Karnataka High Court
Meenaxi W/O Madhukar Naik, vs Pandurang Bhimrao Laxmeshwar, on 14 July, 2020
Bench: S.Sujatha, Shivashankar Amarannavar
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 14 t h DAY OF JULY 2020
PRESENT
THE HON'BLE MRS. JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
Miscellaneous First Appeal No.22850/2013 (LAC)
BETWEEN:
1. MEENAXI W/O MADHUKAR NAIK,
AGE: 68 YEARS , OCC: HOUSEHOLD,
R/O: PLO T NO. 302, SARASWA TI,
C.H.S . LTD., S ECTOR - II,
CHARKOP, KANDIWALI (WEST) ,
MUMBAI-400 067.
2. ATUL S/O MADHUKAR NAIK,
AGE: 48 YEARS , OCC: BUSINESS ,
R/O: S.F.9, ROYAL ARCH APARTMENT
BHAVANI NAGAR, SAI GARDEN LAYOUT,
NEXT TO SHINDE GUEST HOUSE,
HUBLI-580 023.
3. SNEHAL W/O MAHENDRA JAIN,
AGE: 51 YEARS , OCC: HOUSEHOLD,
R/O: 13/C, I CROS S, IV MAIN
SECTOR 6, H.S .R. LAYOUT,
BANGALORE-56.
4. ANUP S/O MADHUKAR NAIK,
AGE: 46 YEARS , OCC: BUSINESS ,
R/O: PLO T NO. 302, SARASWA TI
C.H.S . LTD., S ECTOR II,
CHARKOP, KANDIWALI (WEST) ,
MUMBAI-400 067.
... APPELLANTS
(BY SRI. MRUTYUNJAYA TATA BANGI, ADVOCATE)
2
AND:
PANDURANG BHIMRAO LAXMESHWAR,
SINCE DEAD. BY L.Rs.
i) KIRAN @ JOHN, S/O PANDURANG LAXMESHWAR
SINCE DEAD. BY L.Rs.
(i)(a) SMT. ASHWINI
W/O KIRAN @ JOHN LAXMESHWAR
AGE 35 YRS., OCC: BUS INESS
(i)(b) KUMAR ANU SH,
S/O KIRAN LAXMESHWAR
AGED ABOUT 7 YRS., OCC: STUDENT
(i)(c) KUMAR ANUJ,
S/O KIRAN LAXMESHWAR
AGED ABOUT 4 YRS., OCC: STUDENT
ii SMT KEERTHI @ JULI
D/O PANDURANG LAXMESHWAR
AGED ABOUT 35 YEARS,
OCC: BUS INESS & H/W
RESPONDENTS (i)( b) AND (ii)(c) ARE MINORS
REPRESENTED BY THEIR NA TURAL GUARDIAN
MOTHER RESPONDENT R(i)(a) .
All R/A T OPPOSITE KALA BHAVAN,
P.B. ROAD, DHARWAD.
... RESPONDENTS
(BY SRI. SUDHARSHAN SURESH, ADV. for R(ii) AND R(i)(a))
THIS APPEAL IS FILED UNDER SECTION 54(1) OF LA
ACT 1894, AGAINST THE JUDGMENT AND AWARD
DTD:04.08.2011 PASSED IN MISC. CASE NO.67/2010 ON
THE FILE OF THE PRINCIPAL SENIO R CIVIL JUDGE, H UBLI,
ALLOWING THE PETITION FILED U/S. 31 OF LAND
ACQUISITION ACT.
RESERVED ON :16.06.2020
PRONOUNCED ON :14.07.2020
3
THIS APPEAL HAVING BEEN HEARD AND RESERVED
AND COMING ON FOR PRONOUNCEMENT, TH IS DAY,
SHIVASHANKAR AMARANNAVAR J., DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is filed by the appellants being aggrieved by the order dated 04.08.2011 passed in Miscellaneous Case No.67/2010 by the learned Principal Senior Civil Judge, Hubli, wherein it is held that the petitioner/respondent herein is entitled to receive the entire compensation awarded by the Special Land Acquisition Officer.
2. For the purpose of convenience, the parties are referred to as per their ranking before the Reference Court.
3. The respondents/appellants herein had challenged the impugned order dated 04.08.2011 passed in Misc.Case No.67/2010 before the learned I Additional District and Sessions Judge, Dharwad sitting at Hubli in Misc.Appeal No.105/2011 which came to be dismissed by order dated 26.06.2012. The same was challenged before this Court in Miscellaneous Second Appeal No.573/2012. This Court by judgment dated 14.06.2013 has set aside the order passed in 4 Misc. Appeal No.105/2011 and remanded the matter back to the lower appellate Court with a direction to return the appeal memo to the appellants therein to be filed before the Court having jurisdiction to entertain the same within the time frame fixed therein. The appeal memo in M.A. No.105/2011 has been returned to the appellants therein on 11.07.2013. The appellants therein have filed the present appeal along with the returned appeal memo in Misc.Appeal No.105/2011 on 15.07.2013.
4. The facts in brief are as under:
The Land Acquisition Officer had referred the matter to the learned Principal Senior Civil Judge, Hubli, under Section 31 of the Land Acquisition Act as per the directions given by this Court in Writ Petition No.61411/2010 disposed off on 07.04.2010 along with the cheque for Rs.1,23,02,274/-. After receipt of the said reference, one Pandurang Bheemrao Laxmeshwar/petitioner filed a claim petition stating that he had entered into an agreement dated 27.12.1984 in respect of the agricultural land bearing Sy. No.3 measuring 6 acres 5 situated in Gokul village, Gokul road, Hubli with late Madhukar Ramrao Naik, who was the absolute owner of the said land. The said M.R. Naik had also executed an irrevocable General Power of Attorney on 27.12.1984 which was registered before the Sub-Registrar, Hubli. As per the agreement, the petitioner was obliged to pay Rs.3,00,000/- to the owner including Rs.1,50,000/- payable to the Canara Bank, Durgad Bail Branch, Hubli, since M.R. Naik was suffering from court decrees in the suits instituted by the Canara Bank. The petitioner had paid Rs.2,50,000/- to Canara Bank, Hubli on 29.10.1987 through cheque and in all, the petitioner paid Rs.4,00,000/- to late M.R. Naik and Shri Atul Naik under the instructions of M.R. Naik under valid receipts. As per the authority given by late M.R. Naik under the registered irrevocable General Power of Attorney, the petitioner has got the land converted into non-
agricultural land after the Canara Bank, Hubli, withdrew its charge over the said land. The petitioner formed 67 residential plots and sold 59 plots to third parties under registered sale deeds. After the entire land was developed at 6 the cost of nearly Rs.20,00,000/-, the petitioner has put a borewell in plot No.15 and constructed a guest house in plot No.8. As such, interest is created on the land in favour of the petitioner. 6 acres of land out of Sy.No.3 was sub-divided between M.R. Naik and other owners. 6 acres of land belonging to M.R. Naik was numbered as Sy.No.3B. After the residential plots were formed on the land in question, different numbers were given to the respective plots. The names of purchasers of respective plots appeared in the mutation register with respect to their respective lands and the names of some of the purchasers were not entered in the mutation register, due to inadvertence of the revenue officials, though registered sale deeds were executed. The State of Karnataka had issued a Notification dated 02.09.2008 under Section 28(4) of the Karnataka Industrial Areas Development Act, 1966 ('Act' for short) for acquisition of the properties for upgrading the Hubli Airport. The petitioner's name appeared in the record of rights relating to the lands in question as General Power of Attorney Holder along with the name of the holder M.R. Naik. M.R. Naik expired on 18.04.1993. The 7 name of the petitioner as well as M.R. Naik continued all these years even though he expired in the year 1993 itself. Therefore, Atul Naik and his family members got their names entered as legal heirs of M.R. Naik in respect of the subject properties on 29.5.2007, 09.01.2009 and 02.02.2009 deleting the name of the petitioner and M.R. Naik. The petitioner filed an appeal before the Assistant Commissioner, Dharwad and the Deputy Commissioner, Dharwad. The III Additional Civil Judge (Junior Division), directed the Special Land Acquisition Officer to deposit the compensation amount in the Court. Mr. Atul Naik and his family members tried to withdraw the compensation amount and the petitioner filed a suit in O.S.No.364/2009 on the file of the III Additional Civil Judge(Jr.Dn) wherein an order of injunction was granted against the legal heirs of late M.R. Naik and others. They have preferred M.A. No.31/2009 on the file of the I Additional Civil Judge (Sr. Dn), Hubli, which was allowed by setting aside the trial Court's order. The petitioner preferred Writ Petition before this Court in W.P. No.61411/2010. This Court directed the SLAO to deposit the amount in the Court and 8 directed to investigate as to the entitlement of the party for receiving the compensation.
The Reference Court issued court notice to the parties in WP No.61411/2010. The respondents appeared through counsel and filed objections.
The respondents contended that the petition filed by the petitioner is false, frivolous and vexatious and not maintainable. They have disputed the execution and registration of the irrevocable General Power of Attorney by Mr.Naik on 27.12.1984 in favour of the petitioner. The agreement of sale dated 27.12.1984 said to have been entered into by M.R.Naik with the petitioner in respect of the agricultural land bearing Sy.No.3 measuring 6 acres was also disputed. However, they have admitted that survey No.3 was sub-divided between M.R. Naik and other owners and the land of M.R. Naik was numbered as 3B. It was admitted that the names of different purchasers have been entered in the different plots as per the mutation and the name of some of the purchases have not been entered in the M.R. Register 9 though registered sale deeds have been executed and they have filed an application before the revenue officials to enter their names as per the purchase. The respondents had admitted the notification issued by the State of Karnataka as per Section 28(4) of the Act.
The petitioner, in order to prove his case, examined himself as PW-1 and got marked Ex.P-1 to P-45. On behalf of the respondents, Atul Naik second respondent was examined as RW-1 and produced Exs.R-1 to R-26.
5. After hearing the arguments on both sides, the Reference Court framed the point for consideration and answered the same in the affirmative holding that the petitioner is entitled for payment of compensation deposited before the Court by the SLAO.
6. Being aggrieved by the order of the reference Court, the respondents are before this Court.
7. Learned counsel for the appellants argued that no clauses of the General Power of Attorney executed by M.R. 10 Naik in favour of Pandurang Bhimrao Laxmeshwar, would show that it is an irrevocable power of attorney. On the other hand, it is only a simple General Power of Attorney. He further argued that on the death of the principal, the General Power of Attorney executed by him has no value and therefore the petitioner has no right over the property of the principal- M.R. Naik. He further argued that the General Power of Attorney executed by M.R. Naik in favour of P.B. Laxmeshwar is not coupled with interest and it is a revocable power of attorney and ceases after the death of the principal.
8. Per contra, learned counsel appearing for the respondent argued that the General Power of Attoreny executed by M.R. Naik in favour of P.B. Laxmeshwar (petitioner) is irrevocable power of attorney and it is coupled with interest and it will not cease to have effect even after the death of the principal. He further argued that a conjoint reading of the contents of Ex.P-23-power of attorney and contents of ExP-22- agreement, go to establish that the General Power of Attorney executed by M.R. Naik in favour of 11 P.B. Laxmeshwar as per Ex.P.23 is an irrevocable power of attorney and it is coupled with interest.
9. We have heard the learned counsel appearing for the parties and perused the documents on record.
10. On perusal of the grounds urged and the arguments advanced, the following points arise for our consideration:
i. Whether the General Power of Attorney executed by M.R. Naik dated 27.12.1984 is irrevocable power of attorney coupled with interest?
ii. Whether the appellants are entitled for payment of compensation and to what extent?
Our answer to the aforesaid points are as under:
i. -in the affirmative ii. - the appellants are entitled to compensation with accrued interest in respect of plot measuring 40' x 60' and the respondents are entitled to the remaining compensation amount.12
11. Points (i) and (ii): The fact that Sri. M.R. Naik is the owner of Sy. No.3 situate at Gokul village, Hubli and he had availed loan from Canara Bank, which has obtained a decree against him, and that the said property was given for collateral security to the Canara Bank, is not in dispute.
12. RW-1-Atul Naik, who is the son of M.R. Naik, during his cross-examination has admitted regarding the decree obtained by the Canara Bank and also clearance of loan account of Canara Bank by P.B. Laxmeshwar (petitioner). RW-1 has also admitted regarding receipt of Rs.2,50,000/- by cheque under Ex.P.38, Rs.10,000/- cheque and cheque for Rs.25,000/- under Ex.P-37 and also admitted the amount received by his father under receipts as per Exs.P.28-36, P.40 and P.41. Ex.P.28-41 disclose that M.R. Naik had received the amount of consideration of agreement dated 27.12.1984 through cash and cheques. He has also admitted that P.B. Laxmeshwar had paid Rs.2,50,000/- to the Canara Bank.
13
13. Ex.P-22 is an agreement dated 27.12.1984 entered into between M.R. Naik-first part and Sri P.B. Laxmeshwar- second part.
14. Ex.P.23 is the irrevocable General power of Attorney executed by M.R. Naik appointing P.B. Laxmeshwar as his attorney to deal with the agricultural land bearing Sy. No.3 measuring 6 acres. The clauses in the agreement-Ex.P- 22 and power of attorney-Ex.P-23 have to be looked into to ascertain whether Ex.P-23 is a General power of Attorney coupled with interest. The clauses in Ex.P-22 reads thus:
" The first part is the exclusive owner of the agricultural land bearing Sl. No.3 of Gokul Village, measuring 6-0-0 acres situated at Gokul road, near B.D.K. Alloys Factory, Hubli. That it is the self earned property of First Part.
Whereas the First Part had taken loan from Canara Bank, Durgadbail, Hubli and having failed to pay back the loan amount, the Canara Bank filed suit against First Part and got the suit decreed. That now the First Part is to pay Rs.5,00,000/- approx. to the Canara Bank, Hubli towards the decreetal amount. That now the First Part is not in a position to pay this decreetal amount to the Bank and the First Part is compelled to dispose off the above said land for paying the decreetal amount to the Canara Bank, Hubli.14
Whereas the First Part is not in a position to deal with the property for its selling and contacting the prospective purchasers and to deal with the Bank Authorities, the First Part makes this agreement with the Second Part as under:-
FIRST PART AND SECOND PART AGREES AS UNDER:-
1. That the First Part authorizes the Second Part to deal with the above said property for which a separate General Irrevocable Power of Attorney will be executed in favour of Second Part.
2. That the First Part agree that only after executing the General Irrevocable Power of Attorney in favour of Second Part, the Second Part agrees to pay the negotiated amount of Rs.1,50,000/- with Canara Bank outstanding in the name of First Part in the Canara Bank, Hubli and in addition, the Second Part agrees to pay Rs.75,000/- to the First Part if the Second Part disposes off the above said land as it is, i.e., as an agricultural land. That if the Second Part converts the above said land into non-agricultural one and converts them to plots and sell them, the second part agrees to pay Rs.1,50,000/- instead of Rs.75,000/- in addition to the payment of negotiated amount of Rs.1,50,000/- to the Bank. This will be towards full cost of land. In addition, the Second Part agrees to give one plot to the First Part or his nominee of 40' x 60' size, free of cost.
3. After the acceptance of the proposal of sale of land by Canara Bank through the Second Part, the Second Party shall be liable to pay interest as per the decree obtained by the Bank on Rs.1,50,000/- from the date of 15 acceptance of the proposal till the actual transfer of the amount in the loan account of the First Part.
4. Rs.75,000/- as mentioned in Clause 2 of the agreement, will be paid by the Second Part in 3 monthly installments of Rs.25,000/- each after the acceptance of offer by the Bank. The First installment shall be paid within one month thereafter.
5. That the First Part agrees that First Part will have no claim over the property once the payment is made as above by the second Part. That the First Apart agrees that once the payment is made as above, the First Part agrees to transfer the land/plots in favour of the Second Part by way of Sale Deed or in favour of persons to whom the Second part suggests. That the Second Part is free to deal with the land as per his will and wish i.e., the First Part will have no claim over the property or amount once the payment is made to the First Part as above.
6. The Second Part agrees to make a payment as above to the First Part. That First Part agrees that in respect of the Bank's decreetal amount, the Second Part may make the payment direct to the Bank and get the encumbrance removed or discharged. That the First Part agrees in case there are any other encumbrances on the property than that of the Bank, the First Part himself should discharge them at his own cost. The Second Part is not liable to pay other debts or encumbrances if any."16
15. The clauses at Ex.P-23- General power of attorney are extracted as under:
" ACTS TO BE DONE BY OUR ATTORNEY
1. To apply for certified copies of property extracts or decrees in Revenue/Civil/Criminal Courts in respect of the suits filed against me by the Banks and also in respect of this agricultural land.
2. To negotiate with the Canara Bank, Durgadbail, Hubli, in respect of Loan Account No.________ and about discharge of the loan amount and its negotiation etc.
3. To pay the loan amount and to obtain the Receipt from the Bank. To adjust the loan amount if necessary.
4. To apply to the Deputy Commissioner, Dharwad and other Government Offices for getting the exemptions and other orders in respect of sale of the said land. To apply to the Government of Karnataka and other Government Departments in the State for getting the exemption and converting the Agricultural land into no-agricultural one and to convert the land into plots and any act in this regard.
5. To apply to C.T.S. and Reveue Authorities for any records and measuring and fixing of the boundaries of the land/plots etc.,
6. To execute any agreement in respect of the land/plots and to receive E.M.D. and Sale consideration etc., and to pass the valid receipts and to make payments to any authorities 17 Government or Private and to obtain receipts in respect of the above land/plots. To make any transactions with the prospective purchasers of land/plots.
7. To Execute the Sale Deeds before the Sub-Registrar, Hubli, in respect of the land/plots. To handover the possession of the land/plots. This authority can be exercised by the Attorney, only after the entire amount is paid to the Bank as per the agreement and after obtaining the clearance of the Bank. (This authority means the authority given at para 7 of General Power of Attorney).
8. To develop the land/plots/layout in respect of the above land. To apply to the C.T.S., C.I.T.B., Town Planning Offices and to make payments in respect of developments etc., and to apply to other Local Offices also.
9. To file suits, or to initiate any legal proceedings in Revenue/Civil/Criminal Courts and to subscribe and to verify the pleadings and to engage the Lawyer and to compromise the suits or litigations and to execute the decrees etc., in respect of this transaction in respect of the above said land/plots.
10. To do all necessary acts for the purpose of selling of the land/plots, developing of the layouts, conversion of agricultural land into non-agricultural one and to get an exemption from the Government of Karnataka and the Deputy Commissioner, Dharwad and to obtain any necessary orders from the competent authorities in this regard and to execute the sale-deed before the Sub-Registrar, Hubli etc.,"18
16. Ex.P-22 and 23 both are executed on 27.12.1984 by M.R. Naik is not disputed or denied during his life time. The said M.R. Naik died on 18.04.1993. The respondents 1 to 4, who are the appellants herein, are the legal representatives of deceased M.R. Naik.
17. In the case of Seth Loon Karan Sethiya v. Ivan E. John and others reported in AIR 1969 SC 73, the Hon'ble Apex Court has observed thus:
" 5. There is hardly any doubt that the given by the appellant in favour of the Bank is a power coupled with interest. That is clear both from the tenor of the document as well as from its terms. Section 202 of the Contract Act provides that 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. It is settled law that where the agency is created for valuable consideration and authority is given to effectuate a security or to secure interest of the agent, the authority cannot be revoked. The document itself says that the power given to the Bank is irrevocable. It must be said in fairness to Shri Chagla that he did not contest the finding of the High Court that the power in question was irrevocable. "19
The Reference Court has placed reliance on the said judgment.
18. If an agreement is entered into on a sufficient consideration whereby an authority is given for the purpose of securing some benefit to the donee of the authority, the authority is irrevocable on the ground that it is coupled with an interest.
19. The petitioner-P.B. Laxmeshwar has to make payment of Rs.1,50,000/- to the Canara Bank towards the loan outstanding by M.R. Naik, in addition, he has to pay Rs.75,000/- if he disposes off the land of M.R. Naik as it is, as an agricultural land and if he converts the said land into non- agricultural one and forms plots and sell them, then he has to pay Rs.1,50,000/- instead of Rs.75,000/- in addition to the negotiated amount of Rs.1,50,000/- to the Bank. In addition, P.B. Laxmeshwar has agreed to give one plot to M.R. Naik or his nominee measuring 40' x 60' free of cost. Under Clause 5 of Ex.P.22, it is mentioned that P.B.Laxmeshwar once makes payment as above, he is free to deal with the land as per his 20 will and wish and M.R. Naik will have no claim over the property or the amount. The said agreement dated 27.12.1984 has been referred in Ex.P-23-General Power of Attorney in clause 7. Ex.P-23, power of attorney has been executed in favour of P.B. Laxmeshwar by M.R. Naik to deal with the land only after the entire amount is paid to the bank as per the agreement and after obtaining clearance certificate from the bank. Therefore, on conjoint reading of Exs.P-22 and 23, it is clear that an agreement is entered into on a sufficient consideration whereby an authority is given for the purpose of securing some benefit to the donee of the authority, the authority is irrevocable on the ground that it is coupled with an interest.
20. Where agency is created for valuable consideration, an authority is given to effectuate the security or to secure the interest of the agent, the authority cannot be revoked. Section 202 of the Contract Act reads thus:
" S. 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 21 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."
As per the said provision, if the agency is coupled with interest, it is irrevocable. From the reading of the illustration
(a), it is clear, that if the authority is coupled with interest, principal cannot revoke the authority nor it can be terminated by insanity or death. Therefore, even after the death of the principal, the agent can act on the basis of the said authority. Therefore, the General Power of Attorney executed in favour of P.B. Laxmeshwar dated 27.12.1984 as per Ex.P-23 read along with Ex.P-22 is irrevocable power of attorney as it is coupled with interest.
21. The subject matter of Exs.P-22 and 23, Sy.No.3 of Gokul village has been acquired for the purpose of Air Port. In the meantime, P.B. Lakshmeshawar had converted the said land into non-agricultural land and formed layout and sites 22 and sold some of the sites except site Nos.1, 6, 7, 8, 13, 15, 24, 40 and 42. The SLAO assessed the compensation in a sum of Rs.1,23,02,274/- and deposited the said amount with the Reference Court while making reference under Section 31 of the Land Acquisition Act. The said P.B. Laxmeshwar is having right to receive the said compensation in respect of the remaining plots except a plot measuring 40' x 60' which he has agreed to give to Sri. M.R. Naik or his nominee as per clause(2) of the agreement at Ex.P-22. Therefore, the appellants, who are the legal heirs of M.R. Naik are entitled to proportionate compensation along with accrued interest in respect of the plot measuring 40' x 60' and the said P.B. Laxmeshwar is entitled for the remaining amount of compensation along with accrued interest. What is the exact value of the site measuring 40' x 60' cannot be ascertained on the basis of the material available on record. Therefore, the matter requires to be remanded for the said purpose to the Reference Court so that the Reference Court can ascertain its value after giving the parties an opportunity to lead their evidence in this regard. Accordingly, we pass the following: 23
ORDER The appeal is allowed in part.
The appellants are entitled to the proportionate compensation amount with proportionate interest in respect of site measuring 40' x 60'. The petitioner-P.B. Laxmeshwar (Dead. By his legal representatives) is entitled for the remaining amount of compensation with proportionate interest.
The Reference Court is directed to hold an enquiry by giving an opportunity to the parties to lead evidence and ascertain the proportionate compensation amount in respect of the plot measuring 40' x 60'.
The matter is remitted to the Reference Court for the limited purpose as aforesaid.
Sd/-
JUDGE Sd/-
JUDGE kmv