1997 Supreme(Online)(Bom) 9
BOMBAY HIGH COURT
Mr. Chagla, J
Devkubai N. Mankar and Others v. Rajesh Builders and Others
Civil Appeal | Appeal No. 958 of 1995
The authority to negotiate for a sale does not grant the power to enter into an agreement of sale.
Headnote:(A) Specific Relief Act, 1963 - Sections 10 and 14 - Power of Attorney - The authority conferred on an attorney to negotiate for sale does not equate to the authority to enter into an agreement of sale. The Court ruled that Mr. Patil, the attorney, lacked the power to enter into an agreement for the sale of the Warli property, as the powers granted were limited to management and negotiation only. (Paras 6, 9, 10)
(B) Jurisdiction - The learned single Judge's order restraining appellant's transfer of property was overturned upon determining lack of proper authority and notice for the injunction as issued. (Para 11)
| Table of Content |
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| 1. facts of the appeal regarding property ownership and power of attorney. (Para 1 , 2 , 3) |
| 2. argument on the scope of authority granted to the attorney. (Para 4 , 6) |
| 3. interpretation of power terms and basis for decision. (Para 5 , 7 , 10) |
| 4. court's ruling on the limitations of negotiation authority. (Para 9) |
| 5. final conclusion and appeal decision. (Para 11 , 12) |
1. This is an appeal of the successors of original defendant No. 2 from the order of the learned single Judge dated 3rd November, 1995 made in Notice of Motion No. 2284 of 1989 in Suit No. 2421 of 1983 refusing to set aside the interim order of injunction passed on 19-6-1984 in Notice of Motion No. 1953 of 1983 against their predecessor (original defendant No. 2 since deceased).
2. The relevant facts of the case, briefly stated, are as follows. The appellants (hereinafter, for the sake of convenience, referred to as "the heirs of Warli") are the heirs and legal representatives of one Madhya Pradesh Warli who was defendant No. 2 in the suit filed by M/s. Rajesh Builders, respondent. No. 1 herein. On or about 5th July, 1973, Mr. Warli, the predecessor of the appellants, had executed a power of attorney in favour of one Mahendra Damodar Patil, original defendant No. 1 (since deceased and represented by his legal representatives who are respondents in this appeal), in respect of certain immovable properties bearing Survey No. 327, Hissa No. 3 and Survey No. 328, Hissa No. 11 (hereinafter referred to as "Warli property"). Identical power of attorney was also executed by one Mr. Mhase, original defendant No. 3 in respect of certain property belonging to him. Another appeal, being Appeal No. 958 of 1995, which is clubbed with this appeal for hearing, pertains to the property belonging to Mr. Mhase and the alleged agreement of sale executed by Mr. Patil in respect of the said property.
3. The suit in question was filed by respondent No. 1 against the predecessor of the appellants for specific performance of an agreement of sale dated 10th June 1983 executed by the power of attorney holder Mr. Patil for sale of the Warli property. The case of respondent No. 1 in the suit was that by the agreement dated 10th June, 1983 executed by Mr. Patil in his individual capacity for his own property, as a constituted attorney for the predecessor of the appellants in respect of Warli property, and on behalf of Mr. Mhase as his constituted attorney in respect of Mhase properties, all the properties including Warli property and Mhase property were agreed to be transferred or conveyed to the respondent No. 1 for development. The agreement is a composite one for development of the personal property of Mr. Patil as well as Warli property and Mhase property. In this appeal, we are concerned only with Warli property and so henceforth we would refer only to that property. The case of the appellants is that the said transaction is collusive. According to the appellants, Mr. Warli had no knowledge of the agreement entered into by Mr. Patil with the respondent No. 1 for development of the Warli property. Mr. Warli never received any consideration. Admittedly, he was all throughout in the possession of the said property. It appears that in course of time, some differences arose between respondent No. 1, the developer, and Mr. Patil, the power of attorney holder, as a result of which respondent No. 1 filed a suit for specific performance of the agreement of sale dated 10th June 1983. The said suit was numbered as Suit No. 2421 of 1983. In that suit, respondent No. 1, original plaintiff, also took out a Notice of Motion, being Notice of Motion No. 1953 of 1983 and prayed for appointment of a receiver and injunction. Prayer (b) of the Notice of Motion which is relevant for the purposes of the present controversy is set out below:
"that pending the hearing and final disposal of the above suit, the defendants, their servants and / or agents be restrained by an order and injunction of this Hon