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2025 Supreme(Mad) 4615

IN THE HIGH COURT OF JUDICATURE AT MADRAS 
R. Sakthivel, J.
Devi and ors. - Appellants
Versus
Tamilarasi and ors. - Respondents
S.A.No.102 of 2020 and CMP No.2144 of 2020
Decided On : 04-06-2025


Advocates:
Advocate Appeared:
For the Appellant : Mr. R. Rajarajan
For the Respondent: Mr. E.K. Kumaresan

Agents may execute sale deeds within their authority; failure to set aside such deeds results in enforceability. Remedies against breaches of power are financial rather than reclaiming properties.

Headnote:(A) Indian Contract Act, 1872 - Section 215 - Transfer of Property Act, 1882 - Section 55(4)(b) - Dispute over ancestral property rights - Plaintiffs executed General Power of Attorney in favor of second defendant. Second defendant fraudulently executed Sale Deeds to first defendant, resulting in a suit filed for declaration and recovery of possession. Trial Court favored plaintiffs, however, First Appellate Court upheld the decision referring to Section 215. Second Appeal answering questions regarding legality of G.P.A. revocation and consideration under Sale Deeds; court ruled that since plaintiffs did not challenge Sale Deeds, the remedies sought were not maintainable - Ultimately, while confirming the sale was valid, a money decree was passed against defendants for sale considerations. (Paras 11-25)

(B) Agency Law - Execution of Sale Deeds by Agent - Courts observed that actions of an agent acting beyond the scope of the power granted can be repudiated by the Principal if done without knowledge, but if the agent acted under valid authority, transactions remain enforceable unless set aside. The remedy for clients whose rights are breached lies in rendition of accounts rather than declaration. (Paras 11-22)

Facts of the case:
Plaintiffs held joint ownership of ancestral properties, executed a G.P.A. for management. Second defendant, as agent, sold properties without plaintiffs' consent, later revoked G.P.A. Plaintiffs sued for possession, alleging fraud and lack of consideration. (Paras 3-4)

Findings of Court:
Validity of G.P.A. upheld; plaintiffs failed to prove consideration was not passed in Sale Deeds. Sale Deeds deemed valid unless set aside; thus, remedies sought by plaintiffs deemed improper. (Paras 12-21)

Issues: 1) Validity of G.P.A. revocation and its effect on transactions, 2) Appropriateness of the suit for recovery and not cancellation of Sale Deeds. (Paras 7, 25)

Ratio Decidendi: Courts determined that since plaintiffs admitted execution of the G.P.A. and did not challenge the Sale Deeds, the transactions remained valid under law. The remedy for any breach aimed at unjust enrichment lies in financial compensation rather than reclamation of property. (Paras 13-23)

Result: Second Appeal partly allowed; plaintiffs dismissed on the request for declaration and possession, but awarded monetary compensation. (Para 25)

Table of Content
1. introduction and parties involved (Para 1 , 2)
2. factual background of the property dispute (Para 3 , 4)
3. establishes ownership claim and fraudulent disposition. (Para 5 , 6)
4. arguments of both parties (Para 8 , 9)
5. court's examination of g.p.a. validity (Para 10 , 11)
6. analysis of consideration in sale deeds (Para 12 , 13)
7. validity of sale deeds and implications (Para 14 , 15)
8. conclusion on legal precedents pertaining to property transactions. (Para 19 , 20)
9. final observations and decision (Para 21 , 22 , 23)
10. conclusion and order (Para 24 , 25)

JUDGMENT :

R. Sakthivel, J.

This Second Appeal is directed against the Judgment and Decree dated April 16, 2019 passed in A.S.No.64 of 2018 by the 'Subordinate Court, Ulundurpet' ['First Appellate Court' for brevity], whereby the Judgment and Decree dated July 20, 2015 passed in O.S.No.35 of 2010 by the 'Principal District Munsif, Ulundurpet' ['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.

PLAINTIFFS' CASE

3. The Suit Properties are ancestral properties in which the plaintiffs hold joint ownership rights. Due to family circumstances, the plaintiffs were unable to personally manage the properties. Hence, on July 29, 2002 they executed a registered 'General Power of Attorney' ('G.P.A.' for brevity) in favour of the second defendant, authorizing him to manage the Suit Properties on their behalf. Acting as their agent under the said G.P.A., the second defendant administered the properties. However, the second defendant fraudulently executed Sale Deeds dated July 30, 2003 and June 19, 2007 in favour of the first defendant in respect of Item Nos.1 and 2 of the Suit Properties respectively, that too without consideration, behind the back of the plaintiffs, only with a view to defeat and defraud the legitimate rights of the plaintiffs. This came to the knowledge of the plaintiffs only on November 1, 2009. Upon learning the same, the plaintiffs revoked the G.P.A. on November 10, 2009. Thereafter, the plaintiffs approached the defendants and attempted to reclaim the properties through mediation by community elders, but the defendants refused. Consequently, the plaintiffs issued a legal notice on December 14, 2009, demanding return of the Suit Properties. The defendants, upon receiving the notice on January 2, 2010, responded with a reply notice denying the plaintiffs’ claims. Therefore, the plaintiffs filed the Original Suit praying for a decree of declaration of title and recovery of possession.

DEFENDANTS' CASE

4. The first defendant filed a written statement, which was adopted by the second defendant. In the written statement, it is averred that the Suit filed by the plaintiffs is legally unsustainable and liable to be dismissed. It is averred that, the Suit Properties originally belonged to Muthulingam and others, which were later allocated to Muthulingam through a Family Partition as his share. Upon Muthulingam's demise, the plaintiffs, as his legal heirs, took possession of the Suit Properties and executed the registered G.P.A. in favour of the second defendant. At the time of executing the G.P.A., the plaintiffs received consideration from the second defendant in the presence of witnesses. Pursuant to the authority granted under the G.P.A., the second defendant took possession of the Suit Properties and subsequently sold them to the first defendant through valid Sale Deeds for consideration. From then on, the first defendant is enjoying the absolute ownership of the Suit Properties and the plaintiffs no longer have ownership rights over the properties following these transactions. Furthermore, the plaintiffs cannot unilaterally revoke / cancel the G.P.A., without prior notice to the second defendant. Alleged Revocation / Cancellation Deed is invalid and has no legal validity. The plaintiffs have filed the present Suit with the ulterior motive of gaining

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