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N.KUMAR, B.MANOHAR
U. Vijaya Kumar – Appellant
Versus
Malini V. Rao – Respondent
The principle that a sale deed executed by an attorney in favor of his own wife without the principal's knowledge constitutes a violation of Section 215 and allows the principal to repudiate the transaction is based on the following points:
Agent's Duty to Act within Authority: An agent must act within the scope of authority granted by the principal. Any act outside this scope, especially for personal benefit or involving a conflict of interest, is invalid and can be repudiated by the principal (!) .
Fiduciary Duty and Good Faith: An attorney has a fiduciary duty to act in the best interests of the principal. Executing a sale in favor of a close relative, such as his wife, without disclosure or approval breaches this duty, rendering the transaction invalid (!) .
Violation of Section 215: Section 215 of the Indian Contract Act stipulates that an agent must not deal on his own account or for his own benefit without the principal's consent. Executing a sale deed to his wife without such consent is a breach of this section (!) .
Principal's Right to Repudiate: Due to the breach of fiduciary duties and violation of statutory provisions, the principal has the right to repudiate or rescind the transaction, as it was made without proper authority and in breach of trust (!) .
These points collectively support the Court's decision that such a transaction is invalid and can be repudiated by the principal.
N. Kumar, J.—This is the defendants’ regular first appeal challenging the judgment and decree dated 24.02.2012 in O.S.No.2405/2010 passed by the XII Addl. City Civil Judge, Bangalore, decreeing the plaintiff’s suit by declaring that the sale-deed dated 17.2.2009 in respect of ‘B’ schedule property, executed by the 1st defendant as the GPA holder of M/s. Tex X International in favour of the 2nd defendant is null and void and not binding on the plaintiff etc. and for damages at the rate of Rs.50,000/- p.m.
2. For the sake of convenience, the parties are referred as per their original rank before the trial court.
3. The subject matter of the suit is ‘B’ schedule property measuring 12070 Sq. feet forming the western portion of ‘A’ schedule property, an industrial shed measuring 2074 Sq. meters.
4. The plaintiff’s case is that she is the proprietress of M/s. Tex X International, Bangalore: Karnataka Industrial Area Development Board (for short ‘KIADB’) allotted and sold ‘A’ schedule property in favour of the said Firm under registered sale-deed dated 04.05.1995. The 1st defendant is her brother and the 2nd defendant is his wife. When the 1st defendant lost his job and was unemp
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