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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
M.G. PRIYADARSINI, J.
Podila Sailaja @ Lakkineni Sailaja - Appellant
Versus
Podila Sasikala - Respondent
Appeal Suit No. 69 of 2019
Decided On : 16-04-2024
Specific Performance - Agreement of Sale - Section 202, Indian Contract Act; Section 20, Specific Relief Act - The court interpreted the provisions regarding agency and specific performance, emphasizing that unilateral cancellation of an irrevocable GPA is impermissible when the agent has an interest in the property.
Fact of the Case:
The plaintiff sought specific performance of an agreement of sale and declared a subsequent sale deed to a third party as null and void, claiming prior possession and rights under the agreement.
Finding of the Court:
The court found the plaintiff's agreement valid and binding, ruling that the subsequent sale deed was executed in violation of the existing agreement, thus nullifying it.
Issues: Whether the agreement of sale is valid and binding, whether the plaintiff is entitled to specific performance, and whether the sale deed to the third party is null and void.
Ratio Decidendi: The court held that an irrevocable GPA cannot be unilaterally cancelled when the agent has an interest in the property, and the plaintiff's prior rights must be upheld.
Result: The appeal is dismissed, upholding the trial court's decree in favor of the plaintiff.
Based on the provided legal document, the following key points are relevant:
Unilateral cancellation of an irrevocable General Power of Attorney (GPA) is not permissible when the agent has an interest in the property. This is because such an interest creates a binding relationship that cannot be terminated unilaterally by the principal without due process or legal proceedings (!) (!) .
The agreement of sale and GPA in question were registered documents, and their validity and enforceability are recognized, especially when the agreement creates an interest for the agent, which makes unilateral cancellation void (!) (!) .
The possession of the plaintiff over the property, as evidenced by the agreement and related documents, was considered sufficient proof of possession, even though no mutation in revenue records was shown. The delivery of possession at the time of agreement was accepted as valid evidence (!) (!) .
The sale deed executed in favor of the third party (defendant No.2) was declared null and void because it was in violation of the existing agreement of sale and GPA, which was binding on the defendant No.1 and the plaintiff. The subsequent sale was found to be in collusion and fraudulent (!) (!) .
The court emphasized that the sale of immovable property requires diligent verification of title, ownership, and possession by the purchaser. The defendant No.2, despite being aware of the prior agreement, failed to take appropriate precautions such as issuing a public notice or verifying the original documents before purchasing (!) .
The necessity of including all interested and necessary parties, such as vendors, in legal proceedings to prevent future disputes or claims was highlighted. Failure to join all relevant parties could affect the validity of the judgment and the rights of those parties (!) (!) .
The discretion of the court to grant specific performance is guided by principles of fairness and reasonableness. The court rightly exercised its discretion in favor of the plaintiff, considering the evidence and the legal position that the agreement and GPA were valid and binding (!) .
The appeal filed by the defendant No.2 was dismissed, reaffirming the trial court’s judgment, and no costs were awarded (!) .
These points collectively reinforce that the agreement of sale and GPA, being registered and creating an interest, could not be unilaterally canceled, and the subsequent sale to the third party was invalid. The court maintained the rights of the original parties based on their valid agreements and possession, emphasizing due diligence in property transactions.
JUDGMENT :
M.G. Priyadarsini, J.
Aggrieved by the judgment and decree dated 20.11.2018 in O.S.No.30 of 2014 (hereinafter will be referred as ‘impugned judgment’) passed by the learned VI Additional District Judge at Siddipet (hereinafter will be referred as ‘trial Court’), the defendant No.2 preferred the present appeal to set aside the impugned judgment.
2. For the sake of convenience, the parties hereinafter are referred to as they are arrayed before the trial Court.
3. The brief facts of the case, which necessitated the appellant to file the present appeal, are as follows :
(i) Defendant No.1 has executed an agreement of sale cum GPA with possession in favour of suit schedule property vide document bearing No.142 of 2012 dated 03.02.2012 by receiving sale consideration from the plaintiff and also delivered vacant, physical and peaceful possession of the property apart from handing over all the original documents to the plaintiff. As per the terms of agreement, defendant No.1 agreed to execute registered sale deeds in favour of intending purchasers either in part or in total.
(ii) Without knowledge of the plaintiff, the defendant No.1 by suppression and concealment of material facts of agreement, sold away suit property to defendant No.2 vide document bearing No.6153 of 2014 dated 08.05.2014. Defendant No.1 is not competent to execute impugned sale deed in favour of defendant No.2 during subsistence of agreement of sale cum – GPA. The impugned sale deed executed by defendant No.1 in favour of defendant No.2 is a fraudulent document and thus, liable to be declared as null and void and not binding on the plaintiff.
(iii) On 27.11.2014 defendant No.2 along with her henchmen in collusion with defendant No.1 came to suit land, tried to dispossess the plaintiff, who could resist them with the help of neighbours and well wishers. Hence, plaintiff filed the suit for specific performance.
(b) In reply to the plaint averments, the defendant No.1 filed written statement, the brief averments of which are as under:
(i) Plaintiff misrepresented the actual facts as the plaintiff executed an undertaking letter dated 03.02.2012 on the same day when the document No.142 of 2012 was executed. The plaintiff did not pay any sale consideration and executed an undertaking letter to defendant No.1 and stated that he will pay sale consideration of Rs.10,00,000/- to defendant No.1 on 18.03.2012. Defendant No.1 executed a Revocation Deed on 17.01.2013. There is no delivery of possession and no sale consideration was paid by the plaintiff. There is no cause of action for filing of the suit. Suit is bad for suppression of facts.
(ii) Defendant No.1 issued notice to the plaintiff, for which the plaintiff issued reply notice on 30.07.2014, then defendant No.1 issued rejoinder notice to the counsel for the plaintiff. Plaintiff filed the suit suppressing the fact that GPA was cancelled. It is defendant No.2, who is holding peaceful possession as absolute owner. Plaintiff is aware about the case vide File No.F3/2831/2012, F3/22/ROR/2012 adjudicated before the Joint Collector.
(iii) Originally Mohammed Hafeezuddin, S/o. Mohd. Sardar Ali was pattadar and possessor of suit schedule property and he has gifted the said land on 02.11.1947 to Mohd. Amjad Ali, S/o.Md.Mumtaz Ali, who is brother in law (sister’s husband). After the demise of Mohd. Amjad Ali,
Unilateral cancellation of an irrevocable GPA is impermissible when the agent has an interest in the property, ensuring the protection of the agent's rights.
A sale of immovable property requires a registered deed, and agreements without consideration are void, impacting the validity of subsequent transactions.
The court affirmed that specific performance is a discretionary remedy, requiring the plaintiff to prove the validity of the contract and readiness to perform.
(1) Agreement to sell – Specific performance will not be ordered if contract itself suffers from some defect which makes contract invalid or unenforceable – Discretion of court will not be there even....
A sale agreement executed by only one co-owner is defective and cannot support a claim for specific performance, which necessitates establishing readiness and willingness separately.
The main legal point established in the judgment is the court's affirmation of the specific performance of the agreement of sale dated 05-8-1995, and the rejection of the 4th defendant's claim as a b....
A plaintiff seeking specific performance must demonstrate continuous readiness and willingness to perform their contractual obligations, and the agreement must be validly executed by all necessary pa....
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