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2026 Supreme(Mad) 1292

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. Dhanabal, J.
N.Harimoorthy - Plaintiff
Versus
KVK Satheesh – Respondent
CS No. 346 of 2020
Decided On : 27-04-2026

Advocates Appeared:
For the Plaintiff : M/s R Abdul Mubeen
For the Defendant : Mr. L. Murali, Mr. Y. Arulmanickam, Mr. M. Rajendiran, Additional Government Pleader. Mr. D. Rajendran

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.

Headnote:(A) Specific Relief Act - Sections 27 and 31 - Code of Civil Procedure, 1908 - Order VII Rule 1 - Transfer of Property Act - Power of Attorney - Joint Venture Agreement - Cancellation of sale deed - Power of attorney executed for specific purpose of development and construction - Agent unilaterally selling property without completing construction - Fraudulent execution of sale deed and mortgage by attorney holder - Purchaser with knowledge of joint venture agreement purchasing property without verification of title - Sale deed held sham and nominal

(B) Agency - Scope and limits - Power of Attorney must be strictly construed - Agent cannot exceed authority conferred - Sale without fulfilling purpose of power of attorney is unauthorized and voidable

Facts of the case:
Plaintiff was owner of property through sale deed. Plaintiff and first defendant entered joint venture agreement for construction of apartments. Same day, plaintiff executed general power of attorney in favour of first defendant for development purposes. First defendant failed to commence construction, mortgaged property and executed sale deed in favour of third and fourth defendants. Plaintiff sought cancellation of sale deed and power of attorney. Alternative prayers relating to specific performance of another property and mortgage cancellation were deleted. First defendant remained ex parte.

Findings of Court:
Documents revealed power of attorney executed solely for development and construction. First defendant misused power by selling without construction. Third and fourth defendants admitted knowledge of joint venture yet purchased without proper inquiry. Sale deed held sham, nominal and outcome of collusion. No evidence for additional compensation claim. Property directed to be restored to plaintiff.

Issues: Whether first defendant misused registered power of attorney; whether plaintiff entitled to cancellation of power of attorney and joint venture agreement; whether sale deed is sham and nominal; whether plaintiff entitled to possession and balance consideration.

Ratio Decidendi: Power of attorney executed for specific purpose of development must be construed strictly. Sale without fulfilling purpose of power renders transaction unauthorized. Knowledge of joint venture and failure to verify title by purchasers makes sale deed sham and nominal. Plaintiff entitled to restoration of property.

Result: Suit partly decreed. Sale deed cancelled. Defendants 3 and 4 directed to deliver vacant possession to plaintiff. Other prayers dismissed with cost against first defendant.

Table of Content
1. plaintiff claims owner of suit property; defendants collude to sell property via misused power of attorney (Para 1 , 2 , 3)
2. issues framed on misuse of power of attorney, fraud, and entitlement to reliefs (Para 4 , 5)
3. conflicting contentions on nature of poa, fraud, mortgage and right to sell (Para 6 , 7)
4. poa executed solely for development and sale after construction (Para 8 , 9 , 10 , 11 , 12)
5. power, jv agreement and mortgage deeds become irrelevant after sale (Para 13 , 14 , 15 , 16)
6. sale deed to third parties is sham and nominal because of known joint-venture restriction (Para 17 , 18 , 19 , 20 , 21 , 22)
7. suit partly decreed: sale deed cancelled & possession ordered; other prayers dismissed (Para 23 , 24 , 25 , 26)

JUDGMENT :

P. Dhanabal, J.

1.This Civil Suit has been filed by the Plaintiff for the reliefs (a) to cancel the sale Deed dated 05.04.2017 fraudulently executed by the 1st Defendant on behalf of the Plaintiff in favour of the 3rd and 4th Defendants and registered before the 5th Defendant as Document No.1186 of 2017 in respect of the Plaint Schedule A property; (b) to direct the 3rd and 4th Defendants to quit and deliver vacant possession of the Plaint schedule A property to the Plaintiff; (c) to cancel the General Power of Attorney dated 06.10.2016 executed by the Plaintiff in favour of the 1st Defendant and registered before the 5th Defendant as Document No.3663/2016 in respect of the Plaint schedule A property; d) to declare the Joint Venture Agreement dated 06.10.2016 entered between the Plaintiff and the 1st defendant in respect of the Plaint Schedule ‘A’ property as null and void and not binding on the Plaintiff; and e) to direct the 1st defendant to pay compensation to the Plaintiff for demolishing the existing residential building in the Plaint Schedule ‘A’ property worth of Rs.25,00,000/- on the false pretext of constructing new apartment as per the Joint Venture dated 06.10.2016; or alternatively (i) Specific performance of the Sale Agreement dated 06.10.2016 and to direct the 1st defendant and the 2nd defendant to execute and register the Sale Deed in respect of Plaint Schedule ‘B’ property in favour of the Plaintiff or his nominee, failing which, to direct its Register to execute the Sale Deed in respect of the Plaint Schedule ‘B’ property in favour of the Plaintiff or his nominee within a time stipulated by this Court; (ii) to direct the 1st defendant to pay a sum of Rs.77,00,000/- to the Plaintiff towards the balance Sale Consideration of the Schedule ‘A’ property along with interest at 18% per annum from the date of the Plaint till date of realization; and (iii) to declare that the registered Mortgage Deed executed by the 1st defendant in favour of the 6th defendant under the registered Mortgage Deed dated 25.05.2016 registered as Doc.No.1897 of 2016 before the Sub Registrar Office, Sembium in respect of the Schedule B mentioned Suit property as null and void and not binding on the Plaintiff. Thereafter, the alternative prayers (i) and (iii) were deleted as per the order dated 07.02.2025 in pursuance to the memo dated 07.02.2025.

2. The brief averments of the Plaint are as follows:-

The Plaintiff is the absolute owner of the ‘A’ schedule property and the same was purchased through a Sale Deed dated 28.12.1991 and he had constructed a residential house admeasuring to an extent of 700 sq. ft. and resided there for more than 25 years and was in absolute and peaceful possession and enjoyment of the same. While so, the Plaintiff has intended to construct and develop the ‘A’ schedule property into residential apartments and the 1st defendant represented that he has expertise and wherewithal to develop the ‘A’ schedule property on his own fund in a Joint Venture basis. Considering the age of the Plaintiff, he also accepted for the said Joint Venture and they mutually fixed a sum of Rs.1,65,00,000/- as a total value of the Schedule A property and entered into a Joint Venture Agreeme

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