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2025 Supreme(P&H) 447

PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
VIKRAM AGGARWAL, J.
Nirmal Singh Sehmbey – Appellant
Versus
Kuldip Singh And Others – Respondent
RSA No. 4577 of 2014 (O&M)
Decided on : 01-04-2025

Advocates Appeared:
For the Appellant :Mr. Onkar Singh, Advocate,
For the Respondent:Mr. Amit Jain, Senior Advocate with Mr. Anupam Mathur, Advocate, Mr. ADS Jattana, Advocate and Mr. Mandeep Singh Gill, Advocate

An agent must act in the principal's best interests; unauthorized sales executed under a power of attorney without consent are fraudulent.

Headnote:(A) Code of Civil Procedure, 1908 - Order 1 Rule 10 - General Power of Attorney - Sale of property without consent of principal and subsequent sale considered illegal and fraudulent - Court upheld that the agent acted in a manner prejudicial to the principal's interests and set aside transactions. (Paras 20, 28, 34)

(B) Power of Attorney - Interpretation of powers conferred therein for sale of property - Authority must not benefit the agent or their family members - Sale conferred broad powers intended for the management of properties, not merely for sale. (Paras 24, 30)

Facts of the case:
The appeal concerns the validity of sale deeds executed under a general power of attorney. The plaintiff alleged fraud and misrepresentation by the agent in selling the disputed lands without his consent.

Findings of Court:
The first appellate court found the sales fraudulent as they occurred without the plaintiff's approval and in violation of the agent's duties, confirming the plaintiff's ownership.

Issues: The court assessed whether the sales executed were legitimate based on the powers granted by the power of attorney documents.

Ratio Decidendi: The court ruled that an agent's authority must be exercised in the best interest of the principal, noting that the sales lacked justification and occurred under suspicious circumstances.

Result: Appeal dismissed.

Table of Content
1. authority in powers of attorney must be exercised for the principal's benefit. (Para 1 , 3 , 24)
2. the necessity of consent in sales is paramount. (Para 8 , 10 , 12 , 33)
3. court affirms due diligence and rightful ownership. (Para 18 , 19 , 32)
4. sales must adhere strictly to the powers stipulated. (Para 20 , 28 , 30 , 31)
5. final ruling dismisses the appeal based on merit. (Para 36)

JUDGMENT :

Vikram Aggarwal, J.

CM-2673-C-2017

1. This is an application filed under Order 1 Rule 10 of the Code of Civil Procedure, 1908 (for short the 'CPC') read with Section 151 CPC for permission to implead the applicant namely Sukhmander Singh son of Sh. Bhag Singh as a party/appellant No.2.

Heard learned counsel for the applicant.

The applicant is a subsequent purchaser having purchased the land vide three registered sale deeds dated 26.12.2002, 26.05.2003 and 26.05.2003. He is neither a necessary nor a proper party for, Kuldip Singh from whom he had purchased the land was already a party to the suit and the land was sold during the pendency of the lis.

Accordingly, finding no merit in the application, the same is dismissed.

RSA No. 4577 of 2014

The present appeal is directed against the judgment and decree dated 31.05.2014 passed by the Court of learned Addl. District Judge, Ludhiana, vide which the appeal filed by the respondent No. 1-plaintiff against the judgment and decree dated 13.05.2004 passed by the Court of learned Addl. Civil Judge (Sr. Divn.), Jagraon, dismissing the suit filed by respondent No. 1-plaintiff, was allowed and the suit was decreed.

2. For the sake of convenience and clarity, parties shall be referred to as per their original status.

3. The plaintiff (Kuldeep Singh) is a resident of the United States of America. He was the joint owner in possession of land measuring 49 kanals 10 out of which 43 kanals (fully described in the plaint) was situated in the revenue estate of Village Bhumal, Tehsil Jagraon, District Ludhiana and 6 kanals 10 marlas in Village Jandi, Tehsil Jagraon, District Ludhiana (hereinafter referred to as the 'disputed land-I and disputed land-II'). He executed a general power of attorney on 19.06.2001 in favour of defendant No.l (Balwinder Singh), who was his brother-in-law (wife's brother). As per the plaintiff, the said power of attorney had been executed for management of the properties owned by the plaintiff. However, defendant No.l, with the intention to cause wrongful loss to the plaintiff, alienated the disputed land-I in favour of defendant No.2 (Avtar Singh), who was none else than the brother-in-law (wife's brother of defendant No.l) vide registered sale deed dated 02.07.2001 for a purported sale consideration of Rs.6,45,000/-. Similarly, he executed a sale deed dated 05.07.2001 qua the disputed land-II again in favour of Avtar Singh for a total sale consideration of Rs. 1,18,500/-. Avtar Singh further sold the disputed land-II to defendant No.3 (Nirmal Singh) (brother of the plaintiff-Kuldeep Singh) vide registered sale deed dated 22.07.2002. He also executed a sale deed dated 22.07.2002 for land measuring 14 kanals 8 marl as out of the disputed land-I again in favour of defendant No.3 (Nirmal Singh).

It is the case of the plaintiff that when his wife Amarjit Kaur came to India in July 2002, she came to know about the sale deeds having been executed by his own brother (defendant No.l). Accordingly, a suit for declaration that the plaintiff was the joint owner in possession of the disputed lands and further that the sale deeds were illegal, null and void and without consideration was filed on 24.12.2002.

4. The defendants chose not to appear despite service and were accordingly proceeded against ex parte.

5. In the ex-parte evidence, plaintiff examined three witnesses which included his wife Amarjit Kaur, who stepped into the witness box as PW3.

6. The trial Court dismissed the suit filed by the plaintiff leading to the filing of an appeal which was allowed by the Court of Addl. Distri

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