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2008 DIGILAW 632 (PNJ)

Ram Asri v. Rakesh Chand

2008-03-04

PERMOD KOHLI

body2008
JUDGMENT Permod Kohli. J.:-At the time of admission of this appeal on January 11, 1985, no substantial question of law was framed. After hearing learned counsel for the parties frame following substantial questions of law for determination in this appeal:­ 1. Whether a written notice of cancellation of a General Power of Attorney by the Principal is essentially required to be issued to the person holding such GPA and the subsequent vendee?. 2. What is the extent of enquiries that a vendee must make to be eligible for the protection envisaged under Section 41 of the Transfer of Property Act as a bona fide vendee? 3.Whether the objections taken by the plaintiff in this case against the subsequent will dated 26.5.1978 in favour of Harish Kumar (Ex.P1) amount to “suspicious circumstances” surrounding the said will. 2. Remaining unsuccessful in the trial court as well as First Appellate Court, the plaintiff has approached this Court by filing the present Regular Second Appeal assailing the findings and consequential judgments and decrees passed by the courts below. 3. The dispute relates to the property of one Mahant Jaram Dass. It is admitted case of the parties that the property was owned by Mahant Jaram Dass. Defendant No.4-Ram Gopal is the son and plaintiff, Smt. Ram Asri alias Nikko is daughter of Jaram Dass. Defendant no.3-Harish Kumar is the son of Ram Gopal i.e. the grand son of Mahant Jaram Dass. Defendants no. 1 and 2 are the purchasers of the property sold by Ram Gopal as an attorney of Mahant Jaram Dass. It is also admitted case of the parties that Jaram Dass executed a power of attorney registered with the Sub Registrar, Anandpur Saheb on 10.6.1968 authorising him to manage and sell his property. On the authority conferred upon him, Ram Gopal claims to have sold the suit land for a consideration of Rs.30,000/- to defendants no.1 and 2, vide sale deed dated 7.7.1977. Subsequently, Jaram Dass also executed a will dated 26.5.1978 in favour of his grand son, Harish Kumar, respondent no.3. Smt. Ram Aasri filed the suit for possession of land measuring 33 kanals 7 marl as situated in Village Sahota on the plea that she being the daughter of Mahant Jaram Dass is entitled to inherit his property after his death. It was alleged that Jaram Dass died intestate on 15.10.1978. Smt. Ram Aasri filed the suit for possession of land measuring 33 kanals 7 marl as situated in Village Sahota on the plea that she being the daughter of Mahant Jaram Dass is entitled to inherit his property after his death. It was alleged that Jaram Dass died intestate on 15.10.1978. She also claimed that defendants no.1 and 2 are forcibly occupying the suit property, on the basis of the sale deed allegedly executed by Ram Gopal, defendant no.4. Plaint contains further allegations that Ram Gopal was not the attorney of Jaram Dass on 7.7.1978, the date of execution of the sale deed. She claims to have looked after deceased Jaram Dass during his life time and thus challenged the will dated 26.5.1978 executed by Jaram Dass in favour of Harish Kumar, defendant no.3. Defendants no.1 and 2 filed their written statement and claimed to be the bona fide purchasers of the land. They pleaded that they purchased the property from Jaram Dass through Ram Gopal, his attorney duly registered with the Sub Registrar. They also pleaded that they had no notice of any cancellation of power of attorney. 4. On the basis of the pleadings, the trial court framed following issues:­ “1.Whether the plaintiff is owner of the property in dispute? OPP 2. Whether Jarsam Dass had cancelled the general power of Attorney dated 10.6.1968 through registered cancellation deed dated 18.4.1977. If so, what are its effect?OPP 3.Whether the suit is within time? OPP 4.Whether the defendants Nos.1 and 2 are the bona fide purchasers for a consideration without any prior notice OPD 5.Whether the plaintiff is estopped by her admission to challenge the will executed in favour of Harish Kumar by Sh.Jaram Dass? OPD 6.Whether Sh.Jaram Dass had executed the valid will dated 26.5.1978 in favour of Harish Kumar defendant while in his sound disposing mind? OPD 7. Whether the present suit is not maintainable against defendants no.3 and 4 as no permission has been obtained by the plaintiff to file the suit afresh with liberty? OPD, 8. Whether Sh. Jaram Dass had executed a General Power of Attorney dated 10.6.1968 in favour of defendant no.4? OPD 9. Whether the plaintiff is entitled for the possession of the suit property? OPD 10.Relief. 5. OPD, 8. Whether Sh. Jaram Dass had executed a General Power of Attorney dated 10.6.1968 in favour of defendant no.4? OPD 9. Whether the plaintiff is entitled for the possession of the suit property? OPD 10.Relief. 5. The trial court also framed following additional issue vide its order dated 21.12.1982: 1.(a)Whether Ram Gopal defendant no.1 is not the general attorney of Mahant Jaram Dass through alleged Mukhtiaraam dated 10.6.1968? OPP. 6. While deciding issue no.2, the trial court held that the power of attorney dated 10.6.1968 executed in favour of Ram Gopal by Mahant Jaram Dass had been cancelled through a registered cancellation deed dated 18.4.1977. However, while deciding the issue no.1, the trial court ruled that the plaintiff has no right whatsoever. It has been observed that though the power of attorney was cancelled and was not in existence on the date of sale in favour of defendants no.1 and 2 made on 7.7.1977, but the defendants no.1 and 2 are the bona fide purchasers for consideration as they had no intimation or notice of the cancellation of the power of attorney. The trial court also upheld validity of the will dated 26.5.1978 executed by late Jaram Dass in favour of defendant no.1 and in presence of the will, the plaintiff was held not entitled to any relief. Consequently, the suit came to be dismissed vide judgment and decree dated 1.2.1983. 7. Aggrieved of the aforesaid judgment and decree of the trial court, plaintiff preferred appeal before the Additional District Judge, Rupnagar. The lower appellate court vide the impugned judgment and decree dated 1.2.1984 dismissed the appeal. While upholding the validity of the will, the lower appellate court has observed that there is practically no challenge to the will as the only statement made by the plaintiff is that she was looking after her father Jaram Dass and thus, he could not have executed will in favour of defendant no.3. Only ground to challenge the will pleaded was that there is no averment in the will as to why the daughter has been excluded from the property. The lower appellate court, however, found that the plaintiff admitted in her statement that late Mahant Jaram Dass gave the gaddi to Harish Kumar; his grand son. It was accordingly held that will is valid and is not surrounded by any suspicious circumstances. The lower appellate court, however, found that the plaintiff admitted in her statement that late Mahant Jaram Dass gave the gaddi to Harish Kumar; his grand son. It was accordingly held that will is valid and is not surrounded by any suspicious circumstances. Lower appellate court also held that the sale in favour of defendants no.1 and 2 is valid irrespective of the fact that the power of attorney on the basis of which the sale deed executed by to Gopal had been cancelled Ram prior execution/registration of the sale deed. This finding has been returned primarily on the ground that the purchasers had no notice of the cancellation of power of attorney. 8. Learned counsel appearing for the appellant/plaintiff has challenged the aforesaid findings of the courts below on the following grounds:­ (1) The sale in favour of defendants no.1 and 2 vide sale deed dated 7.7.1977 made by Ram Gopal was without any authority in view of cancellation of will on 18.4.1977; (2) The will is surrounded by suspicious circumstances as no reason for excluding the natural successors has been indicated in the will. It is admitted case of the parties that the general power of attorney dated 10.6.1968 executed by Mahant Jaram Dass in favour of Ram Gopal was cancelled on 18.4.1977 whereas sale deed was executed on 7.7.1977. Both the courts below have concurrently held that the purchasers-defendants no.1 and. 2 had no notice of the cancellation of deed. From the record and also from the observations made by the lower appellate court, it has been found that the power of attorney was registered at Anandpur Saheb whereas it was cancelled at Ropar and no intimation of the cancellation was given to the office of Sub Registrar at Anandpur Saheb regarding cancellation. Ram Gopal in his own statement denied that his power of attorney was cancelled. It has also come on record that Ram Gopal continued to serve his father Mahant Jaram Dass till his death. There is absolutely no evidence on record to show that the purchasers-defendants no.1 and 2 had any notice of cancellation of power of attorney. Learned counsel for the plaintiff/appellant has relied upon the definition of expression “a person is said to have notice” in Section 3 of the Transfer of Property Act which reads as under:­ “3.Interpretation Clause:-........ There is absolutely no evidence on record to show that the purchasers-defendants no.1 and 2 had any notice of cancellation of power of attorney. Learned counsel for the plaintiff/appellant has relied upon the definition of expression “a person is said to have notice” in Section 3 of the Transfer of Property Act which reads as under:­ “3.Interpretation Clause:-........ a person is said to have notice of a fact when he actually knows that fact, or when but for willful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it. Explanation I.- Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of Section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share of interest is being acquired, is situated “Provided that­ (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1998 (16 of 1908), and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act. Explanation II- Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation II- Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III - A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material: Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.” 9. Based upon aforesaid definition, it is contended that the registration of document itself is a notice to all. 10. This contention is, however, not acceptable and is not based upon the true interpretation of the aforesaid provisions of law. The expression “a person is said to have notice” has been clearly defined to mean that when a fact actually comes to the notice of the person unless he willfully abstains from an enquiry and search which he ought to have made or in case of gross negligence. Even the explanation appended to this provision impute knowledge to the person who acquires the property through a registered instrument. Admittedly, there was a registered general power of attorney in favour of Ram Gopal which was produced at the time of registration of sale deed. It has also come in the statement of Charan Dass, guardian of defendants no.1 and 2 who were minor at the time of sale of property in their favour that Jaram Dass told him that Ram Gopal, his son will sell the property to them. There was no occasion for him to have made any further enquiry in view of the statement of Jaram Dass and the registered general power of attorney. No evidence whatsoever has been brought on record to establish that the vendees (defendants no.1 and 2) had the knowledge of cancellation of power of attorney. Sale was effected on 7.7.1977 with delivery of possession. Jaram Dass was alive and he died on 15.10.1978 i.e. more than a year after the execution of the sale deed. He never challenged the sale deed during his life time. Sale was effected on 7.7.1977 with delivery of possession. Jaram Dass was alive and he died on 15.10.1978 i.e. more than a year after the execution of the sale deed. He never challenged the sale deed during his life time. Apart from above, Section 208 of the Indian Contract Act, 1872 protects the rights of bona fide purchaser under such a situation. Section 208 reads as under: “208. When termination of agent’s authority takes effect as to agent, and as to third persons- The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them.” 11. This Section clearly provides that termination of an agent’s authority is not to take place unless communicated to him and will not effect the third party unless it becomes known, to him. Therefore, it was obligatory for the plaintiff to have established not only that Jaram Gopal Dass had the knowledge of cancellation of his general power of attorney, but also that the vendees (defendants no.1 and 2) had the knowledge of the cancellation of general power of attorney. Though an attempt is made that Ram Gopal Dass being the son of Jaram Dass and staying with him had the knowledge of cancellation, but no other evidence has been brought on record that he actually had the knowledge. It is mere presumption and not the proof. Assuming Ram Gopal had, the knowledge, but there is absolutely not even an iota of evidence to establish that the vendees-defendants no.1 and 2 had the knowledge of the cancellation of general power of attorney in favour of Ram Gopal. A similar issue came up for consideration before the Madras High Court in the case of Kathoom Bivi Ammal and another v. Arulappa Nadar and another, AIR 1970 Madras 76 wherein following observations have been made:­ “2.. ..This illustration is apposite to the facts of this case. In Mulla on Indian Contract Act, Students’ Edition, Eighth Edition page 226, the case of Trueman v. Loder, (1840) 11 Ad & El 589, is referred to. That was a case where A traded as B’s agent with B’s authority. ..This illustration is apposite to the facts of this case. In Mulla on Indian Contract Act, Students’ Edition, Eighth Edition page 226, the case of Trueman v. Loder, (1840) 11 Ad & El 589, is referred to. That was a case where A traded as B’s agent with B’s authority. All parties with whom A made contracts in that business were held to have a right to hold B’ liable to them until B gives notice to the world that A’s authority is revoked; and it makes no difference if in a particular case the agent intended to keep the contract on his own account. It is argued on behalf of the appellant that it is very unreasonable to expect that the first defendant should inform the whole world that she had cancelled the power-of-attorney given to the fourth defendant, and that that she cannot be expected to approach every body with whom the fourth defendant was likely to enter into contract and inform them of the cancellation. I do not think that such considerations have any relevance in the face of, the clear words of the section. The policy of the law, apparently in the interests of trade and commerce, is that the agent’s action should bind the principal, even though the principal might have cancelled the agent’s authority unless the third persons with whom the agent enters into contracts knew of the termination of the agency. On this point, therefore, the conclusion of the lower appellate Court is correct, and it should be held that the mortgage executed by the fourth defendant in favour of the plaintiff is valid and binding on the first defendant.” 12. Similar view has been expressed by the Madhya Pradesh High Court in the case of Kulsekarapatnam Hand Match Workers’ Cooperative Cottage Industrial Society Ltd., Madras State v. Radhelal Lalloolal and others, AIR 1971 Madhya Pradesh 191 wherein following observations have been made: “12.As regards the liability of the principal on the agreement of 16th October, 1964, there is no manner of doubt that the contract of agency terminated w.e.f. 30th September, 1964, but we are of the view that such termination would not affect the buyer. So far as third parties are concerned, the law is that the termination of a contract of agency takes effect only from the time the third party obtains knowledge of it. So far as third parties are concerned, the law is that the termination of a contract of agency takes effect only from the time the third party obtains knowledge of it. This is clear from Section 208 of the Contract Act. The principle is also now well settled that a third party is not affected unless he has knowledge of such termination.....” 13. It has also come in evidence that Ram Gopal liquidated the loan secured by Jaram Dass from the Bank out of sale proceeds of the property in question. This fact must be in the knowledge of Jaram Dass. Be that as it may, right of the vendees-defendants no.1 and 2 cannot be affected in any manner, unless it is established that they had the notice of cancellation of power of attorney which fact, has not been proved and thus, by virtue of Section 208 of the Indian Contract Act, termination of agent’s authority will have no impact upon the validity of the sale.” 14. As noticed above, the will in favour of defendant no.3- Harish Kumar has been found to be valid. Even if the sale in question goes, the plaintiff has no locus to file the suit as she will have otherwise also no right in view of the valid will executed in favour of defendant no.3 by the deceased Jaram Dass, the owner of the property. 15. I have examined the questions of law framed during the course of arguments. I am of the view that there is no necessity of written notice of cancellation of general power of attorney by the principal to his attorney. However, there must be adequate evidence to establish the factum of notice verbally or written to the attorney and also to the subsequent vendees. 16. Though the vendee has to be vigilant and must make necessary enquiries to seek protection of his right over the property by virtue of Section 41 of the Transfer of Property Act. However, neither any such plea has been raised nor any evidence has been led in this regard. Yet there is un-rebutted statement of Charan Dass that before purchase of the property, he had enquired from Jaram Dass, the owner who had conveyed to him that Ram Gopal (general power of attorney) will sell the property to him. However, neither any such plea has been raised nor any evidence has been led in this regard. Yet there is un-rebutted statement of Charan Dass that before purchase of the property, he had enquired from Jaram Dass, the owner who had conveyed to him that Ram Gopal (general power of attorney) will sell the property to him. Question no.3 relates to only appreciation of evidence and does not amount to any substantial question of law. I find no merit in this appeal which is accordingly dismissed. ------------------