When a fiduciary agent misappropriates a principal's funds to acquire property in a third party's name, the court may look beyond the registered deed's recitals to determine the true nature of the transaction and order the cancellation of said deed and the recovery of the property.

COMMON JUDGMENT :

P. VELMURUGAN, J.

These intra-Court Appeals are directed against the common judgment dated 03.02.2017 rendered by the learned Single Judge in C.S.Nos.247 and 593 of 2010.

2. Since the subject matter in controversy in both the captioned appeals is identical, the parties are also the same, and both appeals challenge the very same judgment passed by the learned Single Judge of this Court, the appeals were heard together and are being disposed of by this common judgment.

3. For the sake of convenience and clarity, the parties are referred to as per their ranking in C.S.No.247 of 2010.

4. The brief facts, in a nutshell, are as follows:

4.1 The plaintiff in C.S.No.247 of 2010 (since deceased, V.Kimis) a Malaysian National of Indian Origin, was engaged in various business activities in Malaysia. In the year 1994, he incorporated a Company, namely M/s.Phoenix Technology Corporation Private Limited at Bangalore. The second defendant, Ramaraj, who is the sister’s son of the plaintiff, was appointed as Branch-in-Charge of the Chennai branch office. The first defendant, Johnsy Papa, is the wife of the second defendant. One Kamaraj, the brother of the second defendant, was appointed as Director of the said Company.

4.2 The suit property, being a house, ground and premises bearing Door No.41/B, Pasumarthy Street, Rangarajapuram, Kodambakkam, Chennai, ad-measuring about one ground and 21 sq.ft., with a superstructure of approximately 1700 sq.ft. (comprising about 800 sq.ft. on the ground floor and 900 sq.ft. on the first floor), was taken on lease by the said Company for use as guest house. The plaintiff retained a room on the first floor and the entire second floor for his exclusive use, while permitting the family members of the second defendant to occupy the ground floor and a portion of the first floor.

4.3 As the Company was incurring loss, the plaintiff infused funds from Malyasia for its sustenance. In the course of time, the plaintiff was informed that the suit property was available for sale. Expressing his intention to purchase the same, the plaintiff authorized the second defendant to negotiate the transaction. The sale consideration was stated to be Rs.98,00,000/-. On 02.03.2007, the second defendant received a sum of 2,64,500/- Malaysian Ringgits (equivalent to Rs.34,00,000/- [Rupees Thirty Four Lakhs only]) from the plaintiff in Malaysia as advance towards the proposed purchase. Subsequently, a further sum of Rs.64,00,000/- (Rupees Sixty Four Lakhs Only) was paid by way of Demand Draft in April 2008 in favour of the fourth defendant. In addition thereto, on the representation of the second defendant that he was facing acute financial difficulties, the plaintiff raised a sum of Rs.9,50,000/- from his friends in India and paid the same to the second defendant.

4.4 While that being so, on 14.01.2010, the plaintiff received an unsigned letter dated 08.01.2010 from the second defendant, purporting to set up an agreement of sale in his favour in respect of the suit property. Subsequently, the plaintiff came to know that the second defendant, acting as the Power of Attorney agent of the third defendant, had caused a sale deed to be executed in favour of the first defendant. The Power of Attorney dated 02.05.2008 was registered as Document No.860 of 2008, and the sale deed dated 31.12.2009 was registered as Document No.4118 of 2009.

4.5 The sale deed dated 31.12.2009 recites a consideration of only Rs.52,60,000/- (Rupees Fifty Two Lakhs and Sixty Thousand only). On aware of these developments, the plaintiff lodged a criminal complaint on 20.01.2010, in Crime No.51 of 2010 before the Central Crime Branch, Chennai. Thereafter, the second defendant approached the plaintiff and undertook to re-convey the suit property. He also handed over the original sale deed dated 31.12.2009 executed by the third defendant in favour of the first defendant, and defendants 1 and 2 prepared an agreement of sale in respect of the suit property, alon