Punjab-Haryana High Court
Smt. Bhagwan Kaur Wife Of Major Chanan ... vs Land Acquisition Collector on 18 July, 2012
Author: K. Kannan
Bench: K. Kannan
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RFA No.220 of 1984 (O&M)
Date of decision:18.07.2012
Smt. Bhagwan Kaur wife of Major Chanan Singh, resident of
Ambala Cantt., and others
...Appellants
versus
Land Acquisition Collector, Ludhiana, and others
....Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
----
Present: Mr. R.L. Batta, Senior Advocate, with
Mr. Nikhil Batta, Advocate, for the appellants.
Mr. Jaskiran Singh Sidhu, Advocate,
for the LRs of respondent No.2.
----
1. Whether reporters of local papers may be allowed to see the
judgment ? Yes.
2. To be referred to the reporters or not ? Yes.
3. Whether the judgment should be reported in the digest ? Yes.
----
K.Kannan, J. (Oral)
1. The appeal is in relation to an adjudication regarding title for apportionment under Section 30 of the Land Acquisition Act. The principal contest is between purchaser from one Chanan Singh claiming to be a power of attorney from the original owners of the property Yusaf and Ali. The rival claim to title was set up initially by Yusaf and Ali contending that they had been duped by the power of attorney and that they had revoked their power. The RFA No.220 of 1984 (O&M) -2- fact remained however that the sale itself had been prior to the date of revocation of the power of attorney by Yusaf and Ali. The Reference Court held that the sale in so far as it related to the share of Ali was not valid and provided for apportionment of the compensation ignoring the sale effected by Chanan Singh.
2. The appeal is filed at the instance of the purchaser from Chanan Singh, who incidentally happens to be the son of Chanan Singh himself. The question that would arise for consideration is whether the principal, Ali could ignore the sale as not binding by contending that his power of attorney Chanan Singh had committed a fraud and was acting on his own account by taking a sale in favour of his son. This is again to be seen in the context of a co-claimant along with Ali, Yusaf, who had lodged the claim contending that the sale was not binding on them, however resiled from his statement in the course of trial and was prepared to concede that he had received his share of sale consideration from his power of attorney. It appears that during the course of trial when Yusaf gave evidence that he had received his share of consideration and that Ali had also received his share of consideration. Ali had sought permission of the court to cross-examine the co-petitioner. The Court had declined permission and that order was not challenged at any time. I may observe that in a petition which was jointly filed under a single verification, it could not have been possible for one petitioner to cross-examine another petitioner. The best course in such a RFA No.220 of 1984 (O&M) -3- situation would have been for one of the parties who complained that the other was acting against his interest must have taken permission of the Court to transpose him from the array of parties from claimant to the position of a respondent. However, in this case, I find even a petition for transposition had not been made and the cause title reveals that both Yusaf and Ali continued to be treated as applicants and the Land Acquisition Officer and other persons, who were setting up the title adverse to the applicant, had been shown as respondents. If Ali, who was one of the applicants, had not not availed to himself the opportunity to cross-examine his co- applicant by securing a transposition, he had also forsaken his opportunity to cross-examine a statement issued against his interest. In a situation like this, a statement which would be contested in cross-examination by a co-petitioner would itself operate as an admission to bind his interest as well.
3. I do not want the case to be knocked out at the threshold and an adjudication rendered in favour of the appellants only by taking the issue of admission relating to title. Admission as constituting a transfer of title in relation to immovable property is itself weak evidence as held by the Supreme Court in Ambika Prasad Thakur Versus Ram Ekbal Rai-AIR 1966 SC 605. I will therefore, proceed to examine whether the applicant Ali could have made valid assertion of title to the property by ignoring the sale which his power of attorney Chanan Singh had made in favour of RFA No.220 of 1984 (O&M) -4- his son Manjit Singh, arrayed as the 4th respondent. It should be noticed that an act of an agent is binding on his principal and if any transaction of sale is made by a principal, it will bind him to divest him of the title which he had. In a normal situation therefore when Chanan Singh had purported to sell the property that included the share of Ali, the transaction of sale would operate to transfer the title in favour of the purchaser, no matter that he did not know that his agent was selling the property at the particular time. The only situation when a principal could be protected is when the sale itself was unauthorized and the power of attorney did not provide such a right of transfer. That issue is not before me that the power of attorney was not granted a power to transfer title to the property. What is contended now is that Ali did not know about the sale and that he came to know about the sale only when the purchaser staked his claim before the Reference Court. He would contend that his agent had committed a fraud in selling the property. The limitation for fraud could be pleaded from the time when a person came to know that a fraud had been practiced. However, this cannot be applied without minding the act of agent will bind him against a third party, while he may initiate an action against the agent within a period of 3 years from the time when a fraud is unearthed. Such an action cannot validly be founded in law so as to bind a 3rd party, if an action is not brought within 3 years from the date when the sale had actually taken place.
RFA No.220 of 1984 (O&M) -5-
4. Here the sale by Chanan Singh in favour of the 4th respondent Manjit Singh had been made on 05.11.1971. The claim for apportionment after the award was passed on 28.11.1977 was made only on 29.09.1980 before the Additional District Judge at Ludhiana. The registration of an instrument itself constitutes notice and it will be futile for a person to contend that the fact of registered sale deed came to be surface only when the property was acquired and when the complaint was lodged before the Collector when the award was passed on 28.11.1977. Section 3 of the Transfer of Property Act which defines the expression "registered" means "registered in any part of the territories to which this Act extends under the law for the time being in force regulating the registration of documents." The definition, "a person is said to have notice" is also included in the Transfer of Property Act to mean, " a fact when he actually knows that fact, or when, but for willful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it. This definition has an explanation which reads as follows:-
Explanation 1.-Where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, RFA No.220 of 1984 (O&M) -6- where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:
Provided that (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act.
Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.RFA No.220 of 1984 (O&M) -7-
Explanation III.- A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud."
5. This definition contains two important incidents where a transfer takes place in relation to immovable property which is registered. (i) The registration constitutes notice; (ii) if an agent has a knowledge of any particular act that knowledge is attributed to the principal himself. The proviso, however, excepts a situation where an agent fraudulently conceals the fact and the principal shall not be charged with notice thereof as against any person, who was a party to or otherwise cognizant of the fraud. In this case, if the agent was concealing the fact of sale, the principal could not be presumed to have notice of the transaction of sale. The proviso in explanation III states that he would not be charged with notice thereof as against any person, who was a party to or cognizant thereof. This exclusion is possible only if the other party, who was acting through the agent was himself cognizant on such fraud. It has to be, therefore, established that not merely the agent but also the purchaser had participated in the fraud by an active collusion amongst themselves. RFA No.220 of 1984 (O&M) -8-
6. In this case, the person, who was purchaser, is the son of the principal himself. It is, therefore, perhaps possible for a person to contend that Chanan Singh was himself acting on his own account by a benami purchase in his son's name or that it was merely a sham transaction to take the property within the reach of the real owner. A transaction where an agent deals on his own account is not however void per se, but it is voidable. Section 215 of the Contract Act provides for a situation where a right of a principal who deals on his own account without the principal's consent is dealt with. The Section and illustration A would be relevant to be reproduced:-
"215. Right of principal when agent deals, on his own account, in business of agency without principal's consent.- If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows, either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.
Illustration-(a) A directs B to sell A' estate. B buys the estate for himself in the name of C. A, on discovering that B has bought the estate for himself, may repudiate RFA No.220 of 1984 (O&M) -9- the sale, if he can show that B has dishonestly concealed any material fact, or that the sale has been disadvantageous to him."
The law requires that a principal who pleads that an agent was acting on his own account must repudiate the sale. The repudiation must be in a manner that the law admits of. The known manner of such repudiation is possible only by an action set aside the sale.
7. If the property had been sold in the year 1971 by his agent and the principal was contending that his agent had committed a fraud by acting on his own account by taking a sale fraudulently in the name of his son then even such an action cannot be ignored by merely claiming his share and contending that the sale will not bind him. Repudiation ought to be by means of a suit that will annul the sale by a decree of Court. A self-serving statement that he came to know only when the award was passed by the Collector on a transaction that had taken place 7 years earlier cannot be countenanced. There ought to be even a specific pleading therefor the Court to infer that the power of attorney was acting beyond his power or that the transaction was wholly vitiated. What was contended in the claim petition filed before the Additional Court by Yusaf and Ali was, inter alia, that his agent Major Chanan Singh represented to them that he would felicitate the allotment of land in their favour from the Rehabilitation Department and secure a power of attorney in their favour. On 14.05.1969, Chanan Singh was RFA No.220 of 1984 (O&M) - 10 - alleged to have brought to the notice of the petitioners a document and represented that it was a special power of attorney and induced the petitioners of such representation by affixing their thumb impression marks. The counsel Shri Kidar Nath Kohli had also attested the document but it was alleged in the petition that he had also misrepresented them. The scribe was also said to have misrepresented to them about the nature of the instrument. The document was subsequently registered on 14.05.1969 at the Sub Registrar's office at Patiala and the contention was that the Sub- Registrar did not read and explain the contents of the deed. From the perusal of the contentions raised in the petition by Yusaf and Ali, it could be seen that they were literally trying to disown every transaction including even the power of attorney and the nature of instrument. If the petitioners had known that the power of attorney had been brought about fraudulently in the year 1973 and they had gone to the extent of making an instrument of cancellation, that itself must be taken to be a starting point when the appellants ought to have known the transactions that he had brought about. In this case, it had been stated in para 11 of the petition that the power of attorney was cancelled at Malerkotla in the year 1973. Even after the cancellation of the deed in the year 1973, the applicants have not taken any steps to have the sale made by the power of attorney in favour of the 4th respondent annulled or repudiated. RFA No.220 of 1984 (O&M) - 11 -
8. If the parties are pleading for a case of non est factum, it is essentially a question of fact of whether a deception in the manner said to have practiced on them was properly established. Normally a fraudulent transaction is voidable and it would require a positive action taken by the person, who had been defrauded to annul a transaction. If a person was making a plea of invalidity by fraud practiced by another, then such a transaction would require to be set aside within 3 years from the time when the transaction took place or where the transaction was not known from the time, when the fact came to be known. The period of limitation will be irrelevant in a case where an instrument is put against a person and the latter defends an action contending that the person who propounded the document was guilty of fraud. In other words only for a plea in defence, there is no bar of limitation (see: Shrimant Shamrao Suryavanshi Versus Pralhad Bhairoba Suryavanshi-(2002) 3 SCC
676). In this case, Ali was one of the claimants making a claim ignoring the transaction which allowed for the beneficiary under the transaction to claim title. Without a positive action on his part to have the sale set aside, he could not have an adjudication of title in his favour.
9. In cases where a transaction is said to be affected by non est factum with a plea available for a person, who did not know of the nature of document and he was illiterate, then Courts have expressed such transactions to be not merely voidable but even void. RFA No.220 of 1984 (O&M) - 12 - The point, however, would be whether a plea of non est factum had been made and evidence was adduced to that effect. It is a mixed question of fact and law (see: Smt. Hans Raj Versus Yasodanand- (1996) 7 SCC 122). In this case, the evidence has been placed before the Court relating not merely to the transaction of sales but also to the power of attorney itself. The petition writer Harnam Singh has been examined as AW2, who has scribed the document of sale brought at the instance of Yusaf and Ali through the power of attorney. AW3 is Gian Chand, Registration Clerk from the Sub- Registrar's office, Patiala, who was examined for proof of the power of attorney. He had brought the original registers since it was stated at the trial that the original power of attorney had gone missing. An application had been filed for reception of copy of the power of attorney as a secondary evidence. The Court had also allowed for such permission. His evidence could be examined only to the extent of ascertaining that Yusaf and Ali had actually affixed their thumb-impressions in the instrument of power of attorney and affixed their thumb-impressions in the official register. It cannot go as far as to say whether a power of attorney was really executed after apprising the principals of what the document contained. This evidence is brought through PW4 Ishar Singh, who gave evidence to the effect that he typed the power of attorney himself. His evidence runs as follows:-
".....The power of attorney was typed at the instance of RFA No.220 of 1984 (O&M) - 13 - Yusaf and Ali. It was executed in favour of Chanan Singh. Both Yusaf and Ali had thumb marked the original and the copy found pasted on the summoned babi after admitting the contents as correct. They had also thumb marked on the each page of document. The attesting witnesses had also attested the document in my presence and in presence of Yusaf and Ali. On the duplicate copy pasted on the summoned bahi, I have mentioned the serial no. and date of the execution. Chanan Singh had also signed the document. I brought the petition writer register brought by me. There is an entry at serial no.25, dt. 14.5.69 regarding execution of this document. Yusaf and Ali had thumb marked the entry in the register."
10. All that has been elicited in the cross-examination was that he did not know Yusaf and Ali personally. It was nobody's case that Yusaf and Ali did not themselves execute the power of attorney. Their only attempt was to say that their thumb impressions had been taken without apprising them of the contents of the instrument. No cross-examination at all had been made as regards the alleged deception practiced by the agent against the principals or that they had affixed their thumb impressions in the instrument without knowing what the document contained. AW7 was Shri Kidar Nath Kohli, who had attested the power of attorney as a witness, has RFA No.220 of 1984 (O&M) - 14 - specially spoken about the fact that the recitals in the power of attorney were read over to Yusaf and Ali and they had thumb marked the same after admitting the contents as correct. He had also signed as an identifying witness before the Sub-Registrar and he had also spoken about the fact that they admitted execution before the Registrar. He also stated that he knew Yusaf and Ali personally. In the cross-examination, it has been elicited as follows:-
".......I had attested the power of attorney as a witness. It was executed at the instance of Usif and Ali sons of Badra. It was read over to Usif and Ali and they had thumb marked the same after admitting the contents as correct. xxxxxxxxxxxxx. I had been conducted cases for Usif and Ali since 1963. The said case was pending before the Custodian. The cases were in the names of Usif and Ali. One case was decided on 11.7.1966. I had been appearing before Raj Das, Assistant Custody Jullundur and also beore one Mr. Bhanot. I had knowing Chanan Singh about 1 year prior to the execution of the power of attorney. Since he had been coming to Dharam Pal Singh at Patiala."
Evidently he was a person, who had conducted the cases for Yusaf and Ali relating to some property matters and his evidence was therefore very significant to what the document contained and how Yusaf and Ali were themselves parties to the same. RFA No.220 of 1984 (O&M) - 15 -
11. Apart from the evidence of witnesses which clearly established the proof of the instrument of power of attorney, the evidence of AW11 about which I had already referred to above would require to be extracted only to drive the final nail to the coffin as it were, for the contentions raised by Ali, "I owned land measuring 185 bighas in village Ramgarh and 132/133 bighas in village Chahel. I and my brother Mohamad Ali had executed a power of attorney in favour of Chanan Singh for getting the land allotted and for managing and dealing with the land. The power of attorney was got executed at Patiala. I had appeared before the Sub Registrar and so had may brother Mohamad Ali. (emphasis supplied). xx xx xx xx xx. Major Chanan Singh had sold land which had been allotted to our favour, in favour of Atam Dev Singh, Mohinder Kaur, Manjit Singh. Major Singh had authority under the power of attorney to sell the land and on my behalf of my brother Ali Mohamad Since he had been given right to sell or alienate the land on our behalf. I and my brother had received the consideration of the said sale. The acquired land measuring a out 9 killas belong to us and we are entitled to the compensation regarding this land." I have already pointed out that an attempt was made feebly by Ali to cross-examine his brother but he was not however successful. He has, therefore, in fact allowed the evidence of his brother to prevail. I have really no reason as to why his brother acted against his interest. It cannot be taken to be merely a RFA No.220 of 1984 (O&M) - 16 - light incident for it goes a long way to prove the falsity of the contentions which are now raised by Ali that he did not know what the agent was doing and that he did not know that he had sold the property to his son.
12. The transaction of sale by Chanan Singh to the 4th respondent will verily bind both the principals and Ali's title to the property had therefore been totally divested by such transaction of sale. No portion of compensation for property acquired could have been directed to be given by apportionment to Ali or persons claiming under him. The award in so far as it provides for such a right is erroneous and would require to be set aside and accordingly set aside. The appeal filed by the purchaser would, therefore, require to be upheld and the appeal is allowed on the above terms.
(K.KANNAN) JUDGE 18.07.2012 sanjeev