Skip to content


Doddarajappa Vs. Venkoba Rao - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberFirst Appeal Nos. 95 and 107 of 1975
Judge
Reported inAIR1986Kant70; ILR1985KAR2109
ActsIndian Contract Act, 1872 - Sections 226; ;Powers of Attorney Act, 1882 - Sections 2; ;Specific Relief Act, 1963 - Sections 16 and 21
AppellantDoddarajappa
RespondentVenkoba Rao
Appellant AdvocateM. Ranga Rao and ;Jagadish Mundargi, Advs.
Respondent AdvocateMirle L. Krishnamurthy, Adv.
Excerpt:
.....not authorise 8th defendant to do anything more than to secure a good price and intimate the price secured for the suit scheduled property before any sale could be effected. he also asserted that such documents as were available and necessary for any prudent man to purchase the property were shown to plaintiff and plaintiff was satisfied and even got ready for registration of the document. (ii) whether plaintiff failed to deposit the balance of the bid amount as per the terms of the auction sale and if he failed to deposit whether he thereby forfeited his right to seek specific performance of the contract? (4) to make all possible arrangements to secure the best price in the scheduled properties either by selling the scheduled properties by public sale or otherwise. he further stated..........till date of realisation.4. the suit prayer was resisted by defendant-1 on the ground that the suit property was worth more than rs. 50,000/and the sale conducted by 8th defendant was fraudulent in collusion with plaintiff and that he had not authorised 8th defendant to sell the property, but only to negotiate for the sale of the property. he stated the circumstances in which he was called upon to execute the power of attorney in favour of the 8th defendant. he was emphatic in his defence that the power of attorney did not authorise 8th defendant to do anything more than to secure a good price and intimate the price secured for the suit scheduled property before any sale could be effected. having not intimated the price secured for the suit scheduled property, he was not authorised.....
Judgment:

Chandrakantaraj URS, J.

1. These appeals are directed against the Judgment and Decree in O. S. No. 94/62 on the file of the then Principal District Judge, Bangalore City. Later the suit was transferred to the file of the I Addl. Civil Judge, Bangalore City and re-numbered as O.S. No. 119/64, Defendants 1 to 7 are the appellants in R. F. A. No. 95/75 and plaintiff is the appellant in R. F. A. 107/75.

2. In the course of the judgment, we will refer to the parties according to the rank assigned to them in the Trial Court.

3. Plaintiff filed the suit for specific performance of a contract. The facts leading to the filing of the suit may be briefly stated as follows :

Plaintiff, in response to an, advertisement he saw in the newspaper 'Deccan Herald', made enquiries about the public auction of premises No. 74/125 (old) New No. 3, situated in 5th Cross Narasimharaja Colony, Bangalore. The advertisement for public auction was inserted by a firm of auctioneers known as 'Reliable Auctioneer' apparently under the instructions of one Sait Chaganmal Ghasiram. The said Sait Chaganmal Ghasiram and the Reliable Auctioneer are the 8th and 9th defendants in the suit. Ultimately the auction took place on 2-8-1962. At that auction, plaintiff was the highest bidder having bid the suit schedule property for Rs. 22,250/-. In accordance with the terms set by the auctioneer, the 9th defendant, he paid 1/4th of the bid amount to the auctioneer. The terms of the auction were such that the balance of the bid amount was to be paid on or before 17-8-1972 and within 15 days there from, the conveyance deed was required to be got executed and registered. However, plaintiff met defendant-8, the power of attorney holder of the owners on the date of the auction and sought inspection of the relevant documents in proof of the vendor's title and he was promised that the same would be furnished for inspection before 17-8-1962, the date fixed for payment of the balance by the successful bidder. Accordingly the 8th defendant furnished on or about 6-8-1962 certain other documents (copies) which disclosed that the first defendant was acting tinder the power of attorney given to him by his son, the 4th defendant in the matter of the sale of plaint schedule property. Plaintiff, on further enquiries, learnt that the said power given by 4th defendant was later cancelled by him and that there were other Court proceedings relating to the family of the 1st defendant the details of which plaintiff could not ascertain in spite of his diligent enquiries. Plaintiff, therefore, sought a clarification by issuing a notice dated 9-8-1982 to the auctioneers as well as the 8th defendant. Those notices were replied to by the 8th and. 9th defendants. In the replies furnished, it was made known to plaintiff that the 8th defendant was competent to convey title to the suit scheduled property and, therefore he may pay to him Rs. 1000/- towards conveyance charges including registration fee. Accordingly, on 17-8-1962, 8th defendant was paid a sum of Rs. 1,000/-by plaintiff in addition to the sum of Rs. 5,625/paid on 2-8-1962 to the auctioneers. Plaintiff also obtained encumbrance certificate in respect of the property. He also got ready the balance of the sale consideration to be paid to the 8th defendant. Plaintiff has asserted that the transaction could not be gone through on 17-8-1962, as the 8th defendant was out of town on or about that date.

In this position, plaintiff received on 21-81962 a notice from the Counsel of defendants 1 to 7 intimating plaintiff that the power of attorney granted by the 2nd defendant had been cancelled in the year 1957 itself and the power of attorney given by the 1st defendant to 8th defendant had also been cancelled and in effect, the notice repudiated and cancelled the contract and their obligations arising under the contract to plaintiff in respect of the auction sale. Plaintiff has further asserted that defendants 1 to 7 had knowledge of the auction sale, as they had been intimated of the auction sale by telegram by 6th defendant. In that circumstance, plaintiff caused another notice to be issued to 8th defendant calling upon him to get the owners also to join in the execution of the sale deed. Admittedly, the balance of bid amount was not paid to the auctioneers, 9th defendant on or before 17-8-1962. In that circumstance, as plaintiff was ready and willing to perform his part of the contract and the defendants had not performed their obligations arising out of the auction sale, he filed the suit for specific performance of conveying the suit scheduled property in his favour on acceptance of the balance of consideration. In the alternative if specific performance was not granted, plaintiff proved that the amount he had paid by way of 1/4th of the consideration on the date of auction and Rs. 1,000/- paid to 8th defendant towards conveyance charges and registration fee should be directed to be refunded together with interest at 12 per cent per annum from 21-8-1962 till date of realisation.

4. The suit prayer was resisted by defendant-1 on the ground that the suit property was worth more than Rs. 50,000/and the sale conducted by 8th defendant was fraudulent in collusion with plaintiff and that he had not authorised 8th defendant to sell the property, but only to negotiate for the sale of the property. He stated the circumstances in which he was called upon to execute the power of attorney in favour of the 8th defendant. He was emphatic in his defence that the power of attorney did not authorise 8th defendant to do anything more than to secure a good price and intimate the price secured for the suit scheduled property before any sale could be effected. Having not intimated the price secured for the suit scheduled property, he was not authorised to proceed with the sale. In that circumstance, he prayed for dismissal of the suit and he was not bound by any commitment made by 8th defendant by virtue of the power of attorney given in his favour.

5. Defendants 2, 3, 5 and 7 filed separate written statements. We do not propose to recite their stand inasmuch as it was more a case made out against their father, the 1st defendant which has nothing to do with the alleged specific performance sought by plaintiff in the suit.

6. However, 8th defendant also filed a separate written statement which requires to be noticed. 8th defendant asserted that he was the power of attorney holder of the first defendant for selling the suit scheduled property along with other properties which he had validly sold on earlier instances. He had advertised in terms of the general power of attorney for the sale of the scheduled properties even on the earlier occasions just as he had done in the case of the suit scheduled property he asserted that plaintiff was at all times aware that the auction sale had been authorised by him as the power of attorney holder. He also asserted that such documents as were available and necessary for any prudent man to purchase the property were shown to plaintiff and plaintiff was satisfied and even got ready for registration of the document. He disclaimed any responsibility for the notice or notices issued on behalf of defendants I to 7. Even after the auction, defendant 8 had a valid power of attorney in his favour and he did not receive any notice of cancellation' from any person and there was ample opportunity for defendants I to 7 to repudiate or cancel the power of attorney. He further stated that plaintiff was free to retrace his bid or seek cancellation of the sale at any time if he found the power of attorney had not authorised him to sell the property. Plaintiff not only did not resile from the sale, but further agreed and paid necessary amounts for stamps for purposes of registration. 8th defendant asserted that he had acted bona fide as a power of attorney holder of the first defendant and he was in no way responsible for any damages that plaintiff might have sustained in that behalf. He resisted the relief of specific performance prayed for and considered the damages claimed to be high which in any event could not be enforced against the 8th defendant.

7. 9th defendant does not appear to have filed any written statement.

8.On the above pleadings, the Trial Court framed as many as 23 issues which we think were quite unnecessary as most of the facts were not in dispute. We will set out those issues which we think were relevant in the light of the undisputed facts of the case.

Issue No. 3 : Has the 8th defendant no right to sell the suit schedule item?

Issue No. 10 : Is the plaintiff entitled to Rs. 7750.00 ;is damages?

Issue No. 11 : Is not the plaintiff entitled to refund of Rs. 5625.00 paid by him as 1/4th of the amount?

Issue No. 12 : Has the plaintiff paid Rs. 1000.00 on 17-8-1962 towards stamp paper and registration charges and Rs. 33.00 for 11 9 obtaining the encumbrance certificate?

Issue No.. 13 : Is the plaintiff entitled to-specific performance of the contract by the defendants 1 to 7 executing a sale deed in his favour?

9. In support of their respective cases, plaintiff examined himself and two other witnesses as also the 8th defendant as P. W. 4 and defendants examined two witnesses including defendant1 as D. W. 2. Plaintiff got marked as many as 20 documents and the defendants got marked 4 documents. On appreciating the evidence, the trial Court came to the conclusion that the 8th defendant was competent, under Exhibit P-8, the power of attorney in his favour to sell the property in question by public auction. Having reached that conclusion, he held that defendants 1 to 7 were bound by the sale, and therefore, they were required to execute the sale deed as demanded by plaintiff, but refused to grant the prayer for specific performance holding that plaintiff was not entitled to the same in view of his having breached one of the terms of-the auction sale in not depositing the balance of bid amount on or before 17 -8-1962. In the result the prayer for specific performance was refused. but having regard to the evidence of P. W. 4 (defendant-8) that the initial amount paid by plaintiff having been applied to discharge part of the debts of defendants I to 7, he directed that defendants 1 to 7 should pay the same to plaintiff with interest at 12 per cent per annum from 21-8-1962 to 25-7-1964 and interest at 6 per cent per annum from the date of suit till the date of realisation.

10. We may here point out that he completely forgot to deal with Rs. 1,000/- received by 8th defendant towards registration fee and conveyance charges. It is in the light of this finding that both the appellants i.e., defendants 1 to 7 and plaintiff have before us presented these appeals and in the light of the contentions raised in the Trial Court, the q questions which we are called upon to answer may be stated as follows :

(i) Was there a contract for sale of the suit-scheduled property between plaintiff and defendants 1 to 7 and, if so, whether plaintiff is entitled to a decree for specific performance?

(ii) Whether plaintiff failed to deposit the balance of the bid amount as per the terms of the auction sale and if he failed to deposit whether he thereby forfeited his right to seek specific performance of the contract?

(iii) Whether plaintiff is entitled to refund of 1/4th of the bid amount and Rs. ISM, -paid by him towards registration and conveyance charges?

11. Sri Mirle L. Krishnamurthy, learned Counsel appeared for plaintiff in R. F. A. No. 107'75, strenuously contended before us that there was no contract of sale which would bind or which would in any way oblige defendants 1 to 7 to convey the suit scheduled property as under Exhibit P-8, the power of attorney; that 8th defendant had not been authorised to effect a sale and, therefore, in the light of the cancellation of the power of attorney and the notice received by him from defendants 1 to 7 plaintiff was justified in not paying the balance of the bid amount before the same was actually executed in his favour by 8th defendant along with defendants 1 to7. He has commended to us to look at Exhibit P 8 as no more than a document which authorised 8th,defendant to negotiate and find a buyer for the items of properties and if seen that way, there would be no power to convey title on behalf of defendants 1 to 7 given under the power of attorney. It would be, therefore, useful to set out the relevant paragraphs in the power of attorney. Exhibit P-8, as follows :

'(2) To discharge the debt due under the hypothecation deed dated 13-1-1956 hereby empower my power of attorney holder Sri Chugganmal Ghaziram, to sell the immoveable properties scheduled hereunder.

(3) To give wide publicity of the sale of the scheduled properties and to advertise the same in some local paper on three successive weeks and to inform me the several offers made in respect of each item of the scheduled properties.

(4) To make all possible arrangements to secure the best price in the scheduled properties either by selling the scheduled properties by public sale or otherwise.

(5) To appropriate the sale proceeds realised after tile sale of the scheduled properties towards the discharge of the debt under the hypothecation deed dated 13th January. 1956, and intimate the same to me.

And I hereby agree and undertake to ratify and confirm all and whatsoever my said Attorney Chugganmal Ghaziram shall do or purport to do by virtue of this deed.'

12. Having regard to the clear language used in Para 2 extracted above, it is evident that power to sell the immoveable properties was indeed given to 8th defendant by the first defendant on behalf of himself and defendants 2, 3, 6 and 7. Even apart from the plain language employed to remove ambiguity, Mr. Krishnamurthy now wants us to read into that Clause ambiguity which did not exist when plaintiff had the inspection of Exhibit P-8 and other documents. Plaintiff in his evidence has stated that he verified that the 8th defendant had necessary power to sell the property. He further stated that seeing the documents he satisfied himself that he could purchase the property. If that is how he understood Exhibit P-8 at the relevant time before he made up his mind to bid at the auction, he cannot now call upon this Court to clear the ambiguity which does not exist in the document and to give benefit of construction to deny the power of sale to 81h defendant under Exhibit P-8. The rule of construction commended by the Learned Author in page 75, is that power of attorney should be construed and interpreted so as to give only such authority as is conferred expressly or by necessary implication. The rules of constructions suggested by him arc that the operative part of a deed should he controlled by the recitals where there is ambiguity: where authority is given to do particular acts, followed by general words, the general words should be restricted to what is necessary for the proper performance of the particular acts authorised; general words do not confer general powers, but should be limited to the purpose for which the authority is given and should be construed as enlarging the special powers only when it is necessary for that purpose: and the deed must be construed so as to include all incidental powers necessary for its effective execution, If we apply the above rules of construction commended and accepted, in our jurisprudence, it is easy to see that Mr. Krishnamurthy's contention cannot succeed.

13. Paragraph-4 clearly specifies the purpose for which the power is conferred. The purpose is to enable the power of attorney holder to discharge the admitted debts of the donors of the power, i.e., 1 to 11. By employing the expression 'to sell,' the donors have made it clear that their agent is authorised to do all that is necessary in accordance with law to complete the act of selling or the sale. In paragraph 5 of the power of attorney extracted above, the agent is required to apply the sale proceeds to the discharge of the debts which by necessary implications means that the agent should receive the consideration of the sale if he is specifically authorised to receive. Then it further strengthens the in caning we have given to the expression 'to sell' with all its incidental powers to necessary mean that the agent had the power to convey proper title under Exhibit P-8. In that sense, the Trial Court was correct in coming to the conclusion that plaintiff had acquired the right to enforce the obligation arising out of the public auction against the defendants 1 to 7. Defendants 1 to 7, therefore, cannot escape their liability having, regard to the plain language of Section 226 of the Contract Act and Section 2 of the Power of Attorney Act. We, therefore, sustain the conclusion reached by the Trial Court in this regard.

14. Though defendants 1 to 7 are not directly parties to any contract between plaintiff and 8th defend ant, through the sub-agency of defendant-9, the effect of the acts done by 8th and 9th defendants in terms of Exhibit P-8 is such that the principal who authorised the agent to perform such act is bound by the actions of the agents. Therefore, though there is direct contractual obligations between plaintiff and defendants I to 7, they are bound to perform the obligations arising out of the public auction between plaintiff and 8th defendant by virtue of the power of attorney given and by reasons of, S. 226 of the Contract Act.

15. This takes us to the second question. Mr. Krishnamurthy strenuously contended that the Trial Court was in error in recording a finding that the breach of the terms of sale was committed by plaintiff which disentitled him to seek specific performance. He contended that there was sufficient justification for plaintiff not to pay the balance of the bid amount on or before 17-8-1962. We are unable to see how there could be any justification. Admittedly, the power of attorney was cancelled only a week after the sale was held. Plaintiff came to know of it only when he received the notice from defendants I to 7 much later i.e. on or about 21-8-1962. He has pursued his queries and investigation of title between 2-8-1962 and 17-8-1962. He has even paid Rs. 1,000/- towards registration fee and conveyance charges, but he has declined to have the sale deed executed by only 8th defendant, the power of attorney holder. He has insisted that defendants I to 7 should also join in the execution of the sale deed in his favour. That fact is admitted in the plaint itself apart from being crystal clear from a perusal of Exhibits P-16 and P-18. We, therefore, do not think that there was sufficient justification for plaintiff not to conform to the terms of the auction sale which are to be found at Exhibits P-18 and P-19(a) which were published in the newspaper when the advertisement of the sale was inserted. He relied upon sonic of the decisions of the Supreme Court in support of his contention that he was justified because of the ambiguity and the doubt created about the competency of defendants to sell. The drew our attention to the decision of the Supreme Court in Abdulla Ahmed v, Animendra Kissen : [1950]1SCR30 . In that case what fell for consideration was a letter of authorisation issued by one in favour of other to negotiate the sale of his property free from all encumbrances at a price not less than Rupees one lakh. Interpreting the letter of authorisation per majority, it was held that the letter did not authorise the agent to sell but only to negotiate or being the buyer and the seller together and no more. We are indeed bound by that decision. That view was taken by the Supreme Court on the language employed in the letter of authorisation and that is not the case here. Here, as we have already noticed, there was no room for ambiguity in the power of attorney.

16. The other decisions relied upon by the learned counsel, in our opinion, do not have any bearing or application to the facts of the case. In the result, we must answer the second question also against the plaintiff and examine the last question as to what relief plaintiff is entitled to.

17. Defendants 1 to 7 have at no time denied the fact that 1/4th of the bid amount received by the auctioneer and apparently transferred to the 8th defendant has been applied to discharge the debts to which reference has been made in the power of attorney, Exhibit P-8. In fact, it has been elicited in the cross examination of defendant 8 (P. W. 4) that he applied the funds for discharging the debts in accordance with the power of attorney. If that way the defendants are benefited, defendants 1 to 7 to the extent are enriched by the money belonging to plaintiff and they must refund the same if they are not bound to convey the house.

18. Whatever the reasons the trial Court might have given, the conclusion reached by it that defendants 1 to 7 are liable to pay together with interest at 12 per cent per annum from 21-8-1962 to 25-7-1964 and thereafter at 6 per cent per annum from the date of suit till t he date of realisation in our opinion is sound and does not call for interference.

19. We have already pointed out earlier that the Trial Judge has totally forgotten about the claim of refund of Rs. 1,000/- paid to 8th defendant towards registration fee and conveyance charges on 17-8-1902. This has been admitted by 8th defendant, but no order has been made in regard to this amount. It is unfortunate that 8th defendant is not represented before us. He has remained ex parte. Possible that amount could not have been applied for discharging the debts. He has clearly stated in the evidence that 1/14th of the hid amount received by him was applied to the discharge of debts of defendants 1 to 7.

20. In the result, we allow R. F. A. 107/75 in part. While affirming the decree of the Trial Court, we further direct that there shall also be a decree for Rs. 1,000/- as against defendants 1 to 8 without interest. Costs to the extent of success only.

21. In the light of the conclusions reached in R. F. A. No. 107/75, R. F. A. No. 95/75 stands dismissed.

22. Appeals dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //