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2020 DIGILAW 53 (CAL)

Allied Enterprises v. Rekha Basu

2020-01-14

HARISH TANDON

body2020
JUDGMENT Harish Tandon, J. - The instant appeal is directed against a judgment and decree dated 8th May, 2014 passed by the Learned Civil Judge, Senior Division, 1st Court, Barasat in Title Suit No. 269 of 1999. 2. A suit for specific performance of a contract for sale of the immovable property, as described in Schedule A to the plaint, was instituted by the appellant against the respondent in the Trial Court. It is specifically stated in the plaint that by virtue of an agreement dated 12th August, 1996, the defendants agreed to sale the said property at a total consideration of Rs. 13,16,000/- and a sum of Rs. 8,00,000/- was advanced to them as earnest money. It is further stated that the defendants agreed to sell the said property at Rs. 20,000/- per cottah and since the property also comprised of a tank, a fixed price of Rs. 1,00,000/- was agreed upon. The earnest money of Rs. 8,00,000/- was paid partly in cash and partly by cheque. It is the specific case of the plaintiff/appellant that a sum of Rs. 4,00,000/- was paid by three account payee cheques in favour of the respondent nos. 1, 2 and 3 and the break-up given was that a cheque for Rs.1,00,000/- was issued to the respondent no.1, a cheque for Rs. 1,00,000/- was issued in favour of the respondent no.2 and a cheque for Rs.2,00,000/- was issued in favour of the respondent no.3 . The remaining amount of Rs.4,00,000/- was paid in cash which was duly acknowledged by issuing receipts. 3. It is further stated that the defendants previously sold a piece and parcel of land measuring 2 bighas and 2 cottahs to the plaintiff/appellant by executing and registering a deed of sale on 9th October, 1994, which is almost 40% of the total land owned by them. According to the plaintiff/appellant, though no formal deed of agreement was entered into but it would be evident from the conduct of the defendants and also from the money receipts executed in its favour that, a conclusive contract was entered into and therefore, the plaintiff is entitled to specific performance of such contract. According to the plaintiff/appellant, though no formal deed of agreement was entered into but it would be evident from the conduct of the defendants and also from the money receipts executed in its favour that, a conclusive contract was entered into and therefore, the plaintiff is entitled to specific performance of such contract. It is expressly stated in the plaint that the entire property is a part of the property which was already sold to the plaintiff/appellant and he was in occupation as tenant upon payment of rent at Rs.3,000/- per month and the plaintiff was all along paying the municipal rates and taxes applicable thereto. 4. As per the plaintiff, after such agreement was entered into, they have taken several steps by removing the care-taker and spending money in order to preserve and protect the said property. Though the plaintiff was all along ready and willing to perform his obligations under the said agreement but subsequently, the defendants refused to execute and register the deed of sale and therefore, the present suit has been filed.The plaint was thereafter amended and an alternative prayer for refund of the earnest money was also incorporated therein. 5. The respondent nos. 1, 2 and 3 jointly filed the written statement with an intent to contest the said suit. A specific allegation has been made therein that there was no agreement ever entered into for sale of the suit property. However, the said amount of Rs.8,00,000/- was taken as loan since the aforesaid defendants was undergoing financial crisis at the relevant point of time. 6. However, the respondent nos. 4 and 5 who are the daughters of the respondent no.1 separately filed the written statement denying the execution of the agreement for sale. It is specifically stated that they had never entered into any agreement for sale of the property nor did they receive the amount allegedly advanced by the plaintiff as earnest money. 7. Such being the pleadings, the parties went on trial and the defendant no.1 as constituted attorney of the defendant nos.2 and 3 deposed as first witness. The respondent no.4 deposed as second witness on behalf of the other defendant. 8. The Trial Court rejected the claim of specific performance of the said agreement but decreed the suit directing the defendant no.1/respondent no.1 to refund the said amount of Rs. 8,00,000/- with interest at the prime-lending rate of the bank. The respondent no.4 deposed as second witness on behalf of the other defendant. 8. The Trial Court rejected the claim of specific performance of the said agreement but decreed the suit directing the defendant no.1/respondent no.1 to refund the said amount of Rs. 8,00,000/- with interest at the prime-lending rate of the bank. 9. The appeal has been filed by the plaintiff/appellant primarily on the refusal to pass a decree for specific performance of the said agreement. 10. Mr. Ayan Banerjee, the learned Advocate for the appellant submits that the Trial Court committed error in refusing to pass a decree for specific performance even after holding that the money receipt proves the concluded contract was entered into in favour of the plaintiff. He further submits that there is a manifest error in the impugned judgment when the Trial Court has held that the respondent no.1 did not have an authority or power to execute an agreement for sale for and on behalf of the other defendants in absence of any express provision contained in the power of attorney executed by the said defendants. It is thus submitted that a portion of the entire property was sold in favour of the plaintiff/appellant by executing and registering the deed by the respondent no.1 as constituted attorney of the respondent nos. 2 and 3 on the basis of the said power of attorney and the said respondent nos. 2 and 3 have never taken any steps nor contended that no authority was given to the respondent no.1. It is strenuously submitted that the Learned Judge in the Trial Court has made out a third case, which was neither pleaded by the said respondent nos. 1 to 3 nor taken in the evidence. It is thus submitted that the evidence which is de hors the pleading cannot be looked into by the Court as held by the Supreme Court in the case of Union of India vs. Ibrahim Uddin & anr., (2012) 8 SCC 148 . 11. Mr. Banerjee further submits that although the respondent nos. It is thus submitted that the evidence which is de hors the pleading cannot be looked into by the Court as held by the Supreme Court in the case of Union of India vs. Ibrahim Uddin & anr., (2012) 8 SCC 148 . 11. Mr. Banerjee further submits that although the respondent nos. 4 and 5 were not signatory in the agreement in the form of money receipts but such agreement can be deciphered from the written statement filed by them in a previous proceeding filed by the plaintiff and he contends that such admission remains binding on the aforesaid respondents and placed reliance upon a judgment of the Supreme Court in the case of Basant Singh vs. Janaki Singh & ors., (1967) AIR SC 341 and Thimmappa Rai vs. Ramanna Rai & ors., (2007) 14 SCC 63 . Mr. Banerjee would further submit that the Trial Court misinterpreted the judgment of the Supreme Court rendered in the case of Suraj Lamp and Industries Private Limited vs. State of Haryana & anr., (2012) 1 SCC 656 wherein a question was decided that whether general power of attorney can be construed as sale. According to Mr. Banerjee, the aforesaid judgment did not lay down any absolute proposition of law that the constituted attorney cannot execute the sale deed for and on behalf of the principal and in fact, a part of the property was sold to his client as constituted attorney on the basis of the self-same power of attorney. 12. Mr. Saha, the learned Advocate appearing for the respondent nos. 1, 2 and 3 submits that there was no agreement for sale ever entered into by the respondent nos. 1, 2 and 3 and therefore, the Court has rightly refused to pass a decree for specific performance. Mr. Saha further submits that the constituted attorney cannot act in derogation to the powers given by the principal and if no power to execute the sale or enter into an agreement is provided in the power of attorney, any action done by the constituted attorney shall not bind the principal. In support of the aforesaid contention, Mr. Saha relies upon a judgment of the Supreme Court in the case of Church of Christ Charitable Trust and Educational Charitable Society vs. Ponniamman Educational Trust, (2012) 8 SCC 706 . 13. Mr. In support of the aforesaid contention, Mr. Saha relies upon a judgment of the Supreme Court in the case of Church of Christ Charitable Trust and Educational Charitable Society vs. Ponniamman Educational Trust, (2012) 8 SCC 706 . 13. Mr. Saha strenuously argues that the granting of relief of specific performance is discretionary in nature and if a discretion is exercised by the Trial Court in not granting such relief the Appellate Court should not ordinarily interfere with such discretionary order/judgment. He further submitted that if there was no authority given to the respondent no.1 to enter into an agreement for sale, there is no infirmity in the impugned judgment and placed reliance upon a judgment of the Supreme Court in the case of S. Abdul Khader vs. Abdul Wajid(Dead) by LRS. & Ors., (2008) 9 SCC 522 . 14. Mr. Saha thus submits that, the respondent nos. 2 and 3 never authorised respondent no.1 to enter into an agreement for sale and there is no illegality and/or infirmity in the findings made by the Trial Court in this regard. Mr. Saha further submits that the Trial Court rightly assessed the pleading and the evidence adduced by the respective parties and refused to pass a decree for specific performance. 15. Mr. Sunderananda Pal, the learned Senior Advocate appearing for the respondent nos. 4 and 5 is very categorical in his submission that his client never executed any agreement for sale of the suit property. He further submits that the plaintiff/appellant knew that his clients never executed any power of attorney in favour of the respondent no.1 nor it would be evident from the agreement in the form of money receipt that there is any signature appended by his clients. He submits that there was no admission as to the agreement alleged by the plaintiff in a pleading filed in the previous suit and therefore, it is preposterous to suggest that there was any admission made by his clients. He thus submits that since his clients were not a party to the alleged agreement, the Trial Court has rightly held that there was no agreement ever executed by them nor they received any amount out of the earnest money paid to the respondent no.1. 16. He thus submits that since his clients were not a party to the alleged agreement, the Trial Court has rightly held that there was no agreement ever executed by them nor they received any amount out of the earnest money paid to the respondent no.1. 16. At the very outset we must record that the Trial Court has held that there was an agreement for sale of the suit property but such agreement was executed by the respondent no.1 alone. It is the specific finding of the Trial Court that the respondent nos. 2 and 3 never authorised the respondent no.1 to act as constituted attorney and therefore, the said agreement is valid visa-vis the respondent no.1. The Trial Court refused to pass a decree for specific performance of an agreement invoking the provisions contained in Section 12 of the Specific Relief Act, 1963, as specific performance cannot be granted for negligible share. 17. The respondents have not challenged the said decree nor filed any cross-objection that the finding recorded by the Trial Court on the validity and/or legality of the agreement for sale is erroneous, infirm and not based on the materials of the case. The plea of the respondent nos. 1 to 3 that the said amount of Rs.8,00,000/- was infact taken as a loan and not relatable to the sale of the suit property, was held against the aforesaid respondents. However, the Trial Court found that the respondent nos. 4 and 5 did not receive any amount out of the said earnest money either from the appellant or from the respondent no.1 and therefore, there is no agreement for sale of the property, so far as, to the extent of their share in the suit property is concerned. 18. It is pertinent to record that the agreement was impounded by the Court and after the payment of the ascertained stamp duty with penalty, the document was received in evidence and marked Exhibit therein. Before we proceed to decide the issue pertaining to the authority and power given to the respondent no.1 by the other respondents we find that there is prevarication of the stand by the respondent no.1 who stood as the first witness and deposed not only on her behalf but on behalf of her sons namely respondent nos. 2 and 3. Before we proceed to decide the issue pertaining to the authority and power given to the respondent no.1 by the other respondents we find that there is prevarication of the stand by the respondent no.1 who stood as the first witness and deposed not only on her behalf but on behalf of her sons namely respondent nos. 2 and 3. The written statement filed by them was duly signed by the respondent no.1 as constituted attorney is expressive to the extent that, the said sum of Rs.8,00,000/- was admitted to have been received as a loan and not for the sale of the suit property. However, the said witness while standing in the witness box admitted the execution of an agreement and receipt for the said sum of Rs. 8,00,000/- for sale of the suit property. She further deposed that the amount was received as an earnest money, partly in cash and partly in cheque and she had signed on those documents. She further admitted that the said amount was received against the proposed sale of the suit property and in fact, the cheques issued in favour of her sons were deposited in their respective accounts. Precisely for such admission having being made in the cross-examination, the Trial Court held that there was a valid agreement executed by her but such agreement should be restricted to her share in the suit property and cannot bind the respondent nos. 2 and 3. 19. Admittedly, the respondent no. 1 sold, transferred and conveyed a portion of the property to the plaintiff by executing a sale deed and signing the same as constituted attorney of the respondent no. 2 and 3. Though no plea was taken in the written statement nor in evidence that she was not authorised to enter into an agreement for sale as constituted attorney for and on behalf of the respondent nos.2 and 3, yet, the Trial Court proceeded to hold that in absence of any specific power given in the Power of Attorney, she cannot act as an agent of the principal. It is no longer res integra that the suit is decided on the basis of pleadings and the evidence and the Court cannot make out a third case of its own. It is no longer res integra that the suit is decided on the basis of pleadings and the evidence and the Court cannot make out a third case of its own. The respondent no.1 acted as the constituted attorney on the strength of the self-same power of attorney and executed the sale deed for and on behalf of respondent nos. 2 and 3 and thus, while executing and registering the sale deed in respect of the portion of the larger property, she cannot retract and take a plea that in absence of any express power she was not authorised to enter into an agreement for sale. Furthermore, the respondent nos. 2 and 3 never repudiated the said sale deed nor challenged the same on the above ground; rather they accepted the act of the respondent no.1 as attorney duly authorised in the said power of attorney to effect the sale of their shares. 20. There is no quarrel to the provision of law laid down in Church of Christ Charitable Trust and Educational Charitable Society (supra) that in order to sale or effect the sale by a power of attorney there must be an express power conferred upon the constituted attorney to execute the sale deed. In the aforesaid case, the appellant society entered into an agreement for sale in favour of the second defendant with the stipulation that the entire transaction should be completed within six months after obtaining necessary clearance from the Income Tax authorities and the other departments and received a sum of Rs. 5,00,000/- as advanced. Subsequently, the said society executed a registered power of attorney in favour of the second defendant empowering him to represent the society before the statutory authorities. The said power of attorney was subsequently revoked citing various reasons and thereafter, the agreement for sale was cancelled. Assailing the said cancellation of the agreement a suit was filed before the High Court of Madras for specific performance of the said cancelled agreement. The High Court rejected the plaint, so far as the first defendant is concerned and directed the suit to be proceeded against the second defendant. The said order was carried to a Division Bench of the High Court and upon its dismissal; the matter was taken to the Apex Court. The High Court rejected the plaint, so far as the first defendant is concerned and directed the suit to be proceeded against the second defendant. The said order was carried to a Division Bench of the High Court and upon its dismissal; the matter was taken to the Apex Court. In the backdrop of the above, the Apex Court held that the moment there is a serious dispute on the interpretation of the clauses mentioned in the power of attorney and the powers given to the agent, the power of attorney is to be construed strictly and if there is any absence of power authorising the sale, or to enter into an agreement for sale the same is beyond such authority and cannot bind the principal. 21. There is no dispute ever raised on the power of attorney executed by the respondent nos. 2 and 3 in favour of the respondent no.1. The power of attorney gives an unbridled power to the constituted attorney to do, execute and perform all acts relating to their concern and the business in their absence and in fact, the respondent nos.1 as constituted attorney acted in such capacity on the strength thereof and executed the previous sale deed conveying a portion of the larger property to the appellant. 22. A plea has been taken that the Power of Attorney Act, 1882 prescribes the mode of the execution and the corresponding statutory obligations contained therein. We do not detain us to go into the intricacies of the aforesaid provisions for the said reason that neither in the pleadings nor in the evidence, any such plea has been taken by the aforesaid respondents and therefore, anything which is beyond the record should not be taken as a point in the suit. The entire evidence of the respondent no.2 who deposed on behalf of the respondent no.2 and 3 is silent on the above aspect. On the other hand she stood in the witness box and categorically stated that she is deposing on behalf of her sons i.e., respondent no. 2 and 3 on the strength of an authority given to her. 23. Even in the case of Suraj Lamp and Industries Private Limited (supra) it has not been laid down in absolute terms that the constituted attorney cannot execute the sale deed or enter into an agreement for sale. 2 and 3 on the strength of an authority given to her. 23. Even in the case of Suraj Lamp and Industries Private Limited (supra) it has not been laid down in absolute terms that the constituted attorney cannot execute the sale deed or enter into an agreement for sale. What has been held is that the concept of sale while executing a power of attorney is not recognised in law. In the said report, the power of attorney was construed as a sale deed which was negated by the Supreme Court in the following:- "23. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank, (2001) 94 DLT 841 , that the "concept of power of attorney sales have been recognized as a mode of transaction" when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law. 24. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. 25. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. 25. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship." 24. We, thus, find that the decision of the Trial Court in this regard was unwarranted and beyond the scope of the issues involved therein. 25. Reverting to the other issue, it is undeniable that there was a valid agreement for sale executed by the respondent no.1 as constituted attorney of the respondent no.2 and 3. The Trial Court refused to grant relief for specific performance, as the said agreement was restricted to the share of the respondent no.1 and invoked the provisions contained u/s Section 12 of the said Act. Since we have held that the respondent no.1 was duly authorised by the respondent no.2 and 3 to act as constituted attorney for and on their behalf, let us examine whether Section 12 of the said Act has any manner of applicability in the instant case. 26. There appears to be a serious dispute on the shares held by the parties in respect of the suit property. According to the respondent no.1, upon the death of her husband she along with her four children inherited the same in equal shares meaning thereby each child having 1/5th share therein. It was a specific case of the appellant that, initially the property belonged to the grandfather of the respondent nos. 2 to 5 and upon his death, it devolved upon the husband of the respondent no.1 and the father of the respondents along-with her aunt being the sister of the father. The parties are at variance whether the said aunt relinquished and/or divested her share in favour of her father or in favour of the respondent no.3. 2 to 5 and upon his death, it devolved upon the husband of the respondent no.1 and the father of the respondents along-with her aunt being the sister of the father. The parties are at variance whether the said aunt relinquished and/or divested her share in favour of her father or in favour of the respondent no.3. The undeniable position as it appear is that the said aunt has divested her share which she inherited on the death of her father. In the cross-examination the D.W.1 and the D.W. 2 admitted that the said aunt gave her share to the respondent no.3 and not to her other brother. The aforesaid facts would further be corroborated from the earlier sale deeds executed by the respondents wherein the respondent nos. 1, 2, 4 and 5 admitted their share to the extent of 10% and rest in favour of the respondent no.3. Naturally upon the death of the original owner who left behind a son and her daughter both acquires shares equally and if the aunt divested her share in favour of the respondent no. 3, he would acquire more share than the share acquired by the other respondents upon the death of the father. 27. Naturally, the 50% share of the father devolved upon the five respondents in equal shares and since the remaining 50% was given to the respondent no. 3, he acquired 60 % share in the said property. 28. Since there is no dispute on the validity of the agreement for sale and we have held that the respondent no.1 in fact acted as constituted attorney under the authority given by the respondent no.2 and 3, at best the agreement shall be held to be valid to the extent of 80% share. 29. So far as the defence of the respondent no.4 and 5 are concerned, they have categorically stated that they never executed the said agreement nor received any amount out of the earnest money paid through the respondent no.1, the appellant have failed to prove any agreement with them and reliance appears to have been placed on the previous pleading filed by the said respondents in an earlier suit. We have examined the averments made therein and do not find that there is a clear admission of any agreement having entered into by the said respondents for sale of the suit property. 30. We have examined the averments made therein and do not find that there is a clear admission of any agreement having entered into by the said respondents for sale of the suit property. 30. It is no longer res integra that the admission in the previous pleading binds the parties in subsequent suits as well as held in Thimmappa Rai (supra) and Basant Singh (supra). The admission must be clear, lucid and unconditional. The appellant could not take out anything from the deposition of the D.W. 2 that they, in fact, agreed to sale their shares in the suit property. If the parties have not agreed to sale their shares held in the suit property, merely because the other co-sharers have agreed to sale their shares, they cannot be forced to join the said agreement. It is further manifest from the earlier sale deed that the said respondents i.e. respondents nos. 4 and 5 put their signature therein and received a consideration in commensurate with the shares held by them therein. 31. We, thus, do not find that the respondents no. 4 and 5 ever entered into an agreement for sale of the suit property and therefore, the appellant is not entitled to get the relief of specific performance against them. Since the moiety share i.e. the 80% share was agreed to be sold by the respondent nos. 1, 2 and 3, there is no applicability of Section 12 of the Specific Relief Act 1963 and therefore, the findings of the Trial Court cannot be accepted. 32. The impugned judgment is thus, set aside. 33. The appellant shall get a decree for specific performance of the said agreement for sale against the respondent nos. 1, 2 and 3. They are directed to execute the sale deed in favour of the appellant within two months from the date of this order failing which, it is open to the appellant to take recourse to law. 34. The decree for specific performance against the respondent no. 4 and 5 is refused. 35. The appeal succeeds. 36. No order as to costs. 37. Urgent certified website copy of this judgment, if applied for, be given to the parties upon compliance with all requisite formalities. Later After delivery of this judgment, the Learned Advocate appearing for the respondent nos. 1 to 3 prays for stay of operation of this judgment. 35. The appeal succeeds. 36. No order as to costs. 37. Urgent certified website copy of this judgment, if applied for, be given to the parties upon compliance with all requisite formalities. Later After delivery of this judgment, the Learned Advocate appearing for the respondent nos. 1 to 3 prays for stay of operation of this judgment. After deliberating over such prayer, we do not find that it is a fit case to accede to such prayer. The prayer is thus refused.