CIVIL SUIT FILED THROUGH Power
of Attorney: LEGALITIES
The Supreme Court has on 17th
May 2024 in a matter captioned as Rajesh Kumar Vs Anand Kumar & Ors 2024 INSC 444 (Civil Appeal No. 7840 of
2023) has
dealt with a vital issues i.e Role and evidentiary value of a deposition made in
suit filed through a Power of Attorney in civil suit, and whether any fetter
shall be attached to the deposition of such Power of Attorney. The Supreme Court has comprehensively dealt
with the issue while deliberating in appeal thereby impugning judgment passed by Madhya Pradesh High Court.
FACTUAL MATRIX
1.
That the factual matrix of the above case, revolves around the
fact that the Power of Attorney Holder of respondents/defendants had executed
the sale deed of suit property on 14.05.1997 in favour of respondent nos. 1 to
3/defendant nos. 12 to 14. It appears that the same was done, even, though, the
said respondents were aware of the earlier sale agreement and its extensions
with the appellant. The sale deed dated 14.05.1997 was executed behind the back
of the appellant/plaintiff, which came to the notice of plaintiff later and
thus, a legal notice was sent on 30.05.1997 calling upon the
respondents/defendant nos. 1 to 11 to be present in the Registrar’s office on
31.05.1997 to carry out the formalities for execution of the sale deed. Despite
receipt of this notice, the respondents/defendant nos. 1 to 11 did not attend
the Registrar Office. On 31.05.1997, the appellant/plaintiff was informed by
the sub-Registrar that the suit land has been sold in favour of respondent nos.
1 to 3/defendant nos. 12 to 14.
2.
That the plaintiff claimed that he is in possession of the suit
land, therefore, he objected to the application dated 20.08.1997 moved by the
respondents/defendant nos. 12 to 14 for mutation of their names. The Gram
Panchayat assured the appellant/plaintiff in its meeting dated 06.12.1997 that
defendant nos. 12 to 14 will execute a sale deed in favour of the appellant/plaintiff,
therefore, legal action was not initiated. The present suit was filed on
19.06.2000.
3.
That the respondents/defendants in their joint written statement
contended that the suit land is in possession of the respondent nos. 1 to
3/defendant nos. 12 to 14 being the bona fide purchasers for value paid vide registered sale deed dated
14.05.1997. It was also pleaded that the respondents/defendants were not aware
if any agreement to sell between the appellant/plaintiff and respondent nos. 1
to 11 existed. The plea of limitation was also raised that the suit is barred
by limitation. Another plea was that time was the essence of the contract and
the sale deed was to be executed within six months from the date of the
agreement and that the appellant/plaintiff did not have sufficient funds with
him for payment of the sale consideration. Moreover, the advance amount of Rs.
40,000/- was also returned to the appellant/plaintiff was also returned.
4.
That the Trial Court was pleased to decree the suit upon finding
that the agreement to sell was executed between the appellant/ plaintiff and
defendant no. 1 as a Power of Attorney Holder of defendant nos. 2 to 11. It was
also held that the time allowed for execution of sale deed was extended twice
and earnest money was duly paid and that the appellant/plaintiff was ready and
willing to perform his part of the contract. The suit was held to be not barred
by limitation as time was reckoned from the date of expiry of extended period
for payment and the also that the period of summer vacation were to be
excluded.
HIGH COURT
The High Court however had set aside
the judgment and decree passed by the Trial Court. The high court inter alia has non-suited the
appellant/plaintiff on two counts. Firstly, it was held that defendant no. 1 was not the sole owner
of the property which was the coparcenary property and the other coparceners
did not sign the initial agreement and secondly, that the appellant/plaintiff having failed to appear in
the witness box, the testimony of his Power of Attorney Holder cannot be read
as statement of the plaintiff in a civil suit of this nature.
According to the appellant, though,
non-appearance of the appellant/plaintiff as a witness would not have any
adverse impact in a suit of this nature and that the readiness and willingness
can be proved by the Attorney Holder.
Per contra, on behalf of the
respondents/defendants it was submitted that the agreement dated 26.09.1995 is void ab initio because it was not executed by all
the owners of the suit land. It was then argued that in a suit for specific
performance non-appearance of plaintiff as a witness is fatal to his case,
because, it is he who has to plead and prove the readiness and willingness.
Thus, it was contended that the high court has rightly set aside the judgment
and decree of the Trial Court which was based on perverse finding and incorrect
application of settled legal principles.
SUPREME COURT
The Supreme Court, has upheld the
judgment of Madhya Pradesh High Court. The details in this regards are
delineated further.
1.
That the Supreme Court has held that, unless, all the co-owners
have signed the agreement, the same could not be construed as valid and it is
rightly held so by the high court. Even, the subsequent endorsement of receipt
of additional amount of Rs. 40,000/- was also not signed by all the co-parceners.
The same is the condition with the 3rd agreement dated 26.12.1996
and the extension endorsement dated 27.03.1997 and 23.04.1997. Significantly,
the so-called power of attorney pleaded in the plaint through which the
defendant nos. 2 to 11 authorised defendant no. 1 to execute the agreement,
have not been produced and proved in the Trial Court. Thus, neither in the
agreement nor in course of trial the power of attorney is proved by tendering
the same in evidence. Hence, in the absence of evidence, the High Court rightly
held that the agreement is not signed by all the co-owners.
The Supreme Court, while upholding the
decision of high Court had referred to the following judgments:
(i)
Shambhu Dutt Shastri [(1986) 2 WLN
713 (Raj)]
(ii)
Ram Prasad v. Hari Narain [AIR 1998 Raj 185;
(iii) Pradeep Mohanbay (Dr.) v. Minguel Carlos Dias [(2000) 1 Bom LR 908]
(iv) Shanmughasundaram &
Ors. Vs. Diravia Nadar (dead) by Lrs. & Anr AIR 2005 SC 1836’
(v) Janki Vashdeo Bhojwani & Anr. vs. Indusind
Bank Ltd. & Ors. (2005) 2
SCC 217.
(vi)
Man Kaur vs. Hartar Singh Sangha 2010 (10) SCC 512
(vii) Vidhyadhar v. Manikrao [(1999) 3 SCC 573
(viii)
A.C. Narayanan vs. State of Maharashtra
& Anr.
(2014) 11 SCC 790
2.
In the matter of Shanmughasundaram & Ors. Vs. Diravia Nadar
(dead) by LRs. & Anr AIR 2005 SC 1836, the Supreme Court has held that
in the event all the co-sharers of the property have not executed the sale
agreement, a suit for specific performance cannot be decreed. The following is
held in paras 29,30 & 31:
“29. The
facts in present case are distinguishable. Admittedly, the property has been
jointly inherited by two brothers and three sisters. As heirs under the Hindu
Succession Act, they inherited the property as co-owners. In the absence of
partition between them, the two brothers together had undivided share in the
property, and they could not have agreed for sale of the entire property. They
were competent to execute agreement to the
extent
only of their undivided share in the property. In the event of sale of such
undivided share, the vendee would be required to file a suit for partition to
work out his right in the property. The left out three sisters as co-owners
having undivided share in the whole property, the two brothers are incompetent
to abide by the award”.
30.
Learned counsel makes a reference to Section 12 of the Specific Relief Act,
1963 and submits that the arbitration agreement and consequent award should be
allowed to be enforced to the extent of share of two brothers leaving the
vendee to work out his right, if necessary, in case the sisters object to the
sale, by a suit in accordance with Section 12 of the Specific Relief Act.
31.
Section 12 of the Specific Relief Act, in our considered opinion, would be of
no assistance in the situation obtaining here. In the absence of sisters being
parties to the agreement, the vendee can at best obtain undivided interest of
two brothers in the property. Section 12 of the Specific Relief Act cannot be
invoked by the vendee to obtain sale of undivided share of the two brothers
with a right to force partition on the sisters who were not parties to the
agreement of sale. Such a relief under Section 12 cannot be obtained by a
vendee, on purchase of an undivided share of the property of some of the
co-owners, against other co-owners who were not parties to the sale agreement.”
SUPREME COURT ON POWER OF ATTORNEY
1.
That the Supreme Court has held in Rajesh Kumar (Supra) that the
plaintiff failed to appear in the witness box. Instead, his Power of Attorney
Holder appeared and has got himself examined as PW-1.Interestingly, this
witness was examined on 05.09.2002 and the power of attorney was executed on
26.08.2002. It is not a case where the suit itself was filed by a Power of
Attorney Holder. He appeared subsequently only for recording his evidence as
the Special Power of Attorney Holder of the plaintiff. The legal position as to
when the deposition of a Power of Attorney Holder can be read in evidence has
been dealt with by the Supreme Court in several decisions.
(i)
In Janki Vashdeo Bhojwani & Anr. vs. Indusind Bank Ltd. &
Ors. (2005) 2
SCC 217 it is held that a Power of Attorney Holder cannot depose
for principal in respect of matters of which only principal can have personal
knowledge and in respect of which the principal is liable to be cross-examined.
It is also held that if the principal to the suit does not appear in the
witness box, a presumption would arise that the case set up by him is not
correct. This Court has discussed the legal position in the following words in
paras 13,15,17:
“13. Order 3 Rules 1 and 2 CPC
empower the holder of power of attorney to “act” on behalf of the principal. In
our view the word “acts” employed in Order 3 Rules 1 and 2 CPC confines only to
in respect of “acts” done by the power-of-attorney holder in exercise of power
granted by the instrument. The term “acts” would not include deposing in place
and instead of the principal. In other words, if the power-of-attorney holder
has rendered some “acts” in pursuance of power of attorney, he may depose for
the principal in respect of such acts, but he cannot depose for the principal
for the acts done by the principal and not by him. Similarly, he cannot depose
for the principal in respect of the matter of which only the principal can have
a personal knowledge and in respect of which the principal is entitled to be
cross-examined.
15. Apart from what has been stated,
this Court in the case of Vidhyadhar v.
Manikrao [(1999) 3 SCC 573] observed at SCC pp. 583-84, para 17 that:
“17. Where a party to the suit does
not appear in the witness box and states his own case on oath and does not
offer himself to be cross-examined by the other side, a presumption would arise
that the case set up by him is not correct. On the question of power of
attorney, the High Courts have divergent views. In the case of Shambhu Dutt
Shastri v. State of Rajasthan [(1986) 2 WLN 713 (Raj)] it was held that a
general power-of-attorney holder can appear, plead and act on behalf of the
party but he cannot become a witness on behalf of the party. He can only appear
in his own capacity. No one can delegate the power to appear in the witness box
on behalf of himself. To appear in a witness box is altogether a different act.
A general power-of attorney holder cannot be allowed to appear as a witness on
behalf of the plaintiff in the capacity of the plaintiff”.
2.
That in the case of Ram
Prasad v. Hari Narain [AIR 1998 Raj 185 : (1998) 3 Cur CC 183] . It was
held that the word “acts” used in Rule 2 of Order 3 CPC does not include the
act of power-of attorney holder to appear as a witness on behalf of a party.
Power-of-attorney holder of a party can appear only as a witness in his
personal capacity and whatever knowledge he has about the case he can state on
oath but he cannot appear as a witness on behalf of the party in the capacity
of that party. If the plaintiff is unable to appear in the court, a commission
for recording his evidence may be issued under the relevant provisions of CPC.
3.
That in the case of Pradeep
Mohanbay (Dr.) v. Minguel Carlos Dias [(2000) 1 Bom LR 908] the Goa Bench
of the Bombay High Court held that a power of attorney can file a complaint
under Section 138 but cannot depose on behalf of the complainant. He can only
appear as a witness. However, in the case of Humberto Luis v. Floriano Armando
Luis [(2002) 2 Bom CR 754] on which reliance has been placed by the Tribunal in
the present case, the High Court took a dissenting view and held that the
provisions contained in Order 3 Rule 2 CPC cannot be construed to disentitle
the power-of-attorney holder to depose on behalf of his principal. The High
Court further held that the word “act” appearing in Order 3 Rule 2 CPC takes
within its sweep “depose”.
4.
That the Supreme Court has referred to with approval, the view
taken by the Rajasthan High Court in the case of Shambhu Dutt Shastri [(1986) 2 WLN 713 (Raj)] followed and
reiterated in the case of Ram Prasad [AIR 1998 Raj 185 : (1998) 3 Cur CC 183]
is the correct view. The view taken in the case of Floriano Armando Luis
[(2002) 2 Bom CR 754] cannot be said to have laid down a correct law and is
accordingly overruled. Bom CR 754].
5.
That yet in another judgment referred to as Man Kaur vs. Hartar Singh
Sangha 2010
(10) SCC 512 the
Court referred to its earlier decisions including Janki Vashdeo Bhojwani (supra) and concluded thus in paras
17 :
“17. To succeed in a suit for specific performance, the plaintiff
has to prove: (a) that a valid agreement of sale was entered into by the
defendant in his favour and the terms thereof; (b) that the defendant committed
breach of the contract; and (c) that he was always ready and willing to perform
his part of the obligations in terms of the contract. If a plaintiff has to
prove that he was always ready and willing to perform his part of the contract,
that is, to perform his obligations in terms of the contract, necessarily he should
step into the witness box and give evidence that he has all along been ready
and willing to perform his part of the contract and subject himself to
cross-examination on that issue. A plaintiff cannot obviously examine in his
place, his attorney-holder who did not have personal knowledge either of the
transaction or of his readiness and willingness. Readiness and willingness
refer to the state of mind and conduct of the purchaser, as also his capacity
and preparedness on the other. One without the other is not sufficient. Therefore
a third party who has no personal knowledge cannot give evidence about such
readiness and willingness, even if he is an attorney-holder of the person
concerned”.
6. That the Supreme
Court has therefore summarized the position vis a vis right and capacity to
depose by a power of attorney in a civil suit. The summary is as under in para
18:
18. We may now summarise for convenience, the position as
to who should give evidence in regard to matters involving personal knowledge:
(a) An attorney-holder who has signed the plaint and
instituted the suit, but has no personal knowledge of the transaction can only
give formal evidence about the validity of the power of attorney and the filing
of the suit.
(b) If the attorney-holder has done any act or handled any
transactions, in pursuance of the power of attorney granted by the principal,
he may be examined as a witness to prove those acts or transactions. If the
attorney-holder alone has personal knowledge of such acts and transactions and
not the principal, the attorney-holder shall be examined, if those acts and
transactions have to be proved.
(c) The attorney-holder cannot depose or give evidence in
place of his principal for the acts done by the principal or transactions or
dealings of the principal, of which principal alone has personal knowledge.
(d) Where the principal at no point of time had personally
handled or dealt with or participated in the transaction and has no personal knowledge
of the transaction, and where the entire transaction has been handled by an
attorney-holder, necessarily the attorney-holder alone can give evidence in
regard to the transaction. This frequently happens in case of principals
carrying on business through authorized managers/ attorney-holders or persons
residing abroad managing their affairs through their attorney-holders.
(e) Where the entire transaction has been conducted
through a particular attorney-holder, the principal has to examine that attorney-holder
to prove the transaction, and not a different or subsequent attorney-holder.
(f) Where different attorney-holders had dealt with the
matter at different stages of the transaction, if evidence has to be led as to
what transpired at those different stages, all the attorney-holders will have
to be examined.
(g) Where the law requires or contemplated the plaintiff
or other party to a proceeding, to establish or prove something with reference
to his “state of mind” or “conduct”, normally the person concerned alone has to
give evidence and not an attorney-holder. A landlord who seeks eviction of his
tenant, on the ground of his “bona fide” need and a purchaser seeking specific
performance who has to show his “readiness and willingness” fall under this category.
There is however a recognized exception to this requirement. Where all the
affairs of a party are completely managed, transacted and looked after by an
attorney (who may happen to be a close family member), it may be possible to
accept the evidence of such attorney even with reference to bona fides or
“readiness and willingness”. Examples of such attorney-holders are a
husband/wife exclusively managing the affairs of his/her spouse, a son/daughter
exclusively managing the affairs of an old and infirm parent, a father/mother
exclusively managing the affairs of a son/daughter living abroad.”
6.
In a more recent judgment, Supreme Court in the matter of A.C. Narayanan vs. State
of Maharashtra & Anr. (2014) 11 SCC 790, again considered
the earlier judgments, particularly, Janki Vashdeo Bhojwani (supra) and having noticed that Janki Vashdeo Bhojwani relates to Power of Attorney Holder
under CPC, whereas, in the matter of (A.C. Narayanan) the Court was concerned with a criminal case. It was
observed that since criminal law can be set in motion by anyone, even by a
stranger or legal heir, a complaint under Section 138 of the Negotiable
Instruments Act, 1881 preferred by the Power of Attorney Holder is held
maintainable and also that such Power of Attorney Holder can depose as
complainant.
The Supreme Court, therefore, in Rajesh Kumar (Supra) has held in
para 12 as under:
“12. Having noticed the three judgments of this
Court in Janki Vashdeo Bhojwani (supra), Man Kaur (supra) &
A.C. Narayanan (supra),
we are of the view that in view of Section 12 of the Specific
Relief Act, 1963, in a suit for specific performance wherein the plaintiff is
required to aver and prove that he has performed or has always been ready and
willing to perform the essential terms of the contract, a Power of Attorney
Holder is not entitled to depose in place and instead of the plaintiff
(principal). In other words, if the Power of Attorney Holder has rendered some
‘acts’ in pursuance of power of attorney, he may depose for the principal in
respect of such acts, but he cannot depose for the principal for the act done
by the principal and not by him. Similarly, he cannot depose for the principal
in respect of the matter of which only the principal can have personal
knowledge and in respect of which the principal is entitled to be
cross-examined. If a plaintiff, in a suit for specific performance is required
to prove that he was always ready and willing to perform his part of the
contract, it is necessary for him to step into the witness box and depose the
said fact and subject himself to cross-examination on that issue. A plaintiff
cannot examine in his place, his attorney holder who did not have personal
knowledge either of the transaction or of his readiness and willingness. The
term ‘readiness and willingness’ refers to the state of mind and conduct of the
purchaser, as also his capacity and preparedness, one without the other being
not sufficient. Therefore, a third party having no personal knowledge about the
transaction cannot give evidence about the readiness and willingness”.
The appeal of the appellant in Rajesh Kumar (Supra) was therefore upheld by the Supreme Court.
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Anil
K Khaware
Founder & Senior Associate
Societylawandjustice.com
