Punjab-Haryana High Court
Pardeep Chaudhary And Anr vs Birwati And Ors on 4 July, 2022
RSA No.799 of 2019(O&M) and -1-
other connected cases
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
(1) RSA No.799 of 2019(O&M)
Date of Order:04.07.2022
Reserved On: 29.04.2022
Pardeep Chaudhary and another
...Appellants
Versus
Birwati and others
..Respondents
(2) RSA No.1012 of 2019(O&M)
Veena Chaudhary and others
...Appellants
Versus
Birwati Chaudhary and another
..Respondents
(3) C.R.No.406 of 2020 (O&M)
Shri Chand
..Petitioner
Versus
Birwati Chaudhary
...Respondent
CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL
Present: Mr. Chetan Mittal, Sr. Advocate, with
Mr. Mayank Aggarwal, Advocate and
Ms. Shifali Goyal, Advocate,
for the appellant(s).
Mr. V.K.Jindal, Sr. Advocate, with
Mr. Gopal Soni, Advocate,
Mr. Akshay Jindal, Advocate
for respondent no.1.
Mr. Kulbhushan Sharma, Advocate
Mr. Alok Jain, Advocate
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RSA No.799 of 2019(O&M) and -2-
other connected cases
Mr. Amit Jhanji, Sr. Advocate with
Mr. Siddharth Bhukkal, Advocate
for the petitioner (in CR-406 of 2020)
ANIL KSHETARPAL, J
1. Through this judgment, two Regular Second Appeals arising
from a common judgment passed by the trial Court as well as the First
Appellate Court while deciding two cross-suits and a Civil Revision petition
arising from proceedings under the Haryana Urban (control of Rent and
Eviction) Act, 1973, shall stand disposed of. The above Civil revision
petition is an offshoot of the dispute in the Regular Second Appeals. The
learned counsels representing the parties at ad-idem that all these cases can
conveniently be decided together.
2. In the considered opinion of the Bench, the question which
arises for consideration is:-
"If an allottee of the house, on receipt of the entire sale
consideration, delivers possession to an agent while
executing a registered General Power of Attorney in his
favour, then whether, a subsequent sale deed executed by
him in favour of agent's children after agent's death
would be in continuity with the previous contract of
agency so as to give superiority to the rights of the
children?
3. In order to understand the inter-se relationship between the
parties, it is appropriate to draw a small pedigree table:-
Jeet Singh Chaudhary
|
-----------------------------------------------------------------------------------
| |
Prem Singh Roop Singh
|---- Veena Chaudhary |---Beerwati
|
-----------------------------------------------------------------------------------
| |
Sheetal Pardeep
4. One suit was filed by Smt. Sheetal and Sh. Pardeep Chaudhary,
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children of Late Sh. Prem Singh with a prayer to grant decree of declaration
with consequential relief of permanent mandatory injunction. They claim to
be joint owners in possession of House No.176, Sector 10, Faridabad, on the
basis of a registered sale deed dated 29.09.2010, executed by Sh. J.S.Luthra
(the original allottee). It is their case that on 11.06.1980, Sh. J.S.Luthra
executed a General Power of Attorney in favour of their father late Sh. Prem
Singh with respect to the suit property and delivered its possession.
Thereafter, late Sh. Prem Singh has been depositing the installments and
house tax and a conveyance deed was registered by the Housing Board in
favour of Sh. J.S.Luthra on 25.09.2000 through late Sh. Prem Singh in
which Sh. Roop Singh was the witness. A non-encumbrance certificate was
also issued by the Housing Board (allotting agency) in favour of late Sh.
Prem Singh. It is claimed that the defendants were permitted to reside on the
first floor as licencees which was terminated vide notice dated 13.10.2010.
Sh. J.S.Luthra wrongly executed a General Power of Attorney in favour of
Sh. Roop Singh with respect to the property in question on 23.01.2001 and
on that basis, Sh. Roop singh has executed a sale deed in favour of Smt.
Birwati (his wife) on 23.02.2010. They claimed that such General Power of
Attorney and the sale deed are fraudulent.
5. In a joint written statement filed by Sh. Roop Singh and Smt.
Birwati, the defendants claim that they have filed a previous suit. They
claim that the property was allotted to Sh. J.S.Luthra on 13.05.1980 and he
executed a General Power of Attorney in favour of late Sh. Prem Singh.
Thereafter, a conveyance deed of the property in question was registered on
25.09.2001 in favour of Sh. J.S.Luthra through late Sh. Prem Singh.
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Thereafter, Sh. J.S.Luthra executed a General Power of Attorney in favour
of Sh. Roop Singh on 23.01.2001 and Sh. Roop Singh, on the strength of the
aforesaid attorney, executed a registered sale deed on 23.02.2010 in favour
of Smt. Birwati for a total consideration of Rs.18,00,000/-. The Power of
Attorney in favour of late Sh. Prem Singh was cancelled on 23.01.2001. The
defendants, thus, claim that they are owners in possession of the property
and the licence in favour of the plaintiffs, namely Smt Sheetal and Sh.
Pardeep Chaudhary stands terminated and thus, they are liable to be evicted.
There is a cross suit filed by Smt. Birwati while impleading Smt. Veena
Chaudhary (widow of late Sh. Prem Singh), Sh. Pardeep Chaudhary and
Smt. Sheetal as defendants apart from Sh. J.S.Luthra. Both the suit were
consolidated.
6. On the pleadings of the parties, the trial court culled out the
following issues:-
1. Whether Birwati and Roop Singh are liable to be
directed to hand over the vacant possession of the 1st
floor of house No.176, Sector 10, Faridabad to Pardeep
Chowdhary, as alleged?OPP
1A. Whether the plaintiffs are lawful owners in equal shares
of house no.176, Sector 10, Faridabad on the basis of
alleged sale dated 20.09.2010 in their favour alleged to
be executed by Sh. J.S. Luthra?OPP
2. Whether GPA No.725 dated 23.01.2001 executed by
Jaspal Singh in favour of Roop Singh regarding the suit
property is liable to be declared illegal, null and
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void?OPP
3. If the issue no.2 is proved, whether the sale deed bearing
document No.10575 dated 23.02.2010 executed by
defendant Roop Singh in favour of Birwati is liable to be
declared illegal, null and void, as alleged?OPP
4. Whether the defendants are liable to be restrained from
further alienating, transferring and interfering in the
possession of Pardeep Chowdhary and Sheetal
Chowdhary over the suit property, as alleged?OPP
5. Whether Veena Chowdhary, Pardeep Chowdhary and
Sheetal Chowdhary are liable to be diretced to handover
the vacant and peaceful possession of the portion
detected in red colour of house no.176 Sector 10 to
Birwati Chaudhary, as allegd?OPD
6. Whether the suit of plaintiffs is not maintainable?OPD
7. Whether the defendant (plaintiff of consolidated suit
no.261) is entitled to get decree of mandatory injunction
as alleged OPP
8. Whether the plaintiffs have no cause of action and locus
and conceal the true and material facts to file the present
suit?OPD
9. Whether the suit of plaintiffs is bad for misjoinder of
necessary parties?OPD
10. Relief."
7. At this stage, it is important to note the facts of Civil Revision
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No.406 of 2020. Smt. Birwati, claiming to be the owner of the suit property
has filed an eviction petition against Shri Chand from Shop No.176,
Housing Board Colony, Sector-10, Faridabad. She claims that she, being the
landlady, is entitled to get the possession of the property on various grounds
of eviction including non-payment of rent, change of user, breach of terms
and conditions, nuisance etc. Shri Chand, the tenant, has denied the
relationship of landlord and tenant and claimed that the owners of the
premesis are Sh. Pardeep Chaudhary and Smt. Sheetal. Before the learned
Rent Controller, the tenant has suffered a statement that he has vacated the
tenanted premises. An application filed by Sh. Pardeep Chaudhary and Smt.
Sheetal under Order 1 Rule 10 of the Code of Civil Procedure, 1908, was
dismissed. The eviction petition was dismissed as infructuous since the
tenant had vacated the premises. Smt. Birwati filed an appeal, which has
been accepted by the Appellate Authority. While declaring Smt. Birwati to
be the landlord, a decree for possession has been passed against Shri Chand
on the ground that he has cleverly handed over the tenanted premises to Sh.
Pardeep Chaudhary and Smt. Sheetal. This is how Shri Chand has filed the
present revision petition.
8. During the course of recording evidence, DW7-Sh. J.S.Luthra
was examined by Smt. Birwati and Sh. Roop Singh as their witness. He
stated that on receipt of Rs.25,000/- he executed a General Power of
Attorney in favour of late Sh. Prem Singh. Of course, he stated that
subsequently, he cancelled the General Power of Attorney on 23.01.2001
and executed a fresh Power of Attorney in favour of Sh. Roop Singh. He
further stated that the widow of late Sh. Prem Singh came to his house and
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explained the entire situation on which he executed a registered sale deed in
favour of Sh. Pardeep Chaudhary and Smt. Sheetal. In cross-examination,
he stated that he had received the amount from late Sh. Prem singh when he
executed the Power of Attorney on 11.06.1980. On being questioned, he
stated that he does not know whether the notice of cancellation of Power of
Attorney was given to late Sh. Prem Singh or not. Smt. Birwati Chaudhary
appeared as DW8. In her cross-examination, she evaded to answer the
question as to whether Sh. J.S.Luthra executed a General Power of Attorney
in favour of late Sh. Prem Singh on 11.06.1980 or not? She admitted that
since 1980, all the members of the family including late Sh. Prem Singh, his
wife and children have been residing in the concerned house. On being
further questioned, she feigned ignorance of the fact that before 2010, the
house was registered in the name of late Sh. Prem Singh. On a further
question, she stated that she does not know whether they have sold House
No.919, Sector 9, Faridabad in the year 2010. She has further stated that
they had paid Rs.18,00,000/- to Sh. J.S.Luthra in installments, however, she
failed to disclose any details of the payments ever made. She repeatedly
stated that her husband is dealing with the matter.
9. In substance, from the reading of the evidence and the
pleadings, it is proved that originally the house in question was allotted to
Sh. J.S.Luthra, of which some installments were yet to be paid. He
executed a General Power of Attorney in favour of late Sh. Prem Singh on
11.01.1980 on receipt of Rs.25,000/- Thereafter, late Sh. Prem Singh, on the
strength of the attorney, has been depositing the installments towards the
price of the house and house tax. On 25.09.2001, a conveyance deed was
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registered in favour of Sh. J.S.Luthra through late Sh. Prem Singh in which
Sh. Roop Singh was a witness. Thereafter, Sh. J.S.Luthra, cancelled the
Power of Attorney in favour of late Sh. Prem Singh on 23.01.2001 and on
the same day, executed a new General Power of Attorney in favour of Sh.
Roop Singh, who, thereafter, executed a registered sale deed in favour of his
wife Smt. Birwati on 23.02.2010. Sh. J.S.Luthra, executed a registered sale
deed in favour of Sh. Pardeep Chaudhary and Smt. Sheetal on 29.09.2010.
10. The General Power of Attorney dated 11.06.1980, executed by
Sh. J.S.Luthra in favour of late Sh. Prem Singh is not disputed by any of the
parties. Sh. J.S.Luthra admits that the aforesaid Power of Attorney was
executed on receipt of Rs.25,000/-. Sh. J.S.Luthra has stated that he has not
received any sale consideration from Sh. Roop Singh and/or Smt. Birwati.
The sale deed executed by Sh. J.S.Luthra in favour of children of late Sh.
Prem Singh, namely, Sh. Pardeep Chaudhary and Smt. Sheetal makes an
important reading. He states that the aforesaid house was allotted to him in
the year 1980 and the conveyance deed of the aforesaid house was registered
in his favour through a power of attorney executed by late Sh. Prem Singh,
who died on 11.12.2003. On account of his death, the ownership rights
came back to him. He has already received the entire sale consideration of
Rs.5,00,000/- from late Sh. Prem Singh. Hence, he is executing the sale
deed in favour of children of late Sh. Prem Singh, namely Sh. Pardeep
Chaudhary and Smt. Sheetal.
11. This Bench has heard the learned senior counsels representing
the parties at length and with their able assistance perused the paper book as
well as the lower courts record which was requisitioned in the Regular
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Second Appeals.
12. The learned senior counsel representing Sh. Pardeep Chaudhary
and Smt. Sheetal has contended that in view of Section 202 and 208 of the
Indian Contract Act, 1872, the General Power of Attorney executed in
favour of late Sh. Prem Singh could not be cancelled by Sh. J.S.Luthra. Sh.
Roop Singh was in knowledge of the entire facts and was a witness to the
conveyance deed registered on 25.09.2001. There was no notice of
cancellation to late Sh. Prem Singh and execution of subsequent General
Power of Attorney in favour of Sh. Roop Singh, who, in turn, executed a
registered sale deed in favour of his wife is illegal and not binding on the
rights of the appellants. He submits that the courts below have failed to
examine the facts of the case in a proper perspective.
13. On the other hand, the learned senior counsel representing Smt.
Birwati and Sh. Roop Singh contends that the ownership of the property in
dispute has passed on to Smt. Birwati on the basis of sale deed dated
23.02.2010 particularly when Sh. Roop Singh had a valid General Power of
Attorney executed by the owner in his favour. He submits that the
subsequent sale deed by Sh. J.S.Luthra in favour of Sh. Pardeep Chaudhary
and Smt. Sheetal would not confer any right, title or interest in the property.
He, while relying upon the judgment passed by the Supreme Court in Suraj
Lamp and Industries Pvt. Ltd vs. State of Haryana and another (2012) 1
SCC 656, claims that the General Power of Attorney did not create any right
in the property and Sh. Pardeep Chaudhary and Smt. Sheetal cannot claim
ownership on the basis of the aforesaid General Power of Attorney or the
subsequent sale deed executed by Sh. J.S.Luthra. He submits that Sh.
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Pardeep Chaudhary and Smt. Sheetal have admitted that the power of
attorney executed by Sh. J.S.Luthra on 11.06.1980, came to an end on
11.12.2003, the date of death of late Sh. Prem Singh. Thereafter, the sale
deed has been executed in favour of Smt. Bitwati, consequently, Sh. Pardeep
Chaudhary and Smt. Sheetal have no right, title or interest in the property.
14. First of all, the Bench proceeds to analyse the provisions of law.
Section 202 of the Indian Contract Act, 1872, is extracted as under:-
Section 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. --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."
(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. (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. (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."
15. It is evident on reading Section 202 of the Indian Contract
Act,1872 that where the agent himself has an interest in the property which
forms the subject matter of the agency, the same cannot, in the absence of an
express contract, be terminated to the prejudice of such interest. The
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aforesaid provision has been interpreted by the various Courts including our
High Court. In Ramesh Mohan and another vs. Raj Kishan and others,
1984, Punjab Law Reporter, 211, the Court held that the sale agreement, on
receipt of the entire sale consideration, followed by Power of Attorney and
delivery of possession renders the power of attorney irrevocable and in view
of Section 202 of the Indian Contract Act, 1872, the power of attorney
holder continues to be the agent despite cancellation of power of attorney.
Furthermore, the Supreme Court, while examining the aforesaid provisions,
in Seth Loon Karan Sethiya vs. Ivan E. John and others, AIR 1969 SC 73,
held that there is hardly any doubt that the power of attorney given by the
appellant in favour of the bank is a power coupled with an interest, therefore,
in view of Section 202 of the Indian Contract Act,1872, where the agent has
himself an interest in the property which forms the subject matter of agency,
the same, in the absence of any contract, cannot be terminated. In this case,
the borrower being highly indebted to the bank, executed a power of
attorney authorizing the bank to execute a decree which was passed in his
favour. Subsequently, he disputed the maintainability of the execution
petition by the bank. The Supreme Court rejected his objection.
16. Similarly, in Jeet Kumari vs. Girdhari Lal 2003(3)
R.C.R.(Civil) 391, the Court held that though the title will not pass only on
the basis of execution of power of attorney, without execution and
registration of the sale deed, however, the vendor cannot revoke the power
of attorney and the possession of the plaintiff is protected under Section 53-
A of the Transfer of Property Act,1882.
17. On a careful perusal of the judgment passed in Suraj Lamp
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(supra), which has been relied upon by the learned counsel representing
Smt. Birwati and Sh. Roop Singh, the Supreme Court has held that the
execution of the agreement to sell coupled with delivery of possession, the
execution of the power of attorney and other documents does not amount to
transfer of the property. While overruling the view of the Delhi High Court
in Asha M. Jain vs. Canara Bank, (2001) 94 DLT 841, the Court held that
equation of the aforesaid document with a complete sale deed opens the
doors for fraud and therefore, requirement of registered sale deed under
Section 17 of the Registeration Act,1908 cannot be substituted by such
documents. It was held that the execution of the agreement to sell, general
power of attorney, special power of attorney and Will is not a mode of
transfer and that it can never be a valid substitute for a sale deed. The
observations recorded in Asha M. Jain's case (supra) to that extent were
overruled as would be evident from reading of para 23 of the SCC. With
greatest respect, the judgment passed in Suraj Lamp (supra) is not
applicable to the present case because in the present case, the plaintiff-Sh.
Pardeep Chaudhary and Smt. Sheetal are not claiming ownership on the
basis of the power of attorney. In fact, they are claiming ownership on the
basis of the sale deed executed in their favour, by the owner Sh. J.S.Luthra,
on 29.09.2010.
18. On a careful analysis of the case law and the relevant statutory
provisions, it is abundantly clear that the title transferred by Sh. J.S.Luthra
in favour of Sh. Pardeep Chaudhary and Smt. Sheetal vide registered sale
deed dated 29.09.2010 is in acknowledgment of the receipt of entire sale
consideration from late Sh. Prem Singh and in continuation of the execution
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of the General Power of Attorney dated 11.06.1980. From the reading of the
sale deed as also the deposition of Sh. J.S.Luthra, the agent (late Sh. Prem
Singh) had an interest in the property which formed the subject matter of
the agency. Consequently, Sh. J.S.Luthra executed a General Power of
Attorney in favour of late Sh. Prem Singh, the agent. The subsequent sale
deed executed by Sh. J.S.Luthra is in continuation of the General Power of
Attorney which was executed in the year 1980. In other words, the sale deed
dated 29.09.2010 is connected to the previous contract entered into with late
Sh. Prem Singh. Therefore, the matter is required to be examined in that
context. The agency was created in which the agent had an interest in the
property, thus, the power of attorney could not be cancelled. Therefore, the
action of Sh. J.S.Luthra in cancelling the General Power of Attorney on
23.01.2001 is illegal, as the same is in violation of Section 202 of the
Indian Contract Act,1872. Similarly, execution of fresh power of attorney in
favour of Sh. Roop Singh by Sh. J.S.Luthra was also incorrect. Such step
would not create any right in favour of Sh. Roop Singh.
19. Now, let's examine the rights of Smt. Birwati and Sh. Roop
Singh. Smt. Birwati and Sh. Roop Singh claim that a General Power of
Attorney was executed by Sh. J.S.Luthra in favour of Sh. Roop Singh on
23.01.2001. In absence of evidence of payment of consideration, the power
of attorney did not create any interest in the property. Smt. Birwati has
failed to prove payment of any sale consideration to Sh. J.S.Luthra, who
while appearing in evidence has specifically denied receipt of any such
payment, although, he was examined by Smt. Birwati as a witness to prove
her own case. Sh. Roop Singh has not appeared in evidence. On reading of
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Smt. Birwati's cross-examination, it is evident that she tried to avoid
answering the questions put to her in the cross-examination while claiming
that her husband knows everything, however, Sh. Roop Singh did not
appear as witness to provide information on this aspect. Sh. Roop Singh is
defendant no.2 in the suit filed by Sh. Pardeep Chaudhary. Hence, Smt.
Birwati and Sh. Roop Singh have withheld the best evidence forcing the
Court to draw an adverse inference against them.
20. It may be noted that the interest created in favour of late Sh.
Prem Singh in the year 1980, was in the knowledge of Smt. Birwati as she is
not a stranger but a member of the family. When conveyance deed was
executed by the Haryana Housing Board on 25.09.2000 in favour of Sh.
J.S.Luthra through late Sh. Prem Singh, Sh. Roop Singh concealed the
factum of cancellation of the power of attorney executed by Sh. J.S.Luthra in
favour of late Sh. Prem Singh on 23.01.2001. He also concealed the fact
that Sh. J.S.Luthra has executed a fresh power of attorney in his favour with
respect to the house in question. In fact, the signatures of Sh. Roop Singh as
witness acknowledges the correctness of the power of attorney in favour of
late Sh. Prem Singh which was created along with interest in the house
which continues to operate. Consequently, the rights of Smt. Birwati, if any,
would be subservient to the rights of late Sh. Prem Singh or his children.
Even though, the sale deed was executed in favour of late Sh. Prem Singh's
children on 29.09.2010, however, this shall be considered to in continuity of
the rights flowing from the power of attorney dated 11.06.1980 which was
executed on receipt of the entire sale consideration particularly when the
possession of the property was also delivered to late Sh. Prem Singh at that
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time. Hence, the rights of late Sh. Prem Singh's children stand on a higher
pedestal and are superior to that of Smt. Birwati, who cannot claim to be a
bonafide purchaser for consideration, particularly when she has neither
proved payment of consideration nor proved that she was not in knowledge
of the aforementioned facts of the case.
21. The appellant has also filed an application under Order 41 Rule
27 of the Code of Civil Procedure, 1908, to lead additional evidence in order
to prove the agreement to sell and the proceedings recorded by the Haryana
Housing Board in its report. In the facts and circumstances of the present
case, this court does not require the additional evidence. Hence, the
application is disposed of while giving liberty to the appellant to revive the
application in case the conclusion drawn by this Court is reversed.
22. Consequently, both the courts have erred in overlooking these
material aspects of the case. In view of the aforesaid discussion, the
conclusion is inevitable. Hence, while allowing the appeals, the judgments
and decrees passed by the courts below are set aside. The suit filed by Sh.
Pardeep Chaudhary and Smt. Sheetal shall stand decreed, whereas the suit
filed by Smt. Birwati shall stand dismissed.
23. In view of the aforesaid discussion, the civil revision petition
filed by Shri Chand is allowed because Smt. Birwati is neither the owner nor
the landlord of the suit property.
04th July, 2022 (ANIL KSHETARPAL)
nt JUDGE
Whether speaking/reasoned :YES/NO
Whether reportable :YES/NO
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