The power of attorney holder's actions were not authorized due to fraud, making the agreement for sale void.

JUDGMENT

Defendant No.2 has come up in appeal challenging the judgment and decree of the III Additional Sub Judge, Ernakulam whereby Ext.B1, agreement for sale dated 4.4.1991 executed by respondent No.2/defendant No.1 as power of attorney holder of respondent No.1/plaintiff was cancelled, respondent No.2 was restrained and prohibited from executing any sale deed pursuant to that agreement and rejecting the counter claim made by the appellant for specific performance of Ext.B1 or, in the alternative for return of advance money of Rs.35,000/- with interest.

2. Short facts necessary for consideration of this appeal are: 1 ½ cents of land together with the building thereon situated on the side of the road connecting YMCA Junction to the M.G.Road at Ernakulam in the heart of the City was acquired by respondent No.1 as per Ext.A1, assignment deed No.866 of 1990 dated 7.3.1990 for a sum of Rs.80,000/- . The husband of respondent No.1 (PW4) is conducting a restaurant in the said building. According to respondent No.1, her husband was in need of money and she thought of disposing of the said property. Respondent No.2 who is a money lender by profession approached respondent No.1 and told her that the property would fetch anything not less than Rs.1.50 lakhs per cent and that the property with building could be sold for Rs.3 to 4 lakhs. Accordingly, respondent No.1 executed a power of attorney in favour of respondent No.2 (Ext.A2 is its copy) on 11.1.1991 and registered as document No.32/1991 conferring power on respondent No.2 to sell the said property. While so, respondent No.2 served a notice on respondent No.1 demanding her to vacate the building in the said property within 30 days and threatening eviction with police assistance in case she failed to vacate. Following that, respondent No.1 cancelled the power of attorney as per Ext.A3, registered document No.503/1992 dated 4.7.1992. On 5.7.1992, a photocopy of that cancellation deed along with a notice (Ext.A6 is its copy) was given to respondent No.2. Respondent No.2 gave Ext.A4, reply dated 14.7.1992 wherein he claims that on the strength of the power given to him as per Ext.A2 he negotiated the sale of the said property and entered into Ext.B1, agreement with the appellant on 4.4.1991 for sale of the said property for a total consideration of Rs.50,000/- and received Rs.35,000/- as advance. Immediately, respondent No.1 applied (to the Registrar) for a copy of the said agreement for sale and got it on 16.7.1992. Respondent No.1 states that it was a fraudulent and collusive act of the appellant and respondent No.2 in entering to Ext.B1, agreement for sale for a throw away price of Rs.50,000/-. Therefore, she sued the appellant and respondent No.2 as aforesaid. Respondent No.2/defendant No.1 contended that respondent No.1/plaintiff borrowed Rs.3.50 lakhs from him on 12.11.1990 and executed a demand promissory note for the said amount. Respondent No.1 created equitable mortgage of said property in his favour by deposit of the original title deed. At a time when he demanded repayment of that amount, respondent No.1 told him that he could sell the property and adjust the sale proceeds in the loan amount payable by her. It is accordingly that the power of attorney was executed in his name and on the strength of that power of attorney, he entered into Ext.B1, agreement for sale dated 4.4.1991 with the appellant. He claimed that since the property was encumbered, the maximum sale consideration that could be fetched is only Rs.50,000/- and that the sum of Rs.35,000/- given by the appellant as advance was adjusted in the loan amount payable to him by respondent No.1. Appellant contended that he agreed to purchase the property as per Ext.B1 for Rs.50,000/- and paid Rs.35,000/- as advance. He is entitled to get the sale deed executed in terms of that agreement and at any rate, for return of the advance money with interest. He therefore, laid the counter claim as aforesaid. Respondent No.1 filed