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Nagar Susheela Nayak Vs. the Headquarters Sub-registrar and Deputy Commissioner of Stamps, Tumkur and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberCivil Referred Case No. 3 of 1978
Judge
Reported inAIR1979Kant126; ILR1980KAR1024; 1979(1)KarLJ269
ActsKarnataka Stamp Act, 1957 - Sections 33 and 54; Indian Contract Act, 1872 - Sections 202
AppellantNagar Susheela Nayak
RespondentThe Headquarters Sub-registrar and Deputy Commissioner of Stamps, Tumkur and anr.
Excerpt:
.....determination of market value of chillies, no exemption can be taken. finding of the reference court does not call for any interference. - in the power of attorney in question it is clearly stated as follows: 202 of the indian contract act of 1872 clearly spells out in what circumstances a person cannot unilaterally terminate the agency. that is clear both from the tenor of the document as well as from its terms. besides as earlier noticed, both at the beginning of the deed as well as at clause (c) set out above, the consideration for its execution has been the loan sought and granted to the petitioner in the sum of rs. 1,50,000/-.thus it clearly falls under entry 41(e) of the schedule to the act......commissioner under the act), the petitioner preferred an appeal before the chief controlling revenue authority. 3. the petitioner was given an opportunity by the chief controlling revenue authority to put forward her case. after hearing the learned counsel for the petitioner, the chief controlling revenue authority passed an order holding that the power of attorney in question was an irrevocable power of attorney executed for consideration and therefore liable to stamp duty under entry 41(e) of the schedule to the act. on the request of the petitioner, the chief controlling revenue authority has made this reference under s. 54 of the act to this court with a statement of the case. 4. shri p. r. srinivasan learned counsel for the petitioner before us has strongly urged that the loan.....
Judgment:

Chandrakantaraj Urs, J.

1. This reference made under S. 54 of the Karnataka Stamp Act, 1957, (hereinafter referred to as the Act) by the Chief controlling Revenue Authority under Act, gives rise to the following question which falls for determination:

'Whether the document in question namely, the instrument of General Power of Attorney executed by the petitioner, constituting Canara Bank, Tumkur, as her attorney in respect of matters specified in the document is one falling under Entry 41 (c) or (e)?'

2. The petitioner is a hotel owner at Tumkur and she applied for a loan of Rs. 1,50,000/- to the Canara Bank, Gurappa Choultry Road, Tumkur Branch against the security of the schedule property set out in the document in question. The said Bank required the petitioner to execute an irrevocable power of attorney in addition to any other security which might have been taken from the petitioner. When the document was presented for registration, it was impounded for not being duly stamped under S. 33 of the Act. The Sub-Registrar, Tumkur, before whom it was presented for registration purporting to act under S. 39 of the Act, treating the document as a deed of mortgage with possession, as per his Order No. 1/77-78 dated 3-9-1977, levied stamp duty of Rs. 8,305/- and a penalty of Rs. 6,805/- directing the petitioner to pay the same within 15 days. Aggrieved by the Order of the Sub-Registrar (also invested with the power of Deputy Commissioner under the Act), the petitioner preferred an appeal before the Chief Controlling Revenue Authority.

3. The petitioner was given an opportunity by the Chief Controlling Revenue Authority to put forward her case. After hearing the learned Counsel for the petitioner, the Chief Controlling Revenue Authority passed an order holding that the power of attorney in question was an irrevocable power of attorney executed for consideration and therefore liable to stamp duty under Entry 41(e) of the Schedule to the Act. On the request of the petitioner, the Chief Controlling Revenue Authority has made this reference under S. 54 of the Act to this Court with a statement of the case.

4. Shri P. R. Srinivasan learned counsel for the petitioner before us has strongly urged that the loan was advanced against other security offered by the petitioner and it is only at the instance of the Bank that the power of attorney was executed and there is nothing in the power of attorney to indicate that it was irrevocable and that it was executed for consideration. It is difficult to accede to this contention. In the power of attorney in question it is clearly stated as follows:--

: AND WHEREAS the Principal has sought a loan of Rs. 1,50,000 (Rupees one Lac fifty Thousand only) from the Attorney at their above said Gurappa Choultry Road, Tumkur branch office against the security of the schedule property to construct therein a new additional building intended for hotel, lodging shops office etc., AND whereas the attorney has required the Principal to execute a irrevocable registered power of Attorney in favour of the attorney authorising-(Underlining is ours)

This recital makes it abundantly clear that it was in consideration of the Bank advancing the loan that the petitioner was called upon to execute the power of attorney. A perusal of clause (c) of the power of attorney which is as follows:--

(c) To sell, alienate by way of mortgage or otherwise to deal with the property described in the Schedule at a price to be fixed and deemed fit and reasonable by the attorney at its sole discretion and appropriate the same proceeds and or the mortgage consideration first towards interest cost and other charges incurred therein and the balance towards reduction of the liability due to the attorney and a loan of Rs. 1,50.000/- (Rupees One Lac Fifty Thousand only).

also makes it clear that the power of attorney was executed for consideration of the grant of loan.

5. The other contention of Shri Srinivasan that the document does not expressly state anywhere that it is irrevocable and therefore it should not be construed as such is also not tenable. Section. 202 of the Indian Contract Act of 1872 clearly spells out in what circumstances a person cannot unilaterally terminate the agency. The section 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.'

This illustration given to that section as (a) is somewhat similar to clause (c) of the power of attorney set out earlier. A case almost similar to the one came up for consideration before the Supreme Court in Loon Karan Seth v. Ivan E. John : [1969]1SCR122 , in which it has been observed (at p. 76):--

'5. There is hardly any doubt that the power given by the appellant in favour of the Bank is a power coupled with interest. That is clear both from the tenor of the document as well as from its terms. S. 202 of the Contract Act provides that 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. It is settled law that where the agency is created for valuable consideration and authority is given to effect that a security or to secure interest of the agent, the authority cannot be revoked. The document itself says that the power given to the Bank is irrevocable. It must be said in fairness to Shri Chagla that he did not contest the finding of the High Court that the power in question was irrevocable.'

In the instant case also it is clear that an interest in the property is created in favour of the Bank in terms of clause (c) and other clauses. Therefore, the petitioner has no power to revoke the deed unilaterally. Besides as earlier noticed, both at the beginning of the deed as well as at clause (c) set out above, the consideration for its execution has been the loan sought and granted to the petitioner in the sum of Rs. 1,50,000/-. Thus it clearly falls under Entry 41(e) of the Schedule to the Act.

6. In the result, and for the reasons stated above, the reference is accordingly answered in favour of the Revenue and the matter stands remitted to the Chief Controlling Revenue Authority for appropriate action in accordance with law.

7. Answered in favour of the Revenue.


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