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2025 Supreme(Online)(MAD) 779

2025 MHC 171
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.Sakthivel, J.
J.Padmavathi - Appellant
Versus
T.R.Muthuswami and Ors. - Respondents
S.A.No.155 of 2017 and CMP No.3236 of 2017
Decided On : 20-01-2025
Advocate Appeared :
For the Appellant : Mr.S.Parthasarathy, Senior Counsel for Mr.V.S.Kesavan
For the Respondent : Mr.T.M.Hariharan, Mrs. R.Anitha, Special Government Pleader

Advocates:
Advocate Appeared:
For the Appellant : Mr.S.Parthasarathy Senior Counsel for Mr.V.S.Kesavan
For the Respondent: Mrs.R.Anitha Special Government Pleader

The Sale Deed executed under a General Power of Attorney is invalid if the G.P.A. is cancelled prior to the Sale Deed's registration, and registration is mandatory for a valid sale.

Headnote:(A) Transfer of Property Act, 1882 - Section 54 - Indian Contracts Act, 1872 - Sections 204, 203, 206, and 207 - Validity of Sale Deed - The court affirmed that the Sale Deed executed by the first defendant in favor of the second defendant was invalid due to the prior cancellation of the General Power of Attorney (G.P.A.) by the plaintiffs, which was not communicated to the defendants at the time of the Sale Deed's registration. The court emphasized that the Sale requires registration to be complete and that the defendants were aware of the cancellation before the Sale was completed. (Paras 16-18)

(B) Registration of Documents - The court held that the cancellation of the G.P.A. could be registered at any Sub-Registrar's office within Tamil Nadu, and the failure to communicate the cancellation did not constitute fraud. (Paras 14-16)

(C) Specific Performance - The court noted that the second defendant retains the right to file a Suit for specific performance based on the Sale Agreement and unregistered Sale Deed. (Paras 18-19)

Facts of the case:
The plaintiffs sought a declaration of title over a property originally owned by their grandfather, asserting that a G.P.A. executed under coercion was invalid, leading to a disputed Sale Deed executed by the first defendant in favor of the second defendant. The Trial Court ruled in favor of the plaintiffs, which was upheld by the First Appellate Court.

Findings of Court:
The courts found the G.P.A. was a sham document, and the Sale Deed executed based on it was invalid.

Issues: The key issues were the validity of the Sale Deed and the communication of the G.P.A. cancellation.

Ratio Decidendi: The court reasoned that the Sale Deed was invalid as it was executed after the cancellation of the G.P.A., emphasizing the necessity of registration for validity and the defendants' knowledge of the cancellation prior to presentation for registration.

Result: Second Appeal dismissed.

JUDGMENT :

R.Sakthivel, J.

This Second Appeal is directed against the Judgment and Decree dated July 15, 2015 passed in A.S.No.9 of 2014 by the 'Subordinate Court, Bhavani' ['First Appellate Court' for brevity], whereby the Judgment and Decree dated August 30, 2013 passed in O.S.No.195 of 2007 by the ‘I Additional District Munsif Court, Bhavani' ['Trial Court' for brevity] was confirmed.

2. For the sake of convenience, hereinafter, the parties will be referred to as per their array in the Original Suit.

PLAINTIFF'S CASE

3. The first plaintiff is the father of plaintiff nos.2 to 4. The Suit Property originally belonged to Karuppa Gounder, who is the maternal grandfather of the first plaintiff. After the demise of Karuppa Gounder, his three daughters namely, Velammal, Kuttiammal and Lakshmiammal became the owners of the Suit Property and they jointly enjoyed it. On May 9, 1972, Velammal sold her share within specific boundaries to the 1^st plaintiff. Subsequently, on December 5, 1990 Kuttiammal and Lakshmiammal bequeathed their shares to the 1^st plaintiff through a registered Will. The Will came into force and the plaintiffs are in possession and enjoyment of the Suit Property.

3.1. In 2001, the 1^st plaintiff borrowed a sum of Rs.10,000/- from the 4^th defendant with interest at 60% per annum and could not repay the same. At that time, the 4th defendant informed the 1st plaintiff that the outstanding due was Rs.85,000/- and insisted him to execute a General Power of Attorney ['G.P.A.' for short] in favour of the 1^st defendant as security and promised him that it would be cancelled upon repayment of loan amount. Accordingly, the 1^st plaintiff executed a G.P.A. on February 21, 2002 and it was duly registered. But, the 1^st defendant misused this power and entered into a Sale Agreement with the 2^nd defendant on February 22, 2002 in respect of Suit Property for a sum of Rs.2,00,000/- without the plaintiff's consent and the 4^th defendant also received an advance of Rs.1,80,000/-. Upon learning the same, the plaintiffs cancelled the G.P.A. on July 26, 2002 and filed an objection on July 29, 2002 before the Sub-Registrar, Bhavani. Despite this, the 1^st defendant continued with his attempts to alienate the Suit Property.

3.2. The 1st defendant had executed a Sale Deed in favour of the 2nd defendant and when it was presented for registration, the Sub- Registrar, Bhavani refused to register the said document and returned the same vide Order dated October 10, 2002. Aggrieved by the said Order, the second defendant preferred an appeal before the District Registrar / third defendant and the same was pending.

3.3. Subsequently, on June 27, 2003, the plaintiffs caused a legal notice to the defendants 1, 2 and 4, and the same was returned by the defendants 2 and 4. The plaintiffs remain in possession of the Suit Property, using it for residential and agricultural purposes. On June 20, 2007, the defendants attempted to trespass into the Suit Property and thereby, disturbed the peaceful possession and enjoyment of the Suit Property by the plaintiffs.

3.4. Further, on May 31, 2010, pending the Original Suit, the third defendant vide his Order dated May 31, 2010 directed the Sub Registrar, Bhavani to register the impugned Sale Deed and the same was registered accordingly on June 3, 2010 as Document No.3323 of 2010.

3.5. According to the plaintiffs, the G.P.A. was executed by the first plaintiff under threat and coercion and it was never intended to confer any ownership or sale rights to 1^st defendant. Therefore, the plaintiffs filed the Suit praying for declaration of title, for declaration that the third defendant’s Order dated May 31, 2010 is bad in law, for declaration that the alleged Sale Deed is not binding on the plaintiff and does not confer any title to the second defendant and for permanent injunction restraining the defendants from interfering with their possession and enjoyment of the Suit Property.

FIRST AND SECOND DEFENDANTS’ CASE

4. The defendants

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2025 Supreme(Online)(MAD) 779

The Sale Deed executed under a General Power of Attorney is invalid if the G.P.A. is cancelled prior to the Sale Deed's registration, and registration is mandatory for a valid sale.

Cases Referred (3)