Mrs. Umadevi Nambiar vs Thamarasseri Roman Catholic Diocese rep by its Procurator Devssia’s Son Rev. Father Joseph Kappil

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No.2592 of 2022 (Arising out of Special Leave Petition (C) No.20047 of 2017)

MRS. UMADEVI NAMBIAR ...APPELLANT(S)

VERSUS

THAMARASSERI ROMAN CATHOLIC DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER JOSEPH KAPPIL ...RESPONDENT(S)

JUDGMENT

V. Ramasubramanian

1. Their suit for partition having been decreed by the trial Court

but reversed by the High Court in a regular first appeal, the

plaintiffs have come up with the above appeal.

Signature Not Verified

2. Digitally signed by Jayant Kumar Arora Date: 2022.04.02 We have heard Shri Dushyant A. Dave, learned senior counsel 12:06:46 IST Reason:

for the appellant and Shri Thomas P. Joseph, learned counsel for

1 the respondent.

3. The suit schedule property originally belonged to one

Ullattukandiyil Sankunni. After his death, the property devolved

upon his two daughters, one of whom is the appellant herein. The

appellant herein executed a general Power of Attorney on

21.07.1971, registered as Document No.35 of 1971, in favour of her

sister Smt. Ranee Sidhan. However, the said power was cancelled

on 31.01.1985. But in the meantime, the appellant’s sister was

found to have executed four different documents in favour of certain

third parties, assigning/releasing some properties. Therefore, the

appellant first filed a suit in O.S.No.16 of 1986 followed by another

suit in O.S.No.27 of 1988 against the assignees/releasees. Though

a preliminary decree was passed in the second suit on 7.01.1989,

the appellant came to know later that the assignees/releasees had

sold the property to the respondent herein.

4. Therefore, the appellant filed yet another suit in O.S No.130 of

1989, seeking partition and separate possession of her half share in

the suit property. The trial Court granted a preliminary decree in

favour of the appellant. However, the regular appeal filed by the

2 respondent herein was allowed by a Division Bench of the High

Court by the judgment and decree impugned in this appeal.

Therefore, the appellant has come up with the above appeal.

5. At the outset, it should be stated that the respondent herein

did not dispute the fact that the suit schedule property originally

belonged to the father of the appellant and her sister and that the

appellant and her sister were entitled to equal shares in the

property. But the respondent contested the suit on the grounds

inter alia (i) that in view of two prior suits for partition, namely, O.S.

No.16 of 1986 and O.S.No.27 of 1988, the suit was barred under

Order II Rule 2 of CPC; (ii) that the general Power of Attorney

executed by the appellant in favour of her sister, authorized the

agent to sign all documents and present them for registration;

(iii) that by virtue of the said power, the appellant’s sister

transferred the suit schedule properly to four persons, for the

purpose of discharging the debts incurred in the family business;

(iv) that those transferees, in turn, sold the property to the

respondent herein for a valuable consideration; (v) that though the

3 appellant was earlier residing in England, she came back to India

and was staying in a house just 1 km. away from the plaint

schedule property; (vi) that the appellant was therefore aware of all

the transfers including the transfer in favour of the respondent and

the development made by the respondent over the suit property;

(vii) that, therefore, the appellant is guilty of acquiescence; and

(viii) that the respondent has actually developed a commercial

complex on the suit property and hence entitled at least to the value

of improvements, in the event of a decree being passed.

6. The trial Court framed as many as 23 issues for consideration

in the suit. The objection on the basis of Order II Rule 2 of CPC was

rejected by the trial Court on the ground that the appellant’s sister

had committed a fraud and that the cause of action for the present

suit was different from the cause of action for the previous suits.

The contention that the appellant was guilty of acquiescence was

rejected by the trial Court on a factual finding that the appellant

was not aware of the transfer. On an examination of the recitals

contained in the Power of Attorney, the trial Court came to the

4 conclusion that the document did not confer any power to sell the

property and that, therefore, the appellant’s sister was not entitled

to alienate the property. Since the original alienations made in 1981

and 1982 by the appellant’s sister were null and void on account of

lack of express power to sell, the subsequent sale made by those

alienees in favour of the respondent herein was also held to be

invalid. On the basis of these findings, the trial Court decreed the

suit, as prayed for.

7. While reversing Judgment and decree of the trial Court, the

High Court held: (i) that the failure of the appellant to seek the relief

of setting aside the documents of transfer and/or recovery of

possession of the property was fatal to her case; (ii) that though the

principle behind Order II Rule 2 CPC may not be applicable to suits

for partition, the appellant must be held to have had constructive

notice of the alienations made by her sister, in view of Section 3 of

the Transfer of Property Act, 1882 (hereinafter referred to as “the

Act”); (iii) that once constructive notice is attributed to the

appellant, any relief for cancellation of the documents of alienation

5 would have already become time barred, by the time the Power of

Attorney was cancelled; (iv) that since the deed of general Power of

Attorney filed as Exhibit A­1 did not contain any express power to

sell the suit property, the transferee cannot be held to have

exercised ‘reasonable care’ as required by the proviso to Section 41

of the Transfer of Property Act, 1882; and (v) that despite this fact,

the appellant was not entitled to a decree for partition, in view of

her failure to seek the cancellation of the alienations, in spite of

having constructive notice of the alienations.

8. As could be seen from the judgments of the trial Court and the

High Court, the deed of general Power of Attorney executed by the

appellant in favour of her sister on 21.07.1971, did not specifically

contain any power of sale. Therefore, the trial Court as well as the

High Court held in no uncertain terms that the appellant’s sister

was not competent to sell the property to the predecessor­in­

interest of the respondent. However, the learned counsel appearing

for the respondent argued, (i) that while construing a document, all

punctuation marks should be given due weightage; (ii) that the deed

6 of Power of Attorney was drafted by a doyen of the Bar; (iii) that

Clause 22 of the deed of Power of Attorney conferred upon the

agent, the power to execute and register all documents; (iv) that the

power to execute a document and present the same for registration,

should be understood to mean the power to execute documents

requiring registration in the light of Section 49 of the Registration

Act, 1908; and (v) that, therefore, a bonafide purchaser like the

respondent should not be made to suffer.

9. But we do not agree with the above submissions of the learned

counsel for the respondent. It remains a plain and simple fact that

the deed of Power of Attorney executed by the appellant on

21.07.1971 in favour of her sister contained provisions empowering

the agent: (i) to grant leases under Clause 15; (ii) to make borrowals

if and when necessary with or without security, and to execute and

if necessary, register all documents in connection therewith, under

Clause 20; and (iii) to sign in her own name, documents for and on

behalf of the appellant and present them for registration, under

Clause 22. But there was no clause in the deed authorizing and

7 empowering the agent to sell the property. The argument that the

deed was drafted by a doyen of the Bar, is an argument not in

favour of the respondent. This is for the reason that the draftsman

has chosen to include, (i) an express power to lease out the

property; and (ii) an express power to execute any document

offering the property as security for any borrowal, but not an

express power to sell the property. Therefore, the draftsman

appears to have had clear instructions and he carried out those

instructions faithfully. The power to sell is not to be inferred from a

document of Power of Attorney. The trial Court as well as the High

Court were ad idem on the finding that the document did not confer

any power of sale.

10. In fact the High Court rejected even the refuge sought by the

respondent under Section 41 of the Transfer of Property Act which

reads as follows:

“Transfer by ostensible owner.­ Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it:

8 Provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.”

11. The High Court has held and in our view rightly so, that if the

respondent had exercised reasonable care as required by the

proviso to Section 41, they could have easily found out that there

was no power of sale.

12. Unfortunately after finding (i) that the Power of Attorney did

not contain authorization to sell; and (ii) that the respondent

cannot claim the benefit of Section 41 of the Act, the High Court fell

into an error in attributing constructive notice to the appellant in

terms of Section 3 of the Act. The relevant interpretation clause in

Section 3 of the Act reads as follows:

“Interpretation Clause­

xxxx xxx xxxx

“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 I­Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring

9 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, where the property is not all situated in one sub­district, or where the registered instrument has been registered under sub­section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub­Registrar within whose sub­district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:

Provided that­­

(1) the instrument has been registered and its registration completed 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 (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under 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 principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.”

13. Two things are important for the above interpretation clause to

10 come into effect. They are: (i) wilful abstention from an enquiry or

search; and (ii) gross negligence. 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. The

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.

14. The reasoning given by the High Court for holding that the

appellant ought to have challenged the alienations, is that the

appellant was out of possession. Here again, the High Court failed

to appreciate that the possession of an agent under a deed of Power

of Attorney is also the possession of the Principal and that any

unauthorized sale made by the agent will not tantamount to the

Principal parting with possession.

15. It is not always necessary for a plaintiff in a suit for partition

to seek the cancellation of the alienations. There are several reasons

11 behind this principle. One is that the alienees as well as the co­

sharer are still entitled to sustain the alienation to the extent of the

share of the co­sharer. It may also be open to the alienee, in the

final decree proceedings, to seek the allotment of the transferred

property, to the share of the transferor, so that equities are worked

out in a fair manner. Therefore, the High Court was wrong in

putting against the appellant, her failure to challenge the

alienations.

16. The learned counsel for respondent relied upon the decision of

this Court in Delhi Development Authority vs. Durga Chand

Kaushish1, in support of his argument about the rule of

interpretation to be adopted while construing Exhibit A­1, the deed

of general Power of Attorney. He also relied upon the Judgment of

this Court in Syed Abdul Khader vs. Rami Reddy and Others2 for

driving home the question as to how the deed of Power of Attorney

should be construed.

17. We do not know how the ratio laid down in the aforesaid

1 (1973) 2 SCC 825 2 (1979) 2 SCC 601

12 decisions could be applied to the advantage of the respondent. As a

matter of plain and simple fact, Exhibit A­1, deed of Power of

Attorney did not contain a clause authorizing the agent to sell the

property though it contained two express provisions, one for leasing

out the property and another for executing necessary documents if

a security had to be offered for any borrowal made by the agent.

Therefore, by convoluted logic, punctuation marks cannot be made

to convey a power of sale. Even the very decision relied upon by the

learned counsel for the respondent, makes it clear that ordinarily a

Power of Attorney is to be construed strictly by the Court. Neither

Ramanatha Aiyar’s Law Lexicon nor Section 49 of the Registration

Act can amplify or magnify the clauses contained in the deed of

Power of Attorney.

18. As held by this Court in Church of Christ Charitable Trust

and Educational Charitable Society vs. Ponniamman

Educational Trust3 the document should expressly authorize the

agent, (i) to execute a sale deed; (ii) to present it for registration;

and (iii) to admit execution before the Registering Authority. 3 (2012) 8 SCC 706 13

19. It is a fundamental principle of the law of transfer of property

that “no one can confer a better title than what he himself has”

(Nemo dat quod non habet). The appellant’s sister did not have the

power to sell the property to the vendors of the respondent.

Therefore, the vendors of the respondent could not have derived any

valid title to the property. If the vendors of the respondent

themselves did not have any title, they had nothing to convey to the

respondent, except perhaps the litigation.

20. Therefore, the appeal is allowed, the impugned judgment of the

High Court is set aside and the Judgment and preliminary decree

passed by the trial Court are restored. There will be no order as to

costs.

…..…………....................J. (Hemant Gupta)

.…..………......................J (V. Ramasubramanian)

APRIL 1, 2022

14 NEW DELHI.

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