General Power Of Attorney-Cum-Sale Agreement Does Not Confer Ownership, Cannot Defeat Decree For Specific Performance: AP High Court

While dealing with a case where the appellants claimed ownership over a suit schedule property based on a GPA/SA of 2007, which was made after the Respondent 1/plaintiff's earlier valid sale agreement of 2006, a Division Bench of Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam held,

“… we hold that the Special General Power of Attorney dated 17.01.2007 in favour of the 1st appellant does not confer or create any right, title and interest in favour of the 1st appellant, nor based thereon the lease in favour of the 2nd appellant by the 1st appellant confers any right to the 2nd appellant, so as to object to the execution of the decree in favour of the 1st respondent/decree holder for delivery of possession of the E.P.schedule property or to resist/obstruct delivery of possession.”

Facts:

The plaintiff/Respondent 1 initially filed a suit against the defendant/Respondent 2 for specific performance of the agreement of sale dated 01.07.2006. The suit was decreed ex parte, whereby the plaintiff was granted right to obtain the registered sale deed by paying the remaining sale consideration. The decree attained finality and the plaintiff deposited the balance sale amount, whereafter, the sale deed was executed by the Court in favour of the plaintiff. Later, when the plaintiff initiated execution proceedings for delivery of possession of property, the appellants objected to delivery of possession and filed a claim petition on the grounds that the defendant had previously sold the property to the appellants through a GPA/SA in 2007, and that they had been in possession of the property since then. The appellants thus argued that the agreement of sale in favour of the plaintiff was collusive.

However, relying on the Supreme Court's decision in Suraj Lamp and Industries Private Limited v. State of Haryana [(2012) 1 SCC 656], the Trial Court rejected the contention of the appellants as the GPA/SA of 2007 was not proved. In light of the same, it was held that appellants were not entitled to any rights over the scheduled property and consequently could not claim to be the absolute owner of the scheduled property.

In Suraj Lamp, the Supreme Court held that transfer of immovable property by way of sale can only be made by a sale deed and in the absence of the same, “no right, title or interest in an immovable property” can be transferred. Further, on the point of scope of power of attorney (POA), it was held that a POA is not an instrument of transfer of any right, title or interest in an immovable property, but is a mere creation of agency, whereby the grantor authorises the grantee to do the acts specified on behalf of grantor, which, when executed, will be binding on the grantor as if done by him.

Challenging the order of the Trial Court, the appellants approached the High Court.

Submissions:

The appellants argued that the judgment in Suraj Lamp, handed down in 2012, was prospective and did not affect the transactions already entered into, and thus the GPA/SA of 2007 validly transferred title to the Appellant 1. The appellant reasoned that the original registered sale deed dated of 2004, in favor of the Respondent 2 and discharge mortgage debt receipt, which was delivered to Appellant 1 under the GPA/SA established that the agreement of sale of 2006 in favour of Respondent 1 was ante-dated. They argued that Appellant 1 had created a lease in favour of Respondent 2 and the appellants had consequently been in possession of the schedule property.

On the contrary, the decree holders/respondents submitted that there was no illegality in the order passed by the Trial Court and that there could be no transfer in favour of Appellant 1 by the GPA/SA of 2007 on the grounds that the agreement of sale in favour of the Respondent 1, who is the decree holder, was done in 2006 , which was prior in time, and consequently, the later GPA/SA of 2007 would not transfer any title nor create rights in favor of the Appellant 1. It was further submitted that the transfer of possession based on the agreement of sale could not be proved from the evidence placed on record, and there was no evidence the GPA/SA establishing that possession was delivered to the appellants. Further, in light of there being a valid decree for specific performance and the sale deed being executed by the Court in favour of the decree holder, the respondents argued that they were entitled to delivery of possession as per the decree and that the appellants could not resist or obstruct the delivery of possession to the decree holder.

Court's Findings:

At the outset, the Court referred to Order 21 Rule 97 of CPC, under which a decree holder of a decree for the possession of immovable property who is resisted or obstructed by any person in obtaining its possession may make an application complaining of such resistance or obstruction and thereafter, the Court is required to adjudicate upon such application in accordance with the provisions contained in Order 21. The Court also referred to Rule 101 which provides that all questions, including those relating to right, title or interest in the property arising between the parties on an application under Rule 97 and relevant to the adjudication of the application shall be determined by the Court– which has to consequently adjudicate if the person resisting or obstructing, obtaining the possession of the property, has right, title or interest in the property.

Thus, the Court, after examining the judgment in Suraj Lamp, refused to accept the contention of the appellants that the judgment is prospective in nature. It stated,

“...so far as the basic principle i.e., the law laid down, that SA/GPA/Will transactions are not transfers or sales and they cannot be treated as complete transfers or conveyances which can be treated as existing agreement of sale, is only the reiteration of the well settled legal position, and it is so stated clearly, in paragraph-26. The legal position has not been said to apply only prospectively. In other words, the contention which is sought to be raised that the special power of attorney cum agreement of sale being of a date prior to the judgment in Suraj Lamp and Industries Private Limited (supra), and for that reason, it would convey the right, interest and title of the 2nd respondent to the 1st appellant, is unacceptable and it does not follow from Suraj Lamp and Industries Private Limited(supra) that the judgment shall apply prospectively in the way as submitted by the learned counsel for the appellants. The reason is that it is not a transfer or conveyance of transfer at all.”

In the context of the present case, the Court explained,

“…It is not a simple case of a power of attorney in favour of the 1st appellant from the 2nd respondent. It is a case where already there exists an agreement of sale (Ex.A1) in favour of the 1st respondent/plaintiff/decree holder from the same 2nd respondent/judgment debtor and based thereon the 1st respondent exercised his right to get the specific performance by filing a suit which has already been decreed and the sale deed also executed by Court.”

The Court consequently held that Appellant 1 cannot derive any benefit with respect to mutation entries or the lease executed in favour of Appellant 2 because prior agreement of sale in favour of Respondent 1, which resulted into a concluded contract under the Court's decree cannot be negatived or overturned by the later GPA/SA in favour of Appellant 1.

Accordingly, the appeal was dismissed.

Case Details:

Case Number: FIRST APPEAL No. 492 of 2024

Case Title: Konkanala Suryaprakasha Rao (died) and others v. Kampa Bhaskara Rao and another

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