Calcutta High Court (Appellete Side)
(Sri Ashim Kumar Pal Since Deceased) vs Sri Krishna Kamal Das And Ors on 22 September, 2023
Author: Rajasekhar Mantha
Bench: Rajasekhar Mantha
22.09.2023
Court No. 13
Item No. 9
AP
FAT 465 of 2013
Sikha Pal and Anr.
(Sri Ashim Kumar Pal since deceased)
Vs.
Sri Krishna Kamal Das and Ors.
Mr. Kamlesh Jha
Ms. Srabani Biswas
... For the Appellant.
Mr. Bhaskar Chakraborty
Mr. S. Mukherjee
... For the Respondent No.8.
1. The appeal is directed against a judgement and/or order dated 10th April, 2013 passed in T.S. No.19 of 2007 by the learned Civil Judge (Senior Division), 2nd Court, Barasat, North 24-Parganas. By the impugned judgement and decree the Court below dismissed a suit for specific performance filed by the appellant/plaintiff.
2. The brief facts of the case are that the original defendant Nos.1 to 4 and one Late Keshab Chandra Das, are joint owners in respect of the suit property measuring about 2 cottahs 4 chhitaks on premises No.10, Bipin Ganguly Road, Kolkata-30. Their names are duly mutated in the records of the municipal corporation.
3. The said original defendant Nos.1 to 4 and Late Keshab Chandra Das entered into an agreement for development of the property on 31st October, 2003 with the 8th defendant for construction of a four storeyed building on the suit property.
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4. The said original defendant nos. 1 to 4 also executed and registered a Power of Attorney dated 31st October 2003 in favour of the original defendant no. 8 to perform all acts necessary for the construction and also sell and execute Conveyance in favour of the third parties who would purchase their share of the constructed building.
5. The building has been constructed as per a sanction plan issued by the municipal corporation.
6. The plaintiff/appellant entered into an agreement for sale on 26th May 2004 with the 8th defendant for purchase of a residential flat unit comprising of 640 sq. ft. on the first floor facing the south and paid a total consideration of Rs.4,35,000/- which has since been paid. Vacant and peaceful possession of the property was delivered to the appellant. The respondents collectively delayed execution of deed of conveyance in favour of the appellant/plaintiff in respect of the flat.
7. The plaintiff therefore filed T.S. No. 19 of 2007 against the defendants, who are the landlords and the promoter.
8. In the meantime one of the co-owners of the property, Keshab Chandra Das died and his legal heirs were brought on record. According to counsel for the promoter/respondent No.8, another defendant also died, 3 during the pendency of the appeal. The appellant has no notice thereof.
9. The original defendants filed written statement inter alia containing as follows:-
(a) The development agreement was not
registered.
(b) Since after the death of Keshab Chandra
Das, one of the co-owners of the property, registered power of attorney dated 31st March 2003 executed by the original landowners stood extinguished and the defendant No.8/promoter was not in a position to execute conveyance in favour of the appellant.
10. The Court below received evidence of all the documents mentioned hereinabove. The defendants did not contest the suit apart from filing written statement. The defendant No.8 neither filed written statement nor contested the suit. Hearing was taken up ex parte.
11. The Court below found that the appellant has not been able to demonstrate the title of the defendants to the property in question and dismissed the suit.
12. The appeal has since been filed in the year 2013 against the judgement and order dated 10th April, 2013. It is for the first time in the appeal, that the defendant No.8 has contested these proceedings.
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13. Counsel for the defendant No.8 would argue that since after death of Keshab Chandra Das, one of the co- owners died and hence the registered power of attorney executed in favour of his client stood extinguished by reason of section 201 of the Indian Contract Act, 1872.
14. It is also submitted that since the development agreement had itself not been registered, no rights can be claimed by the appellant in the said development agreement.
15. This Court has heard counsel for the parties. Admittedly, neither the development agreement dated 31.03.2003 nor the agreement of sale dated 26th May 2004 entered into by the defendants have been registered.
16. It is now well-settled that an unregistered document by itself cannot be a conclusive proof of any transaction between the parties. The same can constitute some evidence to establish the actual contract. The said agreement of sale has been impounded in the court below and stamp duty thereon has been paid.
17. The promoter/defendant No.8 in the suit has admitted execution of the said development agreement by the other defendants in his favour. The power of attorney dated 31st October 2003 in favour of the defendant No.8 by the other defendants has also been admitted. The original owners of the property in the written statement have not denied their title to the property. 5
18. The non-registration of the development agreement in the instant case, therefore, is a curable defect. The promoter/respondent no. 8 has not denied the title of the defendant nos. 1 to 7 in respect of the property. At the relevant time development agreements were not mandatorily registerable.
19. In the back drop of the above, this Court holds that the Court below committed error in refusing specific performance of the agreement of sale on an incorrect assumption that the plaintiff/appellant has not been able to demonstrate the title of the original defendant Nos.1 to 7 in the Court below. Such title has, in fact, been admitted by the defendants in the written statement.
20. The next question that requires to be addressed is as to whether by reason of the death of Keshab Chandra Das during the pendency of the suit and another co- owner during the pendency of the appeal, whether the registered power of attorney dated 31st October 2003, would stand extinguished, revoked by application of Section 201 of the Contract Act.
21. It is now well-settled that the provisions of Section 201 of the Contract Act are subject to the provisions of Section 202. Section 202 of the Contract Act provides as follows:-
202. Termination of agency, where agent has an interest in subject-matter. - Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, 6 in the absence of an express contract, be terminated to the prejudice of such interest.
Illustrations
(a) A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.
(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke his authority, nor is it terminated by his insanity or death."
22. It is abundantly clear from the above that the registered power of attorney dated 31st October 2003 in the instant case has created an interest in favour of the respondent No.8/developer in the property. It is only in exercise of such powers and interest that the defendant No.8 entered into an agreement of sale with the appellant in respect of 640 sq. ft. of a flat standing on the south side of the first floor of the premises.
23. In the case of Seth Loon Karan Sethiya Vs. Ivan E. John and Ors. reported in to (1969) 1 SCR 122, the aforesaid proposition of law has been explained:-
"7. This takes us to the question whether the power given to the Bank amounts in equity to an assignment of the decree or any portion thereof, to the Bank. From the power of attorney it is clear that the amount under the decree was specifically ear- marked for discharge of the debts due to the Bank. It was constituted as a special fund for the said purpose. The power to realise that fund was made over to the Bank with the further authority to set off the amount realised towards the debts due to it. In other words, the power of attorney is an engagement to pay out of the particular fund the debt due to the Bank and hence the same constitutes an equitable assignment of the amount due under the decree or so much of that amount as is necessary for discharging the debts due to it. That rule is recognised in Watson v. The Duke of Wellington [(1830) 39 ER 231] . Therein the plaintiffs, executors of Mr Sims, had advanced a large sum of money to Marquis of Hastings on the joint bond of the Marquis and a surety. The sum due on the bond exceeded pound 9000. Towards the end of 1825, the 7 Marquis having returned from India to England, the plaintiffs made repeated applications to him for payment of the debt. The Marquis represented that he was about to receive a large share of the Deccan prize money; promised that their demand should be paid out of that fund; and begged that, in the meantime, no proceedings might be taken against him or the assets of his surety. On February 6, 1826, Mr Allen, the solicitor of the plaintiffs again waited on the Marquis, who then stated that he had directed Col. Francis Doyle, whom he had empowered to receive his share of the prize-money, to pay the debt and costs due to the executors of Mr Sims; and at the same time the Marquis wrote and delivered to Mr Allen a letter addressed to Col. Doyle directing him that the executors of Mr Sims were claimants on that fund for a bond debt with interest. From these facts the Court of Chancery came to the conclusion that there was an equitable assignment in favour of the executors of Mr Sims of a portion of the prize-money sufficient to meet the debts due to the estate of Mr Sims by the Duke of Wellington. To the same effect is the decision in Burn v. Carvalho [(1839) 41 ER 265] . Therein the Court of Chancery held that in equity, an order given by a debtor to his creditor upon a third person, having the assets of the debtor to pay the creditor out of such fund is a binding equitable assignment of so much of the fund.
8. The courts in India, which administer both law as well as equity, have followed the rule laid down in the above decisions. In this connection reference may be made to the decision of the Bombay High Court in Jagabhai Lallubhai v. Rustamji Nasarwanji [(1885) ILR IX Bom 311] and of the Patna High Court in Prahlad Pd. Modi v. Tikaitni Faldani Kumari [AIR 1956 Patna 233] . In the latter case, the Patna High Court held that a transaction similar to the one we are concerned in this case, in substance amounted to allocation of fund to be appropriated towards the debt and therefore it is an equitable assignment. No decision taking a contrary view has been brought to our notice. We think that the rule laid down in the above decisions is a sound rule as it advances the interest of justice. We accordingly adopt that rule."
24. In the case of P. Seshareddy (D) represented by his LR. Cum irrevocable GPA Holder and Assignee, Kotamreddy Kodandarami Vs. State of Karnataka and Ors. reported in 2022 SCC OnLine SC 1590 the Supreme Court has stated as follows:-
"18. No doubt, the learned Single Judge was right in holding that on account of the death of the original contractor, it amounted to termination of the agency. However, learned Single Judge could not have read Section 201 of the Indian Contract Act in isolation by ignoring Section 202 of the Indian Contract Act. The learned Single Judge failed to take into consideration that on account of the assignment deed, an interest accrued in the said contract in favour of the appellant. Indisputably, the said contract was the subject matter of the agency and as such in the absence of an express provision to the contrary, the appellant was entitled to continue with the said agency."8
25. It is clear and abundant from the above that unless there is a specific averment in the power of attorney revoking the same upon the death of the principal any interest created in the agent shall continue to remain operative and the Power of Attorney does not cease to exist or get extinguished by the death of the principal.
26. In the light of the above, this Court is of the clear view that the appellant was entitled to a decree for specific performance of the agreement of sale dated 26.05.2004. There shall, therefore, be a decree for specific performance of the agreement of sale dated 26th May 2004 against the respondents jointly and severely.
27. This Court appoints Mr. Kamlesh Jha, learned advocate for the appellant (Mob No.9830162840) and Mr. Bhaskar Chakraborty, learned advocate for the respondent No.8 (Mob No.9830466986) as joint receivers to execute conveyance on behalf of all the owners of the property and the promoter, in favour of Sikha Pal and Amiya Paul, legal heirs of the original appellant deceased Ashim Kumar Pal within a period of two months from date.
28. For the aforesaid purpose, the joint receivers shall be paid a sum of Rs.8,500/- each by the appellant.
29. The property shall be registered at RA 1 office at Kolkata or the Sub-Registrar at Barasat. The Registrar 9 shall take into account the stamp duty already deposited by the appellant in the Court below and the differential value of the same with the stamp duty payable on the current market value shall be paid for registration of conveyance together with registration charges.
30. Advocate on record for the appellant shall however be entitled to withdraw the stamp papers towards stamp duty paid pursuant to impounding of the agreement of sale dated 26.5.2004 in the Court below, from the LCR available with this Court.
31. With the aforesaid directions, the appeal is disposed of.
32. In view of the dismissal of the main appeal, connected pending application, if any, shall also stand disposed of.
33. There shall be no order as to costs.
34. Let the LCR be sent back to the Court below after a period of 2 months.
35. All parties shall act on the server copy of this order duly downloaded from the official website of this Court. 10
36. Urgent certified photocopy of this order, if applied for, be supplied to the parties expeditiously on compliance of usual legal formalities.
(Rajasekhar Mantha, J.) (Supratim Bhattacharya, J.)