Kerala High Court
Babu vs Elsamma Mathew @ Ely Kurchardt on 20 August, 2025
2025:KER:62276
RFA NO. 162 OF 2020
1
CR
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE M.A.ABDUL HAKHIM
WEDNESDAY, THE 20TH DAY OF AUGUST 2025 / 29TH SRAVANA, 1947
RFA NO. 162 OF 2020
AGAINST THE JUDGMENT AND DECREE DATED 16.03.2020 IN OS NO.117 OF
2013 OF SUB COURT, PALA
APPELLANTS/DEFENDANT NO.2 AND 3:
1 BABU
AGED 46 YEARS
S/O.LATE GEORGE, RESIDING AT PONNAMKUZHIYIL HOUSE,
KURUVAMUZHI, KOOVAPPALLY VILLAGE, KANJIRAPPALLY TALUK,
KORATTY KARA, PRESENTLY AT 83 MILE STREAM SHANIKIL, BLARNEY
ROAD, CORK IRELAND REPRESENTED BY POWER OF ATTORNEY HOLDER
ALEYAMMA(MOTHER).
2 ALEYAMMA,
AGED 62 YEARS
W/O.LATE GEORGE, RESIDING AT PONNAMKUZHIYIL HOUSE,
KURUVAMUZHI, KORATTY KARA, KOOVAPPALLY VILLAGE,
KANJIRAPPALLY TALUK.
BY ADVS.
SRI.BIJU .C. ABRAHAM
SHRI.B.KRISHNAN
SHRI.R.PARTHASARATHY
RESPONDENTS/PLAINTIFF AND DEFENDANT NO.1:
1 ELSAMMA MATHEW @ ELY KURCHARDT
W/O.KUCHARDT, RESIDING AT KARWENDEL STRASSE 21, 12203,
BERLIN, WEST GERMANY REPRESENTED BY HER POWER OF ATTORNEY
HOLDER SMT.ALICE, W/O.CHACKO, AGED 69 YEARS, MOOZHAYIL
HOUSE, KOT ROAD, MUTTAPPALLY, MUKKOOTTU THARA, KOTTAYAM
DISTRICT.
2025:KER:62276
RFA NO. 162 OF 2020
2
2 SMITHA,
AGED 42 YEARS
W/O.BABU, RESIDING AT PONNAMKUZHIYIL HOUSE, KURUVAMUZHI,
KORATTY KARA, KOOVAPPALLY VILLAGE, KANJIRAPPALLY TALUK,
PRESENTLY AT 83 MILE, STREAM SHANIKIL, BLARNEY ROAD, CORK,
IRELAND.
R1 BY ADVS.
SMT.NISHA GEORGE
SRI.GEORGE POONTHOTTAM (SR.)
SHRI.SIDHARTH.R.WARIYAR
SRI.T.KRISHNANUNNI (SR.)
R2 BY SRI.MATHEWS K.UTHUPPACHAN
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 20.08.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:62276
RFA NO. 162 OF 2020
3
CR
JUDGMENT
1. Appellants are the Defendants Nos.2 & 3 in the suit. The Respondent No.1 is the Plaintiff and the Respondent No.2 is the Defendant No.1 in the suit. The Respondent No.1/Plaintiff filed the suit for cancellation of Ext.A2 Sale Deed dated 18.09.2013 and for a mandatory injunction directing the defendants to vacate the building in the plaint schedule property. The plaint schedule property is an extent of 87.40 Ares of land and the building therein, which belonged to the Plaintiff as per Ext.A1 Sale Deed dated 02.06.1975. Ext.A2 is a Sale Deed executed by the Defendant No.2, as the Power of Attorney Holder of the Plaintiff, as per Ext.A4 Power of Attorney dated 26.02.2001 executed by the plaintiff in favour of the Defendant No.2, transferring the plaint schedule property for a sale consideration of Rs.2,50,000/-. The plaintiff is a lady residing in West Germany 2025:KER:62276 RFA NO. 162 OF 2020 4 since the year 1968. The Defendant No.1 is the wife of Defendant No.2. The Defendant No.2 is the son, and the Defendant No.3 is the wife of the brother of the plaintiff, George, who died in an accident on 26.10.2000.
2. The case of the plaintiff is that since the plaintiff had been residing abroad, the plaint schedule property was being looked after by the plaintiff's brother, George, till his death and thereafter by his son, the Defendant No.2. The plaintiff had certain properties in Vandiperiyar also. After the purchase of the plaint schedule property as per Ext.A1 Sale Deed, the plaintiff permitted the family of her brother to reside in the building on the plaint schedule property. The plaintiff and the family of her brother were having a smooth and cordial relationship. After the death of her brother, the plaintiff planned to dispose of the plaint schedule property and the other properties at Vandiperiyar since it was found that Defendant No.2 would not be able to manage 2025:KER:62276 RFA NO. 162 OF 2020 5 the properties. Ext.A4 Power of Attorney was executed on 26.02.2001 in favour of the Defendant No.2 on account of the close family relationship and mutual confidence since the Defendant No.2 agreed to look after and sell the properties. On the strength of Ext.A4 Power of Attorney, the Defendant No.2 sold the properties at Vandiperiyar as per Exts.A7 & A8 Sale Deeds dated 29.07.2003 and 02.05.2003 respectively. Though the Plaintiff used to enquire with the Defendant No.2 as to the progress of the sale of the plaint schedule property, the Defendant No.2 had been representing that it requires some time, as the land value is very low. Only in February 2013, the Plaintiff came to know, in her enquiry, that the Defendant No.2 executed Ext.A2 Sale Deed in favour of the Defendant No.1 when the Defendant No.3 asked the Plaintiff to leave the plaint schedule property, shouting that the Plaintiff had no right over the said property. Defendant No.2, being an agent of the 2025:KER:62276 RFA NO. 162 OF 2020 6 Plaintiff, obtained an undue advantage by alienating the property to his wife - Defendant No.1, thus directly benefiting himself. The confidence reposed by the Plaintiff in the Defendant No.2 has been misused to obtain gain for himself, which is against the principles of the law of agency. Defendant No.2, bound in a fiduciary character to protect the interest of the Plaintiff by pretending as such, gained for himself huge pecuniary advantages in derogation of the rights of the Plaintiff in the plaint schedule property. The Defendant No.2 has misrepresented and acted fraudulently so as to secure an undue advantage at the cost of the Plaintiff's interest. Hence, Ext.A2 Sale Deed is liable to be cancelled and the defendants are liable to be vacated from the plaint schedule property.
3. The Defendant No.2 and the Defendant No.3 filed separate Written Statements dated 02.01.2014 and 13.11.2013, respectively.
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4. The Defendant No.2 filed Written Statement contending, inter alia, that the plaint schedule property originally belonged to the plaintiff. The Defendant No.2 transferred the properties of the plaintiff as per Document Nos.2794/2003 (Ext.A7) and 2361/2003 (Ext.A2) after receiving sufficient consideration by the Defendant No.2 using Ext.A4 Power of Attorney given by the Plaintiff. The sale consideration was fully paid to the Plaintiff directly and through the bank, and the Plaintiff has issued a Receipt to Defendant No.2 in the year 2005. The Defendant No.2 has not misused or committed breach of trust of the power of attorney given by the Plaintiff. The plaintiff had knowledge about the Ext.A2 document on the date of registration of the said document itself. The said document is valid and sustainable and registered after receiving consideration, and the plaintiff has received the consideration from the Defendant No.2. The allegation that the plaintiff has not received the money and that 2025:KER:62276 RFA NO. 162 OF 2020 8 the Defendant No.1 did not have sufficient financial resources at the time of execution of Ext.A2 is incorrect. The Defendant No.3 is having the right to reside in the plaint schedule property. The Defendant No.3 has been residing in the plaint schedule property in her own right since the year 1975 with her husband. The suit is barred by limitation.
5. The contentions of the Defendant No.3 in her Written Statement are substantially the same as those raised by the Defendant No.2 in his Written Statement.
6. Subsequent to the filing of Written statements by the Defendant Nos. 2 and 3, the Counsel for the Defendants filed a Memo dated 05.11.2014 for treating the contentions in the Written Statements of the Defendants Nos.2 and 3 as the contentions of the Defendant No.1 also.
7. After the filing of Written Statements by the Defendants Nos.2 and 3 and the aforesaid Memo by the Counsel for the 2025:KER:62276 RFA NO. 162 OF 2020 9 Defendants, the Plaintiff amended the Plaint as per the Order in I.A.No.801/2015 dated 04.09.2015, incorporating additional contentions that the Plaintiff has not accepted any amount as consideration towards Ext.A2 Sale Deed. The claim that the plaintiff issued a Receipt in 2005 is against the facts and truth. The plaintiff has not issued any such Receipt as alleged. The Receipt, if any, is obtained by fraud, misrepresentation and undue influence. The Receipt, if any, does not relate to the alleged sale of the plaint schedule property. Even if the Defendant No.2 had somehow managed to obtain any sort of Receipt, it was never intended to be one for the sale of the plaint schedule property as the Defendant No.2 was always maintaining and even made the Plaintiff believe that the plaint schedule property was yet to be sold and that the Plaintiff was having other property too, which was also dealt with by the Defendant No.2.
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8. After amendment of the plaint, the Defendant No.3 filed an additional Written Statement dated 10.09.2015 for herself and as Power of Attorney holder of the Defendant No.2 denying the allegations incorporated through amendment in the Plaint and further contending that the plaintiff received the entire sale consideration of her properties directly and through the bank and that a Receipt with respect to the same was issued to the Defendant No.2.
9. The Trial Court framed the following issues in the suit:
. Whether the second defendant in collusion with the first defendant fraudulently created Ext.A2? . Whether Ext.A2 is void?
. Whether Ext.A2 has to be cancelled?
. Whether the defendants are to be directed to vacate the building in the plaint schedule property by way of mandatory injunction?
. Reliefs and costs?
2025:KER:62276 RFA NO. 162 OF 2020 11 . Is the suit barred by limitation?
10. From the side of the plaintiff, she was examined as PW1, one of the friends of the deceased brother of the plaintiff was examined as PW2, the Advocate Commissioner who prepared Ext.C1 and C1(a) was examined as PW3 and marked Exts.A1 to A12 in evidence. From the side of the defendants, the Defendant No.2 was examined as DW1, the Bank Manager who brought Ext.X1 Statement of Accounts was examined as DW2 and marked Exts.B1 to B4 in evidence. The Statement of Accounts brought by DW2 is marked as Ext.X1. The Commission Report and Sketch prepared by PW3 were marked as Exts.C1 & C1(a).
11. The Trial Court decreed the suit, cancelling Ext.A2 Sale Deed and granting a mandatory injunction directing the defendants to vacate the building in the plaint schedule property within a period of one month from the date of the decree and allowing 2025:KER:62276 RFA NO. 162 OF 2020 12 the plaintiff to realize the costs of the suit from the defendants. The Trial Court found that Ext.A2 is void and the Plaintiff is having title over the plaint schedule property; that the Defendants have been residing in the property as permitted by the Plaintiff; that the plaintiff is entitled to get mandatory injunction as she is not ready to permit the Defendants to continue their residence in the property; that the Plaintiff has filed the suit within three years as required under Article 59 of the Limitation Act from the date on which the facts entitled the Plaintiff to have the instrument cancelled first become known to her; that the evidence and circumstances probabilise the case of the Plaintiff; that the Defendant No.2 who was bound in a fiduciary character to protect the interest of the Plaintiff had put himself in a position where his interest and duty is in conflict; that the Defendant No.2 who is a trustee for sale had obtained benefit out of the trust and gained pecuniary advantage for 2025:KER:62276 RFA NO. 162 OF 2020 13 himself; that the Defendant No.1 was not employed and she has no source of income; that the Defendant No.1 has no case that she received money from any source to purchase the property; and that Defendant No.1 has not entered into the box to prove that she purchased the property for valid consideration.
12. The present Appeal is filed by the Defendants 2 and 3 alone. The Defendant No.1 did not file any appeal challenging the judgment and decree in the suit. It is stated in the appeal that Defendant No.1, who is impleaded as Respondent No.2 in the appeal, is working in Ireland and therefore she is unable to join as Appellant in the appeal.
13. Respondent No.2 appeared through counsel in this appeal.
14. I heard the learned Counsel for the Appellants, Sri. B. Krishnan, assisted by Adv. Sri. Biju C. Abraham, the learned Senior Counsel for the Respondent No.1, Sri. T. Krishnanunni, assisted 2025:KER:62276 RFA NO. 162 OF 2020 14 by Adv. Sri. Sidharth R. Wariyar and the learned counsel for the Respondent No.2, Sri. Mathews K. Uthuppachan.
15. The learned Counsel for the Appellants contended that the suit must fail on two grounds. First is that the suit is barred by limitation. Second is that even if it is accepted that all the findings of the Trial Court are correct, the relief of cancellation of Ext.A2 Sale Deed and consequential mandatory injunction could not be granted in favour of the Plaintiff. The learned Counsel contended that the suit was filed in the year 2013 to cancel the Ext.A2 document, which was executed in the year 2003. Ext.A2 is a registered document. In such a case, in view of the definition of the phrase 'a person is said to have notice' in Section 3 of the Transfer of Property Act, the Plaintiff is deemed to have knowledge of the fact of execution of Ext.A2 from the time at which it was executed. The learned counsel relied on the Order of the Hon'ble Supreme Court in V. Ravikumar v. S. Kumar in 2025:KER:62276 RFA NO. 162 OF 2020 15 SLP (Civil) No.9472/2023 and the decision of this Court in St. Mary's Church, Pattanam v. O.P. Paul and Another [2017 (2) KLT 687] in support of his contention. The learned counsel relied on the decision of the Hon'ble Supreme Court in Shri Mukund Bhavan Trust v. Shrimant Chhatrapati Udayan Raje Pratapsinh Maharaj Bhonsle [2024 KHC 6743], in which it is held that long possession operates as notice of title and that when long possession has been with a party for several decades, it strengthens his claim for title. In the present case, Defendant No.1 has been in possession of the property since the year 2003 on the strength of her title, and the suit was filed only in the year 2013, nearly a decade later. The learned Counsel cited the decision of the Travancore-Cochin High Court in Travancore Bank Ltd. v. P.C. Abraham and another [1954 SCC OnLine Ker 49] and contended that there is no fiduciary relationship between the promisor or promisee and the beneficiary of a contract. The learned Counsel contended that Ext.A4 Power of 2025:KER:62276 RFA NO. 162 OF 2020 16 Attorney is a contract of Agency and hence no fiduciary relationship is created between the Plaintiff and the Defendant No.2. The learned counsel cited the decision of this Court in Mathu v. Cherchi [1990 (1) KLT 416] to substantiate the point that in a case where the person executing the deed is not blind, infirm or otherwise incapacitated and no fraudulent misrepresentation is made to him and he had the opportunity of reading the deed, the plea of non est factum is not available. The learned Counsel contended that Ext.B1 Receipt is admitted by the Plaintiff and hence the plea of non est factum is not available to her in view of the aforesaid decision. The learned Counsel invited my attention to the various provisions under Chapter X of the Indian Contract Act, 1872, dealing with Agency, and contended that in case of violation of any contract of agency, the remedy available to the principal is only for recovery of compensation and not repudiation of the contract entered into by the agent. The 2025:KER:62276 RFA NO. 162 OF 2020 17 learned counsel further contended that as against the third party who entered into a contract with the principal through the agent, the principal is not having any remedy. Hence, even if it is found that the Defendant No.2 has violated Ext.A4 Power of Attorney, the remedy of the plaintiff is only to seek compensation from the Defendant No.2 and the Plaintiff has no right to seek any remedy against the Defendant No.1 who is a total stranger and to seek cancellation of Ext.A2 document in favour of the Defendant No.1. The learned Counsel concluded his arguments praying to allow the Appeal by setting aside the impugned judgment and decree passed by the Trial Court and by dismissing the suit.
16. The Counsel for the Respondent No.2 supported the arguments of the Counsel for the Appellants.
17. Per contra, the learned Senior Counsel for the 1st respondent/plaintiff contended that the case on hand is 2025:KER:62276 RFA NO. 162 OF 2020 18 squarely covered by Section 215 of the Indian Contract Act, 1872. If the conditions in Section 215 of the Indian Contract Act are satisfied, the principal may repudiate the transaction entered into by the agent on behalf of the principal. The learned Senior Counsel contended that the evidence on record would reveal that the Defendant No.2 executed Ext.A2 Sale Deed for his own benefit without obtaining prior consent from the Plaintiff by dishonestly concealing the material fact of sale by the Defendant No.2 in favour of the Defendant No.1 who is his wife and the dealing of the Defendant No.2 has resulted in the disadvantage of the Plaintiff. Hence, the Trial Court rightly cancelled Ext.A2 Sale Deed executed by the Defendant No.2 in favour of the Defendant No.1. The learned Senior Counsel further contended that the Defendant No.1 did not prove her source of income to purchase the plaint schedule property as per Ext.A2 Sale Deed. The Defendant No.1 did not even care to 2025:KER:62276 RFA NO. 162 OF 2020 19 step into the witness box to give evidence. She did not file any Written Statement of her own. She merely adopted the Written Statements of the Defendant Nos.2 and 3 by filing an Adoption Memo. The learned Senior Counsel relied on the decision of the Madras High Court in Achutha Naidu v. Oakley Bowden and Co. and Another [AIR 1922 Madras 497], the Division Bench decision of the Karnataka High Court in U. Vijaya Kumar and Another v. Malini V. Rao [2016 0 Supreme(Kar) 441] and the Division Bench decision of the Gujarat High Court in Prakash Babulal Sheth v. Shashikalal Mayur Sheth [2022 0 Supreme(Guj) 1523] for elaborating the principles under Section 215 of the Indian Contract Act.
18. In the light of the arguments advanced before me and on perusal of the records, the following points arise for determination in this Appeal.
1. Whether the appeal at the instance of the Defendant Nos.2 and 3 against the judgment and decree setting aside Ext.A2 in 2025:KER:62276 RFA NO. 162 OF 2020 20 favour of the Defendant No.1 is maintainable in the absence of any challenge against the same by the Defendant No.1?
2. Whether the suit is barred by limitation?
3. Whether the plaintiff is entitled to seek cancellation of Ext.A2 under Section 215 of the Indian Contract Act? Point No.1
19. The present Appeal is filed by the Defendant Nos.2 and 3 alone. It is stated in the Memorandum of Appeal that the Defendant No.1 is unable to join as Appellant since she is working in Ireland. Order XLI Rule 4 CPC provides that where there are more plaintiffs or more defendants than one in a suit, and the decree appealed from proceeds on any ground common to all the plaintiffs or to all the defendants, any one of the plaintiffs or of the defendants may appeal from the whole decree, and thereupon the Appellate Court may reverse or vary 2025:KER:62276 RFA NO. 162 OF 2020 21 the decree in favour of all the plaintiffs or defendants, as the case may be. Of course, if all the defendants are aggrieved by the judgment and decree, an appeal by one of the aggrieved defendants is sufficient to maintain the challenge to the judgment and decree, and any order in the Appeal would be beneficial to the defendants who have not appealed against it. The Defendant Nos.2 and 3 could not be said to be aggrieved by the cancellation of Ext.A2 by the Trial Court as they do not claim any right over the property covered by Ext.A2 independently of Defendant No.1. The grounds available to the Defendant No.1 with respect to the challenge against Ext.A2 is not available to the Defendant Nos.2 and 3. The contention of the Defendant No.2 is that he executed Ext.A2 Sale Deed in favour of the Defendant No.1 as the Power of Attorney holder of the Plaintiff on the strength of Ext.A4 Power of Attorney and that the property belongs to the Defendant No.1 on the basis of 2025:KER:62276 RFA NO. 162 OF 2020 22 Ext.A2 Sale Deed which was validly executed on the strength of Ext.A4 Power of Attorney. The Defendant Nos. 2 and 3 can have a grievance against the order of mandatory injunction, but they claim the right of residence only on the strength of the right claimed by the Defendant No.1. The relief of mandatory injunction is consequential to the main relief of cancellation of Ext.A2 Document. Hence, an Appeal filed by the Defendant Nos.2 and 3 could not be treated as an Appeal at the instance of the Defendant No.1. The Defendant Nos.2 and 3 could not maintain an appeal against the judgment and decree cancelling Ext.A2 Sale Deed as they are not having any interest in the property covered by Ext.A2. The Defendant Nos.2 and 3 will not be in any way benefited by the reversal of the impugned judgment cancelling Ext.A2. In the Memorandum of Appeal, Defendant No.2 has no case that it is he who purchased the property as per Ext.A2. The statements and grounds in the 2025:KER:62276 RFA NO. 162 OF 2020 23 Memorandum of Appeal would clearly indicate that he is maintaining his position as Power of Attorney of the Plaintiff and Defendant No.1 as the purchaser of the property as per Ext.A2. Hence, I am of the view that this Appeal at the instance of the Defendant Nos.2 and 3 alone against the impugned judgment and decree cancelling Ext.A2 is incompetent. Point No.2
20. The suit is filed for cancellation of Ext.A2 document dated 18.09.2003 executed by the Defendant No.2 in favour of the Defendant No.1. The suit was filed on 10.04.2013. The specific contention of the plaintiff is that she came to know about Ext.A2 document only in February 2013, consequent to the enquiry conducted by her when she was asked to get out of the plaint schedule property by Defendant No.3, shouting that she has no right over the property. The Trial Court relied on Article 59 of the Limitation Act and found that the suit was filed within the period 2025:KER:62276 RFA NO. 162 OF 2020 24 of three years from the date when the facts entitling the Plaintiff to have the instrument cancelled first became known to the Plaintiff. The learned Counsel for the Appellants relied on the decision of this Court in St. Mary's Church (supra) and contended that the Plaintiff after executing a Power of Attorney authorising the Power Holder to deal with the immovable property and transfer the same cannot be permitted to claim ignorance of the documents or acts and deeds done by his agent or power holder on a later stage. The learned Counsel contended that the knowledge of a registered document would start from the date of its execution and registration and that the ignorance or concealment of the contents of the document or nature of the document from the knowledge of the person who had executed the document would not take away the notice of execution of a registered deed in view of the definition of the phrase 'a person is said to have notice' in Section 3 of the Transfer of Property Act. It 2025:KER:62276 RFA NO. 162 OF 2020 25 is useful to extract the definition of the phrase 'a person is said to have notice' in Section 3 of the Transfer of Property Act.
"3. Interpretation clause -- In this Act, unless there is something repugnant in the subject or context,-- xx xx xx "a person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.
Explanation I.-- Where any transaction relating to immoveable property is required by law to be and has been effected by a reg- istered 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, 2025:KER:62276 RFA NO. 162 OF 2020 26 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 regis-
tered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being ac- quired, or of the property wherein a share or interest is being ac- quired, is situated:
Provided that--
(1) the instrument has been registered and its registration com-
pleted 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 2025:KER:62276 RFA NO. 162 OF 2020 27 (3) the particulars regarding the transaction to which the instru- ment relates have been correctly entered in the indexes kept un- der section 55 of that Act.
Explanation II.--Any person acquiring any immoveable 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.
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 prin- cipal shall not be charged with notice thereof as against any per- son who was a party to or otherwise cognizant of the fraud."
21. The deemed knowledge of a registered document under Explanation I is available only against the person acquiring the property covered by the document or any part of, or share or 2025:KER:62276 RFA NO. 162 OF 2020 28 interest in, such property and not against any other person. The plaintiff has not acquired property as per Ext.A2 registered document, and hence the deeming provision in Explanation I is not available against the plaintiff. The deeming provision under Explanation III against the principal is not applicable if the agent fraudulently conceals the fact. The evidence on record reveals that Defendant No.2 has fraudulently concealed the fact of the sale of the property in favour of Defendant No.1 from the plaintiff, and hence, the deeming provision in Explanation III is also not available against the plaintiff.
22. In St.Mary's Church (supra) while interpreting the phrase 'a person is said to have notice' in Section 3 of the Transfer of Property Act, this Court held that the principal cannot avoid the authority given to the power holder to do certain acts or deeds for transfer of immovable property after its execution in tune with the authority;
that the acts which are done by the power holder would be 2025:KER:62276 RFA NO. 162 OF 2020 29 binding on the principal as if it were done by the principal in person; that notice of agent/power holder would amount to notice of principal unless there is an active concealment of the acts done by the power holder or agent, as the case may be; that the active concealment of an act done by the agent or power holder against the principal is the only exception to the general rule that the notice to the agent/power holder would amount to notice to the principal. It is further held that in the case of registered deeds of transfer of immovable property, there cannot be an active concealment since the principal is at liberty to make an enquiry regarding documents executed before the concerned Registrar/Sub Registrar within whose jurisdiction the immovable property situates, in accordance with the law in force; that insofar as the executant of a document is concerned, the fact of execution of the document is actually known to him from the time on which it was executed; that the question 2025:KER:62276 RFA NO. 162 OF 2020 30 whether he was aware of the content of the document or the nature of the document would not change the legal position regarding notice of execution of a registered document and it would start from the date of its execution and registration. The subsequent decision of the Hon'ble Supreme Court in Umadevi Nambiar v. Thamarasseri Roman Catholic Diocese, rep. by its Procurator Devssia's Son Rev. Father Joseph Kappil [2022 (3) KHC 113], cited by the learned senior Counsel for the Respondent No.1 covers the point considered in St. Mary's Church (supra) and it governs the field. In Umadevi Nambiar, it is held that two things are important for the above interpretation clause to come into effect: (i) wilful abstention from an enquiry or search; and (ii) gross negligence; that Explanation I and Explanation II under the above interpretation clause are applicable to the person acquiring an immovable property, the transaction relating to which is required by law to be effected by a registered instrument; and that the 2025:KER:62276 RFA NO. 162 OF 2020 31 High Court has turned the above interpretation clause upside down and held the Principal in relation to a deed of Power of Attorney, to have had constructive notice in terms of Section 3, of a sale effected by the agent. In view of this decision of the Hon'ble Supreme Court, it could not be held that the plaintiff had notice of Ext.A2 Sale Deed from the date of its registration.
23. In the present case, the Defendant No.2 executed Ext.A2 Sale Deed in favour of his wife-Defendant No.1 on the strength of Ext.A4 Power of Attorney. The specific case of the plaintiff is that the plaintiff came to know about the Ext.A2 document only in the year 2013. The plaintiff has adduced evidence in support of the said contention as PW1. The defendants could not make out anything to discredit the evidence of PW1 in the cross- examination. The beneficiary of the Ext.A2 document is Defendant No.1. Defendant No.1 did not file any pleading in the suit. A Memo dated 05.11.2014 was filed by the Counsel for the 2025:KER:62276 RFA NO. 162 OF 2020 32 Defendants stating that the contentions in the Written Statements of the Defendant Nos.2 and 3 are to be treated as the contentions of the Defendant No.1. It is signed by the Counsel as the counsel for the Defendants and not as representing the Defendant No.1 alone. Order VI Rule 14 CPC mandates that every pleading shall be signed by the party and his pleader (if any). Proviso to the said Rule permits any person duly authorized by the party to the suit to sign the pleading on behalf of such party. All the pleadings in the suit have to be mandatorily signed by the respective parties or their duly authorized agents. Counsel cannot sign a pleading on behalf of a party to the suit. The party making the pleadings is responsible for the pleadings made by him. Such responsibility can be attributed to the party only if the party has subscribed his signature to the pleadings. A party can very well disown the pleadings made by a counsel on his behalf. It is not safe for the 2025:KER:62276 RFA NO. 162 OF 2020 33 Court to render its decision relying on the pleadings signed by the counsel, as the party can disown the pleadings if the decision turns against him. Order VI Rule 15 CPC provides for the verification of the pleadings. It provides that every pleading shall be verified at the foot by the party or by one of the parties or some other person acquainted with the facts of the case, and that it shall be signed by the person making it. Sub-Rule 4 is inserted in the said provision by the Code of Civil Procedure (Amendment) Act, 1999, which mandates that the person verifying the pleading shall also furnish an affidavit in support of his pleadings. An affidavit of the party in support of his Written Statement is made mandatory to make the pleadings more authentic and responsible. A pleading without verification and an affidavit as required under Order VI Rule 15 CPC could not be treated as a valid pleading. It is legally permissible for a co- defendant to adopt the contentions in the Written Statement 2025:KER:62276 RFA NO. 162 OF 2020 34 filed by another defendant in the suit. It should be done in the form of a Written Statement. A wrong practice is followed by the Courts permitting the co-defendant to file an Adoption Memo in order to adopt the Written Statement of another defendant. I am of the view that adoption of the pleadings shall be done by a defendant in a suit only through a Written Statement supported by verification and an affidavit, and an Adoption Memo signed by the defendant or his counsel is not sufficient. The purpose of a Memo is only to intimate a particular fact to the Court and it does not form part of the pleadings. In the case on hand, the Adoption Memo is not even signed by the Defendant No.1. Hence, even assuming that the filing of the Adoption Memo is permissible, it could not be said that Defendant No.1 adopted the pleadings of Defendant Nos.2 and 3. Hence, I find that there is no Written Statement from the part of the Defendant No.1 denying the allegations in the Plaint.
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24. The decision of the Hon'ble Supreme Court in Shri Mukund Bhavan Trust (supra) is clearly distinguishable on the facts of the present case. It is the admitted case of the parties that the brother of the Plaintiff, George, and his family were permitted to occupy the residential building in the plaint schedule property by the plaintiff. The Defendant No.1 also continued to occupy the residential building in the plaint schedule property after marrying Defendant No.2 who is the son of the plaintiff's brother. It is not a case where the Defendant No.1 started to occupy the plaint schedule property after execution of Ext.A2 by the Defendant No.2 in favour of the Defendant No.1. In all probability, the plaintiff believed that the Defendants continued possession of the plaint schedule property on the basis of the permission given by her. Hence, it could not be said that long possession operates as notice of title and that possession of the Defendant No.1 for decades strengthens her claim for title.
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25. The learned counsel for the appellant relied on the Order of the Hon'ble Supreme Court in V. Ravikumar (supra) in support of his contention. In the said case, the plaint was rejected on the ground of limitation and the same was reversed by the High Court. The High Court reckoned the limitation from the cancellation of the Power of Attorney, which was assailed by the defendant before the Hon'ble Supreme Court. The Hon'ble Supreme Court has found that the High Court erroneously treated the cancellation as the starting point of limitation. In the case on hand, Ext.A4 Power of Attorney was not cancelled and the plaintiff is not claiming limitation period from the date of cancellation of any power of attorney. Hence, the said decision is not applicable to the case on hand.
26. The pleadings and the evidence of PW1 would prove that the suit is filed within three years as provided in Article 59 of the Limitation Act. I find that the suit is not barred by limitation.
2025:KER:62276 RFA NO. 162 OF 2020 37 Point No.3
27. The contention of the learned Counsel for the Appellants is that even if it is found that the Defendant No.2 has violated Ext.A4 Power of Attorney, the remedy of the plaintiff is only to seek compensation from the Defendant No.2 and the Plaintiff has no right to seek any remedy against Defendant No.1 and to seek cancellation of Ext.A2 document in favour of the Defendant No.1. Learned Counsel relied on the principle that in case of violation of any contract of agency, the remedy available to the principal is only the recovery of compensation and not repudiation of the contract entered into by the agent and as against the third party who entered into contract with the agent, the principal is not having any remedy. Learned counsel invited my attention to various provisions under Chapter X of the Indian Contract Act dealing with Agency, and going through the said provisions, I find that the plaintiff will be entitled to succeed in 2025:KER:62276 RFA NO. 162 OF 2020 38 the suit only if she proves that Ext.A2 is liable to be repudiated under Section 215 of the Indian Contract Act. Since the learned Senior Counsel for the 1st respondent/plaintiff rests the case on Section 215, I need only to consider the applicability of Section 215 to the facts and circumstances of the present case. It is advantageous to extract Section 215 of the Indian Contract Act along with its illustrations for a better understanding:
"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.
2025:KER:62276 RFA NO. 162 OF 2020 39 Illustrations
(a) A directs B to sell A's 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 the sale, if he can show that B has dishonestly concealed any material fact, or that the sale has been disadvantageous to him.
(b) A directs B to sell A's estate. B, on looking over the estate before selling it, finds a mine on the estate which is unknown to A. B informs A that he wishes to buy the estate for himself, but conceals the discovery of the mine. A allows B to buy, in ignorance of the existence of the mine. A, on discovering that B knew of the mine at the time he bought the estate, may either repudiate or adopt the sale at his option."
28. On a reading of Section 215, the said provision is attracted only if an agent deals on his own account without first obtaining the consent of his principal and if it is shown that material facts have 2025:KER:62276 RFA NO. 162 OF 2020 40 been concealed from the principal or the dealings of the agent have been disadvantageous to the principal. Illustration (a) is also very much relevant as far as the present case is concerned. The Illustration illustrates that the principal may repudiate the same if it is found that the agent purchased the estate, which is entrusted for sale, for himself in the name of another person, if the agent has dishonestly concealed any material fact, or if the sale has been disadvantageous to him. It would indicate that the acquisition of the property need not be in the name of the agent himself. It can be in the name of another person also. In the case on hand, it is clear that the Defendant No.2 purchased the plaint schedule property in the name of his wife - Defendant No.1. As stated earlier, there is no pleading from the part of the Defendant No.1 denying the pleading of the plaintiff that the Defendant No.1 has no source of income to pay the sale consideration. In the absence of any Written Statement from the 2025:KER:62276 RFA NO. 162 OF 2020 41 part of the Defendant No.1, she is not entitled to adduce any evidence in the suit. As a matter of fact, she has not mounted the witness box to give any evidence. Even in the Written Statements and in the additional Written Statement of the Defendant Nos. 2 and 3, there is no pleading that the Defendant No.1 paid sale consideration to the plaintiff. On the other hand, the specific statement is that the consideration for the property is received from the Defendant No.2. The defendants could not prove any income or source of income or financial capacity of Defendant No.1 to purchase the property on her own. On account of the facts that the Defendant No.1 is the wife of the Defendant No.2 and the defendants failed to plead and prove any independent source of income for the Defendant No.1 and payment of consideration by the Defendant No.1 to the Plaintiff, the only conclusion which is possible is that the Defendant No.2 2025:KER:62276 RFA NO. 162 OF 2020 42 has dealt with the property on his own account by obtaining the property in the name of his wife - Defendant No.1.
29. There is no contention in the Written Statements and additional Written Statement of the Defendant Nos.2 and 3 that Ext.A2 Sale Deed was executed by the Defendant No.2 in favour of the Defendant No.1 after obtaining consent for the same from the plaintiff. It is the burden of the agent to prove that he has dealt with the property in his own account after obtaining consent from the principal. In the case on hand, there is no evidence to prove that the sale of the property by the Defendant No.2 in favour of the Defendant No.1 was done after obtaining the consent of the plaintiff. The evidence on record would clearly reveal that Defendant No.2 had dishonestly concealed the fact of the sale of the property to his wife/ Defendant No.1, from the plaintiff. The trump card of the Defendant No.2 is that the plaintiff has issued Ext.B1 Receipt for the receipt of the sale 2025:KER:62276 RFA NO. 162 OF 2020 43 consideration of Ext.A2 Sale Deed. Ext.B1 is the Receipt for Rs.10,00,000/- signed by the plaintiff with reference to Exts.A7 and A2 Sale Deeds. Ext.A2 Sale Deed was executed on 18.09.2003. Ext.B1 is dated 09.04.2005. On going through the evidence of Defendant No.2 as DW1, it is clear that he did not explain the need for such a Receipt and the circumstances under which the said Receipt was obtained from the plaintiff two years after executing Ext.A2 Sale Deed. The only statement in the evidence of DW1 is that Ext.B1 Receipt was obtained since his friend Joshy Paul told him that such a receipt is necessary. He deposed that he had no knowledge of the necessity for obtaining such a receipt at the time of execution of Ext.A2 Sale Deed. It is in evidence that Exts.A7 & A8 documents were executed by the Defendant No.2 as power of attorney holder of the Plaintiff for selling her properties situated in Vandiperiyar. The case of the plaintiff is that the Defendant No.2 obtained 2025:KER:62276 RFA NO. 162 OF 2020 44 Ext.B1 Receipt on the misrepresentation that the said Receipt is required by the buyers of her property in Vandiperiyar. In Ext.B1, the name of the Sub Registry office of the documents referred therein is not stated. The Defendant No.1 has no proper explanation as to why, out of Exts.A7 & A8 documents executed with respect to Vandiperiyar property, only Ext.A7 alone is included in Ext.B1. The aforesaid facts lead to the probable conclusion that Ext.B1 Receipt was obtained from the plaintiff by Defendant No.2, misrepresenting that the documents contained in Ext.B1 Receipt are the documents relating to the Vandiperiyar property. If the Defendant No.2 or the Defendant No.1 was in requirement of a receipt for payment of consideration of the property covered by Ext.A2, they could have obtained a receipt with respect to the same alone. The Defendant No.2 does not require a receipt for Ext.A7 property sold by the Plaintiff to a third person. There was no need to 2025:KER:62276 RFA NO. 162 OF 2020 45 obtain a single receipt for the properties sold to different persons. In the Written Statement of the Defendant No.2, though the Defendant No.2 stated about a receipt issued by the plaintiff in the year 2005, the date of the said receipt was not stated, and the said receipt was not produced along with the Written Statement. The details of the consideration paid for Ext.A2 Sale to the plaintiff are not stated in the Written Statement. Only during evidence, the Defendant No.2 has stated that the consideration of the plaint schedule property was Rs.7 lakhs. If the plaint schedule property was purchased by the Defendant No.2 or Defendant No.1 from the plaintiff, as claimed by the defendants, certainly there would have been some discussions or communications with respect to the consideration for the same, as the plaintiff had been residing abroad. Nothing in this regard is either pleaded or proved.
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30. In the decision of the Karnataka High Court in U. Vijaya Kumar (supra), the Division Bench of the Karnataka High Court held that where an agent employed to sell becomes the purchaser himself, then he must show beyond reasonable doubt that it was with the knowledge and consent of the principal and that the price paid was the full value of the property so purchased. It is also held that a principal who seeks to set aside a transaction on the ground that the provisions of Section 215 of the Indian Contract Act have been violated must take proceedings for that purpose within a reasonable time after becoming aware of the circumstances relied on. In the case on hand, the plaintiff has filed the suit immediately on getting knowledge of Ext.A2 Sale Deed. In the said decision, it is held that the burden of proof lies on the agent to prove full disclosure or that the transaction is not disadvantageous to the principal. I fully agree with the propositions of law laid down by the Division Bench of the 2025:KER:62276 RFA NO. 162 OF 2020 47 Karnataka High Court in U. Vijaya Kumar (supra). In the case on hand, the Defendant No.2 has not discharged such burden of proof. On the other hand, the evidence on record would clearly reveal that he concealed material facts about Ext.A2 in favour of his wife/Defendant No.1. The sale consideration of Rs.2,50,000/- for 87.40 Ares and the residential building therein shows that the transaction is apparently disadvantageous to the plaintiff. There is no evidence even for the payment of the said Rs.2,50,000/-. The plaintiff, as PW1, has specifically deposed that the property would have fetched more than Rs.25 lakhs when Ext.A2 was executed. Even according to the evidence of DW1, the value of the property is Rs.7 lakhs, which he claims to have paid to the plaintiff. It is the evidence of DW1 that the plaintiff was available in India when Ext.A2 document was executed, and a part of the payment was directly made to the plaintiff. If that be so, nothing prevented the Defendant No.2 2025:KER:62276 RFA NO. 162 OF 2020 48 from obtaining the sale deed directly from the plaintiff. Even though the defendants claimed that they have several businesses and properties, and the financial status of the parents of the Defendant No.1 is sound, they could not produce any evidence to substantiate the same. On the other hand, the evidence on record, especially the evidence of PW2, who is an independent witness and who was the friend of George, father of the Defendant No.2, would reveal that the financial status of the family of the plaintiff and her brother George was improved only after the plaintiff went to Germany and started sending money.
31. Learned Counsel for the appellants contended that Sections 215 and 216 of the Indian Contract Act are not applicable to a Power of Attorney. The contention is that in the case of Power of Attorney, a Power Holder cannot deal on his own account, and his deals are on the account of the principal and Section 2025:KER:62276 RFA NO. 162 OF 2020 49 216 makes this more clear. It is the Sections 211 and 212 of the Contract Act, providing for compensation, which are applicable in the case of misconduct of the Power Holder. Learned Counsel invited my attention to Sections 1A and 2 of the Powers of Attorney Act, 1882, in this regard. I am unable to accept the said contention. It is true that in the case of a Power of Attorney, a Power holder has to deal on the account of the principal. Section 215 deals with cases in which the Power Holder, who is an agent of the principal, deals on his own account in violation of the Power of Attorney given to him. Hence, it could not be said that when there is a Power of Attorney in favour of an agent, Section 215 will not be applicable. Since the plaintiff is resting her case on Section 215 of the Indian Contract Act, I need not consider whether she is entitled to get compensation under Sections 211 and 212 of the Indian Contract Act.
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32. The learned counsel for the appellant relied on the decision of this Court in Mathu (supra), in which it is held that in case where the person executing the deed is not blind, infirm or otherwise incapacitated and no fraudulent misrepresentation is made to him and he had the opportunity of reading the deed, the plea of non est factum is not available. In the case on hand, there is clear evidence that Defendant No.2 made a fraudulent misrepresentation for obtaining Ext.B1 Receipt from the plaintiff, and hence the said principle is not applicable to the case on hand. Exs.A10 & A11 are the copies of the Plaint in O.S. Nos.50/2004 and 293/2009 filed by the sister of the Defendant No.2 to set aside the sale deeds executed by her alleging that she was defrauded by Defendant No.2. Though the Defendant No.2 deposed that those cases were later withdrawn, no evidence in this regard was produced before the Court. The said cases also would probabilize that the Defendant No.2 attempted 2025:KER:62276 RFA NO. 162 OF 2020 51 to grab the properties belonging to his sister also by adopting unfair means.
33. The learned counsel for the appellants relied on the decision of the Travancore-Cochin High Court in Travancore Bank Ltd. (supra) to distinguish between the fiduciary relationship between the trustee and beneficiary and promisor and promisee and the beneficiary of a contract. It is held in the said decision that there is a fiduciary relationship between trustee and beneficiary, whereas there is no such relationship between the promisor or promisee and the beneficiary of a contract. In State of Rajasthan v. Basant Nahata [AIR 2005 SC 3401], the Hon'ble Supreme Court held a Power of Attorney holder acts in a fiduciary capacity and that any act of infidelity or breach of trust is a matter between the donor and the donee.
34. In view of the aforesaid discussion, I am of the view that Section 215 of the Indian Contract Act is squarely applicable to the facts 2025:KER:62276 RFA NO. 162 OF 2020 52 and circumstances of the case and all the conditions in Section 215 are satisfied to repudiate Ext.A2 Sale Deed executed by the Defendant No.2 as Power of Attorney holder of the Plaintiff in favour of the Defendant No.1 who is the wife of the Defendant No.2. The Trial Court rightly decreed the suit cancelling Ext.A2 Sale Deed and issuing mandatory injunction in favour of the plaintiff and against the defendants.
35. In view of the answers to the aforesaid points, this Appeal is dismissed with costs.
Sd/-
M.A.ABDUL HAKHIM JUDGE Shg/