Madras High Court
K.A.Meeran Mohideen vs Sheik Amjad on 27 September, 2024
Author: R.Subramanian
Bench: R.Subramanian
S.A.No.1391 of 2002
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.09.2024
(Reserved on 18.07.2024)
CORAM :
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
and
THE HONOURABLE MR.JUSTICE R.SAKTHIVEL
S.A.No.1391 of 2002
K.A.Meeran Mohideen ... Appellant
vs.
1. Sheik Amjad
2. Khaleel Sherif
3. Nasbulla Sherif
4. Shawas Jameel
5. Y.Bharkath
6. Shafi ... Respondents
(Respondents 5 and 6 are impleaded vide order dated 26.09.2003 in
CMP.No.3621/2003)
Prayer : Appeal filed under Section 100 of the Civil Procedure Code,
against the decree and judgment of the court of the Subordinate Judge, Hosur,
made in A.S.No.33 of 1997 dated 27.09.2001, confirming the decree and
judgment of the Court of the District Munsif, Hosur, made in O.S.No.118 of
1996 dated 21.04.1997.
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Page No.1 of 19
S.A.No.1391 of 2002
Amicus Curiae : Mr.Srinath Sridevan, Senior Counsel
For R1 & R2 : No appearance
For R3 & R4 : Mr.V.Raghavachari, Senior Counsel for
M/s.V.Srimathi
JUDGMENT
(Judgment of the Court was made by R.SUBRAMANIAN, J.)
This appeal is before us on a reference made by a Hon'ble Single
Judge of this Court by order dated 24.08.2011, wherein, the Hon'ble Single
Judge had referred the following question to be answered by a Larger Bench:
''Whether the General Power of Attorney executed jointly by
more than one Principal will survive even after the death of one of
the Principals and if so, under what circumstances?''
2. The Hon'ble Judge felt compelled to reserve the question for
consideration by a Division Bench since he felt that the law on the point is a
little nebulous and it requires a clarification by a Larger Bench of this Court.
The statutory provisions which relate to powers of attorney are found in the
Indian Contract Act, 1872 and the Powers of Attorney Act, 1882. Chapter X of
the Indian Contract Act, 1872, deals with Agency. While Sections 182 to 189
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deal with Agency, Sections 190 to 195 deals with Sub-agents. Sections 201 to
210 deal with termination of agency or revocation of authority. One of the
circumstances in which the agency gets terminated is when the Principal dies.
Section 201 of the Indian Contract Act, 1872, reads as follows:
''201. Termination of agency.—An agency is terminated by the
principal revoking his authority; or by the agent renouncing the
business of the agency; or by the business of the agency being
completed; or by either the principal or agent dying or becoming of
unsound mind; or by the principal being adjudicated an insolvent
under the provisions of any Act for the time being in force for the
relief of insolvent debtors.''
3. If the statutory provisions namely, Sections 201 to 210 do not deal
with a situation where there are multiple Principals and one of them dies or
becomes insane, we will have to necessarily fall back upon precedents to decide
the said question. Since the appellant went un-represented, we had appointed
Mr.Srinath Sridevan, learned Senior Counsel of this Court to assist us in
answering the question that has been referred to us.
4. Mr.V.Raghavachari, learned Senior Counsel appearing for the
respondents 3 and 4 would submit that the very appeal has abated since the
appellant himself is no more and as such nothing survives for consideration in
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the appeal on merits.
5. No doubt, we will have to necessarily dismiss the appeal as having
abated, but the question that has been referred to us being an important question
and the Courts are faced with such situation in the light of development of
Commerce, we deem it fit to answer the question referred to us. We have
already enumerated the statutory provisions that deal with the termination of
agencies. A agency can be created either by a contract or by operation of law.
There can be several principals or several agents. Termination happens either
by act of parties, within and beyond their control, or by operation of law. An
agency normally gets terminated on the death of either the principal or the
agent. The exception is made where the agent himself has an interest in the
contract. If it is a case of one principal, there is no issue arising out of such
termination. Difficulty arises only where there are several principals having
different interests in the property, subject matter of agency and one of them
dies.
6. If we are to look at the precedents on the issue, the earliest
decision traceable is Re Sital Prosad and others, Insolvents, Badrinarain
Agarwalla vs. Raja Brijnarain Roy and another reported in 1916 SCC
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Online Cal 212 : AIR 1917 Cal 436. That was a case where, three out of four
brothers who formed a Coparcenary, had authorised the fourth brother to
mortgage their interests in the joint family property through a power of attorney
deed. One of the brothers died prior to the execution of the mortgage. A
Division Bench of Calcutta High Court held that the question whether the
power of attorney came to an end by death of one of the principals depends
upon the construction which is to be put upon the terms on the power of
attorney. In coming to a conclusion as to the construction, the Court will also
consider the position of the parties to the power of attorney and the property
which was thereby affected. Though concurring, the two members of the
Division Bench delivered separate opinions containing slightly different
reasons. The Hon'ble Chief Justice SANDERSON concluded that the question
whether the power of attorney came to an end by the reason of death of Ram
Sundar Lall depended upon the construction which is to be placed on the terms
of the power of attorney. He went on to observe that in coming to a conclusion
as to the construction of the document, the Court must necessarily consider the
position of the parties to the power of attorney and the property which was
thereby affected. After analysing the facts of the case, the Hon'ble Chief Justice
concluded that the intention of the parties needs to be ascertained from the
prevailing factual situation as well as the terms of the instrument. The fact that
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the property belonging to the joint Hindu family was also fathomed by the
Hon'ble Chief Justice in coming to the conclusion and he held that the
mortgage created after the death of one of the principals would be valid vis-a-
vis all the principals in the light of the circumstances in that case. The Hon'ble
Mr.Justice MOOKERJEE, the other member of the Bench, also concurred
with the conclusions of the Hon'ble Chief Justice. While agreeing with the
conclusions of the Hon'ble Chief Justice, Justice MOOKERJEE, however,
went a step further and clarified that the agent namely, Raghubir Prosad, one of
the four brothers, cannot act on behalf of his infant nephews namely, the
children of Ram Sundar Lall, the deceased brother. The reason was that the
object of the power was to raise loan for the benefit of the family and that
object would survive and would be capable of realisation even after the death of
one of the principals.
7. This Court had considered the question in M.Ponnuswami Pillai
and another vs. Chidambaram Chettiar and others reported in 1918 Volume
VII Madras Law Weekly 566. There again, the power of attorney was
executed by a two members of a Hindu trading family. After referring to the
judgment of the Calcutta High Court in Re Sital Prosad's case (supra), the
Division Bench held that in the circumstances, the power would survive. In
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doing so, the Division Bench observed as follows:
''Section 253(10) of the Indian Contract Act declares that a
partnership is dissolved by the death of a partner. There is no
principle of Hindu law that a joint family is extinguished by the death
of one member, but if one member dies without effecting a partition,
his undivided share passes by survivorship to the surviving members
of the family. In the present case the uncle Venkatachallam Chetty
died without other heirs than his nephew Chidambaram Chetty with
whom he was joint till the day of his death. The whole of his interest
therefore devolved on the survivor whose authority to the agent"
contained in the power of attorney remained unaffected by the death
of one of the principals (See Re Sital Prasad (1916) 21 C.W.N. 620).
It is not suggested that the surviving principal (first respondent) has
revoked or attempted to revoke his authority under Ex. B. The
objection is a technical one coming only from the judgment debtors.
The 1st respondent after being made a party to these proceedings has
taken no part in supporting this objection. On both points the District
Judge's decision was right. We must therefore dismiss the appeal with
costs.''
8. In 1936, a some what analogous situation arose in Monindra Lal
Chatterjee vs. Hari Pada Ghose and others reported in AIR 1936 Calcutta
650, wherein, the effect of death of one of the principals was raised. The
appointment of agent was to file a suit for accounts. Justice R.C.MITTER of
the Calcutta High Court, on facts, concluded that the power would terminate on
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the death of one of the principals. He, however, concurred with the views in Re
Sital Prosad's case (supra) and M.Ponnuswami Pillai's case (supra). Re Sital
Prosad's case was followed again by Justice VIVIAN BOSE in Agarwal
Jorawarmal and another vs. Kasam and another reported in AIR 1937
Nagpur.
9. The question again sprouted before this Court in Garapati
Venkanna vs. Mullapudi Atchutaramanna and others reported in AIR 1938
Mad 542. Justice VENKATASUBBA RAO held that on the death of one of
the principals, the authority of the agent is determined. Though the learned
Judge referred to Re Sital Prosad's case, he concluded that the circumstances, in
the case before him were little different since one of the parties had a distinct
half right in the property and the circumstances did not favour the conclusion
that the power of attorney was intended to be in force and even after the death
of Brahmayya (Junior). The learned Judge also rejected the contention that
since the agent was to incur expenses in filing a suit for accounts, it would be a
power coupled with interest. It should be noted that the judgment of the
Division Bench in M.Ponnuswami Pillai's case (supra) was not brought to the
notice of Justice VENKATASUBBA RAO who decided Garapati Venkanna's
case.
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10. Recently, a Division Bench of this Court in Periammal and
others vs. Ramesh and others [A.S.No.307 of 2011, decided on 16.11.2022]
followed the view in M.Ponnuswami Pillai's case (supra). The Division Bench
after considering the judgment in M.Ponnuswami Pillai's case (supra), held as
follows:
''12. It is pertinent to mention that a previous judgment by this
Court taking similar view in the case of M.Ponnusami Pillai and
Another Vs. Chidambaram Pillai and Others reported in (1918) 35
MLJ 294 has been considered by the Division Bench of this Court in
2009 (3) MLJ 539. We find that the position is reiterated in several
precedents and it is accepted that A Power of Attorney given to an
agent by two members of a joint Hindu trading family is not
terminated by the death of one of the executants.
13. In several cases, this aspect has been dealt with. When a
Power of Attorney Deed is executed, it only gives only a limited right
in favour of the agent to act on his behalf in respect of certain things
and the right to act on behalf of principal has to be seen from the
written instructions in the deed. In the present case, the Power of
Attorney Deed under Ex.A2 confers absolute right in favour of the
Power of Attorney Agent to deal with the property on behalf of his
principals. The authority under the Power of Attorney Deed to act on
behalf of others does not come to an end by the death of any one of
the executants either as per the terms or by applying any law. No law
extinguishes or terminates the Power of Attorney Deed executed by
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several persons on the death of one of the co-executants. In this case
after the death of brothers of appellants, the other legal heirs
defendants 3 to 5 have also executed a Power of Attorney Deed
independently under Ex.A4. The findings of the Trial Court with
regard to the validity of Power of Attorney Agent to represent
plaintiffs and defendants 1 and 2 despite the death of one of the co-
executants is based on binding precedents and hence no interference
is warranted.''
11. The learned Amicus Curiae Mr.Srinath Sridevan had also placed
before us the position in the United Kingdom and the United States. The
position in United Kingdom is laid down in Tasker vs. Shepherd reported in 9
W.R 476. The facts, as disclosed by the report, are that a partnership which
was carrying on business as stone merchants, appointed the plaintiff as their
sole agent in London for a period of four years and half on certain terms as to
payment. The plaintiff namely, the agent, sued the surviving partner, since one
of the partners died, for recovery of money contending that though he had
performed his part of the contract, the defendant has failed to perform his part
of the contract. The suit was resisted on the ground that one of the partners
Emanuel Bentley died and the partnership itself was dissolved. Therefore, the
plaintiff cannot sue the other partner for recovery. It was also contended that
the contract became unenforceable. The Court held that though the entire
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contract would not become invalid, the facts and circumstances should be
considered by the Court in order to find out whether the contract will be valid
and binding on the surviving partner. On the conclusion that the breach
occurred due to the death of the partner, it was found that there was no business
between the parties after the death of one of the partners. On the above facts,
the Court concluded that the contract was with reference to a certain existing
partnership business only, but it cannot survive after the death of one of the
partners which would result in dissolution of the business of the partnership.
The Court concluded as follows:-
[581] It is not that the defendant failed to employ the plaintiff
as the agent of the "firm," treating the contract as an absolute
agreement on the part of the defendant that the firm should last for
four years and employ the plaintiff during that time, but that the
defendant failed either to carry on business separately after the other
party's death, or, carrying on business, failed to employ the plaintiff.
Probably the latter was intended, though there is no distinct
averment that the defendant did ship any stone, or do any business,
after the death of his partner.
Such being the breach, we are of opinion that the declaration
is bad on the ground that there was no such contract.
We think the contract had reference to a certain existing
partnership business only.
Any business carried on after the death of one partner might
be a totally different one. It might be much smaller and less lucrative
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to the plaintiff. And he might well object to act as agent for a much
more limited concern at the rate of remuneration for which he was
content to serve the original firm.
And as we find no mention in the contract of any other than the
partnership business; as we see no trace of the parties having looked
to or contemplated any other, we conclude that they were contracting
only in reference to the partnership business, and that consequently
there is nothing to bind the parties on either side to an agency for
any other than such business.
This is sufficient to dispose of the case. But as an amendment
in the declaration by extending the breach to the non-employment of
the plaintiff in the partnership business for the full term of four years
would raise the broader question, whether the defendant had
contracted absolutely for the continuance of the partnership, we
think it right to give our opinion upon that point also.
[582] After fully considering the contract and the probable
intention of the parties, to be collected from the various terms of the
agreement, we come to the conclusion that the contract was intended
to be for a period of four years and a half, subject to the condition
that all the parties so long lived.
We do not believe, on reading the contract, that the parties
contemplated the continuance of the agency by the executor after the
death of the agent, or by the surviving partner after the death of
either member of the firm.
We think the agreement of the parties had relation to the
existing state of things, which they presumed would continue for four
years, and in reference to which presumption alone they contracted.''
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12. Similar question arose in Hand vs. Chalhoun reported in 19 Pa. D
& C.2d 655. After discussing the law, it was held as follows:
''As a result of these decisions, we hold that as to whether or
not an agent is authorized to act only on the joint account of the
principals or for the principals separately depends upon the wording
of the instrument, the surrounding circumstances and the
manifestations of the principals. Since this matter is before the
Court on preliminary objections, there is no testimony as to any
manifestations of the principals except such as are indicated in the
power itself. The surrounding circumstances do not indicate any
reason why the power should be revoked as to the surviving
principals. No intention can be gathered from the instrument which
would indicate that the agent or attorney in fact had authority to act
only jointly for all of the principals. On the contrary, the language of
the power is clearly severable in nature and authorizes the attorney
in fact to act for each or any of the principals. The principals each
owned an undivided interest in the real estate in question and each
could have alienated his interest therein without acting in unison
with the remaining principals. In fact, all of the principals together
owned only an undivided three fifth interest in the property. The
agent or attorney in fact was not bound to convey her undivided
twelfth interest to the same granted to whom she might sell the
undivided three-fifth interest of the principals. We therefore hold that
the power of attorney dated January 31, 1944, could be exercised
both jointly and severally and since it contained language which was
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both jointly and severally and since it contained language which was
several, in nature, was not revoked by the death of Ellen Schnars as
to the surviving principals.''
13. There is also one another aspect which we must advert to, that is,
Section 202 of the Indian Contract Act, 1872, which reads 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, 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 this authority, nor is it terminated by his insanity or death.''
14. The termination of an agency in some cases would depend upon
the nature of the agent's interest in the contract. Where the agent has got an
interest in the subject matter of the contract, there cannot be a termination in the
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Krishnaswami Konar and 14 others reported in AIR 1946 Mad 9, the scope
of Section 202 of the Indian Contract Act, 1872, was considered by a Division
Bench of this Court. After discussing the law governing the situation, the
Division Bench concluded as follows:
''The test to be applied for finding out whether a power-of-
attorney given to an agent is irrevocable or not under section 202 of
the Indian Contract Act is to see whether the primary, object in
giving the power-of-attorney was for the purpose of protecting or
securing any interest of the agent. If the primary object was to
recover on behalf of the principal the fruits of his decree and, in
doing so, the agent's rights were also incidentally protected, then the
power is revocable. Still more so would it be if the power-of-attorney
also contained a clause in the following terms:- "I shall not for any
reason whatever cancel without your permission this authority which
I have given you, without paving the amount expended by you and
without giving ... relief for your trouble", which makes express
provision for the revocation of the power under certain terms and
conditions.''
15. From the precedents discussed above, we will have to necessarily
reach the conclusion that a power of attorney deed executed by several persons,
which cannot be said to be coupled with interest, is not automatically
terminated on the death of one of the principals. The question of termination
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terminated on the death of one of the principals. The question of termination
would necessarily depend on the facts and circumstances of each case. We are
aware of the fact that we cannot exhaustively elucidate various circumstances,
under which, the power will terminate or survive. We could only lay down
broad guidelines. The termination will necessarily be,
(i) dependent on the facts and circumstances of each case.
(ii) The intention of the parties at the time of execution of the power
which could be gathered either from the recitals in the instrument or from other
circumstances that are placed before the Court, will play an important role in
the decision making process.
(iii) If it is shown that the intention of the parties was that the power was
to continue even after death of one of the executants as laid down by the
Calcutta High Court in Re Sital Prosad's (supra) and this Court in Garapati
Venkanna's case, (supra), the agency will continue till the object sought to be
achieved is complete.
(iv) If it is shown that the principals had specific interest, independent of
each other, like two joint owners executing a power for sale of the property, if
their share is specific, the power will stand terminated in respect of the joint
owner who dies. If the interest is unascertainable like that of an interest in the
coparcenary of a joint family and the intention is shown to be to survive even
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16. We hasten to add that these are only few instances and the ultimate
conclusion would depend upon the evidence that is made available and the
recitals in the instrument. If the interest of the deceased principal is separable
from that of the surviving principal's, then, the power would not survive in
respect of the deceased principal.
17. Adverting to the question of power coupled with interest if it is
demonstrated that the power is coupled with interest, then the termination is
governed strictly by Section 202 of the Indian Contract Act, 1872, and in such
event, death of one of the principals will not result in termination of the power
even with reference to his interest.
18. In fine, we answer the question as follows:
Termination of the power on the death of one of the principals is not
automatic. It will depend on the facts and circumstances of each case and the
recitals in the document as well as the object that is sought to be achieved.
19. The reference is answered as above. However, in view of the
death of the appellant herein, the Second Appeal will stand dismissed as having
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death of the appellant herein, the Second Appeal will stand dismissed as having
abated. We place on record our sincere appreciation for the valuable assistance
rendered by Mr.Srinath Sridevan, learned Senior Counsel, whose assistance was
sought for by us to enable us to answer the issue raised in this appeal.
(R.S.M, J.) (R.S.V, J.)
27.09.2024
Index : Yes
Neutral Citation : Yes
bala
To
1. The Subordinate Judge,
Hosur.
2. The District Munsif,
Hosur.
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R.SUBRAMANIAN, J.
and
R.SAKTHIVEL, J.
bala
PRE-DELIVERY JUDGMENT
MADE IN
DATED : 27.09.2024
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