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2020 DIGILAW 485 (KAR)

B. S. Nagendra, S/o Late B. Sheshagiri Rao v. Y. S. Suresh, S/o Late Shingegowda

2020-02-18

N.S.SANJAY GOWDA

body2020
JUDGMENT : 1. The plaintiff is in second appeal. 2. The plaintiff had filed a suit seeking for a declaration that the power of attorney executed by the defendants in his favour was subsisting and to act on the power of attorney. He also sought for an injunction to restrain the defendants from interfering with the peaceful possession and enjoyment of the developmental works of the suit schedule property. 2. The undisputed facts are that the plaintiff and defendants entered into a joint development agreement on 27/08/2007 whereby the plaintiff agreed to develop the suit property and thereafter would be entitled to dispose of a portion of suit property to meet the expenditure that he had incurred for developing the property and also towards his profits. 3. Clause 5 of the said Joint Development deals with permission which is as follows; “5.1 That, the owner gives permission to the DEVELOPER to enter upon the schedule property with full right and authority to commence, carry on and complete development thereof in accordance with the permissions herein mentioned. This shall not be construed as delivery of possession under Section 53 A of the Transfer of Property Act, 1882. I other words the OWNER shall continue to be in possession till such time as the contract is discharged by performance and the DEVELOPER shall have only the right of entry to the schedule property for the purpose of this contract.” The Joint Development Agreement also contains a clause regarding completion which reads as follows; “27.1 That, the DEVELOPER agrees to complete the development of the schedule property within 18 calendar months from the date of this Agreement and in case of any un foreseen circumstances, i.e. force majuere, the above said period shall be extended upto 36 (thirty six) calender months period. The time is the essence of this Contract. At the completion of the aforesaid period this Agreement shall stand Cancelled and the OWNER shall be free to transact with the schedule property in any manner the OWNER may choose. However, if here are any Government restrictions, prohibition and orders effecting the development process, this agreement shall be extended upto one year dead line.” 4. At the completion of the aforesaid period this Agreement shall stand Cancelled and the OWNER shall be free to transact with the schedule property in any manner the OWNER may choose. However, if here are any Government restrictions, prohibition and orders effecting the development process, this agreement shall be extended upto one year dead line.” 4. It is clear from this Joint Development Agreement that the plaintiff had only a right to enter upon the land in order to do any developmental work and this agreement would be in subsistence only for 18 months. Since the Joint Development Agreement was entered into on 27/08/2007, as per clause 27.1 the Joint Development Agreement would stand automatically cancelled from 27/04/2009. 5. Clause 26 of the Joint Development Agreement also contemplates that the owner i.e. defendants to execute a power of attorney in favour of a developer which reads as follows; “26. POWER OF ATTORNEY: 26.1 That, the OWNER shall execute a Power of Attorney in favour of the DEVELOPER to do all the acts and/or deeds necessary to carry out the various activities as mentioned in the agreement and any other related or connected matter including the power to execute Agreement for Sale of DEVELOPER’S INTEREST and to receive the money in advance from the intending buyer(s), to execute sale deeds of DEVEOPER’S INTEREST and register the same, present the agreements, sale deed(s) to the Sub-Registrar or Registrar, to admit before the Sub–Registrar or Registrar to sign affidavits, declarations, forms, applications, etc, and to do all other necessary acts and deeds required for registration of sale deed(s) of DEVELOPER INTEREST.” 6. As could be seen from the said clause, the power of attorney was executed only for the purpose of enabling the plaintiff to execute agreements for sale of his (developer’s) interest and to receive money in advance from intending purchasers and to execute the sale deed in respect of the developer’s interest. 7. It is thus clear that under the Joint Development Agreement, the plaintiff was entitled to enter into agreements to sell his share of the developed area. 8. Nearly three years after the deemed cancellation of the Joint Development Agreement, the suit was filed on 26/08/2011 seeking for the aforementioned prayers of declaration and injunction. The said suit has been dismissed by both the Courts, against which this second appeal has been filed. 9. 8. Nearly three years after the deemed cancellation of the Joint Development Agreement, the suit was filed on 26/08/2011 seeking for the aforementioned prayers of declaration and injunction. The said suit has been dismissed by both the Courts, against which this second appeal has been filed. 9. At the time of admission of this second appeal, the following substantial question of law was framed; “Whether an irrevocable Power of Attorney which is said to be coextensive with the joint development of the property, if supported by valuable consideration and coupled with interest for consideration and possession could be cancelled unilaterally under Section 202 of the Indian Contract Act?” 10. By a reading of Clause 26 of the Joint Development Agreement, there cannot be any dispute that the power of attorney was executed only in so far as it related to the plaintiff’s share in the suit schedule property, as a result of the development made by him. In other words, the plaintiff was empowered under the General Power of Attorney to convey that portion of the land which would have fallen to his share pursuant to the development that he undertook in respect of the suit property. If the plaintiff did not develop the land, then the question of subsistence of the General Power of Attorney would not arise at all. 11. It is also to be stated here that the Joint Development Agreement stood automatically cancelled on the expiry of 18 months from the date of execution of Joint Development Agreement. In my view, the General Power of Attorney cannot subsist independent of the Joint Development Agreement. Since the Joint Development Agreement come to an end on 27/04/2009, the plaintiff cannot continue to act under the General Power of Attorney. In my view, no act of either party was necessary either to keep the General Power of Attorney or Joint Development Agreement in subsistence. Since the contractual clause categorically states that the General Power of Attorney would stand automatically cancelled as necessary, a consequent General Power of Attorney, would also stand terminated. 12. Clause 29.1 contemplates that the owner would be free to transact with the schedule property in the manner he may choose fit after the deemed cancellation. I therefore held that the power of attorney would subsist only during the subsistence of Joint Development Agreement. 12. Clause 29.1 contemplates that the owner would be free to transact with the schedule property in the manner he may choose fit after the deemed cancellation. I therefore held that the power of attorney would subsist only during the subsistence of Joint Development Agreement. In other words, the General Power of Attorney would not survive beyond the tenure of the Joint Development Agreement. There is no question of either Joint Development Agreement or the General Power of Attorney being cancelled unilaterally or separately by any other act of the defendant (owner). 13. In other words, the defendants need not have taken any steps to cancel the Joint Development Agreement or General Power of Attorney in view of Clause 27.1 of the Joint Development Agreement. Therefore the question of law is answered in favour of the defendants and against the plaintiff. 14. Hence, this second appeal is dismissed.