Rajesh Kumar v. Anand Kumar & Ors.

Coram: Justices Pankaj Mithal and PK Mishra

Dated: 17 May 2024

Facts:
The appellant/plaintiff entered into an agreement to sell with respondent no. 1 (acting as Power of Attorney holder of respondents/defendant nos. 2 to 11) for purchase of land for sale consideration at the rate of Rs. 3,000/- per acre, totalling Rs. 4,41,000/-. The appellant/plaintiff paid earnest money of Rs. 41,000/- on the date of agreement to sell and the balance amount was to be paid on the date of registration of the sale deed which was to be done within six months from the date of agreement. On 26.12.1996, another agreement was executed between the appellant/plaintiff and the Power of Attorney Holder extending the execution of the sale deed till 31.03.1997, remaining terms being the same. The date was further extended to 31.05.1997 vide entry made in the subsequent agreement dated 26.12.1996. Another entry was made on 23.04.1997 mentioning that the agreement to sell shall come to an end on 31.05.1997. However, the respondent/defendant no. 1 being the Power of Attorney Holder of respondents/defendant nos. 2 to 11 executed the sale deed of the suit land on 14.05.1997 in favour of defendant nos. 12 to 14 even though the said respondents were aware of the earlier sale agreement and its extensions.

The sale deed dated 14.05.1997 was executed behind the back of the appellant/plaintiff which came to his notice subsequently on which a legal notice was sent on 30.05.1997 calling upon the respondents/defendant nos. 1 to 11 to be present in the Registrar’s office on 31.05.1997 to carry out the formalities for execution of the sale deed. Despite receipt of this notice, the respondents/defendant nos. 1 to 11 did not attend the Registrar Office. On 31.05.1997, the appellant/plaintiff was informed by the sub-Registrar that the suit land has been sold in favour of defendant nos. 12 to 14.

According to the appellant/plaintiff, the Gram Panchayat assured the appellant/plaintiff in its meeting dated 06.12.1997 that defendant nos. 12 to 14 will execute a sale deed in favour of the appellant/plaintiff, therefore, legal action was not initiated. The present suit was filed on 19.06.2000.

Decision of trial Court: The Trial Court decreed the suit upon finding that the agreement to sell has been executed between the appellant/plaintiff and defendant no. 1 as a Power of Attorney Holder of defendant nos. 2 to 11. Non-examination of the appellant/plaintiff as a witness was held not having any adverse impact on plaintiff’s case. The Trial Court also found that the time allowed for execution of sale deed was extended twice and he had also paid earnest money, therefore, the appellant/plaintiff was ready and willing to perform his part of the contract and the suit is not barred by limitation. Since the extended time for registration of sale deed was till 31.05.1997 and the suit was to be filed on or before 30.05.2000. However, on the said date, the Court was closed for summer vacation which ended on 18.06.2000 and the suit was filed on 19.06.2000. Therefore, the suit was within limitation, having been filed on the last date of limitation.

Decision of High Court: In appeal the High Court has passed the impugned judgment allowing the appeal to set aside the judgment and decree of the Trial Court consequently dismissing the appellant/plaintiff’s suit. The High Court has non-suited the appellant/plaintiff on two counts. Firstly, that defendant no. 1 is not the sole owner of the property which was the coparcenary property and the other coparceners did not sign the initial agreement and secondly, that the appellant/plaintiff having failed to appear in the witness box, the testimony of his Power of Attorney Holder cannot be read as statement of the plaintiff in a civil suit of this nature.

Contentions of the appellant: The High Court has committed serious error of law and fact by setting aside the well reasoned judgment and decree passed by the Trial Court. According to him, the execution of sale agreement by defendant no. 1 as a Power of Attorney Holder of Defendant Nos. 2 to 11 having been duly proved and the appellant/plaintiff having filed the suit within time, the First Appellate Court ought not to have set aside the judgment of the Trial Court. It is further submitted that the High Court is not correct in holding that the defendant nos. 2 to 11 had not signed the agreement because defendant no. 1 was their Power of Attorney Holder. The High Court has also erred in holding that Power of Attorney Holder cannot depose in a civil suit on behalf of the plaintiff. According to him, non-appearance of the appellant/plaintiff as a witness would not have any adverse impact in a suit of this nature and that the readiness and willingness can be proved by the Attorney Holder.

Contentions of the respondents/defendants: The agreement dated 26.09.1995 is void ab initio because it was not executed by all the owners of the suit land. It was then argued that in a suit for specific performance non-appearance of plaintiff as a witness is fatal to his case because it is he who has to plead and prove the readiness and willingness. He would submit that the High Court has rightly set aside the judgment and decree of the Trial Court which is based on perverse finding and incorrect application of settled legal principles. The respondents/defendants in joint written statement averred that the suit is barred by limitation. It was also pleaded that time was the essence of the contract and the sale deed was to be executed within six months from the date of the agreement and that the appellant/plaintiff did not have sufficient funds with him for payment of the sale consideration and the advance amount of Rs. 40,000/- was also returned to the appellant/plaintiff through one Subhash Chandra Bansal.

Observations of the Court:
Admittedly, the initial agreement dated 26.09.1995 was executed by Defendant no. 1-Gajay Bahadur Bakshi. It is the case of the appellant/plaintiff that Gajay Bahadur Bakshi was the Power of Attorney Holder of Defendant nos. 2 to 11, the other co-owners/coparceners of the suit property. However, the agreement itself no where states that Gajay Bahadur Bakshi has executed the agreement as Attorney Holder of Defendant nos. 2 to 11. On the contrary, it is mentioned in the agreement that Gajay Bahadur Bakshi would be responsible for getting the sale deed executed and registered by all the co-owners at the time of registration.

Neither the names of all the co-owners/coparceners are mentioned in the agreement, thus, the High Court is right in finding that all the co-owners have not signed the agreement. The subsequent endorsement of receipt of additional amount of Rs. 40,000/- is also not signed by all the co-parceners. The same is the condition with the 3rd agreement dated 26.12.1996 and the extension endorsement dated 27.03.1997 and 23.04.1997. Significantly, the so-called power of attorney pleaded in the plaint through which the defendant nos. 2 to 11 authorised defendant no. 1 to execute the agreement, have not been produced and proved in the Trial Court. Thus, neither in the agreement nor in course of trial the power of attorney is proved by tendering the same in evidence. Hence, in the absence of evidence, the High Court rightly held that the agreement is not signed by all the co-owners.

In the matter of Shanmughasundaram v. Diravia Nadar (dead) by Lrs. (2005 SC), this Court has held that in the event all the co-sharers of the property have not executed the sale agreement, a suit for specific performance cannot be decreed. Undisputedly, in the present case, the plaintiff failed to appear in the witness box. Instead, his Power of Attorney Holder – Parmod Khare has got himself examined as PW-1. This witness was examined on 05.09.2002 and the power of attorney was executed on 26.08.2002. It is not a case where the suit itself was filed by a Power of Attorney Holder. He appeared subsequently only for recording his evidence as the Special Power of Attorney Holder of the plaintiff. The legal position as to when the deposition of a Power of Attorney Holder can be read in evidence has been dealt with by this Court in several decisions. In Janki Vashdeo Bhojwani v. Indusind Bank Ltd. (2005 SC), it is held that a Power of Attorney Holder cannot depose for principal in respect of matters of which only principal can have personal knowledge and in respect of which the principal is liable to be cross-examined. It is also held that if the principal to the suit does not appear in the witness box, a presumption would arise that the case set up by him is not correct. This Court observed: “Order 3 Rules 1 and 2 CPC empower the holder

of Power of Attorney to “act” on behalf of the principal. In our view the word “acts” employed in Order 3 Rules 1 and 2 CPC confines only in respect of “acts” done by the Power of Attorney holder in exercise of power granted by the instrument. The term “acts” would not include deposing in place and instead of principal. In other words, if the Power of Attorney holder has rendered some “acts” in pursuance of Power of Attorney, he may depose for the principal in respect of such acts but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of matters of which only the principal can have personal knowledge and in respect of which the principal is liable to be cross-examined.” In the present case, the readiness and willingness of the appellant/plaintiff to perform his part of the contract being an essential requirement for passing a decree for specific performance could be proved only by the appellant/plaintiff who was a party to the agreement.

The High Court has rightly drawn adverse inference against the appellant/plaintiff by not appearing in the witness box. Hence, in our considered opinion, the High Court has rightly held that the appellant/plaintiff failed to prove his readiness and willingness which was an essential ingredient of a suit for specific performance.

The submission of the appellant/plaintiff that the delay in filing the suit was because the Gram Panchayat assured him that defendant nos. 12 to 14 will execute a sale deed in his favour is not acceptable. There is no record to show that the Gram Panchayat has assured the appellant/plaintiff in this regard.

Accordingly, we hold that the High Court was justified in reversing the judgment and decree of the Trial Court which was passed on erroneous appreciation of evidence and incorrect application of law. Therefore, this appeal is devoid of merit and is dismissed.

Note: This judgment does not take into account the 2018 amendment.