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2024 Supreme(Online)(MAD) 14012

HIGH COURT OF MADRAS
Hon`ble Ms. Justice P.T. ASHA
M.SUNDARRAJ – Appellant
Versus
S.JAYALAKSHMI – Respondent



A power of attorney does not confer title; fraudulent sales executed under such authority are void, particularly when challenged by the true owner.

Headnote:

Fraud - Property Dispute - Benami Transactions (Prohibition) Act, 1988, Section 4 - The court addressed fraudulent sale under a power of attorney, reaffirming that transactions disguised as legitimate cannot contravene the provisions of the Benami Transactions Act, rendering the sale deed void.

Fact of the Case:

The plaintiff challenged the validity of a sale deed executed by his brother-in-law under a power of attorney, claiming it was fraudulent. He had intended to purchase the property for personal use but later found it had been sold without his knowledge.

Finding of the Court:

The court found that the plaintiff was the actual owner of the property, having provided the sale consideration, and that the defendants had not proven their ownership claims or the legitimacy of the sale.

Issues: The main issues revolved around the validity of the sale deed, the actual owner of the property, and whether the defendants' claims were barred under the Benami Transactions Act.

Ratio Decidendi: The court established that a power of attorney does not convey ownership and that any sale executed by an agent transferring property to themselves or relatives without proper consideration is a breach of fiduciary duty.

Final Decision: The appeal was allowed and the trial court's judgment was set aside.

JUDGEMENT

The plaintiff in the suit O.S.No.5 of 2016 on the file of the Principal District Judge, Dharmapuri is the appellant before this Court challenging the dismissal of his suit which has been filed for the following reliefs:~ a) Pass a decree in favour of the plaintiff setting aside the alleged sale deed dated 11/02/2015 registered as document No.3305/2015 on the file of the Sub~registrar of Palacode executed by the 2nd defendant in favour of the 1st defendant as null, void, sham, nominal and not binding on the plaintiff and further direct the defendants to deliver possession of the suit property to the plaintiff within a period fixed by this Honourable Court and if the defendants fail to do so cause the same to be done by due process of this Honourble Court;

    b) Pass a decree for permanent injunction in favour of the plaintiff restraining the defendants 1 and 2 from in any way alienating or encumbering the suit properties;
    c) Pass a decree directing the defendants to pay the cost of the suit.
    d) Pass a decree granting such other relief or reliefs as this Honourable court may deem fit and proper in the circumstances of the case and thus render justice.
    The parties are referred to in the same ranking as before the Principal District Court, Dharmapuri.
    Plaintiff’s Case:~ 2. The plaintiff would submit that the 1st defendant is his sister and the 2nd defendant is his brother~in~law. The plaintiff would submit that he had completed his education in 1979 and was employed in India for over 5 years. In the year 1985, he had gone to Kuwait for employment. The plaintiff would submit that thereafter he has been regularly coming to India. In the year 1991, the plaintiff had got married to one, Padmini and they are blessed with 3 children. The plaintiff was desirous of purchasing agricultural lands with a farm house so that he and his family would have a place of their own to stay when they came to India. His brother~in~law, the 2nd defendant has assured him that he would find a suitable property for him. Later, the 2nd defendant had informed the plaintiff that the suit property and its adjacent property was available for sale and the same suited the plaintiff-s requirements. The plaintiff therefore proceeded to purchase the suit property and the adjacent property. On 22.11.2004, the plaintiff had purchased the suit property and thereafter the adjacent property was purchased in the name of his wife, Padmini. 3. The plaintiff would submit that since he was away from the country, the 2nd defendant had assured him that he would take care and manage the property. In the light of the above, the plaintiff had permitted him to reside in the farm house as a care taker. The plaintiff having immense trust on his brother~in~law had executed and registered a general power of attorney in favour of the 2nd defendant on 22.11.2004. The 2nd defendant had taken a power of attorney stating that he would collect the original documents from the Sub Registrar-s Office, effect mutation of records, transfer electricity service connection and all other things that are required for managing the property in the name of the plaintiff. In view of the trust that he had reposed on the 2nd defendant, the plaintiff had not gone through the contents of the power of attorney. The plaintiff would submit that he had never intended to sell the property as the property was purchased for his own use and the power of attorney had been given only to manage the property. 4. The plaintiff would submit that he had returned to Kuwait within 4 days after the registration of deeds and thereafter he has been periodically sending funds to the 2nd defendant for the maintenance of the lands and for meeting the agricultural expenses. The plaintiff has not even checked the accounts on account of the trust that he reposed on the 2nd defendant. Most of the time, defendants would apologetically tell the plaintiff that due to one reason or anoth



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