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Smt. Munni Vs. Atma Ram - Court Judgment

LegalCrystal Citation
CourtHimachal Pradesh High Court
Decided On
Case NumberS.A. No. 79 of 1975
ActsContract Act, 1872 - Section 215; ;Transfer of Property Act, 1882 - Sections 105 and 108; ;Code of Civil Procedure (CPC) , 1908 - Section 100
AppellantSmt. Munni
RespondentAtma Ram
Appellant Advocate Chhabil Dass, Adv.
Respondent Advocate Kapil Dev Sud, Adv.
DispositionAppeal dismissed
Cases ReferredGordon Woodroffe and Co. Ltd. v. Shaik M.A. Majid and Co.
- .....some income and also save the expenses of its cultivation. the aforesaid attorney leased out the suit land to the plaintiff at the annual rent of rs. 150 and also delivered the possession to the plaintiff in the month of asauj sambat 2020 bk, corresponding to about the month of september, 196,3. the plaintiff approached the patwari for makingnecessary entries in the revenue recordto this effect. the patwari, however, isalleged to have directed the plaintiff to get a writing executed so that during the crop inspection the requisite entry could be incorporated in the revenue record. thereafter, the plaintiff executed a rent note in favour of smt. sahabi on 30th january, 1964. smt. sahabi left for pakistan and executed a gift deed in favour of the defendant on llth may, 1964 in respect of.....

H.S. Thakur, J.

1. This second appeal is directed against the judgment and decree of the learned District Judge, Simla, who affirmed the decree and judgment passed by the Sub. Judge, Theog.

2. Aggrieved by the said decree and judgment, the appellant has preferred this second appeal. The relevant facts may be stated. The respondent (hereinafter referred to as the plaintiff) filed a suit against the appellant (hereinafter referred to as the defendant) for the possession of land measuring 6 bighas 4 biswas as detailed in the plaint. The land in suit was owned-by Smt. Sahabi, who was an old woman of about 70 years. She was not able to cultivate the land and appointed Shri Anant Ram, the father of the plaintiff, as her General Attorney by executing a registered document to this effect. Inter alia, she authorised the said Anant Ram to lease out the land to some one so that she may have some income and also save the expenses of its cultivation. The aforesaid Attorney leased out the suit land to the plaintiff at the annual rent of Rs. 150 and also delivered the possession to the plaintiff in the month of Asauj Sambat 2020 BK, corresponding to about the month of September, 196,3. The plaintiff approached the Patwari for makingnecessary entries in the revenue recordto this effect. The Patwari, however, isalleged to have directed the plaintiff to get a writing executed so that during the crop inspection the requisite entry could be incorporated in the revenue record. Thereafter, the plaintiff executed a rent note in favour of Smt. Sahabi on 30th January, 1964. Smt. Sahabi left for Pakistan and executed a gift deed in favour of the defendant on llth May, 1964 in respect of the land in suit. On the basis of the gift deed, the defendant disputed the possession of the plaintiff and asserted that she was in the physical possession of the land. Proceedings under Section 145, Cr. P. C. were initiated by the defendant during the month of September, 1964. The Magistrate by an order dated 18th May, 1965, held the defendant to be in possession and restrained the plaintiff from interfering with her possession. The plaintiff preferred a revision petition before the Sessions Judge and thereafter before the Judicial Commissioner but without any success. It was thereafter that the plaintiff filed the suit. The defendant inter alia contended that from the time of the execution of the gift-deed, she was in possession of the land as an owner and that Shri Anant Ram was not appointed as a General Attorney and that even if such an appointment was made the same was revoked and cancelled by Smt. Sahabi. The factum of the land being leased out to the plaintiff was also disputed. The learned trial court after considering evidence on record came to the conclusion that Smt. Sahabi had appointed Shri Anant Ram as her General Attorney and inter alia empowered him to lease out the suit property. The trial court also found that the plaintiff was given the suit land by way of lease by Anant Ram, initially by an oral lease and thereafter by executing a rent note. The gift deed, however, in favour of the defendant was found valid. Ultimately, the suit of the plaintiff was decreed. The defendant preferred an appeal before the District Judge who also affirmed the decree and judgment passed by the trial court. The defendant has ultimately preferred this second appeal to this Court.

3. Mr. Chhabil Dass, learned counsel for the appellant, has raised only two grounds. The first ground taken by him is that Shri Anant Ram, who wasappointed as a General Attorney by Smt. Sahabi, could not lease out the suit land to the plaintiff, who is his son. It is contended by him that it is not permissible for an attorney, who acts as an agent for his principal, to lease the land to his own son. Such a transaction, according to him, is voidable if not void. The second ground of the learned counsel is that the lease in favour of the plaintiff has not been properly proved. It may be pointed out that the ground No. 1 was neither agitated before the trial court nor before the lower Appellate Court. It is for the first time that this ground has been taken in this Court.

4. The learned counsel has referred to Section 215 of the Contract Act. It is convenient to reproduce the same for a ready reference:

'215. Right of principal when agent deals, on his own account, in business of agency without principal's consent.--If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to the own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.'

5. The learned counsel has referred to a decision in Firm Mathra Das Jagan Nath v. Firm Jiwan Mal Gian Chand, (AIR 1928 Lahore 196). The relevant observations emphasised by the learned counsel may be reproduced :

'......It must be remembered that inthese transactions the plaintiffs were acting as agents on behalf of the defendants (who were not residing at Ludhiana) and as such it was their duty to act in a manner that was most beneficial to their principals. The plaintiffs, however, instead of protecting the interests of the latter, entered into a secret compact with most of the purchasers and other speculators and artificially forced up the rates with a view to benefit themselves at the expense of the sellers. I have no doubt whatever that in acting in this manner they were guilty of a flagrant disregard of their duties as agents. It is a necessary incident of the contract of agency that the agent standsin a fiduciary relation towards his principal. His position is one involving confidence, and in the discharge of his duties he must act with the most perfect good faith towards his principal, and should not in any way abuse the confidence reposed in him. He is bound to use his best endeavours to promote the interests of the person who has employed him. He will not be permitted to enter into any transaction in which his personal interest conflicts with his duty towards his principal, except with the consent of the latter, given after all the material circumstances and the exact nature and extent of the interest of the agent have been fully disclosed to him. In law as well as in equity an agent for the sale of goods belonging to the principal cannot, while actually selling the property or making settlements for damages on foot of such transactions, make any secret profit for himself or for persons with whom he is associated. The proposition is too elementary to require an elaborate discussion, but it seems to me necessary to emphasize it, as the real nature of the obligations of the agent is often lost sight of by themercantile community in this province '

The learned counsel has also placed reliance on the decision in Bisweswar Das Mondal v. Guru Charan Das, (AIR 1928 Cal 727), the relevant observations of which read thus:--

'...... Now, on these facts, the equitable principle is reasonably clear that, if A is B's agent for arrangement for a Joan, it is his duty to get 'hat loan on the best terms possible. He cannot put himself in a position in which his interests conflict with his duty and, without full disclosure to his principal he cannot validly lend his own money to his principal upon terms which he has adjusted. Such a transaction is exactly like the transaction of an agent for sale buying the property for himself or like the transaction of a stockbroker who sells his own shares instead of the shares of a third person. The effect of the breach of this fiduciary relationship which is inherent in all agencies is that the principal is entitled to regard the transaction as a voidable transaction and to have it set aside in the usual way. The consequence is not that the mortgage in a case of this sort is void altogether but it is voidable and equity will avoid it in all cases where the par-ties can be remitted to their former position.'

6. Again, the learned counsel has drawn my attention to the decisions in Firm Kaluram Bhola Ram v. Firm Chimniram Motilal, (AIR 1934 Bom 86) and Raghunath v Rampartab Ramchan-der, (AIR 1935 Sind 38), In Firm Kalu-ram Bhola Ram's case (supra), the Hon'ble Judges observed that where an agent sells his own goods to the principal converting himself into a principal in respect of the sale without disclosing the true position to the principal, the principal is entitled to claim from the agent any benefit which may have resulted to the agent from the transaction. In the case of Raghunath (supra), it was observed that an agent who, while acting as such himself deals as a principal without the knowledge of the other party is acting contrary to the spirit of Ss. 211 to 214 of the Contract Act. It is further observed that in case there be a question upon whom the burden of proof must lie, that burden ought to be laid upon the party who has to justify an apparent deviation from the ordinary rule by which he ought to be guided.

7. On the contrary, Shri K.D. Sud, learned counsel for the respondent, has referred to a decision of the Supreme Court hi Gordon Woodroffe and Co. Ltd. v. Shaik M.A. Majid and Co., (AIR 1967 SC 181). Their Lordships of the Supreme Court in this case took the view that even an agent can become a purchaser when an agent pays the price to the principal on his own responsibility.

8. It is an admitted fact that the plaintiff is the son of the General Attorney appointed by Smt. Sahabi. As such, he was expected to act in the best interest of his principal and should have also apprised the principal of all the material facts. However, the evidence on record reveals that Smt. Sahabi was present when the rent note was executed by the plaintiff in her favour. The plaintiff in his statement as PW 2 has asserted that Anant Ram and Smt. Sahabi had come to Theog and the plaintiff had written the agreement and the same was read over to them and was then signed. It is further stated that after the agreement was executed, the same was handed over to Smt. Sahabi who had given the same to her attorney, Anant Ram. The plaintiff hasalso repeated these facts even in his cross-examination. As such, it cannot be said that Smt. Sahabi was not acquainted with all material facts and circumstances on the subject. At least, there is no material on record to show that Smt. Sahabi was kept in dark about the rent note. No doubt, the lease was created in favour of the plaintiff, who is the son of the attorney, but it cannot be termed as void. At the most it may be voidable if the necessary facts are established. However, as discussed earlier above, there is no material on record to substantiate this contention of the defendant. Accordingly, the contention is repelled.

9. So far as the second contention is concerned, the same can also be not sustained. There is evidence on record to show that 'the possession of the land was delivered to the plaintiff before the rent note was executed. The plaintiff had sown wheat and 'massar' in the land. It was later on that the rent note was executed as directed by the halqa Patwari so as to make the necessary entry in the revenue record as desired by the plaintiff. The trial court as also the lower appellate court have found tenancy in favour of the plaintiff as valid. I am not inclined to interfere with I he concurrent findings of the courts below. No other point has been raised or argued on behalf of the defendant/appellant.

10. For the foregoing reasons, there is no merit in this appeal and the same is dismissed with costs.

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