The court established that GPAs executed in favor of an individual do not confer locus standi to a company, and unregistered Development Agreements are void due to failure of consideration.

COMMON JUDGMENT:

(Per Hon’ble Justice Moushumi Bhattacharya)

The parties to CCCA.Nos.77, 80, 81 and 82 of 2002 (the GPA Appeals) are common to CCCA.No.120 of 2013 (the Partition Appeal).

2. The appellant No.1-M/s.Image Developers Pvt. Ltd. in CCCA.No.120 of 2013 is the sole appellant in the 2002 (GPA) Appeals. The appellant No.2/C.Venkateswara Rao (C.V.Rao) in the 2013 (Partition) Appeal is the Managing Director of appellant No.1/Image Developers.

3. The respondent Nos.1 to 4 in CCCA.No.120 of 2013 are the sole respondents in each of the GPA Appeals respectively. The respondent Nos.5 and 6 in the Partition Appeal are not parties to the GPA Appeals.

4. For the sake of convenience, we propose to deal with the batch of Appeals in two sets i.e., the “GPA Appeals” (2002) and the “Partition Appeal” (2013).

CCCA.Nos.77, 80, 81 and 82 of 2002 – “GPA Appeals”

5. These Appeals arise out of a common judgment dated 23.02.2001 dismissing the Suits filed by the appellant/Image Developers vide O.S.Nos.2080, 2081, 2082 and 2083 of 1997. The Suits were filed by the appellant/Image Developers challenging the cancellation of the General Power of Attorney instruments (GPAs) dated 24.11.1993 vide registered Cancellation Deeds dated 30.07.1997. The respondents executed the GPAs in favour of C.V.Rao in his individual capacity. The appellant/Image Developers however did not array C.V.Rao as a party to the Suits.

The facts leading to the Suits of 1997 forming the subject matter of the 2002/GPA Appeals

6. The source of the disputes between the parties is two properties bearing Sy.No.118/3 of Punjagutta (Schedule ‘A’ property) and Sy.No.14 of Yellareddyguda (Schedule ‘B’ property). In 1992-1993, the appellant Nos.2-6 in the Partition Appeal (family group of C.V.Rao/the appellant No.2) and the respondents (family group of N.Subash/the respondent in C.C.C.A.No.82 of 2002) acquired individual titles to separate extents of the Schedule ‘A’ and ‘B’ properties under separate registered Sale Deeds. The adjacent lands were acquired on a pre-existing oral understanding between the two family groups for jointly developing the land into a multi-storied commercial complex by pooling in their respective resources.

7. The appellant Nos.2-6 in the Partition Appeal and the respondents issued a declaration on 24.12.1992 authorizing C.V.Rao to sign on their behalf on the application for building permission and sanction plan from the Municipal Corporation of Hyderabad (MCH). The respondents also handed over the title deeds in respect of their share of properties to C.V. Rao for completion of permit and approval process for the Schedule ‘A’ and ‘B’ properties.

8. The extent of land owned by each individual land owner was confirmed on the basis of plans prepared for approval of the MCH pursuant to the statutory approvals being granted under the Urban Land (Ceiling and Regulation) Act, 1976 . The respondents’ family group stood entitled to 1899 Square Yards i.e., 35.01% of the total area of 5424 Square Yards of the Schedule ‘A’ property and 2158 Square Yards i.e., 47.95% of the total extent of 4500 Square Yards of the Schedule ‘B’ property.

9. The appellant/Image Developers was incorporated on 18.11.1993 with C.V. Rao, his wife and respondent No.1/N.Subash as equal shareholders. The appellant/Image Developers was incorporated as per the plan of C.V. Rao with a view to save Income Tax and minimize Wealth Tax and Capital Gains Tax arising out of the commercial development project of the Schedule ‘A’ and ‘B’ properties. The appellant/Image Developers claimed title to the land allotted to the respondents on the basis of the Development Agreements dated 24.11.1993.

10. The respondents executed 7 GPAs on 24.11.1993 in keeping with the oral understanding between the individual land owners who had pooled in their resources for the joint development of the Schedule ‘A’ and ‘B’ properties. The respondents’ cancellation of these GPAs is the subject matter of challenge in the present GPA Appeals.