An agency created for valuable consideration where the agent has an interest in the subject matter (authority coupled with interest) cannot be revoked or terminated, even by the death or insanity of the principal, as per Section 202 of the Indian Contract Act, 1872.

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO THE ENDORSEMENT DATED 15.03.2023 IN S.R.O D/520/2022-23 ISSUED BY RESPONDENT NO.1 (ANNEXURE-E); AND ETC.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH

ORAL ORDER

1. In this writ petition, the petitioner is assailing the Endorsement dated 15.03.2023 (Annexure-E) issued by the respondent No.1 inter-alia sought for direction to respondent No.1 to register the Sale deed produced at Annexure-C to the writ petition.

2. Heard learned counsel Sri S.R. Komalacharan, appearing on behalf of learned counsel Sri. Pradeep S. Sawkar, for the petitioner and Sri. Mahantesh Shettar, learned Additional Government Advocate for the respondent-State;

3. It is contended by Sri. S.R. Komalcharan, learned counsel for the petitioner by referring to Section 202 of the Indian Contract Act, 1872 and declaration of law made by the Hon'ble Supreme Court in the case of Seth Loon Karan Sethiya vs. Ivan E. John and others reported in AIR 1969 SC 73, and submitted that, where the agency is created for valuable consideration and authority is given to secure interest of the agent and under such circumstances the authority cannot be revoked. Accordingly, learned counsel for the petitioner sought for interference of this court.

4. Per contra, Sri. Mahantesh Shettar, learned Additional Government Advocate appearing for the respondent-State submitted that, Smt. Munirathnamma (original purchaser) executed power of attorney in favour of the petitioner along with her sons namely, Sri.B.R. Nandakumar and Sri.B. R. Vijaykumar, therefore, sought to justify the impugned Endorsement issued by the respondent No.1. Accordingly, sought for dismissal the writ petition.

5. Having considered the submissions made by the learned counsel for both parties and upon careful examination of the records, it is seen that a Registered Power of Attorney dated 31.07.2014 (Annexure–B) was executed by B.R. Nandakumar, B.R. Vijaykumar and Smt. Muniratnamma in favour of the petitioner. In the said registered Power of Attorney, a clear recital is made regarding the execution of the Registered Agreement of Sale dated 31.07.2014 (Annexure–C). Taking into consideration the language employed Section 202 of the Act, so also, the illustration A provided for Section 202 which reads as under:

"202. Termination of agency, where agent has an interest in subject-matter.- Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.

illustrations

(a) A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to hi from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.

(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price, the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death."

6. The said illustration makes it abundantly clear that once an agency is created for consideration, the authority cannot be revoked even if the principal becomes insane or dies. In this regard, paragraphs 5 to 7 of the judgment of the Hon’ble Supreme Court in 'Seth Loon Karan Sethiya' (supra) are also relevant, wherein, it has been held that where a document itself confers authority coupled with interest, such authority does not