Calcutta High Court (Appellete Side)
Smt. Shamali Das vs Swadesh Ghosh & Ors on 10 July, 2009
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
Form No. J(2)
IN THE HIGH COURT AT CALCUTTA
Appellate/Revisional/Civil Jurisdiction
Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
And
The Hon'ble Mr. Justice Prasenjit Mandal
F.M.A. No. 159 of 2009
(C.A.N. 536 of 2009)
(C.A.N. 721 of 2009)
(C.A.N. 1475 of 2009)
Smt. Shamali Das
Versus
Swadesh Ghosh & Ors.
For the Appellant: Mr. Moloy Roy,
Mr. Swarup Kumar Ghosh
For the Respondent: Sardar Amjad Ali,
Mr. Partha Pratim Mukherjee,
Mr. Harish Tandon,
Mr. Karabi Ghosh.
Heard on: 01.07.2009
Judgment on: 10th July, 2009.
Bhaskar Bhattacharya, J.:
This first miscellaneous appeal is at the instance of the defendant No.1 in a suit for declaration and injunction and is directed against order dated 15th January, 2009 passed by the learned Judge, Seventh Bench, City Civil Court at Calcutta in Title Suit No.4181 of 2008 thereby disposing of an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure filed by the plaintiffs by restraining the appellant from giving effect to the impugned deeds of cancellation of power of attorney as described in Schedule 'B' of the application and also from making any negotiation with any party or intending buyer of the lands in question described in the two power of attorneys dated 18th December, 2006.
Being dissatisfied, the defendant No.1 has come up with the present appeal.
The respondent Nos.1 to 3 filed in the City Civil Court at Calcutta a suit being Title Suit No.4181 of 2008 thereby praying for declaration that two registered deeds for cancellation of power of attorney dated 15th September, 2008 executed by the defendants were illegal, null and void and inoperative and for further declaration that the registered deeds of power of attorney earlier executed by the defendants empowering the plaintiffs to act on their behalf were legal, valid and operative and were still in force.
The case made out by the plaintiffs/respondents may be summed up thus:
(a) The defendants claiming to be the owners of some landed properties intended to sell of those lands to the plaintiffs and entered into two agreements for sale dated 18th September, 2002 upon receiving earnest money.
(b) On 5th July, 2005 and 7th September, 2005, the defendants further executed two agreements for sale of some other properties after taking further earnest money.
(c) Subsequently, in connection with the aforesaid agreements for sale, the defendants executed two deeds of general power of attorney on 18th December, 2006 and those were registered.
(d) In those registered deeds of power of attorney, exclusive power was given to the plaintiffs to look after the lands involved in the four agreements for sale and the plaintiffs were further authorised to protect and manage and also negotiate for sale, the part of the property to the intending buyers.
(e) Although the plaintiffs had all along been sincerely and diligently looking after those landed properties, recently the defendant No.1 informed the plaintiff No.2's husband that in the event the plaintiffs did not pay to her at a higher rate she would cancel those agreements for sale and also the deeds of power of attorney executed in favour of the plaintiffs.
(f) On 20th September, 2008 in the newspaper 'Bartaman', the plaintiffs found out a legal notice, inter alia, stating that those two registered deeds of power of attorney had been cancelled by the defendants on 15th September, 2008 by virtue of two further registered cancellation deeds.
(g) The defendants had illegally cancelled those two registered deeds of power of attorney without notice to the plaintiffs and such arbitrary cancellation of those deeds should be declared to be illegal. Hence the suit.
On the basis of selfsame allegations, as made in the plaint, the plaintiffs came up with an application for temporary injunction for restraining the defendants from giving effect or further effect to the deeds of cancellation of power of attorney and also from making any negotiation with any party or parties or intending buyer of the land in question described in the two deeds of power of attorney dated 18th December, 2006.
The aforesaid application was contested by the appellant by filing written statement thereby denying the material allegation made in the application for temporary injunction and asserting that there was sufficient ground for revocation of the deeds of power of attorney earlier granted in favour of the plaintiffs.
The learned Trial Judge on consideration of the materials on record came to the conclusion that in the absence of any document showing that the plaintiffs were not looking after the landed properties of the defendants sincerely and diligently and also in accordance with the registered deeds of power of attorney, the plaintiffs made out a strong prima facie case to go for trial and the balance of convenience and inconvenience also stood in their favour. The learned Trial Judge further observed that the perusal of the recitals given in the deeds of power of attorney, there was hardly any doubt that the power that was given by the defendants in favour of the plaintiffs was power coupled with interest as indicated in Section 202 of the Contract Act.
The learned Trial Judge, therefore, allowed the application for temporary injunction thereby restraining the defendants from giving effect to the impugned deeds of cancellation of power of attorney and also from making any negotiation with any other parties or intending buyers of the land in question till the disposal of the suit.
Being dissatisfied, the defendant No.1 has come up with the present first miscellaneous appeal.
Therefore, the only question that arises for determination in this appeal is whether the learned Trial Judge was justified in granting the temporary injunction, as indicated above, in the facts of the present case.
In other words, the question is whether the two deeds creating power of attorney by the defendants in favour of the plaintiffs to do various acts on behalf of the defendants is really irrevocable.
In order to appreciate the question, it will be profitable to refer to the provisions contained in Section 202 of the Contract Act and Section 54 of the Transfer of Property Act which are quoted below:
"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.
(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."
"54. "Sale" defined.--"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made.--Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract of sale.--A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
(Emphasis given by us) After hearing the learned counsel for the parties and after going through the provision of the Contract Act including Section 202 mentioned above, we find that an agency in the absence of an express contract to the contrary cannot be terminated by the Principal if the agent has himself an interest in the property which is the subject-matter of agency. 'Agent' has been defined in Section 182 of the Indian Contract Act, 1872, to mean a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the 'principal'. Section 185 of the Contract Act suggests that no consideration is necessary to create an agency. Besides the Indian Contract Act, the Power of Attorney Act, 1882 deals with the subject. Section 1-A of the Power of Attorney Act defines power of attorney to include any instruments empowering a specified person to act for and in the name of the person executing it. Section 2 of the said Act provides that the donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature and his own seal, where sealing is required, by the authority of the donor of the power and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force.
Thus, the donor of a power of attorney has every right to revoke the same at any time after the execution of such power except in a case where Section 202 of the Contract Act is attracted. In the case before us, by the power of attorney in question, the defendants authorised the plaintiffs to do the following acts:
" 1. To look after our landed property, manage, maintain, control, supervise and administer our said properties particularly mentioned in the schedule hereunder written on our behalf from the date of signing of this power of attorney.
2. To take all steps to mutate and record our names with the records in the office of the B.L. & L. R.O. and with the Kolkata Municipal Corporation and pay all taxes upto date in respect of the stated properties on our behalf.
3. To sign on any application forms, papers, documents, statements, undertakings, declarations in connection with the stated properties as would be required for mutation and recording our names with the records in the office of the B.L. & L.R.O. and with the Kolkata Municipal Corporation on our behalf.
4. To sign on any application forms, papers and documents as would be required by the Kolkata Metropolitan Authority, Kolkata Municpal Corporation, Calcutta Improvement Trust and other authorities for proper administration of our said properties on our behalf.
5. To proceed against any trespasser or his unlawful activity on the said landed properties taking the help of any Ld. Advocate including Prof. Amalendu Chakraborty, M.Com., LL.B, who is our Advocate and resides at 44D, Kaloopara Lane, Dhakuria, Kolkata 700 031.
6. To accept and/or receive notices and service of summons from any court, offices and other authorities, postal and/or any person/persons on our behalf in connection with stated properties as scheduled below.
7. The principals will sign, if required, all papers, applications, documents for having the mutation affected in all their records.
8. The attorney will appear before the competent authorities and Government Department and/or offices and also other state executive, Judicial or quasi - judicial, Municipal Corporation and other authorities and also all Courts and Tribunals in connection with our scheduled properties on our behalf.
9. The attorney are empowered to negotiate terms for and to agree to and enter into and conclude any Agreement for sale for any of our stated Scheduled property herein or any part thereof to any intending/prospective Purchaser or Purchasers at such price and terms which our said Attorneys think proper and/or to cancel and/or repudiate the same.
10. The attorney will be entitled to receive from the intending Purchaser or Purchasers any earnest money and/or advance or advances and the contracted amount payable to principals shall be deposited in the principal's bank account.
11. The attorney will be empowered to produce the conveyance of the scheduled landed properties before the Sub-Registrar or Registrar having signatures and thumb impression for the execution of the principles for accomplishing the same.
12. Any earlier understandings between the principals and the attorneys, save and except which are inconsistent with the provisions of the present power of attorney, shall remain in force.
13. And we hereby agree to ratify and confirm all and whatever other act or acts our said Attorneys shall lawfully do execute or perform or cause to be done, execute or perform in connection with the sale of the stated Scheduled properties and/or any part or portion under and by virtue of this deed notwithstanding no express power in that behalf is hereunder provided."
Such power of attorney was executed not on payment of any consideration as it appears from the deed itself.
Mr. Ali, the learned senior advocate appearing on behalf of the respondents, however, pointed out that before execution of the deeds of power of attorney, the defendants admittedly entered into agreements for sale by taking substantial amount as earnest money and according to him, those earlier agreements created right in favour of his clients in the property which is also the subject-matter of the power of attorney. We are afraid, we are not at all impressed by such submission. As indicated earlier, a mere agreement for sale in respect of the property did not create any interest in the land in question as provided in Section 54 of the Transfer of the Property Act and thus, the plaintiffs cannot get the benefit of Section 202 of the Contract Act. The first illustration to Section 202 would indicate that a charge was created in the land for payment of the dues of the donor and at the same time, the donee was authorised to sell the property and to realise the dues from the sale proceeds. In the case, before us, the agreements for sale did not create any interest. In the second illustration, A consigned 1000 bales of cotton to B who made advance to A for such purchase and A by the deed authorised B to sell those bales for the purpose of repaying B the amount he advanced. Once the owner of a movable property acquired with the money of another and consigns it to him for sale for realisation of his dues, the consignee gets interest in the subject-matter unlike the case before us where the donee of the power of attorney got no interest either by virtue of the power of attorney or by virtue of the earlier agreement for sale of immovable property.
Thus, the learned Trial Judge erred in law in holding that it is a case covered by Section 202 of the Contract Act and granting temporary injunction restraining the defendant, the lawful owner of the property, from giving effect to the cancellation of power of attorney. When the owner of the land decided to revoke the power earlier given, it is no part of the job of the Court to allow the plaintiffs to act on that basis although the power had been withdrawn when the plaintiffs acquired no interest in the land.
The second part of the injunction restraining the defendants from entering into any contract with the third party is equally not tenable at least in this suit which is not a suit for specific performance of the agreement for sale entered into between the parties as alleged. In the absence of any suit for specific performance of contract for sale of land allegedly entered into between the parties, in this suit for declaration and injunction, there was no scope of grant of the second limb of injunction granted by the learned Trial Judge.
Mr. Ali, as a last resort, tried to convince us that his clients on the basis of the power of attorney having entered into various contracts with third parties, for revocation of the power of attorney, his client would be in difficulty. Any agreement entered into by virtue of the power of attorney before the same was revoked is equally binding upon the defendants and thus, the apprehension of Mr. Ali is without any substance. As provided in Sections 203, 204 and 206 of the Contract Act, the act done by the agent before revocation, or partial act done before revocation is binding upon the principal and at the same time, for the absence of reasonable notice of revocation, if the agent has suffered any loss, he will be entitled to realise from the Principal but for that reason, the agent cannot be permitted to act in terms of authority even after revocation when the case does not come within the purview of Section 202.
We, therefore, find that the learned Trial Judge erred in law in allowing the application for temporary injunction filed by the plaintiff and consequently we set aside the order impugned and reject the application for temporary injunction. The appeal is, thus, allowed.
In view of the disposal of the appeal itself, all the connected applications have become infructuous and those are disposed of accordingly.
In the facts and circumstances, there will be, however, no order as to costs.
(Bhaskar Bhattacharya, J.) I agree.
(Prasenjit Mandal, J.)