MUKESHBHAI KANTIBHAI PRAJAPATI vs VIREN RATILAL PATEL

C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
Reserved On : 24/07/2026
Pronounced On : 11/09/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SECOND APPEAL NO. 423 of 2026
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/SECOND APPEAL NO. 423 of 2026
With
R/SECOND APPEAL NO. 424 of 2026
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/SECOND APPEAL NO. 424 of 2026

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE MAULIK J.SHELAT

=============================================
Approved for Reporting Yes No
√
=============================================
MUKESHBHAI KANTIBHAI PRAJAPATI & ANR.
Versus
VIREN RATILAL PATEL & ORS.
=============================================
Appearance in SA No.423/2026:-
MR. MIHIR THAKORE, SENIOR COUNSEL assisted by MR SHAKTI
S JADEJA(5491) for the Appellant(s) No. 1,2
MR RUSI B TRIVEDI(11227) for the Respondent(s) No. 5
Appearance in SA No.424/2026:-
MR. AMAR BHATT, SENIOR COUNSEL assisted by MR. TIRTH
NAYAK(8563) for the PETITIONER(s) No. 1,2
MR RUSI B TRIVEDI(11227) for the RESPONDENT(s) No. 5
=============================================
CORAM: HONOURABLE MR. JUSTICE MAULIK J.SHELAT

COMMON CAV JUDGMENT
1. Since both these second appeals, filed under Section 100
of the Code of Civil Procedure (hereinafter referred to as
“ CPC ”), arise out of a judgment and decree dated 27/04/2026
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
passed by the Principal District Judge, Gandhinagar, in
Regular Civil Appeal No.66 of 2019, with the consent of
learned advocates appearing for the respective parties, they
are being heard and decided by way of this common
judgment.
1.1 For the sake of convenience, hereinafter the parties will
be referred to as per their original positions in the suit and/or
appeal.
1.2 The appellants in Second Appeal No. 423 of 2026 have
filed the paper-book containing the pleadings, as well as the
oral, and documentary evidence led by the parties before the
Trial Court.
1.3 The appellants of Second Appeal No. 423 of 2026 are the
original defendants Nos.1 and 2, whereas respondents Nos. 1
to 5 are the original plaintiffs. Respondents Nos.6 and 7 are
the newly added parties in the regular appeal and joined as
respondents Nos.3 and 4, who are also appellants of Second
Appeal No.424 of 2026 (hereinafter referred to as “third party
/ subsequent purchasers”).
BRIEF FACTS OF THE CASE :
2. The land bearing Block/Survey No. 952, admeasuring 0-
50-59 Hectares-Are-sq.meters and bearing Block/Survey
No.950/2, admeasuring 0-37-42 Hectares-Are-Sq.meters
situated at village Uvarsad, Taluka and District Gandhinagar
(hereinafter referred to as the " suit property "), was owned
by one Jivabhai Mathurbhai and after his demise, it was
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
mutated in the name of one Naranbhai Jivabhai in the revenue
records. One Jorabhai Kamabhai was cultivating the suit
property as a tenant and after his demise, since his other legal
heirs waived their right to claim tenancy except
Parshottambhai Jorabhai, accordingly, the name of
Parshottambhai Jorabhai, was mutated in the revenue records
as a tenant. The record suggests that said tenant, namely
Parshottambhai, had shown his willingness to purchase the
suit property as per the provisions of the Gujarat Tenancy and
Agricultural Lands Act, 1948 (hereinafter referred to as “the
Tenancy Act” ); thus, it was given to him at the selling price
of Rs.5,689/-. Parshottambhai appears to have executed a Will
in favour of Ratibhai Bhulabhai Patel (father of plaintiffs Nos.1
to 4). Parshottambhai died on 11/10/1986, thereby, the name
of Ratibhai was mutated in the revenue records. Ratibhai also
died on 22/07/2000 and upon his demise, plaintiffs Nos. 1 to 4
being his legal heirs, their names were mutated in the
revenue records. The fact remains that said Ratibhai had
received the suit property by virtue of a Will executed by said
Parshottambhai in his favour. Since said Parshottambhai had
purchased the suit property as an agricultural tenant as per
the provisions of the Tenancy Act; thus, the suit property was
a new tenure land (restricted land) when received by Ratibhai.
2.1 The said Ratibhai Bhulabhai Patel appears to have
executed a notarized sale agreement and a power of attorney
dated 29/11/1990 in favour of defendant No.2 in relation to
the suit property. The power of attorney was titled as
‘irrevocable’.
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
2.2 The said Ratibhai who happens to be father of plaintiff
Nos.1 to 4 appears to have executed another irrevocable
power of attorney in favour of defendant No.1 on 17/09/1999
in relation to the suit property whereby the attorney was
required to undertake the process of converting the suit
property from new tenure to old tenure and thereafter, he had
to execute a sale deed in favour of defendant No.2, who
happens to be his father. Again, said Ratibhai with plaintiff
No.1, executed one notarized agreement to sell in favour of
defendant No. 2 on 17/09/1999.
2.3 Since the suit property undisputeably a new tenure land
wherein there is a restriction to sell, transfer or create any
third party interest in any manner as provided under Section
43 of the Tenancy Act, the owner, i.e. Ratibhai and/or
plaintiffs Nos.1 to 4, as the case may be, could not have
sold/transferred the suit property in favour of defendant No.2.
2.4 As the suit property was transferred by virtue of the
aforesaid unregistered sale deed in favour of defendant No.2
in the year 1990, the Mamlatdar and ALT, Gandhinagar
initiated Tenancy Case No.23 of 1997 and vide its order dated
13/01/1998 set aside such transfer and the suit property was
ordered to be vested in the Government. Defendant No.2
appears to have carried the matter up to the highest Revenue
Authority which appears to have partly allowed the revision
vide its order dated 06/05/2008 whereby it ordered that the
suit property be restored back to its original position.
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2.5 Thereafter, on 26/05/2008 (at Exhibit 129), an
agreement was executed by plaintiff Nos.1 to 4 through their
power of attorney, i.e., defendant No.1 with defendant No.2,
in regard to the cancellation of aforesaid sale. As per the said
agreement, defendant No.2 restored back the possession of
the suit property to plaintiff Nos.1 to 4. The aforesaid
agreement having been presented before the Mamlatdar and
ALT, Gandhinagar, in Tenancy Case No.13 of 2008, the
Mamlatdar concerned recorded the aforesaid agreement in
his order dated 31/07/2008 and also took note of the
Panchnama dated 12/06/2008 prepared by the Talati-cum-
Mantri of village Uvarsad that the possession has been
restored back to the original owners, i.e., plaintiff Nos.1 to 4.
Accordingly, the Mamlatdar had ordered that the names of
plaintiffs Nos.1 to 4 be mutated in the revenue records.
2.6 Plaintiff Nos. 1 to 4 executed a fresh power of attorney
in favour of defendant No.1 which was duly notarized on
05/03/2007 (hereinafter referred to as " POA "). It was titled as
an ‘irrevocable power of attorney’.
2.7 Plaintiff Nos.1 to 4 appear to have executed one
notarized agreement to sell in favour of plaintiff No.5 on
20/10/2008. Likewise, defendant No.1 had also executed a
registered agreement to sell in favour of defendant No.2 on
15/12/2008.
2.8 Plaintiff Nos. 1 to 4 had issued a notice of termination of
the POA dated 05/03/2007 to defendant No.1 on 06/01/2009,
thereby they had cancelled the POA. Such notice was replied
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to by defendant No.1 on 12/01/2009.
2.9 Thereafter, plaintiff Nos.1 to 4 appear to have executed
a registered agreement to sell in favour of plaintiff No.5 and
also executed a registered power of attorney in favour of
plaintiff No.5 on 10/08/2009.
2.10 The defendant No.1, upon the strength of the POA,
executed the sale deed on behalf of plaintiffs Nos.1 to 4 in
favour of defendant No.2 on 30/07/2009 and presented for its
registration. At the time of registration of the aforesaid sale
deed, undisputably, the POA was already cancelled and the
suit property was new tenure land. It appears that due to a
deficiency of stamp duty, the process of registration of the
aforesaid sale deed could not be completed but the same was
finally registered by the registering authority on 19/05/2011.
2.11 In the meantime, the process of converting the land from
new tenure to old tenure was already initiated by the plaintiff
Nos.1 to 4 - original owners and the Collector, Gandhinagar,
vide its order dated 14/03/2011, appears to have converted the
suit property from new tenure to old tenure, whereby the
restriction of sale/transfer, etc. was lifted.
2.12 After conversion of the suit property from new tenure to
old tenure, by way of a registered sale deed, plaintiff Nos.1 to
4 sold the land in favour of plaintiff No.5 on 18/06/2012.
2.13 Since defendant No.1 had executed a registered sale
deed in favour of defendant No.2 on 30/07/2009 and it was
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finally registered on 19/05/2011, whereas plaintiff Nos.1 to 4
also executed a registered sale deed on 18/06/2012 in favour
of plaintiff No.5 in relation to the suit property, the plaintiffs
(plaintiffs Nos. 1 to 5) instituted Special Civil Suit No.118 of
2014 before the Principal Senior Civil Judge, Gandhinagar,
seeking a declaration and injunction that plaintiff No.5 should
be declared as the owner of the suit property by virtue of the
aforesaid sale deed dated 18/06/2012 and to declare that the
sale deed executed by defendant No.1 in favour of defendant
No.2 dated 30/07/2009 and its registration dated 19/05/2011
is null and void. A permanent injunction was also sought
whereby the defendants were sought to be restrained from
transferring the suit property in favour of others and from
interfering with the possession of the plaintiffs. The
defendants appeared and contested the suit. A fter
appreciating the oral and documentary evidence made
available on record, the Trial Court dismissed the suit.
2.14 Being aggrieved and dissatisfied with the dismissal of
the suit, the original plaintiffs preferred the aforesaid Regular
Civil Appeal No.66 of 2019 before the District Court,
Gandhinagar. It appears that during the pendency of the
appeal, defendant No.2 sold the suit property by way of two
registered sale deeds dated 24/12/2021 in favour of the
appellants of Second Appeal No.424 of 2026 who are the
respondents Nos.6 and 7 of Second Appeal No.423 of 2026; so,
they were joined in the aforesaid regular civil appeal on
03/02/2026 as respondents Nos.3 and 4 – subsequent
purchasers.
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
2.15 After hearing the parties, vide its impugned judgment
and decree dated 27/04/2026, the Appellate Court has allowed
the aforesaid appeal and set aside the judgment and decree
passed by the trial Court. The operative portion of the
impugned judgment of the Appellate Court reads thus:
“ [1] Regular Civil Appeal No.66 of 2019 is hereby
allowed.
[2] The judgment and decree passed in Special Civil
Suit No. 118 of 2014 vide Exh. 161 & Exh. 162
th
respectively, by the learned 4 Additional Senior Civil
Judge, Gandhinagar is hereby quashed and set aside.
[3] sale deed executed by respondent No.1
(defendant No.1) in favour of respondent No.2
(defendant No.2) dated 30.07.2009 vide registration
No.7906, which was registered on 19.05.2011 is
hereby ordered to be null and void.
[4] sale deed executed by appellant No.1 (plaintiff
No.1) in favour of appellant No.5 (plaintiff No.5), dated
08.06.2012 vide registration No.8155 is hereby
declared as legal and valid. Plaintiff No.5 is declared
as bonafide purchaser.
[5] Defendants are hereby restrained from
transferring. mortgaging, gifting, lease etc. the suit
property in favour of any third party.
[6] Defendants, their men, agents, assignee etc. are
hereby restrained from interfering with the possession
of plaintiffs over suit property and entering in the suit
property.
[7] Interim relief/stay, if any, stands vacated.
[8] No order as to costs.
[9] Decree to be drawn accordingly.
[10] Copy of this judgment along with the R&P if any,
be sent to the concerned trial Court, forthwith.”
2.16 Feeling aggrieved and dissatisfied with the impugned
judgment and decree passed by the Appellate Court, the
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
defendants Nos.1 and 2 as well as subsequent purchasers,
have preferred these second appeals.
3. Heard Mr.Mihir Thakore, learned Senior Counsel
assisted by Mr. Shakti S. Jadeja, learned advocate for the
appellants in Second Appeal No.423/2026 & Mr. Amar Bhatt,
learned Senior Counsel assisted by Mr.Tirth Nayak, learned
advocate for the appellants in Second Appeal No.424 of 2026,
as also Mr. Rusi B. Trivedi, learned advocate for respondent
No.5 – Caveator.
SUBMISSIONS OF APPELLANTS - DEFENDANT NOS.1
AND 2 :
4. Mr.Mihir Thakore, learned Senior Counsel assisted by
Mr.Shakti Jadeja, learned advocate for defendants Nos.1 and
2, has made the following submissions:
4.1 The Appellate Court has committed a gross error in law
by reversing the well-reasoned judgment of the trial Court.
The Appellate Court has completely overlooked the fact that
the POA dated 05/03/2007 executed by plaintiff Nos.1 to 4 in
favour of defendant No.1 was an irrevocable one and prior to
its cancellation, the defendant No.1 had partly exercised his
authority having executed a registered agreement to sell in
favour of defendant No.2 on 15/12/2008 in relation to the suit
property. Once such authority was exercised by the POA, as
per Section 204 of the Indian Contract Act, 1872 (hereinafter
referred to as " the Act, 1872 "), plaintiff Nos.1 to 4 cannot
revoke the POA.
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4.2 The Appellate Court has completely lost sight of the fact
that in view of the registered agreement to sell dated
15/12/2008 in favour of defendant No.2 by defendant No.1 as
power of attorney for plaintiff Nos.1 to 4, there was a
subsisting interest in the subject matter of the agency created
in favour of defendant No.1 which was coupled with interest
within the meaning of Section 202 of the Act, 1872 and in
such a scenario, the agency (the POA) could not have been
terminated by plaintiff Nos. 1 to 4, as had been done by them.
Plaintiff Nos.1 to 4 were made aware about the execution of
the registered agreement to sell dated 15/12/2008 vide reply
dated 12/01/2009 issued by the advocate of defendant No.1.
The plaintiff Nos.1 to 4 had received the part consideration of
Rs.8,00,000/-, out of the total sale consideration of
Rs.10,00,000/-; thus, in the absence of any challenge qua the
cancellation of the POA dated 05/03/2007 and/or the
registered agreement to sell dated 15/12/2008 in the suit, the
sale deed dated 30/07/2009 could not have been declared null
and void by the Appellate Court.
4.3 The decision of the Hon'ble Apex Court in the case of
M.S. Ananthamurthy v. J. Manjula - (2025) 10 SCC 596,
is not applicable to the facts of the present case, inasmuch as
in the case before the Hon’ble Apex Court, the person who
executed the power of attorney died at the time of execution
of the sale deed, whereas in the case on hand, the executants
of the POA are alive, i.e., plaintiffs Nos.1 to 4. Even the
agreement to sell in that case was unregistered, whereas in
the present case, it was a registered one. Rather, the
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observations made by the Hon'ble Apex Court in the aforesaid
decision (paragraphs 35 and 45) are helpful to the case of
defendants Nos.1 and 2. Moreover, by reading the POA, it is
very much clear that it is a power of attorney coupled with
interest then it was irrevocable one. As can be seen from the
evidence on record, there was a principal-agent relationship
between the plaintiff Nos.1 to 4 and defendant No.1 and
defendant No.1’s interest created in the subject matter, such
agency could not have been terminated by the principal.
4.4 The Appellate Court has wrongly placed reliance upon
Section 43 of the Tenancy Act while holding sale deed null
and void. Though the sale deed was executed on 30/07/2009,
nonetheless, it was registered only on 19/05/2011 due to non-
payment of requisite stamp duty.
4.5 The Appellate Court has completely misinterpreted
Section 47 of the Registration Act, 1908 (hereinafter referred
to as “the Act, 1908 ”) and its finding of fact recorded in this
regard is not only perverse but contrary to settled position of
law. As per the settled position, the transfer of the immovable
property becomes effective only upon registration of sale deed
and not date of its execution. The sale deed was executed in
favour of defendant No.2 on 30/07/2009 but it was finally
registered only on 19/05/2011. In the meantime, on
14/03/2011, the Collector had passed an order converting the
suit property from new tenure to old tenure. Thus, as on the
date of registration of sale deed, i.e., 19/05/2011, the suit
property became old tenure land. Consequently, there was no
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breach of Section 43 of the Tenancy Act when the suit
property transferred in favour of defendant No.2.
4.6 The relation back under Section 47 of the Act, 1908,
governs the operation and priority of a registered document
inter se competing documents; it does not advance the
completion of a sale to the date of execution. The Appellate
Court has committed gross error in law by holding that, the
transfer of the suit property in favour of defendant No.2
occurred on 30/07/2009, instead of 19/05/2011 by placing
reliance upon Section 47, is directly contrary to the decision
of the Constitutional Bench of the Hon'ble Apex Court in the
case of Ram Saran Lall vs. Mst. Domini Kuer – AIR 1961
SC 1747. It has been held that a sale which is admittedly not
completed until registration of the instrument of sale is
completed, cannot be said to have been completed earlier
because by virtue of Section 47 the instrument by which it is
affected, after it has been registered, commences to operate
from an earlier date.
4.7 Without prejudice to the aforesaid submissions,
Mr.Thakore, learned Senior Counsel, has placed reliance upon
the interim order dated 12/02/2025 passed by a Division
Bench of this Court in the case of Mukesh Jashvantlal Patel
and others vs. Ishwarlal Bhagwandas Patel and others,
being First Appeal No.280 of 2025 , wherein taking note of
the decision of the Full Bench in the case of Decd. Shaikh
Ismailbhai Hushainbhai Through Lh. vs. Vankar Ambalal
Dhanabhai - 2024 (1) GLH 222 and having so noticed that
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the transaction may be hit by Section 43 of the Tenancy Act,
while adjudicating the aforesaid appeal, the Division Bench
has directed the parties to maintain status quo, as at the
relevant point of time, there were divergent views about the
validity of such types of agreements which were executed in
contravention of Section 43 of the Tenancy Act. Mr.Thakore,
learned Senior Counsel would request this Court that upon
the principle of parity, this Court may also admit the appeal
and direct the parties to maintain status quo.
4.8 The learned trial Court has rightly held that Plaintiff
No.5 is not a bona fide purchaser. The notarized agreement to
sell and the registered agreement to sell dated 10/08/2009
executed by plaintiff Nos.1 to 4 in favour of plaintiff No.5 were
undisputedly created when the suit property was new tenure.
Merely because the sale deed in favour of plaintiff No.5 was
executed on 18/06/2012, which was subsequent to the
conversion of the suit property from new tenure to old tenure
on 14/03/2011, the plaintiff No. 5 could not place himself on a
higher pedestal than defendant No.2. The reply dated
12/01/2009 issued by lawyer of defendant No.1 disclosed the
transaction between defendant No.1 and 2 in regards to suit
property. Thus, the plaintiffs had knowledge of such
transactions prior to execution of the registered Agreement to
Sell dated 10/08/2009 and the sale deed dated 18/06/2012.
Even the public notice dated 27/04/2011 (Exh.98) was issued
by defendant No.2, disclosed the prior sale of the suit
property and it was published much prior to the sale deed
dated 18/06/2012. Plaintiff No.5 also admitted in his
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deposition that he had obtained a search report from the Sub-
Registrar, but the same was not produced before the Court.
Therefore, an adverse inference ought to be drawn against
Plaintiff No.5.
4.9 By making the above submissions, Mr.Thakore, learned
Senior Counsel, would request this Court to admit the second
appeal on the substantial questions of law framed along with
the memo of appeal.
SUBMISSIONS OF APPELLANTS- SUBSEQUENT PURCHASERS:
5. Mr.Amar Bhatt, learned Senior Counsel appearing for
the subsequent purchasers, has adopted the arguments
canvassed by Mr.Thakore, learned Senior Counsel appearing
for the defendants Nos.1 and 2.
5.1 Yet, Mr.Bhatt, learned Senior Counsel, would submit
that no reasonable opportunity was given to the subsequent
purchasers (appellants of Second Appeal No. 424 of 2026). It
is submitted that the subsequent purchasers were joined on
03/02/2026 in the regular civil appeal and it was adjourned to
09/03/2026 and on the very day, the matter was reserved for
judgment by the Appellate Court and vide its impugned
judgment dated 27/04/2026, the Appellate Court allowed the
appeal. It is further submitted that the subsequent purchasers
were not furnished with the copy of plaint, written statement,
other documents etc., and were not allowed to submit their
written statement. It is also submitted that the Appellate
Court, without following the mandatory provisions of law and
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in complete go-by to the provisions of Order 41 Rule 23, Rule
23A or Rule 25 of the CPC, reversed the judgment of the trial
Court.
5.2 By making the above submissions, Mr. Bhatt, learned
Senior Counsel, would request this Court to admit the appeal
of the subsequent purchasers on the substantial questions of
law set out with the memo of the appeal.
SUBMISSIONS OF RESPONDENT NO.5- PLAINTIFF NO. 5:
6. Per Contra , Mr.Rusi B. Trivedi, learned advocate for
plaintiff No.5 (Caveator), has made the following submissions:
6.1 The Appellate Court has not committed any gross error
in law which requires interference by this Court while
exercising its power under Section 100 of the CPC; rather, the
findings of fact recorded by the Appellate Court upon re-
appreciation of evidence on record are neither perverse nor
grossly erroneous.
6.2 The execution of the agreement dated 26/05/2008
between the plaintiffs Nos.1 to 4 through their power of
attorney defendant No.1 with defendant No.2, whereby the
earlier sale and/or interest created in the suit property was
cancelled, thereby the reference of the earlier sale and power
of attorney in favour of the defendant Nos.1 and 2,
respectively, pale into insignificance.
6.3 The POA dated 05/03/2007 was not creating any interest
in favour of defendant No.1 as alleged. Paragraph 27 of the
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C/SA/423/2026 (GJHC240469382026) CAV JUDGMENT DATED: 11/09/2026
POA would show that all the previous power of attorney as
well as deeds etc. stand cancelled. The POA dated 05/03/2007,
though titled as an irrevocable power of attorney, but the
entire reading of the POA would not remotely suggest that
any interest of defendant No.1 being the power of attorney
holder was created by the POA; thereby the plaintiffs Nos.1 to
4 were well within their right to cancel the said POA.
6.4 The issues involved in these appeals are covered by the
decision of the Hon'ble Apex Court in the case of M.S.
Ananthamurthy (supra) and thereby, the defendant No.1
was not authorized to execute any sale deed in favour of
defendant No.2. It is an undisputed fact that the POA dated
05/03/2007 was an unregistered document and if the
defendant No.1 claimed that it was coupled with interest, as
per the provisions of Section 17 of the Registration Act, 1908,
such POA was required to be registered.
6.5 The Appellate Court has committed no error in observing
that before the execution of the sale deed by defendant No.1 in
favour of defendant No.2, the POA was cancelled by plaintiff
Nos.1 to 4; thereby, the sale deed executed in favour of
defendant No.2 was without any authority and was,
accordingly, declared as null and void. The cancellation of the
POA was well within the knowledge of defendant No.2 as can
be seen from the reply dated 12/01/2009 issued by the lawyer
of defendant No.1 wherein he has mentioned that his client
paid Rs.8,00,000/- to plaintiff Nos.1 to 4, which means that he
was referring to defendant No.2, who happens to be the father
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of defendant No.1. Having come to know about the cancellation
of the POA, defendant No.1 could not have executed the sale
deed in favour of defendant No.2 and any such act without
authority was not binding to plaintiffs Nos.1 to 4.
6.6 The Appellate Court has not committed any error in law
by observing that the sale deed executed in favour of defendant
No.2 was hit by Section 43 of the Tenancy Act, but the
appellants are wrongly placing reliance upon the decision of
Ram Saran Lall (supra), inasmuch as the execution of the
sale deed in favour of defendant No.2 was dated 30/07/2009,
and on such date, the suit property was undisputably a new
tenure land; thus, it was hit by Section 43. As per the decision
of Kanwar Raj Singh (Dead) through Legal Representatives
v. Gejo (Dead) through Legal Representatives and Others -
( 2024) 2 SCC 416 , the Hon'ble Apex Court, a fter taking note of
the ratio of Ram Saran Lall (supra) , held that the operation of
a sale deed commences from the date of its execution. Thus, the
sale deed in favour of defendant No.2 could not stand in law.
6.7 By making the above submissions, Mr.Trivedi, learned
advocate for plaintiff No.5, would request this Court to
dismiss these second appeals.
7. No other or further submissions have been advanced by
learned advocates for the respective parties.
ANALYSIS AND REASONS:
8. The facts which are narrated at the outset are not in
dispute. The predecessor of plaintiff Nos.1 to 4, namely
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Ratibhai, initially executed a sale agreement in favour of
defendant No.2 on 29/11/1990 and also executed a power of
attorney in favour of defendant No. 2. By virtue of such sale
agreement, it appears that defendant No.2 was put in
possession of the suit property. The Revenue Authority
appears to have objected to such sale agreement, whereby
Tenancy Case No.23 of 1997 was initiated by the Mamlatdar
and ALT, Gandhinagar, against the owner as well as
defendant No.2. The Mamlatdar and ALT, vide its order dated
13/01/1998, cancelled such sale and ordered that the suit
property be vested in the State. The defendant No.2 appears
to have challenged the aforesaid order before the highest
Revenue Authority and eventually, the Special Secretary,
Revenue Department, State of Gujarat, vide its order dated
06/05/2008, partly allowed the revision application, whereby
it directed to restore the original possession of the suit
property and appears to have directed the parties to act
accordingly. In between, plaintiff No.1 and his father namely
Ratibhai, on 17/09/1999, executed an agreement to sell in
favour of defendant No.2 as well as, on the very day, executed
an irrevocable power of attorney in favour of defendant No.1.
9. Since the owner of the suit property, namely Ratibhai,
died on 22/07/2000 and due to the aforesaid order passed by
the highest Revenue Authority of the State, on 26/05/2008,
defendant No.2 executed an agreement for the cancellation of
sale in favour of plaintiff Nos.1 to 4, which was a duly
notarized agreement between the parties. This agreement
appears to have been signed by defendant No.2 as well as
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defendant No.1 as the power of attorney holder of plaintiff
Nos.1 to 4. The said cancellation of sale agreement was
submitted before the Mamlatdar and ALT, who vide its order
dated 31/07/2008 categorically recorded that possession of
the suit property was restored back in favour of plaintiff Nos.1
to 4 and accordingly, ordered to mutate the names of plaintiff
Nos.1 to 4 in the revenue records qua the suit property.
10. It is an undisputed fact that the suit property was new
restricted tenure land, as it was received by said Ratibhai
through the Will executed by one Parshottambhai - tenant
who purchased the suit land as per the provisions of the
Tenancy Act; thus, the suit property was new tenure land
having a restriction not to transfer in any manner without
prior permission of the Collector as provided under Section 43
of the Tenancy Act.
11. Thereafter, again, plaintiff Nos.1 to 4 appears to have
executed a fresh POA on 05/03/2007 in favour of defendant
No.1, which was titled as an irrevocable power of attorney,
wherein in Clause 27, it was observed that they had not
executed any power of attorney nor any agreement in relation
to the suit property in favour of anyone, but even if it was
executed, all such agreements would stand cancelled.
Subsequent to the execution of the POA dated 05/03/2007,
plaintiff Nos. 1 to 4 executed one notarized agreement to sell
in favour of plaintiff No.5 in relation to the suit property on
20/10/2008. Whereas, defendant No.1, upon the strength of
the POA dated 05/03/2007, executed a registered agreement
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to sell in favour of defendant No.2 on 15/12/2008. Likewise, a
registered agreement to sell was also executed by plaintiffs
Nos. 1 to 4 in favour of plaintiff No.5 on 10/08/2009 and they
also executed a registered power of attorney in favour of
plaintiff No.5 on 10/08/2009. It is required to be mentioned
here that none of such agreements to sell was with
possession, though they were registered agreements to sell.
12. In the meantime, Plaintiff Nos.1 to 4 had cancelled the
POA dated 05/03/2007 by issuing a notice to defendant No.1
on 06/01/2009. Defendant No.1, through his lawyer, replied to
such notice on 12/01/2009. Having perused the reply dated
12/01/2009, wherein it was mentioned that plaintiff Nos.1 to 4
have received a part consideration of Rs.8,00,000/- from his
client (the advocate's client). Although the said reply was sent
on behalf of defendant No.1 who was the POA holder of
plaintiffs Nos.1 to 4. It is not in dispute that defendant No.2
happens to be the father of defendant No.1, accordingly the
reply was sent. It is not even the case of defendant No.2 that
he was not aware about the cancellation of the POA by
plaintiffs Nos.1 to 4 when defendant No.1 executed and
presented the sale deed for its registration in his favour on
30/07/2009 upon the strength of said POA. The registration
process of the said sale deed was completed only on
19/05/2011.
13. The plaintiff Nos.1 to 4 - original owners appears to have
initiated the process of converting the suit property from new
tenure to old tenure and such process was completed with the
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order dated 14/03/2011 issued by the Collector, Gandhinagar,
thereby the suit property was converted from new tenure to
old tenure, whereby the restriction of sale/transfer, etc. was
lifted. After conversion of the suit property from new tenure
to old tenure, by way of a registered sale deed, plaintiff Nos.1
to 4 sold the land in favour of plaintiff No.5 on 18/06/2012.
14. Thus, in view of the aforesaid facts and circumstances,
there are two sale deeds executed and registered for the suit
property. The first one executed by the defendant No.1 on
30/07/2009 as POA of plaintiff Nos. 1 to 4 in favour of
defendant No.2 and same was finally registered on
19/05/2011. Whereas, the second one by plaintiff Nos. 1 to 4 –
owner of the suit property in favour of plaintiff No.5 on
18/06/2012.
15. The Trial Court dismissed the suit by considering that
sale deed dated 30/07/2009 was validly executed by defendant
No.1 as POA of plaintiff Nos. 1 to 4 in favour of defendant
No.2 and they had no right to cancel it once the POA had
executed an agreement to sell in favour of defendant No.2 on
15/12/2008, whereby the authority has been partly exercised
by the attorney. The bare reading of the judgement of the
Trial Court would not suggest that it had accepted the plea of
the defendants that said POA was irrevocable one; rather,
according to the Trial Court, in view of Section 204 of the Act,
1872, in said factual situation, the POA dated 05/03/2007
could not have been cancelled.
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15.1 Whereas, the Appellate Court has interfered with the
aforesaid reasons assigned by the Trial Court and held that
since the POA dated 05/03/2007 was already cancelled by the
plaintiff Nos. 1 to 4 vide their legal notice dated 06/01/2009,
the sale deed dated 30/07/2009 was executed without any
authority by defendant No.1 as POA of plaintiff Nos. 1 to 4 in
favour of defendant No.2. Moreover, the Appellate Court has
also found that execution and registration of the sale deed
dated 30/07/2009 was in contravention of Section 43 of the
Tenancy Act, thereby it is void. Consequently, gave the
declaration in favour of the plaintiffs and against the
defendants, as prayed in the suit.
16. In view of the aforesaid facts and circumstances and
upon appreciation of the submissions canvassed by the
learned Senior Counsels appearing for the respective parties,
the following aspects need to be first examined by this Court:
16.1 Whether the agency created in favour of defendant No.1
by plaintiffs Nos.1 to 4, by virtue of the irrevocable POA dated
05/03/2007, was an agency coupled with interest or not.
16.2 Whether the plaintiff Nos.1 to 4 were entitled to cancel
the said POA after the authority thereunder has been partly
exercised by defendant No.1 by executing the registered
agreement to sell in favour of defendant No.2 and the
resulting legal effect of such cancellation.
16.3 If it is ultimately found that the POA dated 05/03/2007
was not an irrevocable one inasmuch as it was not coupled
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with interest in the subject matter in favour of defendant No.1
and the plaintiff Nos. 1 to 4 were entitled to cancel the said
POA even after execution of the registered agreement to sell
by the defendant No.1 in favour of defendant No.2, then these
second appeals fail as they do not raise any substantial
questions of law; in such a situation, there is no need to
examine the effect of Section 43 of the Tenancy Act to the
registered sale deed executed in favour of the defendant No.2,
inasmuch as deciding such a question would be purely
academic.
17. Before proceeding further to examine the
aforementioned aspects germane to these appeals, it is
necessary to refer to certain relevant provisions of the Indian
Contract Act, 1872 (herein after referred as “ the Act, 1872” ),
which read as follows:
“201. Termination of agency.—An agency is terminated by the
principal revoking his authority; or by the agent renouncing the
business of the agency; or by the business of the agency being
completed; or by either the principal or agent dying or becoming of
unsound mind; or by the principal being adjudicated an insolvent
under the provisions of any Act for the time being in force for the
relief of insolvent debtors.
202.Termination of agency, where agent has an interest in subject-
matter.—Where the agent has himself an interest in the property
which forms the subject-matter of the agency, the agency cannot, in
the absence of an express contract, be terminated to the prejudice of
such interest.
Illustrations
(a) A gives authority to B to sell A’s land, and to pay himself, out of
the proceeds, the debts due to him from A. A cannot revoke this
authority, nor can it be terminated by his insanity or death.
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(b) A consigns 1,000 bales of cotton to B, who has made advances
to him on such cotton, and desires B to sell the cotton, and to repay
himself out of the price, the amount of his own advances. A cannot
revoke this authority, nor is it terminated by his insanity or death.
203.When principal may revoke agent’s authority.—The principal
may, save as is otherwise provided by the last preceding section,
revoke the authority given to his agent at any time before the
authority has been exercised so as to bind the principal.
204.Revocation where authority has been partly exercised.—The
principal cannot revoke the authority given to his agent after the
authority has been partly exercised, so far as regards such acts and
obligations as arise from acts already done in the agency.
Illustrations
(a) A authorizes B to buy 1,000 bales of cotton on account of A,
and to pay for it out of A’s moneys remaining in B’s hands. B buys
1,000 bales of cotton in his own name, so as to make himself
personally liable for the price. A cannot revoke B’s
authority so far as regards payment for the cotton.
(b) A authorizes B to buy 1,000 bales of cotton on account of A, and
to pay for it out of A’s moneys remaining in B’s hands. B buys
1,000 bales of cotton in A’s name, and so as not to render himself
personally liable for the price. A can revoke B’s authority to pay for
the cotton.
*
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.
Illustrations
(a) A directs B to sell goods for him, and agrees to give B five per
cent. commission on the price fetched by the goods. A afterwards,
by letter, revoke B’s authority. B, after the letter is sent, but before
he receives it, sells the goods for 100 rupees. The sale is binding on
A, and B is entitled to five rupees as his commission.
(b) A, at Madras, by letter, directs B to sell for him some cotton
lying in a warehouse in Bombay, and afterwards, by letter, revokes
his authority to sell, and directs B to send the cotton to Madras. B,
after receiving the second letter, enters into a contract with C, who
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knows of the first letter, but not of the second, for the sale to him of
the cotton. C pays B the money, with which B absconds. C’s
payment is good as against A.
(c) A directs B, his agent, to pay certain money to C. A dies, and D
takes out probate to his will. B, after A’s death, but before hearing
of it, pays the money to C. The payment is good as against D, the
executor.”
Whether POA dated 05/03/2007 was irrevocable one and coupled with interest
of POA holder - defendant No.1 in the subject matter.

18. To examine the first limb of the argument of Mr.
Thakore, learned Senior Counsel, I have minutely gone
through the different clauses of the aforesaid irrevocable POA
dated 05/03/2007. It is true that in Clause 1, defendant No.1
was given authority to execute an agreement to sell,
possession agreement, sale deed, cancellation deed etc.
Likewise, in Clause 3, it was mentioned that he was
authorized to take care of the possession, administration, sale
etc. in relation to the suit property. Apart from the above, he
was also authorized to do all the acts to safeguard the suit
property and to appear before various authorities and courts.
However, on a bare reading of the entire POA dated
05/03/2007, nowhere it has been mentioned that any interest
was created in favour of defendant No.1 qua the suit property
inasmuch as defendant No.1 was not entitled to receive any
part of the sale consideration and/or any other type of interest
was created in his favour.
18.1 As per Section 202 of the Act, 1872, when an agency is
created by the principal where the agent has an interest in the
subject matter, such agency cannot, in the absence of an
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express contract, be terminated to the prejudice of such
interest. The illustration (a) as given below Section 202 of the
Act, 1872, which is to be treated as part of the statute
[ Swaminathan and Ors. Vs. Alankamony (Dead) Through
Lrs. – 2022 SCC Online SC 539 ], would clear the doubt in
anyone’s mind, which reads thus: —
“(a) A gives authority to B to sell A’s land, and to pay
himself, out of the proceeds, the debts due to him from A.
A cannot revoke this authority, nor can it be terminated
by his insanity or death.”
18.2 Thus, in the absence of any personal interest of the POA
holder - defendant No.1 created by the principals – plaintiff
Nos.1 to 4 while executing the POA dated 05/03/2007 in
favour of defendant No.1, such POA cannot be treated as an
irrevocable POA.
18.3 As per the settled position of law, merely because the
title of the power of attorney shows that it is an irrevocable
power of attorney, it would not become an irrevocable one.
According to my view, after going through the POA dated
05/03/2007, it was not an irrevocable power of attorney,
inasmuch as it was not coupled with interest in favour of
defendant No.1, except that he was authorized to execute an
agreement to sell and/or a sale deed in favour of anyone. It
was a fortuitous circumstance that he had entered into a
registered agreement to sell in favour of defendant No.2 on
15/12/2008, who happens to be his father. As observed above,
the previous sale agreements etc. were cancelled by
defendant No.2 vide agreement dated 26/05/2008 and such
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sale agreement was not even registered, then no interest was
passed in his favour.
19. At this juncture, it would be appropriate to refer to and
rely upon the recent past decision of the Honourable Apex
Court in the case of M.S. Ananthamurthy (supra) , wherein
the Honourable Apex Court has lucidly described what is
meant by the creation of interest in a power of attorney and to
ascertain the nature of a power of attorney in a case where it
was titled as an "irrevocable power of attorney". The relevant
observations made in the aforesaid decision read thus: —
“ (ii) Independent reading of the general power of
attorney and the agreement to sell
(a) ‘Interest’ in Power of Attorney
32. It was submitted on behalf of the appellants that the
GPA read with the agreement to sell categorically states
that POA was executed for a consideration, and the
possession of the Suit Property was delivered to the
holder. It was further submitted that since both the
documents were executed on the same day, in favour of
the same person, they should be read together and
construed harmoniously. It is because of this reason that
POA holder (agent) has an interest in the subject- matter
of the agency and the POA is coupled with interest which
makes the agency irrevocable by virtue of Section 202 of
the Contract Act.
33. Section 201 of the Contract Act prescribes various
ways of revocation of authority given by the principal to
his agent. A principal can terminate the contract of
agency unless such revocation is precluded by Section
202 of the Contract Act. Section 202 of the Contract Act,
as an exception to the general rule under Section 201,
prescribes that where an agent has himself an interest in
the property which forms the subject-matter of the
agency, the agency cannot be terminated to the prejudice
of such interest unless there is an express stipulation to
the contrary.
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34. Illustration (a) to Section 202 of the Contract Act
states that A (principal) has given authority to B (agent)
to sell A’s land, and to pay himself i.e., the agent, from
the proceeds the debt which is due to him from A.
Illustration (b) states that A (principal) has consigned
1,000 bales of cotton to B (agent), who has given an
advance on the bales of cotton. Now, A wishes B to sell
the cotton and recover his advance from the sale
proceeds. In both the cases, A can neither revoke the
authority nor agency will be terminated by his insanity
or death. It is important to take a note that in both the
cases, the agent has an interest vested in the subject-
matter of the agency. The factum of interest or security of
the agent, in both cases, does not imply that the agent’s
right to remuneration constitutes an interest in the
subject matter of the agency; rather, it extends beyond
the mere advancement of remuneration or commission.
Where POA is coupled with an interest, it
metamorphosizes to an irrevocable agency unless
expressly stated otherwise. There an agent’s right to
remuneration is not an interest in the subject-matter of
the agency.
35. Therefore, the essentials of Section 202 of the
Contract Act are, first, there shall be a relationship in the
capacity of ‘principal and agent’ between the parties and
secondly, there shall be agent’s interest in the subject-
matter of the agency. If both the conditions are fulfilled
the agency becomes irrevocable and cannot be
terminated unilaterally at the behest of the principal. As
the first condition is satisfied in the present case, we
shall now proceed to examine whether from the reading
of the GPA, the holder of POA had an interest in the
subject matter of the agency, namely, the suit property.
36. We may quote an extract from Bowstead on Agency,
14th Edition, page 423 it stated as under:-
“(i) Where the authority of an agent is given by deed or
for valuable consideration, for the purpose of
effectuating any security, or of protecting or securing any
interest of the agent, it is irrevocable during the
subsistence of such security or interest. But it is not
irrevocable merely because the agent has an interest in
the exercise of it or has a special property in, or lien for
advances upon, the subject matter of it, the authority not
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being given expressly for the purpose of securing such
interest or advances;
(ii) Where a power of attorney, whenever created is
expressed to be irrevocable and is given to secure a
proprietary interest of the donee of the power, or the
performance of an obligation owed to the donee, then,
so long as the donee has that interest, or the obligation
remains undischarged, the power is irrevocable;
(iii) Authority expressed by this article to be irrevocable
is not determined by the death, insanity or bankruptcy of
the principal, nor ......where the principal is an
incorporated company, but its winding up or dissolution,
and cannot be revoked by the principal without the
consent of the agent.”
37. As far back as 1931, in Dalchand v. Seth Hazarimal
& Ors., reported in 1931 SCC OnLine MP 57, the
defendant-agent claimed that he had an interest in the
cloth supplied to him by the plaintiff-principal for sale
because according to the agent he was entitled to keep
for himself any amount obtained by him as per the
assigned rates. The court held that the agent had no
interest in the property being sold or in the proceeds of
sale until sale is complete. The relevant observations are
reproduced hereinbelow:-
“5. For the plaintiff, Vishnucharya v. Ramchandra [[1881] 5
Bom. 253.], has been cited, in which it has been held that
an agent for the collection of rents cannot be regarded as
having an interest in the property merely because he is
authorized to take his salary out of the rents. It is objected
on behalf of the defendants that this decision runs directly
contrary to Illus. (a), S. 202. But I find that a similar view
has been taken in Lakhmiohand v. Chotooram [[1900] 24
Bom. 403.], in which the facts more closely resemble those
of the present case and it was held that the interest which
an agent has in effecting a sale and the prospect of
remuneration to arise therefrom is not such an interest as
would prevent the termination of the agency.
6. I am in respectful agreement with the decisions in these
two Bombay cases. They and the case before me are
clearly distinguishable from the case stated in Illus. (a),
Section 202 of the Contract Act. In the illustration, the
principal was under a liability to the agent quite apart from
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the contract of agency, and the authority given to him to
sell the principal’s land was by way of security for the
discharge of that liability. In the present case, the agent
had no interest in the property to be sold or in the sale
proceeds thereof until a sale had been actually effected,
and revocation of the agency, before sale had been
effected, deprived him of nothing that had accrued to him.”
(Emphasis supplied)
38. In the case of Palani Vannan v. Krishnaswami
Konar, reported in 1945 SCC OnLine Mad 119, the
decree-holder had executed a POA authorizing the holder
to execute the decree. Later, the executant revoked the
POA through a notice. The question before the court was
whether the notice revoking the authority was valid in
law or not. The court held that the POA was not
coupled with interest as the object of the POA was
not securing any interest of the agent. It held that
the primary object of the POA was to recover the
fruits of the decree on behalf of the principal
despite the fact that the agent’s remuneration was
fixed to be drawn from the proceeds of the decree .
The relevant observations are reproduced hereinbelow:
“It is only necessary to refer to one further decision, Frith v.
Frith [[1906] A.C. 254.], in which the Judicial Committee
discuss the general position relating to these matters.
Their Lordships point out that in what is known as
Carmichael's case [[1896] 2 Ch. 643.]:
“… the donor of the power, for valuable consideration,
conferred upon the donee, authority to do a particular
thing in which the latter had an interest, namely, to apply
for the shares of the Company which the donee was
promoting for the purpose of purchasing his own
property from him, and the donor sought to revoke that
authority before the benefit was reaped.” The effect of all
these cases appears to be stated accurately in
Bowstead on the Law of Agency, Eighth Edition, page
456. It is stated (Article 138):
“Where the authority of an agent is given for the
purpose of effectuating any security, or of protecting or
securing any interest of the agent, it is irrevocable
during the subsistence of such security or interest.”
--xxx--
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My view of this document is as follows. I think its primary
object was to recover on behalf of the principal the fruits
of his decree. It contained incidentally a provision for the
employment of the agent, Vedavyasachar, in order to
realize that decree. It provides that his remuneration is
to be one-half of the proceeds. It contains an indemnity
clause against any out-of-pocket expenses which he is
entitled also to recover from the amount of the decree.
But the object of the power-of-attorney is not for the
purpose of protecting or securing any interest of the
agent. I think that part of the agreement is purely
incidental. There is, however, another feature of this
document which seems to me to be conclusive against
the appellants. The last words,
“I shall not for any reason whatever, cancel without your
permission this authority which I have given to you,
without paying the amount expended by you and without
giving the aforesaid relief for your trouble”,
seem to me to make express provision for the revocation
of the above power. It can be done in two ways, (a) by
consent, for that is what I understand “your permission”
to mean, and (b) if that permission is withheld, on
payment by the principal of all out-of-pocket expenses
and also remuneration for his services. With regard to
remuneration, the wording is vague, “without giving the
aforesaid relief for your trouble”.
(Emphasis supplied)
39. To the same effect is the decision of High Court of
Delhi in Shri Harbans Singh v. Smt. Shanti Devi, reported
in 1977 SCC OnLine Del 102. The High Court while
dealing with the question of whether the powers of
attorney executed by the appellant were cancelled
validly, laid down the conditions of irrevocability of a
contract of agency as, (i) authority to agent given for
valuable consideration; (ii) such valuable consideration
was given for the purpose of effectuating a security or
protecting or securing the interest of the agent; (iii)
agency not being irrevocable merely because the agent
has some interest in carrying it out or holds a special
right, such as a lien or advance, over its subject matter.
Thus, the agency has to be specifically meant to secure
the agent’s benefit or interest. It further observed that the
interest of the agent can be inferred from the language of
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the document or from the course of business between the
principal and agent. The observations are reproduced
hereinbelow: -
“All the conditions of irrevocability are satisfied in the
present case. The authority to the agent was given for
valuable consideration which proceeded from the
respondent. It was given for the purpose of effectuating
a security or protecting or securing the interest of the
agent. For, the only purpose of the agency was to
ensure and secure the performance of the contract by
the appellant in favour of the respondent for whom Shri
Gulati was acting as the husband and the nominee and,
therefore, a representative or an agent. Where the
performance of the agency is not to secure the interest
or the benefit of the agent then the agency is not
irrevocable merely because the agent has an interest in
the exercise of it or has a special property in or lien for
advances upon the subject-matter of it.”
(Emphasis supplied)
40. In the present case, it is evident from para 1 of the
GPA executed by the original owner in favour of the
holder that the POA was to look after, maintain, manage
the Scheduled Property. Para 2 states that the attorney
can enter into any agreement with any person with
respect to the Scheduled Property for any amount,
receive advance amount, to execute deeds in favour of
such persons, issue proper discharge. Para 3 states that
attorney has the power to apply for transfer of khata and
to pay all future taxes and receive receipts. Further, para
4 states that the attorney can apply for sanctioning of
plan for the purpose of construction, utilize the Scheduled
Property as the holder deems fit and receive all profits
therefrom. Para 5 states that the attorney has the power
to represent the holder in all Government Offices and do
all things connected. Para 6 states that the attorney can
pursue matters in courts, give evidence, obtain decree,
execute the same. Further, para 7 states that the
Scheduled Property is in owner’s peaceful possession
and enjoyment. Lastly, para 8 states that the attorney is
generally entitled to do all acts required in respect of the
Suit Property which are not specifically mentioned and
that the GPA is irrevocable.
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(b) Nature of Power of Attorney
41. It is now appropriate to analyze the nature of the
GPA, specifically whether it is general or special. While
construing a document, a reader should not go by the
title to the document or the nomenclature of the
document. In such a case, the court is endowed with a
duty to see the contents of the document and intention of
the parties which can be gathered from the terms of the
document and/or from circumstances under which the
document was entered into. The intention of the parties
can be ascertained from the language used by the
parties. A document has to be seen as a whole.
42. The import of the word “general” in a POA refers to
the power granted concerning the subject matter. The
test to determine the nature of POA is the subject matter
for which it has been executed. The nomenclature of the
POA does not determine its nature. Even a POA termed
as a ‘general power of attorney’ may confer powers that
are special in relation to the subject matter. Likewise, a
‘special power of attorney’ may confer powers that are
general in nature concerning the subject matter. The
essence lies in the power and not in the subject-matter.
43. In Halsbury, Vol. 1, at page 151, the author defines
special and general agents, the definition of general
agent has been stated as follows:
“A general agent is one who has authority, arising out of
and in the ordinary course of his business or profession, to
do some act or acts on behalf of his principal in relation
thereto; or one who is authorised to act on behalf of the
principal generally in transactions of a particular kind or
incidental to a particular business.”
44. A three-Judge Bench of this Court settled the rules of
interpretation applicable to power of attorney in Timblo
Irmaos Ltd., Margo v. Jorge Anibal Matos Sequeira,
reported in (1977) 3 SCC 474. It was held that words
used in a POA must be interpreted in the context of the
whole; the purpose of the powers conferred must then be
examined through the circumstances in which it was
executed; and finally, necessary powers must be
implied. The relevant observations are reproduced
hereinbelow:-
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“11. We think that perhaps the most important factor in
interpreting a power of attorney is the purpose for which it
is executed. It is evident that the purpose for which it is
executed must appear primarily from the terms of the
power of attorney itself, and, it is only if there is an
unresolved problem left by the language of the document,
that we need consider the manner in which the words used
could be related to the facts and circumstances of the case
or the nature or course of dealings. We think that the rule
of construction embodied in proviso 6 to Section 92 of the
Evidence Act, which enables the Court to examine the
facts and surrounding circumstances to which the language
of the document may be related, is applicable here,
because we think that the words of the document, taken by
themselves, are not so clear in their meanings as the
learned Judicial Commissioner thought they were.
--xxx--
13. The learned Judicial Commissioner had, in our opinion,
overlooked several well-known rules of interpretation:
firstly, that, a word used in a document has to be
interpreted as a part of or in the context of the whole;
secondly, that, the purpose of the powers conferred by the
power of attorney have to be ascertained having regard to
the need which gave rise to the execution of the
document, the practice of the parties, and the manner in
which the parties themselves understood the purpose of
the document; and, thirdly, that, powers which are
absolutely necessary and incidental to the execution of the
ascertained objects of the general powers given must be
necessarily implied.”
(Emphasis supplied)
45. Further, a mere use of the word ‘irrevocable’ in
a POA does not make the POA irrevocable. If the
POA is not coupled with interest, no extraneous
expression can make it irrevocable . At the same time,
even if there is no expression to the effect that the POA is
irrevocable but the reading of the document indicates
that it is a POA coupled with interest, it would be
irrevocable. The principles of construction of a POA
termed as ‘irrevocable’ was explained in Manubhai
Prabhudas Patel v. Jayantilal Vadilal Shah, reported in
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2011 SCC OnLine Guj 7028. The relevant observations
are reproduced below:-
“12. I am of the view that while construing a document, it is
necessary to determine the real intention of the parties.
The mere form in which document is couched is
immaterial. The intention of the parties has to be gathered
from the terms of the documents themselves and from
such of the surrounding circumstances, as later required to
show in what manner the language of the document is
related to the existing fact. It is very difficult task to know
the intention of the parties on the basis of the recital of the
document. But, the Court can rely safely on the language
of the document, the language, which has been used by
the parties to manifest the intention of the parties. If the
Court goes on extraneous evidence, that may lead to more
difficulty and confusion. But, there are certain principles to
be borne in mind. The first principle is, the mere saying that
the power of attorney is an irrevocable power of attorney
coupled with interest is not the end of the matter. The
Court, can clearly say that the document, though, is styled
as an irrevocable power of attorney is not in substance a
power coupled with interest so as to make it an irrevocable
power of attorney. At the same time, even if there is no title
to show that the power is an irrevocable power, but, the
substance of the entire document would suggest that the
same is an irrevocable power coupled with interest.
Therefore, a document has to be construed as a whole. A
stray sentence here and there cannot be picked out to
construe a document. To understand the tenor of the
document and the intention of the parties, it has to be read
as a whole. The real intention of the parties has to be
covered not merely from what ex-facie is stated in the
document, but, from the totality of the recitals in the
document. At this stage, I may quote with profit a very lucid
judgment rendered by learned Single Judge of Madras
High Court explaining the general principles regarding the
construction of power of attorney. In case of Anantha Pillai
v. Ratiinasabapatiiy Mudaliar, reported in 1968 (2) MLJ
574, Ismail, J. (as he then was), held thus:
“The general principles regarding the construction
of power of attorney are well settled. Powers of
attorney must be strictly construed as giving only
such authority as they confer expressly or by
necessary implication. Where an act purporting to
be done under the power of attorney is challenged
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as being in excess of the power, it is necessary to
show that on a fair construction of the whole
instrument the authority in question is to be found
within the four corners of the instrument either by
express terms or by necessary implication. Some
of the principles governing the construction of a
power of attorney are:(1) the operative part of the
deed is controlled by the recitals, (2) where an
authority is given to do particular acts, followed by
general words, the general words are restricted to
what is necessary for the performance of the
particular acts, (3) the general words do not confer
general powers but are limited to the purpose for
which the authority is given and are construed as
enlarging the special powers only when necessary
for that purpose; (4) a power of attorney is
construed so as to include all medium powers
necessary for its effective execution. Bearing
these general principles in mind the question for
consideration is whether the power of attorney in
this case authorised the first defendant to enter
into an agreement to sell or authorised him to
execute a sale-deed….””
(Emphasis supplied)
*
53. Even from the combined reading of the POA and the
agreement to sell, the submission of the appellants fails
as combined reading of the two documents would mean
that by executing the POA along with agreement to sell,
the holder had an interest in the immovable property. If
interest had been transferred by way of a written
document, it had to be compulsorily registered as per
Section 17(1)(b) of the Registration Act. The law
recognizes two modes of transfer by sale, first, through a
registered instrument, and second, by delivery of
property if its value is less than Rs. 100/-.
54. This principle was recently elaborated by the High
Court of Karnataka in Channegowda & Anr. v. N.S.
Vishwanath & Ors., reported in 2023 SCC OnLine
Kar 153 . The relevant portion is reproduced as under:-
“14. An attempt is made on behalf of the plaintiffs to
contend that the second plaintiff has sold the property as a
General Power of Attorney Holder and not as a title holder.
It is argued that the Power of attorney is not compulsorily
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registrable. The submission is noted with care. Suffice it to
note that a deed of power of attorney is not one of the
instruments specified und er Section 17 of t he Registration
Act compulsorily registrable. However, if a power has been
created empowering the attorney to sell the property i.e., if
a document that gives a right to the attorney holder to sell
the immovable property, then it would be a document
creating an interest in immovable property, which would
require compulsory registration. In the present case, the
General Power of Attorney alleged to have been executed
by defendants 1 to 3 in favour of the second plaintiff is
coupled with interest i.e., power of alienation is conferred
but it is not registered. The Apex Court in the SURAJ
LAMP 's case has held that the General Power of Attorney
Sale, or Sale Agreements/Will do not convey title and do
not amount to transfer, nor can they be considered valid
modes of transfer of immovable property. Therefore, it can
be safely concluded that the declaration of facts/statement
of facts (affidavit) and General Power of Attorney do not
convey title. They are inadmissible in evidence.”
(Emphasis supplied)
55. The High Court rightly held that even though the
GPA and the agreement to sell were contemporaneous
documents executed by the original owner in favour of
the holder, this alone cannot be a factor to reach the
conclusion that she had an interest in the POA. Thus,
even though the GPA and the agreement to sell were
contemporaneous documents executed by the original
owner in favour of the same beneficiary, this cannot be
the sole factor to conclude that she had an interest in the
subject-matter. Even if such an argument were to
persuade this Court, the document must have been
registered as per Section 17(1)(b) of the Registration Act.
In the absence of such registration, it would not be open
for the holder of the POA to content that she had a valid
right, title and interest in the immovable property to
execute the registered sale deed in favour of appellant
no. 2.”
(Emphasis supplied)
20. Thus, in view of the aforesaid expositions of law laid
down by the Hon’ble Apex Court, there is no scintilla of doubt
that in a case where by way of document an interest is created
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in an immovable property in favour of the agent by the
principal, such document is required to be registered, failing
which there is no valid right, title or interest created in favour
of the agent by the principal.
21. So far as the case at hand is concerned, undisputably,
the POA dated 05/03/2007 was not registered; rather, stated
supra, no interest of defendant No.1 (POA holder) was created
in the suit property (subject matter) by plaintiffs Nos.1 to 4 at
the same time of execution of the said POA. Thus, by no
means, it can be accepted that aforesaid POA dated
05/03/2007 was an irrevocable POA inasmuch as it was
neither coupled with interest nor registered. Once it is clear
that it was not an irrevocable power of attorney but a general
power of attorney, the principal - plaintiffs Nos. 1 to 4 were
well within their rights to cancel/terminate the POA.
Right of the plaintiff Nos. 1 to 4 to revoke POA after authority has been partly
exercised by the defendant No.1 - POA holder and its effect on subsequent
execution and registration of the sale deed dated 30/07/2009 by POA holder in
favour of the defendant No.2:
22. The second limb of argument of appellants is that once
the defendant No.1 (the POA holder) executed a registered
agreement to sell in favour of defendant No.2 on 15/12/2008
upon the strength of the POA dated 05/03/2007, subsequently
on 06/01/2009, plaintiffs Nos.1 to 4 had no right to cancel the
POA as the authority given to the agent had been partly
exercised. This argument of defendant Nos.1 and 2 is not only
fallacious but is a complete misreading of Section 204 of the
Act, 1872.
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23. As per Section 204 of the Act, 1872, the principal cannot
revoke the authority given to his agent after the authority has
been partly exercised, so far as regards such acts and
obligations as arise from acts already done in the agency. This
means that when an agent has partly exercised the authority
given by the principal, and certain acts have been done or
obligations have been created for the principal, the principal
cannot later revoke such acts and obligations already incurred
during the course of the agency.
24. To better appreciate the implications of Section 204 of
the Act, 1872 in the context of the case at hand: when
defendant No.1, during the subsistence of the POA dated
05/03/2007, executed a registered agreement to sell in favour
of defendant No.2 on 15/12/2008, such an act and obligation
of defendant No.1 bound the principal (plaintiff Nos.1 to 4), as
the POA was in force as on that date. By virtue of the valid
execution of the registered agreement to sell, defendant No.2
could have sued the plaintiff Nos.1 to 4 and sought specific
performance of such an agreement which was executed by
their agent, i.e., defendant No.1. In such circumstances,
plaintiffs Nos.1 to 4 could not have revoked the acts and
obligations already incurred by defendant No.1 at the time
they terminated the POA on 06/01/2009. Nonetheless, no such
recourse was adopted by defendant No.2.
25. The trial Court has completely misconstrued Section 204
of the Act, 1872 by not properly applying the aforesaid
provision to the facts of the present case, which ultimately
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resulted into a wrong conclusion on the part of the trial Court,
by which it held that the power of attorney could not have
been treated as cancelled. Such perverse and grossly
erroneous observations and findings of fact recorded by the
trial Court were correctly interfered with by the Appellate
Court while exercising its appellate power under Section 96
read with Order 41 of the CPC.
26. According to my considered view, what was saved by
virtue of Section 204 of the Act, 1872, was that the registered
agreement to sell dated 15/12/2008 in favour of defendant
No.2 was an act and obligation of the agent during the
subsistence of the agency (POA) and the same was binding on
the principal (plaintiff Nos.1 to 4) and such act and obligation
could not have been revoked by them. Any other
interpretation than the above would render Section 202 of the
Act, 1872, otiose .
27. Apart from the above, during the subsistence of the POA,
no right, title or interest in the suit property was created by
defendant No.1 in favour of defendant No.2, inasmuch as the
execution of a registered agreement to sell is not capable of
creating any right, title or interest in the immovable property
(See: Section 54 of the Transfer of Property Act, 1882). It was
not even the case of the defendants that defendant No.1
executed and registered the sale deed dated 30/07/2009 as an
owner of the suit property, rather the aforesaid sale deed
clearly shows that it was executed/registered by defendant
No.1 as the POA holder of plaintiff Nos. 1 to 4.
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28. Moreover, it was not the case of defendant No.2 that he
was not made aware about the cancellation of the POA by
plaintiffs Nos.1 to 4 on 06/01/2009. The reply to the aforesaid
cancellation though issued on behalf of defendant No.1 on
12/01/2009, but in the reply, it was mentioned by the lawyer
that the part consideration of Rs.8,00,000/- paid by my client
(that would be only defendant No.2) to you, i.e., plaintiffs
Nos.1 to 4. This means that defendant No.2 who happens to be
father of defendant No.1 (the agent) was well aware about the
cancellation of the POA prior to the execution of the sale deed
on 30/07/2009; notwithstanding the same, defendant No.2
procured the execution and presentation of the sale deed on
30/07/2009 through defendant No.1 and finally obtained the
sale deed upon completion of its registration on 19/05/2011.
29. Thus, in view of the aforesaid facts, according to my
view, the plaintiff Nos. 1 to 4 were well within their right to
cancel the POA dated 05/03/2007 irrespective of execution of
the registered agreement to sell dated 15/12/2008 by POA
holder – defendant No.1 in favour of defendant No.2. Rather,
defendant No.1 had, without any authority, executed and
presented the sale deed dated 30/07/2009 for the registration
in favour of defendant No.2, whereby no valid title to the suit
property was conveyed to defendant No.2 on 19/05/2011,
when the sale deed was registered. Accordingly, the aforesaid
sale deed has been correctly declared null and void by the
Appellate Court.
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Validity of sale deed dated 30/07/2009 which was registered only on
19/05/2011 vis-à-vis bar of Section 43 of Tenancy Act:
30. So far as the last limb of the argument of the appellants
is concerned, that the Appellate Court has wrongly arrived at
a conclusion that the sale deed dated 30/07/2009 is hit by
Section 43 of the Tenancy Act as declared it a void. According
to the defendants, at the time of completion of the registration
process of the sale deed on 19/05/2011, the suit property was
already converted from new tenure to old tenure by the
Collector's order dated 14/03/2011, thereby the sale deed was
not hit by the Section 43 of Tenancy Act. It was contended
that the suit property was transferred in favour of defendant
No.2 only on 19/05/2011, thus, the aforesaid sale deed could
not have been declared as void.
31. This aspect and argument could have been appreciated
by me, but when I have found that after cancellation of the
POA dated 05/03/2007, subsequently on 30/07/2009,
defendant No.1 executed and presented the sale deed for
registration as the POA holder of plaintiff Nos.1 to 4 in favour
of defendant No.2, according to me, the aforesaid sale deed is
null and void, as it was executed without any authority.
Consequently, this last limb of argument is not required to be
gone into and to be decided by this Court, as it becomes
academic. This Court would not like to invest its time in such
academic issue. Accordingly, it is left open to be decided in an
appropriate case.
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Effect of declaration of sale deed of defendant No.2 as null and void on the sale
deeds of subsequent purchaser:
32. So far as the rights of the third parties – the subsequent
purchasers (appellants of Second Appeal No.424 of 2026) are
concerned, since they have purchased the suit property from
defendant No.2 who has not derived a valid title in his favour,
as per the settled position of law, defendant No.2 could not
have passed a better title in favour of a third
parties/subsequent purchasers.
32.1 As far as their argument that no reasonable opportunity
was given to them by the Appellate Court is concerned, the
record does not indicate that they had insufficient time to
request the Appellate Court to allow them to submit their
case. In fact, the Rojkam of the appeal proceeding was
submitted before me by Mr. Bhatt, learned Senior Counsel
during his course of arguments, would show that on
03/02/2026 when they were joined in the appeal proceedings,
on very date, the Appellate Court directed the appellants-
plaintiffs to supply copy of the plaint and documents to the
newly added parties, i.e. subsequent purchasers. It appears
that after being joined in the appeal proceedings on
03/02/2026, they had not made such request to allow them to
file their pleadings until the appeal was reserved by the
Appellate Court for judgment on 09/03/2026.
32.2 In any case, they cannot be said to be bona fide
purchasers for value without notice, inasmuch as subsequent
to the completion of the registration of the sale deed in favour
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of defendant No.2 on 19/05/2011, another sale deed came to
be registered by plaintiff Nos.1 to 4 (original owners of the
suit property) in favour of plaintiff No.5 on 18/06/2012. Thus,
the subsequent purchasers/third party who purchased the suit
property by way of a registered sale deed on 24/12/2021, must
have checked the previous title documents of their vendor,
i.e., defendant No.2 and could not have overlooked the
aforesaid registered sale deed in favour of plaintiff No.5
executed and registered on 18/06/2012. The principle of
caveat emptor would squarely apply to them. In such
circumstances, the subsequent purchasers/third parties
cannot derive a better title than their vendor, i.e., defendant
No.2. There is nothing further to be added by this Court.
33. At this stage, it would be apt to refer to and rely upon the
following decisions of the Hon'ble Apex Court regarding the
scope and ambit of the power of this Court while adjudicating
the second appeal filed under Section 100 of CPC.
33.1 In the case of Russi Fisheries (P) Ltd. vs. Bhavna
Seth - 2026 SCC OnLine SC 555 , it has been categorically
held by the Hon’ble Apex Court that this Court should not
interfere with findings of fact recorded by the Courts below
unless they are so perverse or grossly erroneous, and / or
contrary to a settled principle of law. The relevant
observations of the said decision read thus:
"31. It is settled in law that the findings of fact howsoever
erroneous, cannot be reopened and disturbed in second appeal
which is required to be adjudicated only upon the substantial
question of law, if any, arising therein. Thus, the argument that
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the High Court in second appeal ought to have examined the
evidence to ensure the correctness of the findings of the First
Appellate Court has no legs to stand and fails.
32. Long back in 1981, three judges of this Court in the case of
Bholaram vs. Ameerchand – (1981) 2 SCC 414 had ruled
that even if findings of facts by courts below are wrong or
grossly inexcusable that by itself would not entitle the High
Court to interfere under Section 100 CPC in the absence of clear
error of law. A similar view was reiterated in Madhavan Nair
v. Bhaskar Pillai (Dead) by Lrs. - (2005) 10 SCC 553 ,
wherein it has been laid down that even if the First Appellate
Court commits an error in recording a finding of fact, that itself
will not be a ground for the High Court to upset the same.
33. In Kashibai w/o Lachiram v. Parwatibai w/o
Lachiram – (1995) 6 SCC 213 , a similar proposition of law
was laid down by this Court and it was held that the High
Court cannot reappreciate the evidence and interfere with the
findings of facts unless a substantial question of law or a
question of law duly formulated is to be decided. The second
appeal does not lie on the ground of erroneous findings of
facts based on appreciation of the relevant evidence.
35. Again, in Kulwant Kaur v. Gurdial Singh Mann (Dead)
by Lrs – AIR 2001 SC 1273 , it was emphasized that the fact
remains that in a second appeal, a finding of fact, even if
erroneous, will not be disturbed unless it is found that it
stands vitiated for want of perversity. No such case for
interference has been made out in the present case."
(Emphasis supplied)
33.2 It is also profitable to refer to the decision of the Hon’ble
Apex Court in the case of Jaichand (Dead) through Lrs and
Others v. Sahnulal and Another - 2024 SCC OnLine SC
3864 , whereby, the Hon’ble Apex Court held thus:
“25. In Kshitisn Chandra Purkait v. Santhosh
Kumar Purkait reported in (1997) 5 S.C.C. 438) , this
Court held that in the Second Appeal, the High Court
should be satisfied that the case involves a substantial
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question of law and not mere question of law.
27. This Court in Kondira Dagadu Kadam v.
Savitribai Sopan Gujar reported in AIR 1999 S.C.
2213 held:-
“The High Court cannot substitute its opinion for the
opinion of the first Appellate Court unless it is found that
the conclusions drawn by the lower Appellate Court were
erroneous being contrary to the mandatory provisions of
law applicable or its settled position on the basis of
pronouncements made by the Apex Court, or was based
upon inadmissible evidence or arrived at without evidence.”
28. It is thus clear that under Section 100, C.P.C., the
High Court cannot interfere with the findings of fact
arrived at by the first Appellate Court which is the final
Court of facts except in such cases where such findings
were erroneous being contrary to the mandatory
provisions of law, or its settled position on the basis of
the pronouncement made by the Apex Court or based
upon inadmissible evidence or without evidence.”
(Emphasis supplied)
34. For the reasons recorded supra, I do not find that the
findings of fact recorded by the Appellate Court in its
impugned judgement in arriving at its final conclusion were
either perverse or grossly erroneous. On the contrary, I am in
agreement with the final conclusion reached by the Appellate
Court on the aspects discussed in detail above. It is a settled
position of law that unless the findings of fact recorded by the
Courts below are perverse or grossly erroneous and/or run
contrary to the position of law, this Court should not interfere
with such findings of fact while exercising its power under
Section 100 of the CPC.
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CONCLUSION:
35. The upshot of the foregoing discussion and reasons
lead to following conclusions:
35.1 The POA dated 05/03/2007 executed by plaintiff Nos.
1 to 4 (the principal) in favour of defendant No.1 (the agent)
was not an irrevocable POA inasmuch as it was not coupled
with an interest in the subject matter in favour of defendant
No.1 (the agent).
35.2 The plaintiff Nos.1 to 4 were well within their rights
and, without any violation of the provisions of the Act, 1872
referred to supra, cancelled the aforesaid POA on 06/01/2009.
35.3 Once the POA dated 05/03/2007 stood cancelled,
defendant No.1 (the agent) had no authority in law to execute
and register the sale deed on behalf of plaintiff Nos.1 to 4 (the
principal) in favour of defendant No.2 on 30/07/2009.
35.4 The execution and registration of the aforesaid sale
deed dated 30/07/2009, in favour of defendant No.2 by
defendant No.1, is null and void. Conversely, the registered
sale deed dated 18/06/2012, executed in favour of plaintiff
No.5 by original owners – plaintiff Nos. 1 to 4, has been
correctly declared legal and valid.
35.5 Resultantly, defendant No.2 could not derive title to
the suit property by virtue of the aforesaid sale deed.
Consequently, the subsequent purchasers have also not
derived any better title than that which defendant No.2
himself possessed.
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36. In view of the foregoing conclusions, the present second
appeals are found to be devoid of merit, as they do not raise
any substantial questions of law. Accordingly, they are
dismissed. Consequently, the impugned judgement and decree
passed by the Appellate Court is hereby confirmed. No orders
as to costs.
37. As a sequel, the Civil Application(s) for stay also stands
rejected. The interim relief granted earlier stands vacated
forthwith.
38. The Decree shall be drawn accordingly.
(MAULIK J. SHELAT, J)
FURTHER ORDER
After pronouncement of the judgment, Mr.Amar Bhatt,
learned Senior Advocate would request for extension of the
interim relief granted earlier, which is strongly opposed by
Mr.Rusi Trivedi, learned advocate for respondent No.5.
For the reasons supra, the request is refused.
(MAULIK J. SHELAT, J)
GAURAV J THAKER
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