DATED THIS THE 1 - Karjudgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/...2006/01/09  · K.N.Narasimhaiah, Major, Son of Late Narase Gowda, Residing in a portion of No.5, Vidya

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 1st DAY OF JUNE 2015

BEFORE:

THE HONOURABLE MR. JUSTICE ANAND BYRAREDDY

REGULAR FIRST APPEAL No.1267 OF 2009 BETWEEN: Smt. V.R.Shanta, Aged about 54 years, Wife of C. Subramanyam Naidu, Residing at No.153, 22nd Main Road, Raghavendra Layout, Padmanabha Nagar, Bangalore – 560 070. … APPELLANT (By Shri Sreevatsa, Senior Advocate for Shri V. Vishwanath, Advocte) AND: K.N.Narasimhaiah, Major, Son of Late Narase Gowda, Residing in a portion of No.5, Vidya Peeta Circle, Banashankari 1st Stage, Bangalore – 560 050. …RESPONDENT (By Shri R.A. Devanand, Advocate )

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This Regular First Appeal filed under Section 96 read with Order 41 Rule 1 of the Code of Civil Procedure, 1908, against the judgment and decree dated 7.10.2009 passed in O.S.No.7389/2004 on the file of the III Additional City Civil Judge, Bangalore (CCH-25), dismissing the suit for possession, damages and damages and mesne profits. This Regular First Appeal having been heard and reserved on 20.4.2015 and coming on for pronouncement of Judgment this day, the Court delivered the following:-

JUDGMENT

Heard the learned counsel for the parties.

2. The appeal is by the plaintiff before the Trial Court. The

parties are referred to by their rank before the Trial Court, for the

sake of convenience. It was the case of the plaintiff that she was the

absolute owner of property bearing Site No.5, Old No.4 formed in

Sy.No.21 of Sunkenahalli, Kattariguppe Main Road, Ward No.52,

Vidyapeeta Circle, Banashankari I Stage, Bangalore-560 050

measuring East to West on the Northern side 39.6 ft., on the

Southern side 32 feet and North to South on the Eastern side 53 feet

and on the Western side 40 feet with a small house thereon, the said

property is more fully described in the suit schedule. The plaintiff

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claims to have purchased the same under a registered sale deed dated

18.08.2003. There were alleged to be two tenements on the

property, one in the occupation of the defendant herein which is

more fully described in the suit schedule and another in the

occupation of Ananda Naidu.

It is further stated that the vendors of the plaintiff had

originally let out the suit premises in favour of the defendant on a

monthly rent of Rs.200/- and had received an advance of Rs.3,000/-

under a rental agreement dated 16.06.1983 and as already stated, the

other tenement in the occupation of Ananda Naidu was also let out

by the same vendor and the tenancy thereof was attorned in favour

of the plaintiff and rents were being paid to the plaintiff by Ananda

Naidu.

However, the said property in possession of the defendant

consisting of a hall, room, kitchen and toilet, had defaulted and after

a lapse of one year from the date of inception of the tenancy, had

denied rents to the vendor of the plaintiff and on purchase of the

suit property by the plaintiff, the defendant is said to have caused

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nuisance and is said to have harassed the plaintiff as well, in spite of

which the defendant had filed a suit in O.S.No.2821/1994 for a

decree of permanent injunction. It transpires that the suit was

decreed against the General Power of Attorney Holder of the

original vendor of the plaintiff not to dispossess the defendant

without due process of law.

This strained relationship is said to have continued even

thereafter.

In this background, the vendor of the plaintiff had decided to

sell the entire suit property and therefore, had entered into a

registered agreement of sale dated 17.2.1982 through the General

Power of Attorney Holder, agreeing to execute a sale deed in her

favour as per the terms and conditions stipulated therein and had

received a sum of Rs.4,750/-. Thereafter, a registered sale deed is

said to have been executed on 18.08.2003 in favour of the plaintiff in

respect of the entire property including the suit schedule property.

The defendant on the other hand, after having obtained a

judgment and decree for permanent injunction dated 31.08.1998, is

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alleged to have created a document styled as ‘an agreement of sale’ in

favour of his own son. It is pointed out that from 1994 till

31.08.1998, the General Power of Attorney holder of the vendor of

the plaintiff had contested the suit of the defendant. There was no

settlement or negotiation for alienation of the suit property in favour

of the defendant or his son and the possibility of the execution of

any such agreement of sale in favour of the defendant’s son was

therefore highly suspicious. However, the son of the defendant had

proceeded to file a suit for specific performance of the said

agreement in a Civil suit in O.S.No.639/2004 and the said suit was

pending consideration at the time the present suit was filed by the

plaintiff. That suit was contested.

The plaintiff claimed that the suit property in the occupation

of the defendant was required by her along with the other tenements

in the occupation of Ananda Naidu. The plaintiff intended to

convert the property into a single unit and wanted to use the same

for her own purposes. In this regard, Ananda Naidu is said to have

agreed to quit and deliver vacant possession whenever the plaintiff

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called upon him to do so. It is also stated that the son of the

defendant was residing elsewhere and not in the suit schedule

property. The plaintiff further has stated that after obtaining the

registered sale deed dated 18.08.2003, the plaintiff had approached

the defendant as regards rents to be paid in her favour and that he

was also in arrears from the month of January 2002 onwards, till the

date of payment. The defendant had stoically refused to accept the

plaintiff as the owner and therefore, the plaintiff had got issued a

legal notice staking her claim to the property. The defendant is said

to have replied by notice dated 13.08.2004 denying the relationship

of landlord and tenant as well as the claim for arrears of rent.

Hence, the suit. The plaintiff sought the relief of ejectment and

damages for use and occupation from the defendant, from January

2002 onwards.

The defendant on entering appearance, had filed written

statement denying the plaint averments. Though there is a seeming

admission in Paragraph 2 of the written statement as to the

ownership of the plaintiff to the suit property, the subsequent

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statement in the written statement would indicate that the defendant

was vehemently disputing the correctness of the plaint averments

since there is a wholesale denial of all the averments in the plaint.

The defendant, apart from denying the plaint averments, has

stated that the vendor claimed by the plaintiff is none other than the

father of the plaintiff. Her father had inducted the defendant as a

tenant in respect of the suit premises and there were attempts to

illegally dispossess the defendant from the suit property. Therefore,

he had filed the suit for injunction as stated by the plaintiff and there

was a decree of permanent injunction in favour of the defendant

against the father of the plaintiff. After the suit was decreed, it is

claimed that the father of the plaintiff offered the defendant and his

son to purchase the entire property and accordingly, an agreement of

sale dated 25.11.1998 was entered into between the father of the

plaintiff and the defendant’s son for a sale consideration of

Rs.8,00,000/- and had received a sum of Rs.5,00,000/- as advance

on 25.11.1998. It is contrary to the terms of the said agreement that

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the plaintiff claims to have purchased the property to deny the just

due of the defendant and to illegally dispossess him.

It is further stated that the sale deed in favour of the plaintiff

is subject to the agreement in favour of the defendant’s son and the

alleged sale would not bind the defendant and the plaintiff cannot be

construed as a bona fide purchaser for value, as the sale deed is

executed in the knowledge that there was an agreement executed

already in favour of the defendant’s son and it is in that background

that the suit for specific performance has been filed in

O.S.No.639/2004.

3. On the basis of the above pleadings the court below had

framed the following issues :

“1. Whether the plaintiff proves the existence

of relationship of landlord and tenant between the

plaintiff and the defendant?

2. Whether plaintiff legally and validly

terminated the tenancy of the defendant in respect

of the suit schedule property?

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3. Whether plaintiff is entitled to recover

possession of the schedule premises from the

defendant?

4. Whether plaintiff is entitled to recover

Rs.6,400/- by way of damages from January 2002 till

August 2002?

5. Whether plaintiff is entitled to mesne

profits by way of damages from the date of the suit

till delivery of vacant possession of the schedule

property by the defendant to the plaintiff?

6. Whether plaintiff is entitled to the reliefs as

sought?

7. What decree or order?”

The trial court had answered Issue Nos.1, 3, 4, 5 and 6 in the

negative, Issue No.2 as it does not necessitate any findings and Issue

No.7 as per the final order and consequently dismissed the suit. It is

that which is under challenge in this appeal.

4. The learned Senior Advocate, Shri S. Shreevatsa, appearing

for the counsel for the plaintiff would contend that though the

admission by the defendant in the written statement about the

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source of title and her absolute ownership of the suit schedule

property. And further the admission of the defendant that her

vendor had let out the property to him on a monthly rent of

Rs.200/-, under a rental agreement dated 16.6.1983; And that there

was even a civil suit filed by the defendant against her vendor for the

relief of injunction from being dispossessed otherwise than under

the due process of law, the trial court was not justified in denying the

relief to the plaintiff, on the basis of material which was wholly

extraneous.

It is contended that the court below was not justified in

holding that the plaintiff was not entitled to any relief on account of

the singular circumstance that having regard to a death certificate of

the original owner of the suit property, which indicated that the

owner of the property was dead, as on the date of the sale deed in

favour of the plaintiff, and therefore the transaction was a nullity in

the eye of law and hence the plaintiff could not claim any right under

the same. It is contended that the sale deed had been executed by a

duly constituted agent, a power of attorney holder, and the same if

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executed without notice of the death of the principal, would be valid

and would convey good title to the purchaser, notwithstanding the

fact that the principal, on whose behalf the conveyance was made,

was not alive at the relevant point of time.

Incidentally, it is also pointed out that the written statement

did not contain any plea as to the sale being void on account of the

circumstance that the vendor of the plaintiff having died prior to the

execution of the sale deed. It is during the course of the trial that a

death certificate, Exhibit D-1 was produced, which according to the

learned Senior Advocate, could not have been looked into, without

the necessary pleadings in respect of the same, in the light of Order

VI Rule 1 and Order XVIII Rule 2 of the Code of Civil Procedure ,

1908.

It is pointed out that there was also the evidence of PW-2,

Anand Naidu, a tenant of another tenement of the suit schedule

premises, who has endorsed the ownership and the jural relationship

of land lord and tenant as between the plaintiff and himself, which

has been overlooked by the court below.

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It is also pointed out that in the absence of pleadings as

regards the validity or otherwise of the sale deed in favour of the

plaintiff and in the absence of an issue in that regard, the trial court

having arrived at a primary finding that the sale deed executed by a

power of attorney holder, when the principal was dead on the date

of execution would be a nullity, does not also address the question

whether the said power of attorney was executed for consideration.

To wit, it is on record that the entire sale consideration had been

paid on the date of an agreement of sale, much prior to the

execution of the sale deed. In which event it was possible for the

plaintiff to establish that the power of attorney having been executed

as one for consideration, would not terminate on the death of the

principal and the sale deed executed by such a power of attorney

holder would be valid. In any event, it is asserted by the learned

Senior Advocate, that the defendant was hardly competent to

question the validity of the sale deed in favour of the plaintiff, when

there was no claim or objection to the exercise of ownership by the

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plaintiff, from anybody claiming under the erstwhile owner, who are

the only competent persons to raise any such objection.

Hence, it is contended that the appeal be allowed and the suit

be decreed.

5. On the other hand the learned counsel for the respondent,

happily, seeks to justify the judgment of the trial court.

6. At the outset it is to be taken note that the end result of the

judgment of the trial court is that the sale deed of the plaintiff has

been declared as a nullity, by implication, and the suit property has

been handed over to the defendant, when that was not even his

claim.

The trial court has, while deciding Issue no. 1, as regards the

existence or otherwise of the jural relationship of land lord and

tenant- as between the plaintiff and the defendant, has in effect

found all other issues as being redundant and has dismissed the suit

– primarily on a finding that the sale deed in favour of the plaintiff

was executed by a power of attorney holder of the owner of the suit

property as on 18.8.2003, whereas the principal had died as on

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11.5.1998. In the result the trial court has concluded that the

plaintiff had not derived any right under the sale deed and

consequently could not also claim as the landlord of the suit

property.

The approach of the trial court in coming to the above

conclusion is questionable. There were no pleadings as to the

invalidity or otherwise of the sale deed in favour of the plaintiff.

There was also no issue on that aspect. There was however, no

denial of the ownership of the property by the vendor of the

plaintiff. Consequently, a registered sale deed, if not otherwise

challenged or questioned in a properly instituted suit for the

purpose, by any person who is deprived of the property involved

therein, would have to be given due credence. The defendant could

at best claim that his tenancy had never been formerly attorned and

that he would be liable to pay arrears of rent if any, to his landlord or

the legal representatives of the land lord, (that the plaintiff could also

claim as a legal representative by virtue of the sale deed, is another

matter). Therefore in the absence of pleadings or any issue as to the

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validity of the sale deed in favour of the plaintiff, a finding to the

effect that it is null and void is illegal and results in a miscarriage of

justice.

An incidental question that arises for consideration, namely,

whether an agent or a power of attorney holder could transact on

behalf of the principal even after the principal’s death, till such time

that he has notice of the death, would have to be answered in the

negative.

In that, an agency may be terminated by :

a. revocation of the agent’s authority by the principal ;

b. agent renouncing the agency ;

c. completion of the business of agency;

d. death of the principal or agent;

e. the principal or agent becoming of unsound mind;

f. the principal being adjudged an insolvent;

Other than the above modes of termination of the agency as

contemplated under the Indian Contract Act, 1872, ( Hereinafter

referred to as ‘the Contract Act’, for brevity) the 13th Law

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Commission of India, 1958, has recommended the inclusion of the

following additional modes of termination :

a. by mutual agreement;

b. completion of the term of agency- by expiry of the time

agreed upon;

c. destruction of the subject matter of the agency;

d. the agency becoming subsequently unlawful;

e. dissolution of the principal firm.

More particularly, it is the settled legal position that the death of the

principal or the agent terminates the agency at once, whether the

other has notice to that effect or not. (Campanari v. Woodburn (1854 )

15 CB 400; Pool v. Pool (1889 ) 58 LJP 67).

In this regard Section 201 and Section 208 of the Contract

Act are relevant. Section 208 is reproduced hereunder for ready

reference :

“208. When termination of agent’s authority

takes effect as to agent, and as to third persons.—

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The termination of the authority of an agent does

not, so far as regards the agent, take effect before it

becomes known to him, or, so far as regards third

persons, before it becomes known to them.

Illustrations

(a) A directs B to sell goods for him, and

agrees to give B five per cent. commission on the

price fetched by the goods. A afterwards by letter,

revokes B’s authority. B after the letter is sent, but

before he receives it, sells the goods for 100 rupees.

The sale is binding on A, and B is entitled to five

rupees as his commission.

(b) A, at Madras, by letter directs B to sell for

him some cotton lying in a warehouse in Bombay,

and afterwards, by letter revokes his authority to sell,

and directs B to send the cotton to Madras. B after

receiving the second letter, enters into a contract

with C, who knows of the first letter, but not of the

second for the sale to him of the cotton. C pays B

the money, with which B absconds. C’s payment is

good as against A.

(c) A directs B, his agent, to pay certain

money to C. A dies, and D takes out probate to his

will. B, after A’s death but before hearing of it, pays

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the money to C. The payment is good as against D,

the executor.”

The section is not restricted to termination by revocation, but

as Illustration (c) suggests, also applies to other modes of

termination of agency. Its basis is the doctrine of apparent authority.

Except as to Illustration (c), which is derived from the Roman law,

and which removes an anomaly, this Section is in accordance with

the common law. Under the English law, death of the principal

automatically terminates the agency, whether the agent had

knowledge of the death or not. (Blades v. Free (1829 ) 9 B& C 167;

Drew v. Nunn (1879) 4 QBD 661; Yonge v. Toynbee (1910 ) 1 KB 215 ).

Though the agent’s authority is terminated by the death or

insanity of the principal, it is his duty to take reasonable steps for the

protection and preservation of the interests of the principal

entrusted to him. He takes these steps on behalf of the legal

representatives of the deceased principal.

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In the light of the above settled legal position, the proposition

canvassed by Shri Srivatsa, that the termination of the authority of

an agent does not, so far as regards the agent, take effect before it

becomes known to him or, as regards third persons, before it

becomes known to them, is subject to the above exception, in the

event of the death of the principal.

Hence, the trial court was justified in holding that on the

death of the principal the power of attorney holder had no authority

to act on behalf of the principal. But however, this is further subject

to Section 202 of the Contract Act , 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

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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.”

Hence, where an agent has been appointed in respect of a

subject matter, and he has an interest in that subject matter, such an

agency cannot be terminated in any manner so as to prejudice such

an interest, unless there is an express contract to that effect.

7. In the instant case on hand, in the absence of pleadings and

an issue as regards the want of authority of the agent, the question

whether the agency was coupled with an interest, which made the

agency irrevocable has not been addressed. The fact that the entire

sale consideration is said to have been paid even at the time of

execution of an agreement of sale, prior to the sale deed, and the

further circumstance that none of the legal heirs of the deceased

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vendor have come forward to raise any claim, would lead to a

presumption that the agent did posses the authority to convey the

property , notwithstanding the death of the principal. In any event if

the ownership of the vendor was not in dispute , the subsequent sale

deed in favour of the plaintiff could not have been negated by the

trial court by an involved deduction, in the suit by the plaintiff and in

the absence of any challenge to the said sale deed.

Even assuming that the plaintiff had failed to establish that

there was any attornment of the tenancy, the plaintiff was still

entitled to the relief of recovery of possession of the property by

virtue of title. The claim of the defendant that his son held an

agreement of sale in respect of the very property, was wholly

extraneous, as rightly held by the trial court.

In the result, the appeal is allowed in part. The judgment and

decree of the court below is set aside. The plaintiff is held entitled

to recovery of possession of the suit schedule property. The

defendant shall quit and deliver vacant possession of the suit

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property. The plaintiff is not entitled to any rent or damages, in the

absence of satisfactory evidence as regards attornment of tenancy.

Sd/- JUDGE KS*