M/S Dhawan Constructions Thr. Auth. ... vs Omprakash S/O Uttamchand Gautam on 27 September, 2022

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Bombay High Court

M/S Dhawan Constructions Thr. Auth. ... vs Omprakash S/O Uttamchand Gautam on 27 September, 2022

1. The present appeal challenges the judgment dated 04/04/2018, passed by learned Trial Court in a suit for declaration filed by the respondent, seeking the sale-deed dated 01/07/2011 in respect of plot no.93, executed and registered in favour of the appellant to be as null and void ab initio, on the ground, that the power of attorney dated 29/04/2010 executed by Prabhawatibai Gautam in favour of the appellant in pursuance to the agreement of development and sale dated 29/04/2010 in respect of the same property, stood cancelled and revoked automatically on the demise of Prabhawatibai Gautam on 10/09/2010 and therefore the sale- deed executed on the strength of the said power of attorney 2709 SA 324 of 2022.odt 2 on 01/07/2011 was null and void ab initio. The learned Appellate Court by the judgment dated 14/06/2022 has affirmed the judgment of the learned Trial Court.

2. Shri Manohar, learned senior counsel for the appellant/original defendant submits that under the agreement of development and sale dated 29/04/2010 (pg.61), an interest was created in the defendant inasmuch as, under the terms of the agreement, the defendant had agreed to pay a monetary consideration of Rs.90,00,000/- to Prabhawatibai Gautam, out of which Rs.40,00,000/- already stood paid on the date of the agreement itself and two cheques each of Rs.25,00,000/- were also issued in her favour. Apart from the monetary consideration, one flat/apartment was agreed to be given to Prabhawatibai. He contends that acting upon the said agreement the building plans were sanctioned and the entire property stood submitted to the provisions of the Apartment Ownership Act by deed of declaration dated 27/08/2010 indicating that ten apartments, two on each floor with undivided share and proportionate interest in the land of plot no.93 were to be constructed and transferred to third parties, (except the one agreed to be given to Prabhawatibai) for consideration to be received and appropriated by the defendant. He further contented that the power of attorney dated 29/04/2010 which is a registered document was made irrevocable by the granter namely 2709 SA 324 of 2022.odt 3 Smt. Prabhawatibai Gautam and so also on account of an interest having been created in the land of plot no.93 and the apartment scheme to be constructed thereupon in favour of the defendant. Clause-5 of the power of attorney itself makes it irrevocable in terms of Section 202 of the Indian Contract Act. It is further contended that though the said power of attorney further mentions that in case the said attorney/defendant being incapable of acting because of the death of or any other inability her legal heirs would be liable to execute a fresh power of attorney. It is, however, contended that the existence of this clause did not detract from the fact that an interest already stood created in the attorney/defendant under the power of attorney dated 29/10/2010 coupled with the agreement of development and sale of the same date. He therefore submits that the execution and registration of the sale-deed dated on 01/07/2011 of the land of plot no.93 in favour of the defendant by use of the said power of attorney, cannot be faulted with and specifically so when it was not proved that the defendant had knowledge about about the demise of Prabhawatibai. He also invites my attention to the consent deed dated 10/10/2011 executed between the plaintiff Omprakash Gautam, the defendant and all other legal heirs of Prabhawatibai Gautam under the terms of which the agreement of development and sale as well as the power of attorney dated 29/10/2020 stood admitted by them and so also the plaintiff categorically admitted the receipt of 2709 SA 324 of 2022.odt 4 consideration of Rs.40,00,000/- under the agreement of development and sale by Prabhawatibai and so also agreed to receive the balance consideration of Rs.50,00,000/- as the cheques in that regard dated 29/10/2010 of Nagpur Nagrik Sahakari Bank Ltd., Mahal, Nagpur issued in favour of Prabhwatibai were not presented by her and in view of the settlement as evinced by the consent deed, the said amount was to be received by the plaintiff and in fact was so received as enumerated in term no.2 of the consent deed. The plaintiff under the terms of the consent deed had further agreed to receive possession and title in respect of the flat to be allotted to Prabhawatibai under the terms of the agreement of development and sale which consent deed also contained Clause-4 under which the plaintiff undertook not to make any claim demand or objection against the defendant and the matter between them stood finally settled. Further according to him Clause-8 of the consent deed since it acknowledges the mutation of the name of the defendant in the relevant records as absolute owner amounted to an admission regarding registration and execution of the deed of sale. It is, therefore, contended that in light of the consent deed the entire actions done by the defendant in pursuance to the agreement of development and sale and power of attorney dated 29/04/2010 as well as the sale dated 01/17/2011 stood admitted and ratified by the plaintiff himself. By placing reliance upon Seth Loon Karan Sethiya Vs. Ivan E. John and 2709 SA 324 of 2022.odt 5 others, AIR 1969 SC 73 (para 5), Shri Vithaldas Rama Lotlikar Vs. Shri Jose Menino Godinho and others, 1992 (2) Bom. C.R. 254 (para 11), Bhoom Rajam and another Vs. State of A.P. and another, 2002 SCC OnLine AP 1492 (para 9), Ramesh Chand Vs. Suresh Chand and another, ILR (2012) V Delhi 48 (para 4) and Confederation of Real Estate Developers' Association of India (Credia Tamil Nadu) Vs. State of Tamil Nadu , 2014 (6) CTC 13 (Para 23 to 32), it is contended that since an interest stood created within the meaning of Section 202 of Indian Contract Act in favour of the defendant, the power of attorney which was for consideration and for an interest created in the property the same was irrevocable and could not stand terminated by the demise of the executant, namely Prabhawatibai Gautam and therefore all acts done by the defendant in pursuance to the said power of attorney were legal. It is therefore contended that the Courts below could not have rendered a finding to the contrary ignoring the gravamen of Section 202 of Indian Contract Act.

3. Relying upon Rajasthan State Industrial Development and Investment Corporation and another Vs. Diamond & Gem Development Corporation Limited and another, (2013) 5 SCC 470 (para 14 and 16) and Bhagwat Sharan (Dead Through Legal Representatives) (2020) 6 SCC 387, it is contended that once the plaintiff has executed the consent deed dated 10/10/2011, had accepted the amount of 2709 SA 324 of 2022.odt 6 Rs.50,00,000/- thereunder and the entitlement to receive the flat which was to be received by Prabhawatibai Gautam under the agreement of development and sale, he could not turn back and question the sale-deed dated 01/07/2011 on the principles of approbate and reprobate which stood attracted in the present matter, on which grounds he also submitted that the impugned judgment cannot be sustained. It is also contended that since the claim of the plaintiff under the Will dated 29/04/2010 (exh.41) which was admitted by the plaintiff himself to be a forged document stood disproved the suit by the plaintiff was bad for non-joiner of necessary parties as the other legal heirs, of late Prabhawatibai Gautam as reflected in consent deed dated 10/10/2011, were not joined as plaintiffs or defendants to the suit before the trial Court.

4. Shri Sudame, learned counsel for respondent does not dispute the execution of agreement of development and sale and the power of attorney both dated 29/04/2010. He also does not dispute the consent deed as well as the terms contained therein, and the receipt of Rs.50,00,000/- by the plaintiff and entitlement of the flat which was to be received by Prabhawatibai Gautam. It is his contention that Clause-7 of the agreement of development and sale indicated that the possession which was given to the defendant was that of a licensee, which would have to be considered as such while considering the claim under Section 202 of the Indian 2709 SA 324 of 2022.odt 7 Contract Act. It is further submitted that an agreement of sale by itself does not create any interest in the property for which Section 54 of the Transfer of Property Act is relied upon. He submits that Section 202 of the Indian Contract Act cannot be read in isolation but has to be read in the background of Sections 201 to 209 and the related duties and obligations of the attorney vis-a-vis the principle. It is further contended that the power of attorney cannot be in perpetuity and has to end at some point of time. It is further submitted that the power of attorney is only for the purpose of facilitating the construction and under its terms the defendant had no right to get a sale- deed executed and registered to himself.

5. In my considered opinion, the following substantial questions of law arise.

(1) Whether the power of attorney dated 29/04/2010 was for consideration and created an interest in the property in favour of the attorney ?

(2) Whether a power of attorney given for consideration and by which interest is created in the property, becomes irrevocable and cannot be revoked in spite of the demise of the executant whether such demise is brought to the knowledge of the attorney or not ?

(3) Whether in light of the consent deed dated 10/10/2011 the principles of approbate and reprobate became applicable to the plaintiff on which count the suit itself was 2709 SA 324 of 2022.odt 8 not maintainable ?

6. The parties are willing to work out the matter finally at the stage of admission itself, considering which, list the matter tomorrow i.e. 28/09/2022 at 2:30 pm. (AVINASH G. GHAROTE, J.) Wadkar Digitally signed bySHAILENDRA SUKHADEORAO WADKAR Signing Date:27.09.2022 19:51

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Bombay High Court