Kerala High Court
Babu vs Elsamma Mathew @ Ely Kurchardt on 20 August, 2025
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RFA NO. 162 OF 2020
1
CR
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE M.A.ABDUL HAKHIM
WEDNESDAY, THE 20TH DAY OF AUGUST 2025 / 29TH SRAVANA, 1947
RFA NO. 162 OF 2020
AGAINST THE JUDGMENT AND DECREE DATED 16.03.2020 IN OS NO.117 OF
2013 OF SUB COURT, PALA
APPELLANTS/DEFENDANT NO.2 AND 3:
1 BABU
AGED 46 YEARS
S/O.LATE GEORGE, RESIDING AT PONNAMKUZHIYIL HOUSE,
KURUVAMUZHI, KOOVAPPALLY VILLAGE, KANJIRAPPALLY TALUK,
KORATTY KARA, PRESENTLY AT 83 MILE STREAM SHANIKIL, BLARNEY
ROAD, CORK IRELAND REPRESENTED BY POWER OF ATTORNEY HOLDER
ALEYAMMA(MOTHER).
2 ALEYAMMA,
AGED 62 YEARS
W/O.LATE GEORGE, RESIDING AT PONNAMKUZHIYIL HOUSE,
KURUVAMUZHI, KORATTY KARA, KOOVAPPALLY VILLAGE,
KANJIRAPPALLY TALUK.
BY ADVS.
SRI.BIJU .C. ABRAHAM
SHRI.B.KRISHNAN
SHRI.R.PARTHASARATHY
RESPONDENTS/PLAINTIFF AND DEFENDANT NO.1:
1 ELSAMMA MATHEW @ ELY KURCHARDT
W/O.KUCHARDT, RESIDING AT KARWENDEL STRASSE 21, 12203,
BERLIN, WEST GERMANY REPRESENTED BY HER POWER OF ATTORNEY
HOLDER SMT.ALICE, W/O.CHACKO, AGED 69 YEARS, MOOZHAYIL
HOUSE, KOT ROAD, MUTTAPPALLY, MUKKOOTTU THARA, KOTTAYAM
DISTRICT.
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2 SMITHA,
AGED 42 YEARS
W/O.BABU, RESIDING AT PONNAMKUZHIYIL HOUSE, KURUVAMUZHI,
KORATTY KARA, KOOVAPPALLY VILLAGE, KANJIRAPPALLY TALUK,
PRESENTLY AT 83 MILE, STREAM SHANIKIL, BLARNEY ROAD, CORK,
IRELAND.
R1 BY ADVS.
SMT.NISHA GEORGE
SRI.GEORGE POONTHOTTAM (SR.)
SHRI.SIDHARTH.R.WARIYAR
SRI.T.KRISHNANUNNI (SR.)
R2 BY SRI.MATHEWS K.UTHUPPACHAN
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 20.08.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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CR
JUDGMENT
1. Appellants are the Defendants Nos.2 & 3 in the suit. The
Respondent No.1 is the Plaintiff and the Respondent No.2 is the
Defendant No.1 in the suit. The Respondent No.1/Plaintiff filed
the suit for cancellation of Ext.A2 Sale Deed dated 18.09.2013
and for a mandatory injunction directing the defendants to
vacate the building in the plaint schedule property. The plaint
schedule property is an extent of 87.40 Ares of land and the
building therein, which belonged to the Plaintiff as per Ext.A1
Sale Deed dated 02.06.1975. Ext.A2 is a Sale Deed executed
by the Defendant No.2, as the Power of Attorney Holder of the
Plaintiff, as per Ext.A4 Power of Attorney dated 26.02.2001
executed by the plaintiff in favour of the Defendant No.2,
transferring the plaint schedule property for a sale consideration
of Rs.2,50,000/-. The plaintiff is a lady residing in West Germany
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since the year 1968. The Defendant No.1 is the wife of
Defendant No.2. The Defendant No.2 is the son, and the
Defendant No.3 is the wife of the brother of the plaintiff, George,
who died in an accident on 26.10.2000.
2. The case of the plaintiff is that since the plaintiff had been
residing abroad, the plaint schedule property was being looked
after by the plaintiff’s brother, George, till his death and
thereafter by his son, the Defendant No.2. The plaintiff had
certain properties in Vandiperiyar also. After the purchase of the
plaint schedule property as per Ext.A1 Sale Deed, the plaintiff
permitted the family of her brother to reside in the building on
the plaint schedule property. The plaintiff and the family of her
brother were having a smooth and cordial relationship. After the
death of her brother, the plaintiff planned to dispose of the plaint
schedule property and the other properties at Vandiperiyar since
it was found that Defendant No.2 would not be able to manage
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the properties. Ext.A4 Power of Attorney was executed on
26.02.2001 in favour of the Defendant No.2 on account of the
close family relationship and mutual confidence since the
Defendant No.2 agreed to look after and sell the properties. On
the strength of Ext.A4 Power of Attorney, the Defendant No.2
sold the properties at Vandiperiyar as per Exts.A7 & A8 Sale
Deeds dated 29.07.2003 and 02.05.2003 respectively. Though
the Plaintiff used to enquire with the Defendant No.2 as to the
progress of the sale of the plaint schedule property, the
Defendant No.2 had been representing that it requires some
time, as the land value is very low. Only in February 2013, the
Plaintiff came to know, in her enquiry, that the Defendant No.2
executed Ext.A2 Sale Deed in favour of the Defendant No.1
when the Defendant No.3 asked the Plaintiff to leave the plaint
schedule property, shouting that the Plaintiff had no right over
the said property. Defendant No.2, being an agent of the
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Plaintiff, obtained an undue advantage by alienating the
property to his wife – Defendant No.1, thus directly benefiting
himself. The confidence reposed by the Plaintiff in the
Defendant No.2 has been misused to obtain gain for himself,
which is against the principles of the law of agency. Defendant
No.2, bound in a fiduciary character to protect the interest of the
Plaintiff by pretending as such, gained for himself huge
pecuniary advantages in derogation of the rights of the Plaintiff
in the plaint schedule property. The Defendant No.2 has
misrepresented and acted fraudulently so as to secure an
undue advantage at the cost of the Plaintiff’s interest. Hence,
Ext.A2 Sale Deed is liable to be cancelled and the defendants
are liable to be vacated from the plaint schedule property.
3. The Defendant No.2 and the Defendant No.3 filed separate
Written Statements dated 02.01.2014 and 13.11.2013,
respectively.
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4. The Defendant No.2 filed Written Statement contending, inter
alia, that the plaint schedule property originally belonged to the
plaintiff. The Defendant No.2 transferred the properties of the
plaintiff as per Document Nos.2794/2003 (Ext.A7) and
2361/2003 (Ext.A2) after receiving sufficient consideration by
the Defendant No.2 using Ext.A4 Power of Attorney given by the
Plaintiff. The sale consideration was fully paid to the Plaintiff
directly and through the bank, and the Plaintiff has issued a
Receipt to Defendant No.2 in the year 2005. The Defendant
No.2 has not misused or committed breach of trust of the power
of attorney given by the Plaintiff. The plaintiff had knowledge
about the Ext.A2 document on the date of registration of the said
document itself. The said document is valid and sustainable and
registered after receiving consideration, and the plaintiff has
received the consideration from the Defendant No.2. The
allegation that the plaintiff has not received the money and that
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the Defendant No.1 did not have sufficient financial resources
at the time of execution of Ext.A2 is incorrect. The Defendant
No.3 is having the right to reside in the plaint schedule property.
The Defendant No.3 has been residing in the plaint schedule
property in her own right since the year 1975 with her husband.
The suit is barred by limitation.
5. The contentions of the Defendant No.3 in her Written Statement
are substantially the same as those raised by the Defendant
No.2 in his Written Statement.
6. Subsequent to the filing of Written statements by the Defendant
Nos. 2 and 3, the Counsel for the Defendants filed a Memo
dated 05.11.2014 for treating the contentions in the Written
Statements of the Defendants Nos.2 and 3 as the contentions
of the Defendant No.1 also.
7. After the filing of Written Statements by the Defendants Nos.2
and 3 and the aforesaid Memo by the Counsel for the
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Defendants, the Plaintiff amended the Plaint as per the Order in
I.A.No.801/2015 dated 04.09.2015, incorporating additional
contentions that the Plaintiff has not accepted any amount as
consideration towards Ext.A2 Sale Deed. The claim that the
plaintiff issued a Receipt in 2005 is against the facts and truth.
The plaintiff has not issued any such Receipt as alleged. The
Receipt, if any, is obtained by fraud, misrepresentation and
undue influence. The Receipt, if any, does not relate to the
alleged sale of the plaint schedule property. Even if the
Defendant No.2 had somehow managed to obtain any sort of
Receipt, it was never intended to be one for the sale of the plaint
schedule property as the Defendant No.2 was always
maintaining and even made the Plaintiff believe that the plaint
schedule property was yet to be sold and that the Plaintiff was
having other property too, which was also dealt with by the
Defendant No.2.
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8. After amendment of the plaint, the Defendant No.3 filed an
additional Written Statement dated 10.09.2015 for herself and
as Power of Attorney holder of the Defendant No.2 denying the
allegations incorporated through amendment in the Plaint and
further contending that the plaintiff received the entire sale
consideration of her properties directly and through the bank
and that a Receipt with respect to the same was issued to the
Defendant No.2.
9. The Trial Court framed the following issues in the suit:
. Whether the second defendant in collusion with the first
defendant fraudulently created Ext.A2?. Whether Ext.A2 is void?
. Whether Ext.A2 has to be cancelled?
. Whether the defendants are to be directed to vacate the
building in the plaint schedule property by way of mandatory
injunction?
. Reliefs and costs?
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. Is the suit barred by limitation?
10. From the side of the plaintiff, she was examined as PW1, one
of the friends of the deceased brother of the plaintiff was
examined as PW2, the Advocate Commissioner who prepared
Ext.C1 and C1(a) was examined as PW3 and marked Exts.A1
to A12 in evidence. From the side of the defendants, the
Defendant No.2 was examined as DW1, the Bank Manager who
brought Ext.X1 Statement of Accounts was examined as DW2
and marked Exts.B1 to B4 in evidence. The Statement of
Accounts brought by DW2 is marked as Ext.X1. The
Commission Report and Sketch prepared by PW3 were marked
as Exts.C1 & C1(a).
11. The Trial Court decreed the suit, cancelling Ext.A2 Sale Deed
and granting a mandatory injunction directing the defendants to
vacate the building in the plaint schedule property within a
period of one month from the date of the decree and allowing
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the plaintiff to realize the costs of the suit from the defendants.
The Trial Court found that Ext.A2 is void and the Plaintiff is
having title over the plaint schedule property; that the
Defendants have been residing in the property as permitted by
the Plaintiff; that the plaintiff is entitled to get mandatory
injunction as she is not ready to permit the Defendants to
continue their residence in the property; that the Plaintiff has
filed the suit within three years as required under Article 59 of
the Limitation Act from the date on which the facts entitled the
Plaintiff to have the instrument cancelled first become known to
her; that the evidence and circumstances probabilise the case
of the Plaintiff; that the Defendant No.2 who was bound in a
fiduciary character to protect the interest of the Plaintiff had put
himself in a position where his interest and duty is in conflict;
that the Defendant No.2 who is a trustee for sale had obtained
benefit out of the trust and gained pecuniary advantage for
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himself; that the Defendant No.1 was not employed and she has
no source of income; that the Defendant No.1 has no case that
she received money from any source to purchase the property;
and that Defendant No.1 has not entered into the box to prove
that she purchased the property for valid consideration.
12. The present Appeal is filed by the Defendants 2 and 3 alone.
The Defendant No.1 did not file any appeal challenging the
judgment and decree in the suit. It is stated in the appeal that
Defendant No.1, who is impleaded as Respondent No.2 in the
appeal, is working in Ireland and therefore she is unable to join
as Appellant in the appeal.
13. Respondent No.2 appeared through counsel in this appeal.
14. I heard the learned Counsel for the Appellants, Sri. B. Krishnan,
assisted by Adv. Sri. Biju C. Abraham, the learned Senior
Counsel for the Respondent No.1, Sri. T. Krishnanunni, assisted
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by Adv. Sri. Sidharth R. Wariyar and the learned counsel for the
Respondent No.2, Sri. Mathews K. Uthuppachan.
15. The learned Counsel for the Appellants contended that the suit
must fail on two grounds. First is that the suit is barred by
limitation. Second is that even if it is accepted that all the
findings of the Trial Court are correct, the relief of cancellation
of Ext.A2 Sale Deed and consequential mandatory injunction
could not be granted in favour of the Plaintiff. The learned
Counsel contended that the suit was filed in the year 2013 to
cancel the Ext.A2 document, which was executed in the year
2003. Ext.A2 is a registered document. In such a case, in view
of the definition of the phrase ‘a person is said to have notice’ in
Section 3 of the Transfer of Property Act, the Plaintiff is deemed
to have knowledge of the fact of execution of Ext.A2 from the
time at which it was executed. The learned counsel relied on the
Order of the Hon’ble Supreme Court in V. Ravikumar v. S. Kumar in
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SLP (Civil) No.9472/2023 and the decision of this Court in St. Mary’s
Church, Pattanam v. O.P. Paul and Another [2017 (2) KLT 687] in support
of his contention. The learned counsel relied on the decision of
the Hon’ble Supreme Court in Shri Mukund Bhavan Trust v. Shrimant
Chhatrapati Udayan Raje Pratapsinh Maharaj Bhonsle [2024 KHC 6743],
in which it is held that long possession operates as notice of title
and that when long possession has been with a party for several
decades, it strengthens his claim for title. In the present case,
Defendant No.1 has been in possession of the property since
the year 2003 on the strength of her title, and the suit was filed
only in the year 2013, nearly a decade later. The learned
Counsel cited the decision of the Travancore-Cochin High Court
in Travancore Bank Ltd. v. P.C. Abraham and another [1954 SCC OnLine
Ker 49] and contended that there is no fiduciary relationship
between the promisor or promisee and the beneficiary of a
contract. The learned Counsel contended that Ext.A4 Power of
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Attorney is a contract of Agency and hence no fiduciary
relationship is created between the Plaintiff and the Defendant
No.2. The learned counsel cited the decision of this Court in
Mathu v. Cherchi [1990 (1) KLT 416] to substantiate the point that in
a case where the person executing the deed is not blind, infirm
or otherwise incapacitated and no fraudulent misrepresentation
is made to him and he had the opportunity of reading the deed,
the plea of non est factum is not available. The learned Counsel
contended that Ext.B1 Receipt is admitted by the Plaintiff and
hence the plea of non est factum is not available to her in view
of the aforesaid decision. The learned Counsel invited my
attention to the various provisions under Chapter X of the Indian
Contract Act, 1872, dealing with Agency, and contended that in
case of violation of any contract of agency, the remedy available
to the principal is only for recovery of compensation and not
repudiation of the contract entered into by the agent. The
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learned counsel further contended that as against the third party
who entered into a contract with the principal through the agent,
the principal is not having any remedy. Hence, even if it is found
that the Defendant No.2 has violated Ext.A4 Power of Attorney,
the remedy of the plaintiff is only to seek compensation from the
Defendant No.2 and the Plaintiff has no right to seek any
remedy against the Defendant No.1 who is a total stranger and
to seek cancellation of Ext.A2 document in favour of the
Defendant No.1. The learned Counsel concluded his arguments
praying to allow the Appeal by setting aside the impugned
judgment and decree passed by the Trial Court and by
dismissing the suit.
16. The Counsel for the Respondent No.2 supported the arguments
of the Counsel for the Appellants.
17. Per contra, the learned Senior Counsel for the
1st respondent/plaintiff contended that the case on hand is
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squarely covered by Section 215 of the Indian Contract Act,
1872. If the conditions in Section 215 of the Indian Contract Act
are satisfied, the principal may repudiate the transaction
entered into by the agent on behalf of the principal. The learned
Senior Counsel contended that the evidence on record would
reveal that the Defendant No.2 executed Ext.A2 Sale Deed for
his own benefit without obtaining prior consent from the Plaintiff
by dishonestly concealing the material fact of sale by the
Defendant No.2 in favour of the Defendant No.1 who is his wife
and the dealing of the Defendant No.2 has resulted in the
disadvantage of the Plaintiff. Hence, the Trial Court rightly
cancelled Ext.A2 Sale Deed executed by the Defendant No.2 in
favour of the Defendant No.1. The learned Senior Counsel
further contended that the Defendant No.1 did not prove her
source of income to purchase the plaint schedule property as
per Ext.A2 Sale Deed. The Defendant No.1 did not even care to
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step into the witness box to give evidence. She did not file any
Written Statement of her own. She merely adopted the Written
Statements of the Defendant Nos.2 and 3 by filing an Adoption
Memo. The learned Senior Counsel relied on the decision of the
Madras High Court in Achutha Naidu v. Oakley Bowden and Co. and
Another [AIR 1922 Madras 497], the Division Bench decision of the
Karnataka High Court in U. Vijaya Kumar and Another v. Malini V. Rao
[2016 0 Supreme(Kar) 441] and the Division Bench decision of the
Gujarat High Court in Prakash Babulal Sheth v. Shashikalal Mayur
Sheth [2022 0 Supreme(Guj) 1523] for elaborating the principles
under Section 215 of the Indian Contract Act.
18. In the light of the arguments advanced before me and on
perusal of the records, the following points arise for
determination in this Appeal.
1. Whether the appeal at the instance of the Defendant Nos.2
and 3 against the judgment and decree setting aside Ext.A2 in
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favour of the Defendant No.1 is maintainable in the absence
of any challenge against the same by the Defendant No.1?
2. Whether the suit is barred by limitation?
3. Whether the plaintiff is entitled to seek cancellation of Ext.A2
under Section 215 of the Indian Contract Act?
Point No.1
19. The present Appeal is filed by the Defendant Nos.2 and 3
alone. It is stated in the Memorandum of Appeal that the
Defendant No.1 is unable to join as Appellant since she is
working in Ireland. Order XLI Rule 4 CPC provides that where
there are more plaintiffs or more defendants than one in a suit,
and the decree appealed from proceeds on any ground
common to all the plaintiffs or to all the defendants, any one of
the plaintiffs or of the defendants may appeal from the whole
decree, and thereupon the Appellate Court may reverse or vary
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the decree in favour of all the plaintiffs or defendants, as the
case may be. Of course, if all the defendants are aggrieved by
the judgment and decree, an appeal by one of the aggrieved
defendants is sufficient to maintain the challenge to the
judgment and decree, and any order in the Appeal would be
beneficial to the defendants who have not appealed against it.
The Defendant Nos.2 and 3 could not be said to be aggrieved
by the cancellation of Ext.A2 by the Trial Court as they do not
claim any right over the property covered by Ext.A2
independently of Defendant No.1. The grounds available to the
Defendant No.1 with respect to the challenge against Ext.A2 is
not available to the Defendant Nos.2 and 3. The contention of
the Defendant No.2 is that he executed Ext.A2 Sale Deed in
favour of the Defendant No.1 as the Power of Attorney holder of
the Plaintiff on the strength of Ext.A4 Power of Attorney and that
the property belongs to the Defendant No.1 on the basis of
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Ext.A2 Sale Deed which was validly executed on the strength of
Ext.A4 Power of Attorney. The Defendant Nos. 2 and 3 can have
a grievance against the order of mandatory injunction, but they
claim the right of residence only on the strength of the right
claimed by the Defendant No.1. The relief of mandatory
injunction is consequential to the main relief of cancellation of
Ext.A2 Document. Hence, an Appeal filed by the Defendant
Nos.2 and 3 could not be treated as an Appeal at the instance
of the Defendant No.1. The Defendant Nos.2 and 3 could not
maintain an appeal against the judgment and decree cancelling
Ext.A2 Sale Deed as they are not having any interest in the
property covered by Ext.A2. The Defendant Nos.2 and 3 will not
be in any way benefited by the reversal of the impugned
judgment cancelling Ext.A2. In the Memorandum of Appeal,
Defendant No.2 has no case that it is he who purchased the
property as per Ext.A2. The statements and grounds in the
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Memorandum of Appeal would clearly indicate that he is
maintaining his position as Power of Attorney of the Plaintiff and
Defendant No.1 as the purchaser of the property as per Ext.A2.
Hence, I am of the view that this Appeal at the instance of the
Defendant Nos.2 and 3 alone against the impugned judgment
and decree cancelling Ext.A2 is incompetent.
Point No.2
20. The suit is filed for cancellation of Ext.A2 document dated
18.09.2003 executed by the Defendant No.2 in favour of the
Defendant No.1. The suit was filed on 10.04.2013. The specific
contention of the plaintiff is that she came to know about Ext.A2
document only in February 2013, consequent to the enquiry
conducted by her when she was asked to get out of the plaint
schedule property by Defendant No.3, shouting that she has no
right over the property. The Trial Court relied on Article 59 of the
Limitation Act and found that the suit was filed within the period
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of three years from the date when the facts entitling the Plaintiff
to have the instrument cancelled first became known to the
Plaintiff. The learned Counsel for the Appellants relied on the
decision of this Court in St. Mary’s Church (supra) and contended
that the Plaintiff after executing a Power of Attorney authorising
the Power Holder to deal with the immovable property and
transfer the same cannot be permitted to claim ignorance of the
documents or acts and deeds done by his agent or power holder
on a later stage. The learned Counsel contended that the
knowledge of a registered document would start from the date
of its execution and registration and that the ignorance or
concealment of the contents of the document or nature of the
document from the knowledge of the person who had executed
the document would not take away the notice of execution of a
registered deed in view of the definition of the phrase ‘a person is
said to have notice’ in Section 3 of the Transfer of Property Act. It
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is useful to extract the definition of the phrase ‘a person is said to
have notice’ in Section 3 of the Transfer of Property Act.
“3. Interpretation clause — In this Act, unless there is
something repugnant in the subject or context,–
xx xx xx
“a person is said to have notice” of a fact when he actually knows
that fact, or when, but for wilful abstention from an enquiry or
search which he ought to have made, or gross negligence, he
would have known it.
Explanation I.– Where any transaction relating to immoveable
property is required by law to be and has been effected by a reg-
istered instrument, any person acquiring such property or any
part of, or share or interest in, such property shall be deemed to
have notice of such instrument as from the date of registration
or,
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where the property is not all situated in one sub-district, or where
the registered instrument has been registered under sub-section
(2) of section 30 of the Indian Registration Act, 1908 (16 of 1908),
from the earliest date on which any memorandum of such regis-
tered instrument has been filed by any Sub-Registrar within
whose sub-district any part of the property which is being ac-
quired, or of the property wherein a share or interest is being ac-
quired, is situated:
Provided that–
(1) the instrument has been registered and its registration com-
pleted in the manner prescribed by the Indian Registration Act,
1908 (16 of 1908), and the rules made thereunder,
(2) the instrument [or memorandum] has been duly entered or
filed, as the case may be, in books kept under section 51 of that
Act, and
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(3) the particulars regarding the transaction to which the instru-
ment relates have been correctly entered in the indexes kept un-
der section 55 of that Act.
Explanation II.–Any person acquiring any immoveable property
or any share or interest in any such property shall be deemed to
have notice of the title, if any, of any person who is for the time
being in actual possession thereof.
Explanation III.–A person shall be deemed to have had notice
of any fact if his agent acquires notice thereof whilst acting on his
behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the prin-
cipal shall not be charged with notice thereof as against any per-
son who was a party to or otherwise cognizant of the fraud.”
21. The deemed knowledge of a registered document under
Explanation I is available only against the person acquiring the
property covered by the document or any part of, or share or
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interest in, such property and not against any other person. The
plaintiff has not acquired property as per Ext.A2 registered
document, and hence the deeming provision in Explanation I is
not available against the plaintiff. The deeming provision under
Explanation III against the principal is not applicable if the agent
fraudulently conceals the fact. The evidence on record reveals
that Defendant No.2 has fraudulently concealed the fact of the
sale of the property in favour of Defendant No.1 from the
plaintiff, and hence, the deeming provision in Explanation III is
also not available against the plaintiff.
22. In St.Mary’s Church (supra) while interpreting the phrase ‘a person is
said to have notice’ in Section 3 of the Transfer of Property Act, this
Court held that the principal cannot avoid the authority given to
the power holder to do certain acts or deeds for transfer of
immovable property after its execution in tune with the authority;
that the acts which are done by the power holder would be
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binding on the principal as if it were done by the principal in
person; that notice of agent/power holder would amount to
notice of principal unless there is an active concealment of the
acts done by the power holder or agent, as the case may be;
that the active concealment of an act done by the agent or
power holder against the principal is the only exception to the
general rule that the notice to the agent/power holder would
amount to notice to the principal. It is further held that in the case
of registered deeds of transfer of immovable property, there
cannot be an active concealment since the principal is at liberty
to make an enquiry regarding documents executed before the
concerned Registrar/Sub Registrar within whose jurisdiction the
immovable property situates, in accordance with the law in
force; that insofar as the executant of a document is concerned,
the fact of execution of the document is actually known to him
from the time on which it was executed; that the question
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whether he was aware of the content of the document or the
nature of the document would not change the legal position
regarding notice of execution of a registered document and it
would start from the date of its execution and registration. The
subsequent decision of the Hon’ble Supreme Court in Umadevi
Nambiar v. Thamarasseri Roman Catholic Diocese, rep. by its Procurator
Devssia’s Son Rev. Father Joseph Kappil [2022 (3) KHC 113], cited by
the learned senior Counsel for the Respondent No.1 covers the
point considered in St. Mary’s Church (supra) and it governs the
field. In Umadevi Nambiar, it is held that two things are important
for the above interpretation clause to come into effect: (i) wilful
abstention from an enquiry or search; and (ii) gross negligence;
that Explanation I and Explanation II under the above
interpretation clause are applicable to the person acquiring an
immovable property, the transaction relating to which is required
by law to be effected by a registered instrument; and that the
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High Court has turned the above interpretation clause upside
down and held the Principal in relation to a deed of Power of
Attorney, to have had constructive notice in terms of Section 3,
of a sale effected by the agent. In view of this decision of the
Hon’ble Supreme Court, it could not be held that the plaintiff had
notice of Ext.A2 Sale Deed from the date of its registration.
23. In the present case, the Defendant No.2 executed Ext.A2 Sale
Deed in favour of his wife-Defendant No.1 on the strength of
Ext.A4 Power of Attorney. The specific case of the plaintiff is that
the plaintiff came to know about the Ext.A2 document only in the
year 2013. The plaintiff has adduced evidence in support of the
said contention as PW1. The defendants could not make out
anything to discredit the evidence of PW1 in the cross-
examination. The beneficiary of the Ext.A2 document is
Defendant No.1. Defendant No.1 did not file any pleading in the
suit. A Memo dated 05.11.2014 was filed by the Counsel for the
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Defendants stating that the contentions in the Written
Statements of the Defendant Nos.2 and 3 are to be treated as
the contentions of the Defendant No.1. It is signed by the
Counsel as the counsel for the Defendants and not as
representing the Defendant No.1 alone. Order VI Rule 14 CPC
mandates that every pleading shall be signed by the party and
his pleader (if any). Proviso to the said Rule permits any person
duly authorized by the party to the suit to sign the pleading on
behalf of such party. All the pleadings in the suit have to be
mandatorily signed by the respective parties or their duly
authorized agents. Counsel cannot sign a pleading on behalf of
a party to the suit. The party making the pleadings is responsible
for the pleadings made by him. Such responsibility can be
attributed to the party only if the party has subscribed his
signature to the pleadings. A party can very well disown the
pleadings made by a counsel on his behalf. It is not safe for the
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Court to render its decision relying on the pleadings signed by
the counsel, as the party can disown the pleadings if the
decision turns against him. Order VI Rule 15 CPC provides for
the verification of the pleadings. It provides that every pleading
shall be verified at the foot by the party or by one of the parties
or some other person acquainted with the facts of the case, and
that it shall be signed by the person making it. Sub-Rule 4 is
inserted in the said provision by the Code of Civil Procedure
(Amendment) Act, 1999, which mandates that the person
verifying the pleading shall also furnish an affidavit in support of
his pleadings. An affidavit of the party in support of his Written
Statement is made mandatory to make the pleadings more
authentic and responsible. A pleading without verification and
an affidavit as required under Order VI Rule 15 CPC could not
be treated as a valid pleading. It is legally permissible for a co-
defendant to adopt the contentions in the Written Statement
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filed by another defendant in the suit. It should be done in the
form of a Written Statement. A wrong practice is followed by the
Courts permitting the co-defendant to file an Adoption Memo in
order to adopt the Written Statement of another defendant. I am
of the view that adoption of the pleadings shall be done by a
defendant in a suit only through a Written Statement supported
by verification and an affidavit, and an Adoption Memo signed
by the defendant or his counsel is not sufficient. The purpose of
a Memo is only to intimate a particular fact to the Court and it
does not form part of the pleadings. In the case on hand, the
Adoption Memo is not even signed by the Defendant No.1.
Hence, even assuming that the filing of the Adoption Memo is
permissible, it could not be said that Defendant No.1 adopted
the pleadings of Defendant Nos.2 and 3. Hence, I find that there
is no Written Statement from the part of the Defendant No.1
denying the allegations in the Plaint.
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24. The decision of the Hon’ble Supreme Court in Shri Mukund
Bhavan Trust (supra) is clearly distinguishable on the facts of the
present case. It is the admitted case of the parties that the
brother of the Plaintiff, George, and his family were permitted to
occupy the residential building in the plaint schedule property
by the plaintiff. The Defendant No.1 also continued to occupy
the residential building in the plaint schedule property after
marrying Defendant No.2 who is the son of the plaintiff’s brother.
It is not a case where the Defendant No.1 started to occupy the
plaint schedule property after execution of Ext.A2 by the
Defendant No.2 in favour of the Defendant No.1. In all
probability, the plaintiff believed that the Defendants continued
possession of the plaint schedule property on the basis of the
permission given by her. Hence, it could not be said that long
possession operates as notice of title and that possession of the
Defendant No.1 for decades strengthens her claim for title.
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25. The learned counsel for the appellant relied on the Order of the
Hon’ble Supreme Court in V. Ravikumar (supra) in support of his
contention. In the said case, the plaint was rejected on the
ground of limitation and the same was reversed by the High
Court. The High Court reckoned the limitation from the
cancellation of the Power of Attorney, which was assailed by the
defendant before the Hon’ble Supreme Court. The Hon’ble
Supreme Court has found that the High Court erroneously
treated the cancellation as the starting point of limitation. In the
case on hand, Ext.A4 Power of Attorney was not cancelled and
the plaintiff is not claiming limitation period from the date of
cancellation of any power of attorney. Hence, the said decision
is not applicable to the case on hand.
26. The pleadings and the evidence of PW1 would prove that the
suit is filed within three years as provided in Article 59 of the
Limitation Act. I find that the suit is not barred by limitation.
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Point No.3
27. The contention of the learned Counsel for the Appellants is that
even if it is found that the Defendant No.2 has violated Ext.A4
Power of Attorney, the remedy of the plaintiff is only to seek
compensation from the Defendant No.2 and the Plaintiff has no
right to seek any remedy against Defendant No.1 and to seek
cancellation of Ext.A2 document in favour of the Defendant
No.1. Learned Counsel relied on the principle that in case of
violation of any contract of agency, the remedy available to the
principal is only the recovery of compensation and not
repudiation of the contract entered into by the agent and as
against the third party who entered into contract with the agent,
the principal is not having any remedy. Learned counsel invited
my attention to various provisions under Chapter X of the Indian
Contract Act dealing with Agency, and going through the said
provisions, I find that the plaintiff will be entitled to succeed in
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the suit only if she proves that Ext.A2 is liable to be repudiated
under Section 215 of the Indian Contract Act. Since the learned
Senior Counsel for the 1st respondent/plaintiff rests the case on
Section 215, I need only to consider the applicability of Section
215 to the facts and circumstances of the present case. It is
advantageous to extract Section 215 of the Indian Contract Act
along with its illustrations for a better understanding:
“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 his 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.
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Illustrations
(a) A directs B to sell A’s estate. B buys the estate for himself in
the name of C. A, on discovering that B has bought the estate for
himself, may repudiate the sale, if he can show that B has
dishonestly concealed any material fact, or that the sale has
been disadvantageous to him.
(b) A directs B to sell A’s estate. B, on looking over the estate
before selling it, finds a mine on the estate which is unknown to
A. B informs A that he wishes to buy the estate for himself, but
conceals the discovery of the mine. A allows B to buy, in
ignorance of the existence of the mine. A, on discovering that B
knew of the mine at the time he bought the estate, may either
repudiate or adopt the sale at his option.”
28. On a reading of Section 215, the said provision is attracted only
if an agent deals on his own account without first obtaining the
consent of his principal and if it is shown that material facts have
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been concealed from the principal or the dealings of the agent
have been disadvantageous to the principal. Illustration (a) is
also very much relevant as far as the present case is concerned.
The Illustration illustrates that the principal may repudiate the
same if it is found that the agent purchased the estate, which is
entrusted for sale, for himself in the name of another person, if
the agent has dishonestly concealed any material fact, or if the
sale has been disadvantageous to him. It would indicate that the
acquisition of the property need not be in the name of the agent
himself. It can be in the name of another person also. In the
case on hand, it is clear that the Defendant No.2 purchased the
plaint schedule property in the name of his wife – Defendant
No.1. As stated earlier, there is no pleading from the part of the
Defendant No.1 denying the pleading of the plaintiff that the
Defendant No.1 has no source of income to pay the sale
consideration. In the absence of any Written Statement from the
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part of the Defendant No.1, she is not entitled to adduce any
evidence in the suit. As a matter of fact, she has not mounted
the witness box to give any evidence. Even in the Written
Statements and in the additional Written Statement of the
Defendant Nos. 2 and 3, there is no pleading that the Defendant
No.1 paid sale consideration to the plaintiff. On the other hand,
the specific statement is that the consideration for the property
is received from the Defendant No.2. The defendants could not
prove any income or source of income or financial capacity of
Defendant No.1 to purchase the property on her own. On
account of the facts that the Defendant No.1 is the wife of the
Defendant No.2 and the defendants failed to plead and prove
any independent source of income for the Defendant No.1 and
payment of consideration by the Defendant No.1 to the Plaintiff,
the only conclusion which is possible is that the Defendant No.2
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has dealt with the property on his own account by obtaining the
property in the name of his wife – Defendant No.1.
29. There is no contention in the Written Statements and additional
Written Statement of the Defendant Nos.2 and 3 that Ext.A2
Sale Deed was executed by the Defendant No.2 in favour of the
Defendant No.1 after obtaining consent for the same from the
plaintiff. It is the burden of the agent to prove that he has dealt
with the property in his own account after obtaining consent
from the principal. In the case on hand, there is no evidence to
prove that the sale of the property by the Defendant No.2 in
favour of the Defendant No.1 was done after obtaining the
consent of the plaintiff. The evidence on record would clearly
reveal that Defendant No.2 had dishonestly concealed the fact
of the sale of the property to his wife/ Defendant No.1, from the
plaintiff. The trump card of the Defendant No.2 is that the plaintiff
has issued Ext.B1 Receipt for the receipt of the sale
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consideration of Ext.A2 Sale Deed. Ext.B1 is the Receipt for
Rs.10,00,000/- signed by the plaintiff with reference to Exts.A7
and A2 Sale Deeds. Ext.A2 Sale Deed was executed on
18.09.2003. Ext.B1 is dated 09.04.2005. On going through the
evidence of Defendant No.2 as DW1, it is clear that he did not
explain the need for such a Receipt and the circumstances
under which the said Receipt was obtained from the plaintiff two
years after executing Ext.A2 Sale Deed. The only statement in
the evidence of DW1 is that Ext.B1 Receipt was obtained since
his friend Joshy Paul told him that such a receipt is necessary.
He deposed that he had no knowledge of the necessity for
obtaining such a receipt at the time of execution of Ext.A2 Sale
Deed. It is in evidence that Exts.A7 & A8 documents were
executed by the Defendant No.2 as power of attorney holder of
the Plaintiff for selling her properties situated in Vandiperiyar.
The case of the plaintiff is that the Defendant No.2 obtained
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Ext.B1 Receipt on the misrepresentation that the said Receipt
is required by the buyers of her property in Vandiperiyar. In
Ext.B1, the name of the Sub Registry office of the documents
referred therein is not stated. The Defendant No.1 has no proper
explanation as to why, out of Exts.A7 & A8 documents executed
with respect to Vandiperiyar property, only Ext.A7 alone is
included in Ext.B1. The aforesaid facts lead to the probable
conclusion that Ext.B1 Receipt was obtained from the plaintiff
by Defendant No.2, misrepresenting that the documents
contained in Ext.B1 Receipt are the documents relating to the
Vandiperiyar property. If the Defendant No.2 or the Defendant
No.1 was in requirement of a receipt for payment of
consideration of the property covered by Ext.A2, they could
have obtained a receipt with respect to the same alone. The
Defendant No.2 does not require a receipt for Ext.A7 property
sold by the Plaintiff to a third person. There was no need to
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obtain a single receipt for the properties sold to different
persons. In the Written Statement of the Defendant No.2,
though the Defendant No.2 stated about a receipt issued by the
plaintiff in the year 2005, the date of the said receipt was not
stated, and the said receipt was not produced along with the
Written Statement. The details of the consideration paid for
Ext.A2 Sale to the plaintiff are not stated in the Written
Statement. Only during evidence, the Defendant No.2 has
stated that the consideration of the plaint schedule property was
Rs.7 lakhs. If the plaint schedule property was purchased by the
Defendant No.2 or Defendant No.1 from the plaintiff, as claimed
by the defendants, certainly there would have been some
discussions or communications with respect to the
consideration for the same, as the plaintiff had been residing
abroad. Nothing in this regard is either pleaded or proved.
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30. In the decision of the Karnataka High Court in U. Vijaya Kumar
(supra), the Division Bench of the Karnataka High Court held that
where an agent employed to sell becomes the purchaser
himself, then he must show beyond reasonable doubt that it was
with the knowledge and consent of the principal and that the
price paid was the full value of the property so purchased. It is
also held that a principal who seeks to set aside a transaction
on the ground that the provisions of Section 215 of the Indian
Contract Act have been violated must take proceedings for that
purpose within a reasonable time after becoming aware of the
circumstances relied on. In the case on hand, the plaintiff has
filed the suit immediately on getting knowledge of Ext.A2 Sale
Deed. In the said decision, it is held that the burden of proof lies
on the agent to prove full disclosure or that the transaction is not
disadvantageous to the principal. I fully agree with the
propositions of law laid down by the Division Bench of the
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Karnataka High Court in U. Vijaya Kumar (supra). In the case on
hand, the Defendant No.2 has not discharged such burden of
proof. On the other hand, the evidence on record would clearly
reveal that he concealed material facts about Ext.A2 in favour
of his wife/Defendant No.1. The sale consideration of
Rs.2,50,000/- for 87.40 Ares and the residential building therein
shows that the transaction is apparently disadvantageous to the
plaintiff. There is no evidence even for the payment of the said
Rs.2,50,000/-. The plaintiff, as PW1, has specifically deposed
that the property would have fetched more than Rs.25 lakhs
when Ext.A2 was executed. Even according to the evidence of
DW1, the value of the property is Rs.7 lakhs, which he claims to
have paid to the plaintiff. It is the evidence of DW1 that the
plaintiff was available in India when Ext.A2 document was
executed, and a part of the payment was directly made to the
plaintiff. If that be so, nothing prevented the Defendant No.2
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from obtaining the sale deed directly from the plaintiff. Even
though the defendants claimed that they have several
businesses and properties, and the financial status of the
parents of the Defendant No.1 is sound, they could not produce
any evidence to substantiate the same. On the other hand, the
evidence on record, especially the evidence of PW2, who is an
independent witness and who was the friend of George, father
of the Defendant No.2, would reveal that the financial status of
the family of the plaintiff and her brother George was improved
only after the plaintiff went to Germany and started sending
money.
31. Learned Counsel for the appellants contended that Sections
215 and 216 of the Indian Contract Act are not applicable to a
Power of Attorney. The contention is that in the case of Power
of Attorney, a Power Holder cannot deal on his own account,
and his deals are on the account of the principal and Section
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216 makes this more clear. It is the Sections 211 and 212 of the
Contract Act, providing for compensation, which are applicable
in the case of misconduct of the Power Holder. Learned Counsel
invited my attention to Sections 1A and 2 of the Powers of
Attorney Act, 1882, in this regard. I am unable to accept the said
contention. It is true that in the case of a Power of Attorney, a
Power holder has to deal on the account of the principal. Section
215 deals with cases in which the Power Holder, who is an agent
of the principal, deals on his own account in violation of the
Power of Attorney given to him. Hence, it could not be said that
when there is a Power of Attorney in favour of an agent, Section
215 will not be applicable. Since the plaintiff is resting her case
on Section 215 of the Indian Contract Act, I need not consider
whether she is entitled to get compensation under Sections 211
and 212 of the Indian Contract Act.
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32. The learned counsel for the appellant relied on the decision of
this Court in Mathu (supra), in which it is held that in case where
the person executing the deed is not blind, infirm or otherwise
incapacitated and no fraudulent misrepresentation is made to
him and he had the opportunity of reading the deed, the plea of
non est factum is not available. In the case on hand, there is
clear evidence that Defendant No.2 made a fraudulent
misrepresentation for obtaining Ext.B1 Receipt from the plaintiff,
and hence the said principle is not applicable to the case on
hand. Exs.A10 & A11 are the copies of the Plaint in O.S.
Nos.50/2004 and 293/2009 filed by the sister of the Defendant
No.2 to set aside the sale deeds executed by her alleging that
she was defrauded by Defendant No.2. Though the Defendant
No.2 deposed that those cases were later withdrawn, no
evidence in this regard was produced before the Court. The said
cases also would probabilize that the Defendant No.2 attempted
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to grab the properties belonging to his sister also by adopting
unfair means.
33. The learned counsel for the appellants relied on the decision of
the Travancore-Cochin High Court in Travancore Bank Ltd. (supra)
to distinguish between the fiduciary relationship between the
trustee and beneficiary and promisor and promisee and the
beneficiary of a contract. It is held in the said decision that there
is a fiduciary relationship between trustee and beneficiary,
whereas there is no such relationship between the promisor or
promisee and the beneficiary of a contract. In State of Rajasthan
v. Basant Nahata [AIR 2005 SC 3401], the Hon’ble Supreme Court
held a Power of Attorney holder acts in a fiduciary capacity and
that any act of infidelity or breach of trust is a matter between
the donor and the donee.
34. In view of the aforesaid discussion, I am of the view that Section
215 of the Indian Contract Act is squarely applicable to the facts
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and circumstances of the case and all the conditions in Section
215 are satisfied to repudiate Ext.A2 Sale Deed executed by the
Defendant No.2 as Power of Attorney holder of the Plaintiff in
favour of the Defendant No.1 who is the wife of the Defendant
No.2. The Trial Court rightly decreed the suit cancelling Ext.A2
Sale Deed and issuing mandatory injunction in favour of the
plaintiff and against the defendants.
35. In view of the answers to the aforesaid points, this Appeal is
dismissed with costs.
Sd/-
M.A.ABDUL HAKHIM
JUDGE
Shg/