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2025 Supreme(Online)(Mad) 76151

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. Dhanabal, J
R. M. Yousuf – Appellant
Versus
Selvam – Respondent
SA No. 311 of 2015|M.P.No.1 of 2015



Advocates:
For the Appellants/Petitioners: G. Sumitra
For the Respondents: Elizabeth Ravi

A principal is deemed a party to a sale deed executed by their authorized agent under a valid power of attorney, requiring appropriate court fee valuation under the relevant Act. Failure of the principal to testify personally regarding alleged fraud or unauthorized actions undermines the challenge to the sale.

Headnote:(A) Pondicherry Court Fees and Suits Valuation Act, 1972 - Section 25(d) - Section 40 - Valuation of suit - Where a principal grants a power of attorney and the agent executes a sale deed, the principal is deemed to be a party to the document and must pay court fee under Section 40, not Section 25(b) or (d). (Para 20, 21)

(B) Evidence Act, 1872 - Section 120 - Examination of witnesses - Where personal knowledge of transactions between parties is central to the dispute, the failure of the principal to enter the witness box, opting instead to rely on a spouse without personal knowledge, warrants an adverse inference against the claims made against the agent and third-party purchaser. (Paras 14, 18)

(C) Power of Attorney - Scope of authority - A power of attorney granting authority to sell property remains valid and binding on the principal unless specific limitations are proven by extrinsic evidence; the purchaser is entitled to rely on the subsisting power of attorney, and the agent's failure to remit proceeds to the principal is a separate cause of action between the principal and agent. (Paras 12, 13, 19)

Facts of the case:
The appellant (plaintiff) executed a power of attorney in favor of the first respondent. The agent subsequently sold the property to the third respondent. The appellant filed a suit to declare the sale deed null and void, alleging fraud and lack of consideration. The trial court decreed the suit, but the lower appellate court allowed the appeal, finding the sale valid and the purchaser a bona fide buyer. The appellant challenged this in a second appeal.

Findings of Court:
The court held that the sale deed was executed under a valid, subsisting power of attorney. The third respondent was a bona fide purchaser who relied on the agent's authority and a police certificate regarding misplaced title deeds. The appellant failed to establish that the power of attorney was limited only to management, particularly since the appellant did not testify personally.

Issues: Whether the lower appellate court was correct in upholding the sale, whether the purchaser was a bona fide buyer, and whether the suit was properly valued for court fees under the relevant statutes.

Ratio Decidendi: A principal is bound by the acts of an agent within the scope of a power of attorney unless evidence proves otherwise. When a plaintiff seeks to challenge a document executed by an agent, the plaintiff must personally prove the limitations on the agent's authority and is liable to pay court fees as a party to that document under the relevant Valuation Act.

Result: Second appeal dismissed.

Table of Content
1. background of the sale deed dispute and conflicting claims of ownership and agency. (Para 1 , 2 , 3)
2. procedural history and formulation of substantial questions of law. (Para 4 , 5 , 6)
3. parties' contentions regarding power of attorney scope, bona fide purchase, and court fees. (Para 7 , 8)
4. evidentiary burden on the principal to challenge acts of an authorized power agent. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16)
5. validation of acts performed by a power agent and protecting bona fide purchasers. (Para 17 , 18 , 19)
6. suit valuation for documents executed through a valid power of attorney. (Para 20 , 21 , 22 , 23)

Judgment

1.This second appeal has been preferred as against the decree and judgment dated 17.10.2014 passed in A.S.No.17 of 2013 on the file of the Principal District Judge, Puducherry, however, the respondents 1 and 2 have preferred the first appeal as against the decree and judgment passed by the trial Court in O.S.No.57 of 2007 on the file of the Principal Special Judge, Puducherry dated 06.03.2013. In fact, the appellant herein being the plaintiff, has filed the above suit for declaration seeking to declare the sale deed dated 31.07.2006, executed by the first defendant in favour of the third defendant is null and void and to consequently cancel the same and to pass a decree of permanent injunction from their men from interfering with the plaintiff’s peaceful possession and enjoyment of the suit property and also for permanent injunction restraining the defendants their men and agents or anyone claiming under them from creating any encumbrance over the suit property. The said suit was decreed in favour of the appellant. Aggrieved over the same, the defendants 1 and 2 have preferred the first appeal, wherein the first appellate Court had allowed the said appeal by setting aside the order of the trial Court.

2. The brief averments of the plaintiff are as follows:

2.1. The suit property absolutely belongs to the plaintiff through a sale deed dated 29.03.1995 and thereafter, he was in peaceful possession and enjoyment of the property. The plaintiff is employed at Embassy of Beharin at Kuwait and the family members of the plaintiff are residing in Kottakuppam. The first defendant is a known person to the plaintiff, who is working at the Xerox shop of the plaintiff. The first defendant used to borrow paltry sums from the plaintiff whenever he used to visit family members of the plaintiff and also stood as a guarantor for the plaintiff’s loan obtained from the erstwhile Nedungadu Bank subsequently amalgamated with Punjab National Bank for purchase of a Xerox machine. Therefore, the plaintiff trusted the first defendant. Since the plaintiff was in Kuwait, in order to maintain his property, he executed a power of attorney dated 18.03.2000 in favour of the defendant in respect of the suit property.

2.2. Thereafter, when the plaintiff came to India he gathered information that the first defendant had sold the property without the plaintiff’s knowledge or consent by fraudulently conniving with the 2nd defendant as if the original parent document had been lost. The plaintiff also came to know that the first defendant had lodged a false complaint at the Kalapet Police Station as if the original title deeds were not traceable. The defendants 1 to 3 conspired together and have fraudulently fabricated the documents. Therefore, the plaintiff issued a legal notice dated 19.09.2006 to the defendants 1 and 2 and a reply notice dated 27.09.2006 was issued as if the first defendant executed a sale deed in favour of the third defendant through a sale deed dated 31.07.2006. Therefore, the plaintiff had filed a suit for declaration seeking to declare the sale deed dated 31.07.2006 executed by the first defendant in favour of the third defendant is null and void and also for permanent injunction restraining the defendants their men and agents or anyone claiming under them from creating any encumbrance of the suit property

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