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Palani Vannan and ors. Vs. Krishnaswami Konar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1946Mad9; (1945)2MLJ303
AppellantPalani Vannan and ors.
RespondentKrishnaswami Konar and ors.
Cases ReferredFrith v. Frith
Excerpt:
- - 1. this appeal can be dealt with very briefly because it raises a short but interesting question of construction and its decision depends on the view i take of the construction of a single document. we have had the advantage of most interesting arguments from both the earned counsel who have appeared for the parties. 3. i think the learned chief justice when making those remarks must have had in mind the decision in smart v. whether it will succeed or not is another matter, but for the reasons which i have given, i am quite satisfied that this is not such an agency coupled with interest as is contemplated by the contract act......decree in august, 1936. on the 25th july, 1937 the decree was assigned by sethu madhava rao to one govinda konan. on the 19th july, 1939, govinda konan executed a power of attorney, ex. d-1 to one vedavyasachar authorising him to execute the decree. on the 3rd february, 1941, govinda konan assigned the decree to krishnaswami konar, the present first respondent. on the 6th march 1941, by ex. p-3, govinda konan sent a notice to the judgment debtors and to vedavyasachar revoking the power of attorney. the execution petition before the lower court was to recognise the assignment, dated 3rd february, 1941 by govinda konan. it should be added that on the 10th and 11th july, 1942 there was a compromise between vedavyasachar and the appellants. the question that arises in this appeal is, was the.....
Judgment:

Mockett, J.

1. This appeal can be dealt with very briefly because it raises a short but interesting question of construction and its decision depends on the view I take of the construction of a single document. The short facts are as follows: There was a preliminary decree in a mortgage suit, dated the 14th March, 1936 in favour of one Sethu Madhava Rao against, amongst others, the present appellants. There was a final decree in August, 1936. On the 25th July, 1937 the decree was assigned by Sethu Madhava Rao to one Govinda Konan. On the 19th July, 1939, Govinda Konan executed a power of attorney, Ex. D-1 to one Vedavyasachar authorising him to execute the decree. On the 3rd February, 1941, Govinda Konan assigned the decree to Krishnaswami Konar, the present first respondent. On the 6th March 1941, by Ex. P-3, Govinda Konan sent a notice to the judgment debtors and to Vedavyasachar revoking the power of attorney. The execution petition before the lower Court was to recognise the assignment, dated 3rd February, 1941 by Govinda Konan. It should be added that on the 10th and 11th July, 1942 there was a compromise between Vedavyasachar and the appellants. The question that arises in this appeal is, was the notice, Ex. P-3, effective?

2. It is argued for the appellants that it is not, by reason of the fact that the power of attorney Ex. D-1 is irrevocable, it being a power of attorney creating an agency coupled with an interest under Section 202 of the Contract Act. We have had the advantage of most interesting arguments from both the earned Counsel who have appeared for the parties. There is no difficulty with regard to the law. It would seem beyond doubt that the section does no more than state the effect of the English decisions under common law. So long ago as 1866, Couch, C.J., stated the legal position with regard to these powers of attorney. He said in Hurst v. Watson (1866) 2 B.H.C.R. 400 .,

Where an authority or power is coupled with an interest, it is irrevocable, unless there is an express stipulation to the contrary; but the right of the agent to remuneration, although stipulated for in the form of part of the property to be produced by the exercise of the power, is not an interest in this sense.

3. I think the learned Chief Justice when making those remarks must have had in mind the decision in Smart v. Sandars (1848) 5 C.B. 895, which is one of the sources of the law relating to this topic. Wilde, C.J. observes as follows--

But, it is said, a factor for sale has an authority as such (in the absence of all special orders) to sell; and, when he afterwards comes under advances, he thereby acquires an interest; and, having thus an authority and an interest the authority becomes thereby irrevocable. The doctrine here implied, that, whenever there is in the same person an authority and an interest, the authority is irrevocable, is not to be admitted without qualification.

4. It is only necessary to refer to one further decision, Frith v. Frith (1906) A.C. 254 in which the Judicial Committee discuss the general position relating to these matters. Their Lordships point out that in what is known as Carmichael's case (1896) 2 Ch. 643.

5. The donor of the power, for valuable consideration, conferred upon the donee, authority to do a particular thing in which the latter had an interest, namely, to apply for the shares of the company, which the donee was promoting for the purpose of purchasing his own property from him, and the donor sought to revoke that authority before the benefit was reaped.' The effect of all these cases appears to be stated accurately in Bowstead on the Law of Agency, 8th edition, page 456. It is stated (Art. 138)--

Where the authority of an agent is given . for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest.

6. It will be found in all the cases that that is the test when deciding whether an authority is irrevocable or not.

7. I have only then to apply these principles to the present power of attorney, Ex. D-1. The important words are, after referring to the decree--

You shall yourself bear the cost of executing the said decree, and, if money has to be realised by filing a suit against the said Sethu Madhava Rao the cost of filing that suit also. We shall take accounts at the end, take the amount of cost due to you out of the amount realised and you shall take one half and I the other half of the amount that remains. As in respect of the said amounts having to be realised by me, in respect of the said decree amount and in respect of my having obtained assignment I have made you to incur expenditure and take trouble and realise, I shall not in respect of the said documents receive without your permission any amount from any person, in any manner, either amicably or through Court. Nor will I do anything opposed to the steps taken by you.

8. Then follows a very important concluding sentence:

I shall not for any reason whatever, cancel without your permission this authority which I have given to you, without paying the amount expended by you and without giving the aforesaid relief for your trouble.

9. My view of the document is as follows: I think its primary object was to recover on behalf of the principal the fruits of his decree. It contained incidentally a provision for the employment of the agent, Vedavyasachar, in order to realize that decree. It provides that his remuneration is to be one half of the proceeds. It contains an indemnity clause against any out of pocket expenses which he is entitled also to recover from the amount of the decree. But the object of the power of attorney is not for the purpose of protecting or securing any interest of the agent. I think that part of the agreement is purely incidental. There is, however, another feature of this document which seems to me to be conclusive against the appellant. The last words 'I shall not for any reason whatsoever, cancel without your permission this authority which I have given to you, without paying the amount expended by you and without giving the; aforesaid relief for your trouble' seem to me to make express provision for the revocation of the above power. It can be done in two ways, (a) by consent, for that is what I understand 'your permission' to mean, and (b) if that permission is withheld, on payment by the principal of all out of pockets and also remuneration for his services. With regard to remuneration, the wording is vague 'without giving the aforesaid relief for your trouble.'

10. I have no doubt that an action for breach of contract of this agreement would lie by Vedavyasachar against Govinda Konan. Whether it will succeed or not is another matter, but for the reasons which I have given, I am quite satisfied that this is not such an agency coupled with interest as is contemplated by the Contract Act. I have not referred to the many cases cited, as I think that those to which I have referred amply support the position contended for by the respondents. I will, therefore, dismiss the appeal with costs.

Yahya Ali, J.

11. I agree.


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