Gujarat High Court
Manubhai vs Jayantilal on 9 December, 2011
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
Gujarat High Court Case Information System
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SCA/16056/2003 18/ 18 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 16056 of 2003
For
Approval and Signature:
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
MANUBHAI
PRABHUDAS PATEL & 4 - Petitioner(s)
Versus
JAYANTILAL
VADILAL SHAH & 5 - Respondent(s)
=========================================================
Appearance
:
MS
TRUSHA K PATEL for
Petitioner(s) : 1 - 5, 5.2.1, 5.2.4,5.2.5 MR SUNIL S JOSHI for
Petitioner(s) : 5.2.2, 5.2.3,5.2.6 MR MANOJ S JOSHI for Petitioner(s)
: 5.2.2, 5.2.3,5.2.6
RULE SERVED for Respondent(s) : 1, 3,5 -
6.
RULE SERVED BY DS for Respondent(s) : 2,
4,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
Date
: 09/12/2011
CAV
ORDER
This petition under Article 227 of the Constitution of India is at the instance of original plaintiffs seeking to challenge the legality, validity and propriety of judgment and order dated 11.09.2003, passed by 3rd Joint Civil Judge (Senior Division), Ahmedabad (Rural) below Exh.101 in Special Civil Suit No.93 of 1999.
The facts relevant for the purpose of deciding this petition can be summarized as under:-
2.1 The petitioners are original plaintiffs. The petitioners are owners of agricultural lands bearing revenue Survey Nos. 376/2, 384, 385, 386 and 387 situated within the revenue limits of Village:Gota, Ta:Daskroi, Dist:Ahmedabad.
2.2 The petitioners instituted Regular Civil Suit No.93 of 1999 against respondent nos. 2 to 6 for a declaration to the effect that the agreement to sale executed by the petitioners in favour of respondent nos.1, 2 and 3-original defendant nos.1, 2 and 3 be declared as false, illegal and void.
2.3 It appears from the record that during the pendency of the suit, respondent nos. 4, 5 & 6 were impleaded as party-defendants and further prayer was added to declare the sale-deeds dated 10.05.1999 with respect to the suit lands executed by the petitioners in favour of respondent nos. 4, 5 and 6 be declared illegal and void. It is important to note that the suit, which was preferred by the petitioners being Regular Civil Suit No.93 of 1999 was through a constitute power of attorney i.e. respondent no.1 herein.
2.4 It is the case on behalf of petitioners that in respect of the suit properties, the respondent no.1-the power of attorney of the petitioners, at one point of time, produced various instruments in the form of power of attorneys said to have been executed by the petitioners. It is the case on behalf of petitioners that on 30.05.2003, the petitioners revoked all the power of attorneys said to have been executed in favour of the respondent no.1 by serving him personal notice in addition to the public notice published in a daily newspaper "Jan Satta" dated 30.05.2003.
2.5 Record reveals that respondent no.1 replied to the said notice contending that the said power of attorneys executed by the petitioners are irrevocable and the same were executed pursuant to the agreement to sale dated 11.09.1997 executed by the petitioners in favour of one Kishorbhai Khamanbhai Goyal and two others.
2.6 It is the case on behalf of petitioners that despite revocation of the power of attorneys, respondent no.1 pursued Regular Civil Suit No.93 of 1999 filed in the Court of 3rd Joint Civil Judge (Senior Division), Ahmedabad (Rural). This necessitated the petitioners to prefer an application below Exh.101 under the provisions of Order 6 Rule 17 of the Code of Civil Procedure stating that, the power of attorneys executed in favour of respondent no.1 are revoked and the plaintiffs be permitted to amend the plaint by deleting the name of power of attorney i.e. respondent no.1 herein from the cause-title of the plaint.
2.7 Record reveals that respondent no.1 filed his written objections to the application Exh.101 preferred by the petitioners-original plaintiffs contending that the said power of attorney is irrevocable and by virtue of the same, the petitioners-original plaintiffs have created interest in favour of respondent no.1.
2.8 Learned Civil Judge, upon hearing all the parties concerned, rejected the application Exh.101 vide order dated 10.09.2003. It is, at this stage, that the petitioners-original plaintiffs aggrieved by the order passed by learned Civil Judge, challenged the same by preferring the present petition under Article 227 of the Constitution of India.
I have heard learned advocate Ms.Trusha Patel for the petitioners. Though respondents have been served, they have not chosen to appear either in person or through their advocate.
Learned advocate Ms.Trusha Patel vehemently submitted that the impugned order under challenge is illegal and contrary to the provisions of Section 201, 202 and 204 of the Indian Contract Act.
She has submitted that, ultimately the issue in the present case is with regard to the construction of documents viz. power of attorney. She has submitted that close reading of the power of attorney would suggest that no interest has been created, of any nature, in favour of respondent no.1 and same cannot be termed as irrevocable power of attorney.
She further submits that nomenclature i.e. mere use of word 'irrevocable' in a power of attorney will not make the power of attorney 'irrevocable' unless the terms thereof, disclose that it created or recognized an agency coupled with interest in favour of an agent. She further submitted that on the other hand, a power of attorney executed in favour of an agent recording or recognizing an interest of the agent/attorney in the property, which is the subject matter of the agency, cannot be revoked or terminated even if the instrument does not state specifically that it is irrevocable, as then it would be a power coupled with an interest. In short, her submission is that mere title on a document is not sufficient to construe that the power of attorney is irrevocable or revocable.
She further brought to the notice of the Court that on 19.08.2003, Kishorchand and others preferred Suit No.213/2003 seeking specific performance of agreement for sale dated 11.09.1997 executed by the petitioners in their favour. All the parties to the present petition were parties in the said Suit as well. She also brought to the notice of the Court that on 13.01.2009 the said Suit was dismissed by the Trial Judge, against which, First Appeal No.81 of 2010 was filed in the High Court, which also came to be dismissed vide judgment and order dated 23.03.2010. She also brought to my notice that Special Leave Petition was also preferred before the Hon'ble Supreme Court, which also, was, summarily dismissed.
She has invited my attention to certain relevant documents on record. On 30.09.2009, respondent no.1-Power of Attorney filed his affidavit for examination-in-chief. Respondent no.1 was cross-examined and in his cross, he stated certain facts.
1. That he did not have any personal interest in the property.
2. That he filed the present suit as per the instructions of Kishorchand, Dipakbhai and Maljibhai.
3. The present petitioners had not instructed him to file such suit in their behalf.
4. He did not have knowledge about the translations.
5. Another Suit No.216 of 203 filed for specific performance of the agreement for sale in favour of Kishorbhai, so also for cancellation of the sale-deeds executed by the present petitioners, was dismissed.
She submitted that in view of the fact that Kishorbhai and Others have lost the matter, as their suit for specific performance and cancellation of sale-deed executed by the petitioners herein has already been dismissed by the Trial Court and confirmed by this Court as well as Hon'ble Supreme Court, the issue in question poles into insignificance.
Having heard learned advocate for the petitioners and having gone through the materials on record more particularly, the main document i.e. document dated 25.02.1999, I am of the view that the question, which falls for my consideration in this petition, is whether on construction of power of attorney and in light of the facts and circumstances emerging from the record of the case whether power of attorney prima-facie satisfies the requirements for creation of a power coupled with interest.
I have perused the document in question i.e. power of attorney. I have noticed that nowhere it has been stated that it is an irrevocable power of attorney. The title, which has been given to the document reads as "General Power of Attorney". However, while construing the document one cannot just go by the title to the document or the nomenclature, but, Court owes a duty to see the substance of the document.
When the Court is called upon to interpret the document, it looks at its language. If the language is clear and unambiguous and applies to actual existing facts, it shall accept the ordinary meaning. In case of Kamla Devi Vs. Takhatmal, reported in AIR 1964 SC 859, wherein considering the scope of Section 94 to 98 of the Indian Evidence Act, the Hon'ble Supreme Court has held (at Page 863 of AIR) that:
"These observations only apply the well settled rule of construction of documents to a surety bond. Sections 94 to 98 of the Indian Evidence Act afford guidance in the construction of documents; they also indicate when and under what circumstances extrinsic evidence could be relied upon in construing the terms of a document. Section 94 of the Evidence Act lays down a rule of interpretation of the language of a document when it is plain and applies accurately to existing facts. It says that evidence may be given to show that it was not meant to apply to such facts. When a court is asked to interpret a document, it looks at its language. If the language is clear and unambiguous and applies accurately to existing facts, it shall accept the ordinary meaning, for the duty of the Court is not to delve deep into the intricacies of the human mind to ascertain one's undisclosed intention, but only to take the meaning of the words used by him, that is to say his expressed intentions. Sometimes when it is said that a Court should look into all the circumstances to find an author's intention, it is only for the purpose of finding out whether the words apply accurately to existing facts. But if the words are clear in the context of the surrounding circumstances, the Court cannot rely on them to attribute to the author an intention contrary to the plain meaning of the words used in the document. The other sections in the said group of sections deals with ambiguities, peculiarities in expression and the in-consistencies between the written words and the existing facts. In the instant case, no such ambiguity or inconsistency exists as we shall demonstrate presently. The privacy council's case was one of ambiguity and the surrounding circumstances gave the clue to find out the real intention of the parties expressed by them"
I am of the view that while construing a document, it is necessary to determine the real intention of the parties. The mere form in which document is couched is immaterial. The intention of the parties has to be gathered from the terms of the documents themselves and from such of the surrounding circumstances, as later required to show in what manner the language of the document is related to the existing fact. It is very difficult task to know the intention of the parties on the basis of the recital of the document. But, the Court can rely safely on the language of the document, the language, which has been used by the parties to manifest the intention of the parties. If the Court goes on extraneous evidence, that may lead to more difficulty and confusion. But, there are certain principles to be borne in mind. The first principle is, the mere saying that the power of attorney is an irrevocable power of attorney coupled with interest is not the end of the matter. The Court, can clearly say that the document, though, is styled as an irrevocable power of attorney is not in substance a power coupled with interest so as to make it an irrevocable power of attorney. At the same time, even if there is no title to show that the power is an irrevocable power, but, the substance of the entire document would suggest that the same is an irrevocable power coupled with interest. Therefore, a document has to be construed as a whole. A stray sentence here and there cannot be picked out to construe a document. To understand the tenor of the document and the intention of the parties, it has to be read as a whole. The real intention of the parties has to be covered not merely from what ex-facie is stated in the document, but, from the totality of the recitals in the document. At this stage, I may quote with profit a very lucid judgment rendered by learned Single Judge of Madras High Court explaining the general principles regarding the construction of power of attorney. In case of Anantha Pillai Vs. Ratiinasabapatiiy Mudaliar, reported in 1968 (2) MLJ 574, Ismail, J. (as he then was), held thus:
"The general principles regarding the construction of power of attorney are well settled. Powers of attorney must be strictly construed as giving only such authority as they confer expressly or by necessary implication. Where an act purporting to be done under the power of attorney is challenged as being in excess of the power, it is necessary to show that on a fair construction of the whole instrument the authority in question is to be found within the four corners of the instrument either by express terms or by necessary implication. Some of the principles governing the construction of a power of attorney are:(1) the operative part of the deed is controlled by the recitals, (2) where an authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the performance of the particular acts, (3) the general words do not confer general powers but are limited to the purpose for which the authority is given and are construed as enlarging the special powers only when necessary for that purpose; (4) a power of attorney is construed so as to include all medium powers necessary for its effective execution. Bearing these general principles in mind the question for consideration is whether the power of attorney in this case authorised the first defendant to enter into an agreement to sell or authorised him to execute a sale-deed."
"The Apex Court in Syed Abdul Khader Vs. Rami Reddy, reported in 1979(2) SCC 601 : (AIR 1979 SC 553), held that what the power of attorney authorises depends on its terms and the purpose for which it is executed."
"In Timblo Irmaos Ltd., Margo Vs. Jorge Anibal Matos Sequeira, reported in 1977(3) SCC 474 : (AIR 1977 SC 734), the Apex Court laid down that the most important factor in interpreting the power of attorney is the purpose for which it is executed. The Apex Court also held that the power of attorney had to be read as a whole in the light of the purpose for which it was meant. In the said pronouncement the Supreme Court laid down the settled rules of interpretation applicable to interpretation of power and held thus:-
"(i) The word used in a document has to be interpreted or in the context as a whole:
(ii) The purpose of the powers conferred by the power of attorney has been ascertained having regard to the need which gave rise to the execution of the document, the particulars of the parties and the manner in which the parties themselves understood the purpose of the document; and lastly
(iii) Powers which are absolutely necessary and incidental to the ascertained object to the general powers must be necessarily employed."
In the above context, the Apex Court in that context held thus:-
"We think that perhaps the most important factor in interpreting a power of attorney is the purpose for which it is executed. It is evident that the purpose for which it is executed must appear primarily from the terms of the power of attorney itself , and, it is only if there is an unresolved problem left by the language of the document, that we need consider the manner in which the words used could be related to the facts and circumstances of the case or the nature or course of dealings. We think that the rule of construction embodied in proviso 6 to Section 92 of Evidence Act, which enable the Court to examine the facts and surrounding circumstances to which the language of the document may be related."
In light of the above pronouncement of the Apex Court and the pronouncement of Ismail, J. on consideration of the power of attorney, which is a subject matter of dispute in the present case, this Court has no doubt in its mind that the power of attorney cannot be termed as an irrevocable power coupled with interest created in favour of respondent no.1.
What weighed with the Civil Judge in rejecting the application is one stipulation in the document that even if death occurs of a person who has executed the power of attorney, the power would still remain in force and all the acts, which the power would perform, shall not be questioned by any of the legal heirs of the executants of the power and shall be binding to the legal heirs. On plain reading of this power of attorney, I do not find that any interest is created in favour of respondent no.1. Most importantly, the subsequent developments, which have taken place as referred to earlier in this judgment, makes the position more clear, suggesting that no interest has been created in favour of respondent no.1 so as to make the power of attorney an irrevocable power of attorney coupled with an interest. In the cross-examination, respondent no.1 has admitted that he does not have any personal interest in the property and that he filed suit in question as per the instructions of Kishorchand, Dipakbhai and Maljibhai. As stated earlier, Kishorchand has failed right up to the Hon'ble Supreme Court to seek specific performance of the agreement for sale dated 11.09.1997.
This reflects on the intention of the parties, which is patently clear from the fact that respondent no,1 himself has admitted that he does not have any personal interest in the property.
In this view of the matter, the relief as prayed for by the petitioners-original plaintiffs deserves to be granted.
Thus mere use of the word 'irrevocable' in a Power of Attorney will not make the Power of Attorney 'irrevocable' unless the terms thereof, disclose that it created or recognized an agency coupled with interest in favour of the Agent. For example, a power of Attorney simplicitor, which merely authorizes an Agent, to do certain acts, in the name of or on behalf of the excutant can be revoked or cancelled by the excutant at any time, in spite of the instrument stating that the Power of Attorney is irrevocable. On the other hand, a Power of Attorney executed in favour of an Agent, recording or recognizing an interest of the Agent/Attorney, in the property which is the subject matter of the Agency, cannot be revoked or terminated, even if the instrument does not state specifically that it is irrevocable, as then, it would be a power coupled with an interest (Section 202 of the Contract, 1872).
In this context, reference may be made to the following passage from the decision of the Andhra Pradesh High Court, in M.John Kottaiah Vs. A.Divakar, AIR 1985 Andhra Pradesh 30 (Para-20) "From the passage quoted above, it clear that if on a construction of the power of attorney and in the light, of the facts and circumstances obtaining in the case, the document does not prima-facie satisfy the requirements for the creation of a power coupled with interest, then merely because the document itself describes the agency to be an irrevocable one, it does not become an irrevocable agency. The Indian Contract Act also provides that in cases where the period of agency is prescribed and the agency is not, in law irrevocable, then the agent may have a cause of action against the principal for other remedies, in case the agency is revoked within the period. But that does not mean that an agency described as being irrevocable is to be treated as an irrevocable (one) if, in law, it does not satisfy the requirements of an irrevocable power of attorney"
Bowsted on Agency (14th Edition) at pages 423 succinctly states when an authority given to an Agent is irrevocable. The relevant portion reads thus:-
Where the authority of an agent is given by deed, or for valuable consideration, for the purpose of effectuating any security,or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest. But, it is not irrevocable merely because the agent has an interest in the exercise of it, or has a special property in, or lien for advances upon, the subject-matter of it, the authority not being given expressly for the purpose of securing such interest or advance.
Where a power of attorney, whenever created, is expressed to be irrevocable and is given to secure a proprietary interest of the donee of the power, or the performance of an obligation owned to the donee, then, so long as the donee has that interest, or the obligation remains undischarged, the power is irrevocable."
"The mere fact that a power is declared in the instrument granting it to be "irrevocable does not make it so; irrevocability requires something further ----- to be irrevocable, the authority must be conferred at protection of the agent's interest."
In a very recent pronouncement of the Hon'ble Supreme Court in the case of Suraj Lamp and Industries Pvt.Ltd. Vs. State of Haryana & Anr, reported in 2009(7)SCC 363, the Hon'ble Supreme Court, while discussing the ill-effects of General Power of Attorney Sales or Sale Agreement/General Power of Attorney/Will transfers and while holding that SA/GPA/Will transactions are not transfers quoted and unquoted or sales quoted and unquoted and such transactions cannot be treated as completed transfers or conveyances, has made some observations relevant so far as the present matter is concerned, which state as under:-
"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (See Section 1A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State of Rajasthan Vs. Basant Nehata-2005 (12) SCC 77, this Court held:-
"A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal is one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.
Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed herein before, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter the donor and the donee."
An attorney holder nay however, execute a deed of conveyances in exercise of the power granted under the power of attorney and convey title on behalf of the grantor."
In view of the aforesaid discussion, the petition is hereby allowed with no order as to cost. The order passed by 3rd Joint Civil Judge (Senior Division), Ahmedabad (Rural) below Exh.101 in Special Civil Suit No.93 of 1999 is quashed and set-aside. The application Exh.101 preferred by the petitioners in Special Civil Suit No.93 of 1999 pending in the Court of 3rd Joint Civil Judge (Senior Division), Ahmedabad (Rural) is hereby allowed and the relief, as prayed for, at Exh.101 is granted. Rule is made absolute.
(J.B.PARDIWALA, J.) Girish Top