Syed Abdulkhader Vs. Rami Reddy &
Ors [1978] INSC 242 (29 November 1978)
DESAI, D.A.
DESAI, D.A.
SHINGAL, P.N.
CITATION: 1979 AIR 553 1979 SCC (2) 601
ACT:
Powers of Attorney Act, 1882(7 of 1882), s.
2-Three principals if could jointly constitute an agent by a 'power of
attorney'-Construction-Surrounding circumstances if could he taken for
ascertaining the intention of the parties.
Code of Civil procedure 1908 (Act 5 of 1908)
Or. 41 Y. 27-No right conferred on a party to produce additional evidence Only
court hearing action has jurisdiction to permit.
Transfer of Property Act 1882(4 of 1882) S.
41 & Trusts Act 1882(2 of 1882)-s. 82-Benami Transaction-Ingredients of.
HEADNOTE:
The plaintiff (appellant), his father and
step brother were owners of lands in a village in the former State of
Hyderabad. Coming to know that the two brothers and father were contemplating
to migrate to Pakistan, defendant No. 1 suggested to the plaintiff that he
would manage their properties but that since he was not in good health, a
nominal power of attorney might be granted in favour of defendant No. 34. The
power of attorney (Ext. Pl) was granted tc defendant 34 by all of them. It was
later supplemented by another deed (Ext. P2). The plaintiff alleged that
sometime thereafter he realised that the two defendants in collusion with each
other transferred his lands to others for no consideration or inadequate
consideration and that thereby a fraud was perpetrated upon him by the
defendants. Thereupon, it was further alleged, the plaintiff and his brother
published in the newspapers and the official gazette a notice cancelling the
power of attorney granted to defendant No. 34. The plaintiff sued the
defendants for recovery of possession of lands and certain other benefits.
The defendants on the other hand claimed that
the two documents being valid the plaintiff could not resile from them. They
also alleged that the plaintiff was not the full and absolute owner of the
lands but was a benamidar.
The trial court dismissed the plaintiff's
suit holding that the documents were valid The High Court upheld the trial
court's order. It however held that the plaintiff was the absolute owner of the
suit properties Dismissing the appeals.
HELD 1(a) There is no force in the contention
that it is impermissible for three persons to jointly grant a power of attorney
in favour of defendant no. 34. Co-principals may jointly appoint an agent to
act for them and in such a case they become jointly liable to him and may
jointly sue him.
[430C,F] (b) The relation of agency arises
when one person, called the agent, has authority to act on behalf of another
called the principal and consents so to act. The relationship has its genesis
in contract. In order to show that it is impermissible for three principals to
jointly constitute an agent by a common power of attorney it should be shown
that the provisions of Contract Act or the general law of contract have been
violated by such a contract. [430E] In the instant case there is no such
violation.
Halsbury's Laws of England Vol. 1 4th Edn.
para 726 referred to.
2. There is no force in the contention that
since the two documents confer a joint power of attorney in respect of
properties of the three co-principals, the agent could look after the joint
properties of the donors alone and not their individual affairs. What a power
of attorney authorises depends on its terms and the purposes for which it was
executed. Where someone other than the person Who has the right to act in
respect of certain things, has under a contract of agency, the right to act on
behalf of the principal, the authority conferred by the written instrument has
to be strictly construed. Ordinarily the power of attorney is construed
strictly by courts. It is equally well established that in considering a
contract it is legitimate to take into account the surrounding circumstances
for ascertaining the intention of the parties. [430H, 431A, 431H 432A, F]
Bryant, Powis and Bryant Ltd v. La Banque du Peuple, 1893 A.C. 170 at 177, Modi
& Co. v. Union of India, [1963] 2 SCR 565: referred to.
In the instant case in Ext. P1 at three
places the expressions used are" our power of attorney to act on our
behalf and we empower the said person`'. 'on our behalf in all
departments", and lastly, "acts done and effected by the agent shall
be deemed to be acts done and effected by the principals." The power of
attorney having keen granted by three co-principals in favour of one agent the
expression "on our behalf" would hardly be decisive of the scope of
authority conferred by the deed. The surrounding circumstances clearly
established that each of the co- principals had his land, each of them could
not have access to this land and therefore could not manage them, and with a
view to migrating to Pakistan each of them apparently wanted to dispose of his
lands and collect cash and therefore for this purpose each of them wanted to
constitute defendant no.
34 to be his agent in respect of his
individual property.
1432C. G, 433F]
3. A general power of attorney is not a
compulsorily registrable document. When those who executed a deed admit having
executed it, the tact that the Sub-Registrar failed to endorse that the
executants were known to him would not render the deed invalid. Nor is there a
legal obligation on the part of the Sub-Registrar to make an endorsement that
the persons executing a deed were either personally known to him or were
identified by someone known to him. [434C, B]
4. There is no force in the submission that
the authority given under Ex. P1 was only to manage the property and not to
sell it. Ext. P1 clearly shows that apart from the power to manage the property
a further power to purchase and sell lands was conferred on the agent. The
general power of attorney conferred wide authority on defendant no. 34 to file
suits, defend actions. engage lawyers. purchase and sell land and execute sale
deeds and so on. [434D-E, 435A]
5. A document will be considered as a whole
for interpretation of particular words or directions. An ordinary authority
given in one part of the instrument will not be cut down because there are
ambiguous and uncertain expressions elsewhere. A power of wide amplitude
conferring wide authority cannot by 9-978 SCI/78 426 construction be narrowed
down to deny an authority which the donor expressly wanted to confer. [436B]
Halsbury's Laws of England 4th Edn. Vol. 1 para 733;
referred to.
6. (a) By a catena of decisions of this Court
it is well established that Order 41 Rule 27 C.P.C. does not confer a right on
a party to produce additional evidence before an appellate court. But if the
court hearing the action requires any document to enable it to pronounce
judgment, it has the jurisdiction to permit additional evidence to be produced.
If the High Court considered production of registered sale deeds essential to
enable it to pronounce judgment, there is no reason why this Court should
interfere with the discretionary power properly exercised by the High Court in
the interest of justice.
[439E-F]
7. (a) The contention that defendant no. 34
who was the constitute attorney acted as a mere rubber stamp in certain
transactions has no force. Section 41 of the Transfer of Property Act provides
that where, with the consent, express or implied of the person interested in
immovable` property, a person is the ostensible owner of such property and
transfers the same for consideration, the transfer shall not be voidable on the
ground that the transferor was not authorised to make it. [436D, 437F] (b) Even
if the father of the plaintiff could be said to be the ostensible owner of the
land and he purported to sell the land, the plaintiff had acquiesced in the
sale and accepted the consideration. He would therefore be estopped from
challenging the tile which was transferred pursuant to the sale. [437E]
Ramcoomar v. Macqueen, 1872 I.A. 11 Bengal LR 46;
referred to.
8. (a) The contention that the plaintiff was
a benamidar cannot be accepted. The genesis of the concept of benami is that
consideration for a transfer must flow from one person and the transfer is
taken in the name of the other person and the consideration so flowing for the
transfer was not intended to be a "gift in favour of the person in whose
name the transfer is taken. All these ingredients of benami ale absent in the
instant case. [440H] (b) Section 82 of the Indian Trusts, Act, 1882 provides
that where property is transferred to one person for a consideration paid or
provided by another person, and it appears that such person did not intend to
pay or provide such consider for the benefit of the transferee, the transferee
must hold the property for the benefit OF the person paying or providing, the
consideration. [440F] (c) The plaintiff's father held a high office in the
Nizam's Government. He might have influenced the Nizam to grant the land to his
son. There is no evidence to show that the patta was for consideration. Even if
the Nizam in appreciation of the service rendered by the plaintiff's father
granted the land to the plaintiff it could not be said that any consideration
flowed from the father of the plaintiff so as to make him a benamidar. [440E,
G]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1271 of 1969.
Appeal from the Judgment and Order dated 17-8-1966
of the Andhra Pradesh High Court in Appeal Nos. 252 and 283 of 1960.
427 V. Gopala Krishnaiah,, A. K. Ganguli and
D. P. Mukherjee for the Appellant.
Upendralal Waray and A. Subba Rao for the
Respondent.
The Judgment of the Court was delivered by
DESAI J. This appeal by certificate granted under Article 133(1)(a) of the
Constitution arises from Civil Suit No. 23/1 of 1952 filed by the appellant
against 56 respondents for recovering possession of lands more particularly set
out in the Schedule annexed to the plaint, mesne profits, accounts and
injunction, which suit was largely dismissed and partly decreed by the trial
Court but in appeals bearing A. S. Nos. 252 and 283 of 1960 by the unsuccessful
defendants and the plaintiff, respectively, as dismissed as a whole.
A brief narration of facts necessary for
appreciating the contentions raised herein may be set out. Plaintiff- appellant
is the son of late Kazim Yar Jung who was a Minister of H.E.H. the Nizam of
Hyderabad. The father of the plaintiff obtained grant of certain lands in
Ryalamadugu village from the Government of Nizam, the patta having been granted
in the name of the plaintiff. At about the time of police action in 1948 when
the local conditions in Hyderabad City and State were disturbed, the plaintiff,
his father Kazim Yar Jung and his step brother Mustafa found it difficult to
even approach their lands and the plaintiff was then contemplating to shift to
Pakistan with others.
Defendant No. 1 Rami Reddy who was a police
Patel approached the plaintiff and represented that he would manage the affairs
of the plaintiff, his brother and father, out that is he was not keeping well a
nominal Power of Attorney would have to be granted to defendant no. 34 Uppara
Sattayya whereupon the plaintiff, his father and brother jointly executed a
Power of Attorney, Ext. P-1 dated 10th April 1949 in favour of defendant no. 34
which was further supplemented by the deed Ext. P-2 dated 20th April 1949. The
plaintiff alleged that in October 1949 he came to know that defendants nos. 1
and 34 were perpetrating fraud when on 25th October 1949 the plaintiff and his
brother Mustafa published a notice in the newspapers and the Gazette cancelling
the Power of Attorney granted in favour of defendant no. 34.
Plaintiff then came to know that defendant
nos, 1 and 34 and other defendants in collusion with each other got Transferred
the lands of the plaintiff for inadequate or 110 consideration and that a fraud
was perpetrated. The plaintiff further alleged that the Power of Attorney is
vague and void and inoperative and would not clothe defendant no. 34 with legal
authority to deal with the properties in the manner in which they have been
dealt 428 with. At any rate, the Power of Attorney did not clothe defendant no,
34 with the authority to sell the land and, therefore, the purchasers have not
acquired any title to the lands purporting to have been sold by defendant no.
34. The plaintiff accordingly sued for possession, mense profits and accounts
from the defendants.
Different groups of defendants filed three
separate written statements but more or less the contentions raised in the
various written statements are identical. The first contention is that the
plaintiff was not the lull and absolute owner of the suit lands but was a
benamidar inasmuch as the lands were granted to the father of the plaintiff who
was a Minister in the Nizam's Government but the patta was formally taken in
the name of the plaintiff who was then a minor. It was also contended that the
Power of Attorney, Ext, P-l with P-2 was legal and valid and binding and it
clothed del`defendant 34 with an authority to sell the lands and different
parcels of lands have been sold to different defendants for full consideration
and the plaintiff was aware of it and is now trying to take an advantage on the
basis of a technical plea. There were some other contentions which at this
stage are hardly relevant.
The trial Court held that the plaintiff was
the full and absolute owner of the suit properties. The Power of Attorney Ext.
P-1 was not vitiated by fraud and has clothed defendant No. 34 with the
necessary authority to sell the lands and the sale of different parcels of
lands in favour of different defendants were not vitiated by fraud and each
sale was for consideration and binding on the plaintiff. The Trial Court
further held that the properties bearing Items 27 to 40, 42-44, 46, 47, 55-67
and 69 set out in the' Schedule annexed to the plaint were not proved to have
been sold, the conclusion having been based on the only ground that no sale
deeds were forthcoming and accordingly it was held that the plaintiff was
entitled to recover possession of the aforementioned pieces of land. The trial
Court accordingly dismissed the suit except for the aforementioned pieces of land
in respect of which a decree for possession and mesne profits was granted in
favour of the plaintiff.
Two appeals came to be filed to the High
Court. Appeal bearing A. S. 252/60 was preferred by original defendants 8, 9
and 11 to the extent decree was made against them by the trial Court. Appeal
bearing A.S. 283/60 was preferred by the plaintiff to the extent the suit was
dismissed. Both the appeals came to be disposed of by a Division Bench of the
Andhra Pradesh High Court by a common judgment rendered on 17th August 1966 by
which A.S. 252/60 preferred by original defendants 8. 9 and 11 was allowed and
the decree made against them 429 in favour of the plaintiff was set aside, and
A.S. 283/6 preferred by the plaintiff was dismissed. As a consequence the
entire suit of the plaintiff came to be dismissed with costs in one set.
The plaintiff thereupon approached the High
Court for a certificate and on a certificate under Article 133(1) (a) being
granted, the plaintiff lodged the present appeal.
When the appeal reached the stage of hearing
on an earlier occasion, CMP. 17845/78 was filed requesting the Court to record
a memorandum of compromise between the appellant and the legal representatives
of respondents 1, 2, 3, and respondent 34 inviting the Court to dismiss the
appeal of the plaintiff appellant against them. By an order made by this Court,
this compromise was recorded and the appeal was so down for further hearing
against the remaining respondents. We take note of this compromise because on
the basis of this compromise a submission has been made on behalf of the
remaining respondents that the appeal against them would no more survive.
Mr. V. Gopalakrishnayya, learned counsel for
the appellant urged that it is impermissible in law to give a joint Power by
three persons in favour of one agent.
Alternatively it was contended that if such a
power of Attorney is legal and valid it would clothe the agent with the only
authority to Act in respect of the joint affairs or property of the principals
and not for any individual affair or property of any one of them. It was
further urged that upon a true construction of the authority conferred by the
Power of Attorney, Ext-P-1 the scope of authority only encompassed the
management of the joint properties of the three co-principals or at best the
management of property of each one of the principal but it did not clothe him
with an authority to sell the property of any one of them and the situation is
not improved by the supplementary deed, Ext. P-
2. Alternatively it was contended that if Ex.
P-1 conferred an authority to sell the land it was hedged in with a
prerequisite that the property can be sold to finance the litigation or to
repay the loan, if any, borrowed for the aforesaid purpose. In this context it
was submitted that the Court should bear in mind that the garden is on the
party who seeks to rely on the authority of the constituted attorney to
establish that the impugned transaction falls within the ambit of authority of
the attorney, and in this connection it may be borne in mind that ordinarily
the courts construe Power of Attorney strictly. It was then urged that even if
it is held that by the combined operation of Exts. P-1 and P-2 the Attorney had
the authority to sell the land he had not acted on his own but merely completed
the sale negotiated by an outsider and thereby he acted as a rubber stamp and
such an act of the attorney would not bind the principal, and in that 430 event
the purchaser did not acquire any title to the land.
It was also contended that the High Court was
in error in admitting the three sale deeds by granting CMP. 2762/61 purporting
to act under Order 41, rule 27, Civil Procedure Code, and if they are excluded
from consideration, in the absence of sale deeds the decree of the trial Court
against original defendants 8, 9 and 11 will have to be restored.
On behalf of the contesting respondents it
was urged that the plaintiff being benamidar, cannot maintain the suit on the
allegation that he is the full and absolute owner of the properties.
The first contention of the appellant is that
it was impermissible in law for three persons to jointly grant a Power of
Attorney in favour of defendant 34. Barring the ipse dixit of the learned
counsel nothing was shown to us to make such a joint power impermissible in
law. The relation between the donor of the power and the donor of the power is
one of principal and agent and the expression 'agency' is used to connote the
relation which exists where one person has an authority or capacity to create
legal relations between a person occupying the position of principal and third
parties. The relation of agency arises whenever one person called the agent has
authority to act on behalf of another called the principal and' consents so to
act. The relationship has its genesis in a contract. If agency is the outcome
of a contract between the principal and the agent, in order to show that three
principals jointly constituting an agent by a deed called 'Power of Attorney'
was impermissible, provisions of Contract Act or the general law of contract
should have been shown as having been violated by such a contract. Nothing of
the kind was pointed out to us. On the contrary, in Halsbury's Laws of England,
Vol. I, 4th Edn. para 726, the following proposition has been stated:
"Co-principals may jointly appoint an
agent to act for them and in such case become jointly liable to him and may
jointly sue him." We are in agreement with this view and, therefore, three
principals could jointly appoint an agent.
The next limb of the submission was that if
three co- principals jointly constituted an agent then unless contrary is
indicated by the deed of the Power of Attorney, the necessary inference would
be that the agent can act in respect of those affairs in which all the
co-principles are jointly interested. In other words, it was said that such a
Power of Attorney would clothe the agent with an authority to act in respect of
joint affairs of the co-principals. We are unable to find any force in this 431
argument, for what the Power of Attorney authorises depends on its terms and
the purpose for which it is executed. It would, therefore, be necessary to
refer to the Power of Attorney, Ext. P-l and the supplementary deed, Ext. P-2.
Ext. P-l is dated 10th April 1949 and is
styled as general Power of Attorney. The co-principals are: (1) plaintiff Syed
Abdul Khader (2) Kazim Yar Jung, and (3) Syed Mustafa Hussain. The purpose for
which the power was executed is set out in Ext. P-l in the following words:
". ..that in view of our private needs
and as we are unable to conduct cases and answer them in time, we therefore
appoint Copper Sattayya son of Coper Durgayya resident of Ghanpur, Medak Taluq
as our general power of Attorney to act on our behalf and we empower the said
person through this power of Attorney that the said Muktar can conduct the
cases (Parvi) of all sorts, question and answer, admit or deny, either orally
or writing on our behalf in all departments, civil and criminal courts, in the
High Court, in the judicial committee, in the Revenue Departments of the
Districts, namely, in the offices of the IInd, IIIrd, and Ist Taluqdars, the
Tahsil Offices etc and purchased or sell (sic) of lands and that he is
authorised to appoint any pleader or special Muktar when occasioned (sic) and
to stop or to take or file any copies in any suit or to file any suit or file
any written statements with his own signature to fetch any loan for our
business or lands or to pay the debts from out of the income of the estate or
to purchase or sell the lands and to execute the sale deeds and get registered
under his signature etc ... " The last sentence is that "all the acts
of the said Muktar shall be deemed to be acts done and effected by us which we
hereby accept and approve". Subsequently on 20th April 1949 a
supplementary Power of Attorney in addition to Ext. P-l was executed by the
aforementioned three donors of Power in favour of defendant no. 34 in which it
is specifically stated that they affirm earlier Power of Attorney dated 10th April
1949 and thereafter the relevant recital is as under:
".. .But by the said document, the
powers of sale and registration were not confirmed (sic) on him and that
therefore through this deed the same is hereby confirmed (sic) on him'.
It was urged that the Court should bear in
mind the first principle that a Power of Attorney has to be strictly construed.
Undoubtedly, where someone other than the person who has a right to act in
respect 432 of certain things has, under a contract of agency, the right to ac.
On be-half of principal, the authority conferred by the written instrument has
to be strictly construed.
Ordinarily a Power of Attorney is construed
strictly by Courts (vide Bryant, Powis and Bryant Ltd. v. La Banque du Peuple)
(1).
Adopting the principle of strict construction
of a Power of Attorney, the first question that is required to be answered is
whether the Power of Attorney, Ext. P-l was meant to confer the authority on
the agent to act only in respect of the joint affairs or joint property of the
co- principals or it was in respect of the individual affairs and effects of
each principal. In Ext. P- 1 at three places the expression used is: "our
Power of Attorney to act on our behalf and we empower the said person";
then again "on our behalf in all departments", and then lastly,
"acts done and effected by the agent shall be deemed to be the acts done
and effected by the principals." Mr. Gopalakrishnayya said that it would
be extraordinary to hold that the expression "on our behalf" as
disclosing a conjoint action on behalf of more than one person could ever be
interpreted by any canon of construction as one on behalf of each individual.
He said that apart from the strict construction the Court must put on a Power
of Attorney, where the terms of the written contract are clear and unambiguous
it is impermissible for the Court to take into consideration the other
circumstances to determine the intention of the parties. When a contract is
reduced to writing, undoubtedly the Court must look at the terms of the
contract and proceed on the assumption that the parties intended what they have
said and if the terms are unambiguous the Court must give effect to the terms
of the contract. However, it is well established that in considering a contract
it is legitimate to take into account the surrounding circumstances for
ascertaining the intention of the parties (vide Modi & Co. v. Union of
India).(2) Exhibit P-l being a Power of Attorney granted by three co-principals
in favour of one agent, the expression "on our behalf" would hardly
be decisive of the scope of authority conferred by the deed. The circumstances
in which such Power of Attorney came to the executed and the fact that three
different persons though near relations but having no joint property or venture
joined in executing a Power of Attorney and the purpose and object for which it
was executed when taken into consideration would throw light on the true,
nature of the authority conferred by the deed. In this connection it is an
admitted position that the Power of Attorney was executed in April 1949 and
that too, in the.
(1) [1893] A.C. 170 at 177.
(2) [1968] 2 S.C.R. 565.
433 State of Hyderabad, the erstwhile Nizam's
State. In the wake of police action in the fall of 1943 and thereafter there were
unusually disturbed conditions in Hyderabad State.
Plaintiff himself has stated in plaint para 1
that the conditions in Hyderabad were disturbed. that like himself, his father
and brother found it difficult to make contact with their properties and it was
being contemplated by the plaintiff that he might shift to Pakistan with
others. All the three persons, i.e. his father, brother and the plaintiff found
it difficult even to approach the properties of each of them and that all of
them were contemplating;, to migrate to Pakistan. In his belated evidence in
Court after defendants' evidence was closed the plaintiff re-affirmed that
after police action he lost possession of his lands and it was difficult to
approach the lands or manage the same.
Even his clerk was not willing to undertake
the responsibility. Further there is no evidence to show that all the three
co-principals had any joint property or any joint business or any joint venture
in which they were jointly interested. Plaintiff says in his evidence that all
the three joined in executing Power of Attorney Ext. P-1 because each of them
had his land in that area and each was unable to manage his land. In this
background it would be futile to say that the three co-principals executed the
power of Attorney in favour of the agent to lookafter their joint affairs and
joint property alone. In fact, plaint para I leaves no room for doubt that each
of the three co- principals neither could manage nor could have access to each
one's own property and that each one was contemplating to migrate to Pakistan
and that therefore they all gathered together and executed one Power of
Attorney in favour of defendant No. 34 as a matter of convenience for dealing
with the property of each one of the co-principals. It thus clearly transpires
that each one of the co-principals had his land, that each one of them was
unable to manage his land, and that all the three of them were contemplating to
migrate to Pakistan and that they wanted possibly to dispose on their lands, collect
cash and skip over to Pakistan. If Power of Attorney Ext. P-1 was executed in
this background it would illumine the scope and ambit of authority conferred by
Ext. P-1. It would clearly appear that each one wanted to constitute defendant
34 to be his agent in respect of his property. Therefore, the contention that
the power of attorney Ext. P-1 read with Ext. P-2 was a joint power only in
respect of joint properties of the three co-principals must be rejected.
An incidental submission may be disposed of
at this stage. It was urged that the Power of Attorney Ext. P-1 is legally
invalid and defective in form and that the supplementary document Ext. P-2 does
not render in valid.
The defect pointed out is that when Ext. P-1
was offered for registration the Sub-Registrar has nowhere noted in his
endorsement 434 that the donors of the power who executed the Power of Attorney
Ext. P-1 were identified to him by someone known to him or they were personally
known to him. Undoubtedly the Sub-Registrar in order to be satisfied that there
is no impersonation may require some person known to him to identify those who
admit execution before him but in case the persons who have executed the deed
before him are known to him the failure to endorse that fact on the deed does
not render the deed invalid. In any event if those who executed the deed admit
having executed the deed, the fact that the Sub-Registrar failed to endorse the
fact of the persons being known to him would not render the deed invalid. A
General Power of Attorney is not a compulsorily registrable document. No rule
or regulation was pointed out to us in support of the submission that it was
obligatory for the Sub-Registrar to make the endorsement that those who have
executed the deed were either personally known to him or were identified by
someone known to him. Therefore, there is no merit in the contention and it
must be rejected.
The next contention is that upon a true
construction of Ext. P-1, the authority conferred thereby was to manage the
property of the donors of the power and it did not confer any authority to
purchase or sell the property.
Simultaneously it was stated that Ext. P-2
does not improve the position in this behalf. Both the Courts have rejected
this submission and for very good and convincing reasons. A bare perusal of
Ext. P-1 clearly shows that apart from the power to manage the property, a
further power to purchase and sell lands was conferred on the agent. Power to
purchase and sell lands has been expressly mentioned at two places in Ext.
P-1., But even apart from this, the plaintiff in his cross-examination has
admitted that after executing Ext. P-1 the Registrar pointed out that the Power
of Attorney Ext. P- 1 does not confer the authority to sell land and offer for
registration sale deed and requested them to execute a supplemental document
expressly confer ring such authority and he identified Ext. P-2 to be the
supplemental document.
Ext. P-2 has been reproduced in extenso by
the High Court in its judgment and in no uncertain and most unambiguous terms
it is stated therein that the power to sell and registration of sale deed was
conferred by Ext. P-2. But even if Ext. P-2 were to be excluded from
consideration, the Power of Attorney Ext. P-1 clearly confers an authority on
the agent to sell the property. If we recall at this stage the circumstances in
which Ext. P-1 came to be executed in favour of defendant no. 34, it clearly
appears that plaintiff., his father and brother were keen to get the lands sold
as they were contemplating to migrate to Pakistan. In the face of this express
and explicit power it could not be said that the authority was conferred only
to manage the property.
435 In Ext. P-1 the expression 'to manage the
property' is nowhere to be found. On the contrary the general Power of Attorney
is couched in a language which confers wide authority to file suits, defend
actions, engage advocates, appear in various offices, purchase and sell land
and execute sale deeds and get them registered, to borrow money, to employ persons
needed for carrying out affairs and to dismiss them. It is difficult to
appreciate the submission that the authority was only to manage the property.
The submission is not borne out by the contents of Exts. P-l and P-2.
Incidentally in this connection it was urged
that the power to purchase and sell land and to execute documents and to offer
them for registration does not include the power to sell agricultural land.
This has only to be mentioned to be rejected because the expression 'lands'
would include both agricultural and non-agricultural land.
The next contention is that even if the Court
were to accept that the authority conferred by the Power of Attorney
encompasses the authority to sell land, the power to sell land was hedged in
with a pre condition 1 or with a pre- requisite that the land could be sold
either for Financing litigation or if for that purpose a loan was borrowed, to
repay the loan. Sustenance is sought to be drawn for this submission from the
following few lines in Ext. P-1:
". .. and purchase or sell (sic) of
lands and that he is authorised to appoint any pleader or special Muktar when
occasioned (sic) and to stop or to take or file any copies in any suit or to
the any suit or file any written statements with his own signature to fetch any
loan for our business or lands or to pay the debts from out of the income of
the estate or to purchase or sell the lands and to execute the sale deeds and
get registered under his signature and to obtain money or to enter into a
compromise in any suit or get it settled through arbitration or to withdraw any
suit.. .
etc." In Ext. P-2 the supplemental Power
of Attorney, it is stated that the power for sale and registration of documents
was conferred on the agent The, construction suggested is not warranted by the
language used in Ext. P-l. The power to purchase or sell land was not hedged in
by any pre-requisite or pre-condition. Each recital constitutes a separate
power, namely, (i) power to purchase or sell land, (ii) power to appoint a pleader
or Mukhtar, (iii) power to file suit or appear and file written statement (iv)
power to borrow money or to enter into any comprise in any suit or get it
settled through arbitration and withdraw any suit each was an independent
power. There is nothing in Ext. P-1 which 436 would even remotely indicate that
the land could be sold only for financing the litigation or if for that purpose
a loan was borrowed, to repay the loan Such power of wide amplitude conferring
such wide authority cannot by construction be narrowed down to deny an
authority which the donors expressly granted. The ordinary authority given in
one part of the instrument will not be cut down because there are ambiguous and
uncertain expressions elsewhere but the document will be considered as ? whole
for interpretation of particular words or directions (see Halsbury's Laws of
England, 4th Edn., Volume I, Para 733).
The contention, therefore, must be negatived.
The next contention is that even if Ext. P-1
confers authority on dependant 34 to sell land, the authority so conferred on
defendant 34 was to act on his own and not at the behest of an outsider or as a
rubber stamp of someone and that in this case evidence clearly shows that it
was Kazim Yar Jung, the father of the plaintiff who entered into an agreement,
Ext. D-18 dated 14th February 1949, with defendant no. 1 for sale of land and
the agent defendant 34 merely rubber stamped the sale and executed the sale
deed and that such a sale is not binding on the plaintiff. At first blush the argument
is really attractive but it does not stand scrutiny. Land involved in the
dispute was granted by the Nizam when the father of the plaintiff was a
Minister in the Nizam's Government. Patta evidencing the grant was taken in
favour of the plaintiff who was then a minor. The father of the plaintiff
really believed that he was the owner of the land and in fact on 20th October
1949 he wrote to Tahsildar, Medak; that his son was a benamidar and that the
lands may, therefore, be transferred in his name. Thus, the father of the
plaintiff acted as if he was the owner of the land but when a contention on;
behalf of the respondents that the plaintiff was a benamidar would be presently
examined, it would be painted out that the plain tiff we the real owner and was
not a benamdar. That is the true legal.
position. the fact, however, remains hat the
father of the plaintiff who must be a man of considerable influence being a
Minister in the Government of Nizam, must have acted as if he was the owner of
the land. Undoubtedly, the agreement Ext. D-18 for sale of land was entered
into between the father of the plaintiff and defendant no. l and pursuant to
this agreement defendant no. 34 executed a sale deed in favour of defendant no.
31, but it may be noticed that the agreement Ext. D-18 was entered into two
months prior to the grant of Power of Attorney, Ext. P-1. There is, however,
evidence to show that the agreement for sale of land and the sale deed were
taken in the presence of and to the know ledge and with the full acquiescence
of the plaintiff.
witness Kishta Reddy, D.W. 2 has stated in
his evidence that defendant 1 Rami Reddy 437 paid the consideration for
purchase of land pursuant to agreement Ext. D-18 to plaintiff in his own
presence. He has further stated that Kazim Yar Jung, Plaintiff's father and
daughter of Kazim Yar Jung and both of his sons including the plaintiff were
present when the amount of consideration was paid. This witness's presence at
the time of payment of consideration cannot be disputed because receipt Ext.
D-16 which evidences payment of consideration for the sale of land to defendant
No. 1 though signed and passed by Kazim Yar Jung, the father of the plaintiff,
was attested by him. This evidence which has remained uncontroverted would show
that the consideration for sale of land in favour of defendant 1 pursuant to
agreement of sale Ext. D-18 was paid to the plaintiff in the presence of this
witness and plaintiff accepted the same though the receipt Ext. D-18 was passed
by the father of the plaintiff. A feeble attempt was made to explain this
inconvenient evidence by saying that in agreement Ext. D-18 lands are not
especially described by setting out the Survey Numbers or the Khata Numbers and
as in that very village plaintiff's father had also his lands, the plaintiff
may have as well remained under the impression that the father had sold his own
lands and, therefore, could not raise any objection about the sale. This
explanation cannot be swallowed for the obvious reason that there was no reason
for the plaintiff to accept the consideration or the consideration being put in
his hands if his land was not being sold. Even if the father of the plaintiff
could be said to be an ostensible owner of the land and he purported to sell
the land, the plaintiff the real owner as he claimed to be had acquiesced in
the same and accepted the. consideration and in this background he would be
estopped from challenging the title which was transferred pursuant to the sale.
In the back-drop of these circumstances the principle enunciated in section 41
of the Transfer of Property Act would come to the rescue of the transferee.
Section 41 of the Transfer of Property Act provides that where, with the
consent, express or implied, of the person interested in immovable property, a
person is the ostensible owner of such property and transfers the same for
consideration, the transfer shall not be voidable on the ground that the
transferor was not authorized to make it.
Section 41 codifies what was once treated as
a principle in equity which the Judicial Committee had recognised in Ram-
coomar v. Macqueen,.(1) wherein the Judicial Committee observed as under:
"It is a principle of natural equity
which must be universally applicable that, where one man allows another to hold
himself out as the owner of an estate and a third person purchases it, for
value, from the apparent owner in the belief that (1) (1872) I.A. 11 Bengal
L.R. 46.
438 he is the real owner, the man who so
allows the other to hold himself out shall not be permitted to recover upon his
secret title, unless he can overthrow that of the purchaser by showing either
that he had direct notice, or something which amounts to constructive notice,
of the real title; or that there existed circumstances which ought to have put
him upon an inquiry that, if prosecuted would have led to a discovery of it' In
this case the father of the plaintiff throughout acted in relation to others as
the owner of the property though the plaintiff was the real owner of the
property. The father of the plaintiff executed agreement D-18 to sell the land
to defendant 1. The transaction was completed in the presence of the plaintiff
and the consideration was put in the hands of the plaintiff. Plaintiff would
certainly be estopped from contesting the validity of the sale on the ground
that the father had no authority to sell the land or on the ground that though
his father entered into the agreement Ext. D-18, his constituted attorney
defendant 34 acted as a mere rubber stamp.
In this connection it would be very
profitable to refer to a notice served by the plaintiff on defendant 1,
Ext.D-21 dated 19th December 1949. Now, before the true impact of this notice
can be gauged, a few dates may be recalled. The Power of Attorney Ext. P-1 was
executed in favour of defendant 34 on 10th April 1949. Agreement Ext. D-18 was
entered into between the father of the plaintiff and defendant no. 1 on 14th
February 1949. This would show that agreement D-18 was entered into between the
father of the plaintiff and defendant 1 prior to the execution of the Power of
Attorney, Ext. P-1. The public notice cancelling the Power of Attorney was
issued on 25th October 1949. Now, notice Ext. D-21 is dated 19th December 1449.
Therefore, it clearly transpires that notice Ext. D-21 was issued by the
plaintiff after he had developed a suspicion about the fraud alleged to have
been perpetrated by defendants 1 and 34 and after cancelling the Power of
Attorney in favour of defendant no. 34. Yet by this notice Ext. D-21 plaintiff
called upon defendant 1 to meet him to purchase the lands set out in the notice
if he was so desirous, otherwise plaintiff would sell the same to others. The
lands described in the notice clearly exclude those pieces of lands sold under
the authority of Power. Of Attorney Ext. P-1. Does it stand to reason to
believe that plaintiff who suspected that he was the victim of a fraud at the
hands of defendant 1 and that he had to take steps to cancel the Power of
Attorney granted by him in favour of defendant 34 specifically at the instance
of 439 defendant 1 would ever invite him to purchase some other land ? If there
was any substance in the case put forth by the plaintiff that the sale already
completed by defendant 34 in favour of defendant 1 pursuant to the agreement,
Ext.
D-18 executed by the father of the plaintiff
in favour of defendant 1 was not acceptable to him or was not binding on him he
would not invite him to purchase other lands. The conduct of the plaintiff
belies his suspicion, and the allegation of fraud and want of authority is
clearly an afterthought. Viewed from any angle, the contention of the plaintiff
is without merits and must be rejected.
It was next contended that the High Court was
in error in granting MP. 2762/61 permitting the heirs of defendants 8, 9 and 11
to produce the sale deeds which they did not produce in the trial Court and
after relying on the same, reversing the decree of the trial Court. The High
Court has given cogent reasons for granting CMP. 2762/61. Order 41, Rule 27, C.P.C.
enables the appellate Court to admit additional evidence in the circumstances
or situation therein mentioned one such being where the appellate court
requires any document to be produced or any witness to be examined to enable it
to pronounce judgment or for any other substantial cause. By a catena of
decisions of this Court, it is well established that Order 41, Rule 27, C.P.C'.
does not confer a right on the party to produce additional evidence. But if the
Court hearing the action requires any document so as to enable it to pronounce
judgment, it has the jurisdiction to permit additional evidence to be produced.
The High Court has given cogent reasons why it felt impelled to permit
production of registered sale deeds so as to enable it to pronounce judgment in
the matter. If the High Court considered the production of registered sale
deeds essential so as to enable it to pronounce judgment, there is no reason
why we should interfere with the discretionary power properly exercised by the
High Court in the interest of justice. Even otherwise, the High Court was
justified in permitting additional evidence to be produced when it consisted of
registered sale deeds. Such additional evidence has to be read as part of the
record. Once these registered sale deeds are taken into consideration, a part
of the decree of the trial Court granted in favour of the plaintiff awarding
him possession of the land on the only ground that the sale deeds in respect of
those pieces of lands were not produced, could not be maintained and the High
Court rightly allowed the appeal of original defendant nos. 8, 9 and 11 and no
exception can be taken to it.
We may now turn to two contentions raised on
behalf of the respondents.
440 The first contention on behalf of
respondents is that the plaintiff being a benamidar, he is not entitled to seek
possession of the land on the basis of his title as full and absolute owner of
the suit lands. The High Court in this connection has not specifically dealt
with this contention though the trial Court raised a specific issue in respect
of it and answered it in favour of the plaintiff'. The High Court has, however,
ob served that the plaintiff's father was the real owner of the suit lands and
he was managing the property although the patta was issued in the name of his
son, the plaintiff. The High Court then observed that Kazinm Yar Jung for the
reason that he was an employee of the Nizam in order to avoid embarassment to
himself nominally made the plaintiff, his minor son, the pattadar. In the opinion
of the High Court this is borne out by the fact that after executing the Power
of Attorney, Ext. P-1 in favour of defendant 1, he wrote to the Tahsildar,
Medak on 20th October 1949 that his son was a benamidar and that the lands may
therefore be transferred in his name. However, after making these observations
the High Court has not chosen to non-suit the plaintiff on the ground that he n
was a benamidar- Undoubtedly, Kazim Yar Jung was holding a high office in
Nizam's Government It is rational to believe that he may have influenced the
decision of the Nizam to grant the land and that he may not have taken the
patta in his own name.
The patta may, therefore, have been granted
in favour of his minor son, the plaintiff. Does that make the plain tiff a benemidar
Section 82 of the Indian Trusts Act, 1882, provides that where property is
transferred to one person for a consideration paid or provided by another
person, and it appears that such other person did not intend to pay or provide
such consideration for the benefit of the transferee, the transferee must hold
the property for the benefit of the person paying or providing the
consideration.
Now, there is no evidence to show that the patta
was for consideration. It is said that there was a grant of land and it is not
clear that it was meant to be a gift of land. Even if the Nizam in appreciation
of the services rendered by the plaintiff's father granted the land to the
plaintiff, it could not be said that any consideration flowed from the father
of the plaintiff so as to make the plaintiff a benamidar. The genesis of the
concept of benami is the consideration for a transfer must flow from one person
and the transfer is taken in the name of the other person and the consideration
so flowing for the transfer was not intended to be a gift in favour of the
person in whose name the transfer is taken All these ingredients of benami are
absent in this case and, therefore, the contention that the plaintiff was a
benamidar cannot be accepted.
441 lt was also contended that the plaintiff
came to the Court with an allegation that defendant 1 induced the plaintiff,
his father and brother to execute a nominal Power of Attorney in favour of
defendant no. 34, and defendants 1 and 34 in collusion with each other
defrauded the plaintiff his property. It was said that if defendants 1 and 34
were the perpetrators of the fraud, the plaintiff having compromised with them
and withdrawn the appeal against them, the appeal would not survive against the
rest. There is absolutely no merit in this contention. The plaintiff may have
valid reasons for entering into a compromise with defendants 1 and 34 who might
have made good a part of the loss suffered by the plaintiff. But apart from the
allegation of fraud, the suit was substantially based on the scope of authority
conferred by Exts. P-l and P-2 to sell lands and the acquisition of the title.
by the purchasers From the attorney defendant 34 in exercise of the authority
conferred by Exts. P-l and P-2 and, therefore, a compromise with defendants 1
and 34 would not render the appeal against the rest of the defendants
infructuous or untenable.
The third contention was that the plaintiff
left India and his evidence having remained incomplete, the same could not be
read in evidence. After we explained the relevant documents, we are satisfied
that there is no substance in this contention.
As all the contentions raised by the
appellant fail, the appeal fails and is dismissed with costs.
N.V.K. Appeal dismissed .
Back
