Validity of sale deed executed under power of attorney - Sale deed executed when knowledge of power cancellation gained was determined void by lower courts - Evidence shows power of attorney intended as security, not for sale - Cancellation registered validly. (Paras 14-18)

(B) Transfer of Property Act, 1882 - Importance of registration in sale of property emphasized; unregistered sale deed deemed incomplete. (Paras 15-18)

(C) Rights of parties and ability to file specific performance suits discussed, highlighting options based on prior agreements.

Findings of Court:
The courts below found the power of attorney to be a sham document used as security and thus held that the sale deed executed thereafter was invalid due to failure of proper registration and notice of cancellation.

Issues: The key issue was whether the lower courts were correct in ruling that the sale deed was invalid given the cancellation of the power of attorney prior to registration of the sale.

Ratio Decidendi: Courts affirmed that a sale of immovable property requires registration to be valid and the failure to notify under the Indian Contracts Act rendered the defendants without power to execute the sale deed.

Result: Second appeal dismissed with liberty granted to pursue specific performance.

Table of Content
1. overview of the case and appeals (Para 1 , 2)
2. plaintiff's ownership and claims (Para 3)
3. defendants' denial and their stance (Para 4)
4. third defendant's position (Para 5)
5. trial court findings (Para 6 , 7)
6. first appellate court's decision (Para 8 , 9)
7. appellant's arguments (Para 10)
8. respondents' counterarguments (Para 11)
9. third defendant's argument (Para 12)
10. court’s analysis and application of law (Para 13 , 14 , 15 , 16 , 17 , 18)
11. conclusion and final order (Para 19)

JUDGMENT :

R.Sakthivel, J.

This Second Appeal is directed against the Judgment and Decree dated July 15, 2015 passed in A.S.No.9 of 2014 by the 'Subordinate Court, Bhavani' ['First Appellate Court' for brevity], whereby the Judgment and Decree dated August 30, 2013 passed in O.S.No.195 of 2007 by the ‘I Additional District Munsif Court, Bhavani' ['Trial Court' for brevity] was confirmed.

2. For the sake of convenience, hereinafter, the parties will be referred to as per their array in the Original Suit.

PLAINTIFF'S CASE

3. The first plaintiff is the father of plaintiff nos.2 to 4. The Suit Property originally belonged to Karuppa Gounder, who is the maternal grandfather of the first plaintiff. After the demise of Karuppa Gounder, his three daughters namely, Velammal, Kuttiammal and Lakshmiammal became the owners of the Suit Property and they jointly enjoyed it. On May 9, 1972, Velammal sold her share within specific boundaries to the 1st plaintiff. Subsequently, on December 5, 1990 Kuttiammal and Lakshmiammal bequeathed their shares to the 1st plaintiff through a registered Will. The Will came into force and the plaintiffs are in possession and enjoyment of the Suit Property.

3.1. In 2001, the 1st plaintiff borrowed a sum of Rs.10,000/- from the 4th defendant with interest at 60% per annum and could not repay the same. At that time, the 4th defendant informed the 1st plaintiff that the outstanding due was Rs.85,000/- and insisted him to execute a General Power of Attorney ['G.P.A.' for short] in favour of the 1st defendant as security and promised him that it would be cancelled upon repayment of loan amount. Accordingly, the 1st plaintiff executed a G.P.A. on February 21, 2002 and it was duly registered. But, the 1st defendant misused this power and entered into a Sale Agreement with the 2nd defendant on February 22, 2002 in respect of Suit Property for a sum of Rs.2,00,000/- without the plaintiff's consent and the 4th defendant also received an advance of Rs.1,80,000/-. Upon learning the same, the plaintiffs cancelled the G.P.A. on July 26, 2002 and filed an objection on July 29, 2002 before the Sub-Registrar, Bhavani. Despite this, the 1st defendant continued with his attempts to alienate the Suit Property.

3.2. The 1st defendant had executed a Sale Deed in favour of the 2nd defendant and when it was presented for registration, the Sub- Registrar, Bhavani refused to register the said document and returned the same vide Order dated October 10, 2002. Aggrieved by the said Order, the second defendant preferred an appeal before the District Registrar / third defendant and the same was pending.

3.3. Subsequently, on June 27, 2003, the plaintiffs caused a legal notice to the defendants 1, 2 and 4, and the same was returned by the defendants 2 and 4. The plaintiffs remain in possession of the Suit Property, using it for residential and agricultural purposes. On June 20, 2007, the defendants attempted to trespass into the Suit Property and thereby, disturbed the peaceful possession and enjoyment of the Suit Property by the plaintiffs.

3.4. Further, on May 31, 2010, pending the Original Suit, the third defendant vide his Order dated May 31, 2010 directed the Sub Registrar, Bhavani to register the impugned Sale Deed and the same was registered accordingly on June 3, 2010 as Document No.3323 of 2010.

3.5. According to the plaintiffs, the G.P.A. was executed by the first plaintiff under threat and coercion and it was never intended to confer any o

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