Friday, 14 April 2017

Whether irrevocable power of attorney can be revoked by principal?

 This case on hand from the above facts comes only
under Section 201 and not with any bar under Section 202 of the
Act to revoke the GPA.  It is thus rightly concluded by the lower
appellate Court of the GPA given for Ac.6-00 guntas of land to sell,
as already sold and the transaction is completed even with third
party and for nothing remained thereunder and from any of the
terms of the GPA there is nothing to show any consideration or
obligation of the agent involved to be fulfilled by principal with any
express contract therefrom to make it irrevocable till then and
thereby even the nomenclature mentions as irrevocable including
in the title as laid down in John Kotaiah supra that wording does
not make the GPA irrevocable for the principal got always absolute
power to revoke. Thereby there is nothing to interfere by sitting in
revision against the impugned order of the lower appellate Court.
HYDERABAD HIGH COURT
HONBLE DR. JUSTICE B. SIVA SANKARA RAO         

CIVIL REVISION PETITION No.4219 of 2016    

Dated:19-01-2017 

Siddareddy Venkatanagaraja Reddy 

Mir Shahamat Ali Khan 

Citation: AIR 2017 Hydera 59

      The plaintiff maintained the revision against the defendant of
O.S.No.942 of 2011 which is a suit filed in relation to the plaint
schedule property of Ac-24-10 guntas with building therein known
as Mount Pleasant house bearing Nos.8-2-249 to 267 at road No.3 
Banjara Hills, Hyderabad, within boundaries described for the
relief of declaration that action of defendant in cancelling
irrevocable General Power of Attorney (for short GPA) document
No.2119 of 1994 dated 16.09.1994 is illegal and arbitrary and
further to declare the plaintiff would continue as GPA holder of the
defendant in terms of the document supra and to cancel the
cancellation of irrevocable GPA document No.210 of 2011 dated
30.04.2011 and for permanent injunction restraining defendant
and persons claiming through him to give effect to said
cancellation of GPA dated 30.04.2011 supra of Sub Registrar
Khairatabad and such other just reliefs.
      2. The averments in support of the plaint in claiming the
reliefs are that the defendant is the absolute owner of the property
described in the plaint schedule supra and he executed GPA in
1994 referred supra appointing the plaintiff as GPA holder to safe
guard the property and to sell 6 acres out of it and plaintiff is
taking steps to safe guard the property and protect the interest of
defendant.  One M/s. Sultan-Ul-Uloom Educational Society 
claiming the property filed O.S.No.297 of 2004 for specific
performance and the defendant herein was the 1st defendant and
as GPA holder of the defendant herein, the plaintiff contested that
suit and against dismissal decree and judgment of O.S.No.297 of
2004 supra, the plaintiff society maintained CCCA.No.196 of 2006
in High Court and the appeal was also ended in dismissal and the
society filed SLP.No.27953 of 2009 in Supreme Court which is
pending and plaintiff is as GPA holder pursuing the matter there
through senior counsel.  While stood thus, the defendant
mischievously cancelled GPA of 1994 supra though it is irrevocable
GPA. The cancellation in 2011 by registered document supra 
discloses no reasons for cancellation and the cancellation is
unilateral and illegal and unsustainable for the same is protected
by Section 202 of the Indian Contract Act which no way enables
the defendant to cancel the GPA and plaintiff issued notice dated
20.05.2011 questioning the defendant of the cancellation and
seeking to restore the original GPA of 1994 and as defendant failed
to comply and failed to reply, plaintiff is constrained to file the suit
for said reliefs.  It is pending suit, the plaintiff filed I.A.No.317 of
2011 for temporary injunction, therein interim injunction was
granted on 15.07.2011 and for the violation of which plaintiff filed
I.A.No.858 of 2011 under Order 39 Rule 2(a) CPC.
      3. The defendant contested the suit vis--vis the injunction
petition with claim that the plaintiff being an agent as per the
original GPA of 1994, cannot put restriction on the power of the
defendant-principal to deal with the property as defendant is the
absolute owner admittedly and once the defendant already
cancelled the GPA in 2011 undisputedly, the question of not giving
effect to the cancelled GPA does not arise and there is nothing
remained to grant the suit reliefs and the suit reliefs have legal
sanctity and with no maintainability.  The principal does not loose
the powers to deal with his property merely because he executed a
GPA much less to question the same powers of principal to
maintain any suit by the agent and various averments of the plaint
that plaintiff is protecting the interest of the defendant as his GPA
holder in the litigation maintained by the Educational Society
supra are not correct and for plaintiff acted several times without
knowledge of defendant in a manner which he does not like to do
with embarrassment and unhappiness to the defendant by  
defaming the defendant and plaintiff also did not bring to the
notice of the defendant several issues.  So far as legal notice
concerned, before giving reply to the notice received from plaintiff,
plaintiff filed the suit with no opportunity and the contra
contentions are untenable and plaintiff not entitled to the suit
reliefs to question the fiduciary relationship till it is cancelled
including to question the cancellation and thereby there is no
cause of action to the suit and plaintiff is not entitled to any of the
suit reliefs.
      4. The suit was originally filed in vacation Court as
O.S.No.64 of 2011 and renumbered in the regular court as
O.S.No.942 of 2011 and the exparte interim injunction obtained in
vacation Court was in I.A.No.144 of 2011 and in regular court
renumbered as I.A.No.317 of 2011 supra.  The temporary 
injunction granted therein is to the extent of restraining the
defendant from giving effect to the cancellation of the irrevocable
GPA dated 30.04.2011 only in respect of Ac.6-00 guntas of land
covered by B schedule annexed to the GPA of 1994.  Impugning 
the said contest injunction order dated 15.07.2011, the defendant
maintained CMA.No.138 of 2011 before the XIV Additional Chief
Judge (FTC), City Civil Court, Hyderabad, where the learned Judge
from the contest by order dated 31.12.2015 observed that the
contents of GPA dated 16.09.1994 supra reads that same is 
irrevocable till final disposal of the property in an extent of 6 acres
and the respondent/plaintiff sold 6 acres to others and the
purpose of the GPA thereby completed and thereby there is no
prima facie case in favour of the plaintiff and the defendant
therefrom later cancelled the GPA of 1994 by cancellation dated
30.04.2011 and there is no balance of convenience in favour of the
plaintiff to question the same.  What he contends invoking Section
202 of the Indian Contract Act concerned, the Section has no
application to the case because no financial benefit is given to the
plaintiff under the GPA and plaintiff suffers no irreparable loss
therefrom and as per Ex.R4 the GPA is revoked and thereby the 
petitioner is not entitled to the temporary injunction and the order
dated 15.07.2011 granting temporary injunction in I.A.No.317 of
2011 passed by the lower Court is set aside by dismissing the
temporary injunction with a direction to the trial Court for early
disposal of the suit.
      5. The present revision is maintained by the plaintiff
impugning the said CMA No.138 of 2011 impugned order dated  
31.12.2015 allowing the appeal dismissing the temporary
injunction application and vacating the interim injunction even in
relation to the 6 acres of land.
      6. The grounds of revision vis--vis the submissions of the
learned counsel for the revision petitioner/plaintiff are that once
the GPA is mentioned as irrevocable from the contents the
cancellation is unsustainable and said unilateral cancellation has
no sanctity, even plaintiff never acted detriment to the interest of
the defendant pursuant to the GPA even to cancel.  It is the
plaintiff that contested as GPA holder in the suits maintained
against the defendant in O.S.Nos.154 & 181 of 2003 that cannot
be ignored which shows plaintiff protects pursuant to the GPA the
interest of the principal and the lower appellate Court ought to
have seen that GPA coupled with interest not capable of
cancellation and justice, equity and good conscience should not
have been allowed if applied for allowing the appeal setting aside
the trial Courts injunction order, thereby the revision is to be
allowed setting aside the lower appellate Courts order by restoring
the injunction.
      7. Heard both sides at length and perused the material on
record.
      8. The GPA which is covered by the material papers from
pages 38 to 43 which were the registered document No.2119 of 
1994 dated 16.09.1994 executed by defendant in favour of the
plaintiff with the title as irrevocable GPA (no doubt nomenclature
is not decisive but for to decide from the contents as to nature of
document) speaks that the Nizam VII settled certain amount upon
trust for benefit of 2nd son Prince Mouzzam Jah Bahadur in terms
of the trust deed dated 08.10.1949 for utilizing a part of corpus for
purchasing building for residence of prince without vesting in him
any right or interest except lifetime residence and the trustees
purchased the Mount Pleasant (described in the plaint schedule)
with flower gardens, fruit gardens, passages, pathways, swimming
pools etc., in an extent of Ac.24-10 guntas surrounded by
compound wall at road No.3 of the Banjara Hills from Sri Raja Ram
Dev Rao and Sri Pingle Venkat Ram Reddy under registered sale  
deed 01.05.1954 after obtaining permission from I Judge, City Civil
Court, Hyderabad in MC.No.237/2/1953-54 for residence of the
prince.  Prince Mouzzam Jah Bahadur on 14.09.1987 leaving 
behind his son Shahamat Ali Khan as the sole surviving issue (Mir
Shahamat Ali Khan-defendant) and he became absolute owner of  
the said property in terms of the trust deed supra and the trust is
the resolution dated 09.10.1989 declared him as absolute owner of
the said land with house known as Mount Pleasant and possessed  
the property in the building and appurtenant land supra pursuant
to the trust resolution dated 09.10.1989.  The principal (defendant)
in order to meet his necessities and to discharge of liabilities
intended to sell dwelling units bearing Nos.8-10-254 to 267
including the appurtenant land with internal roads, passages and
open land to various persons as the structures and land
appurtenant thereto and meant for common use did not come  
within the purview of Urban Land (Ceiling and Regulations) Act
1976 and the principal already applied for grant of exemption or to
approve scheme for developing the excess land.  The principal is
unable to attend the matters personally due to preoccupation and
requested the GPA (plaintiff) to act for him and on his behalf and to
do all acts, deeds and things necessary for the purpose and the
GPA agreed to do so on behalf of the principal.  The 15 clauses of
the GPA therefrom reads enable the GPA to apply and obtain 
permission, relaxations, exemption, approval, lay out and
clearances in respect of the property known as mount pleasant or
any part thereof from concerned Tribunals, Offices and Authorities
including the Urban Land Ceiling Authority, to pay incur and
deposit amounts, charges and expenses, collect and withdraw 
amount as far as Ac.6-00 guntas situated in the western side of
mount pleasant covered by B schedule annexed to the GPA,  
formulate, prepare and submit plans and schemes for development 
of portion of property admeasuring said 6 acres only and to attend
the work concerned to the development and incur expenses, to
negotiate sale or sell property of the 6 acres or part thereof for
such consideration as think proper and receive advances, deposits
and consideration in full or part and enter into agreement of sale
or other contract and pass receipt for the amounts received and
give discharge of any amounts, to appear in Courts, Tribunals or
other judicial or quasi judicial proceedings; to file, institute,
initiate, conduct, prosecute and defend all suits, appeals, petitions
etc., to sign and verify pleadings, affidavits, statements,
declaration, plans and other papers to file before Courts or
authorities and give evidence, summon document or witness, 
obtain certified copies and return documents entire steps for
protection for the 6 acres, registration and admission of documents
and receive documents after registration in relation to the said
Ac.6-00 guntas of the property covered by western side of mount
pleasant, appoint advocates or technical or professional persons
give and take return of record and revoke the vakalat or authority
in this regard.  In case of authorities under Urban Land Ceiling Act
ultimately finds for any person of the principal is holding excess
land beyond ceiling limit, GPA should surrender by exercising
choice of the owner vacant land lying on eastern side of mount
pleasant and not the B schedule referred supra and to do all acts,
deeds or things necessary and ancillary in concerning the GPA and
principal undertakes to ratify all deeds and acts etc., the GPA no
where mentions the same is supported by consideration or with
reciprocal remunerative obligation of anything incurred by the
agent.
      9. As held by this Court in M. John Kotaiah Vs. A. Divakar
And Others  mere description of power of attorney irrevocable is
immaterial.  If the interest created in the agent in the result or the
proceedings arisen after the exercise of powers then the agency is
revocable and cannot be said to be an irrevocable agency.  However
if the interest in the subject matter, say a debt payable to the
principal, is assigned to the agent as security simultaneously with
the creation of the power and thereafter exercised the power to
collect the debt for discharge of the obligation owned by the
principal in favour of the agent or a third party then agency
becomes irrevocable within the meaning of Section 202 of the
Contract Act.  Once the GPA is empowering to manage, control, 
supervise and develop the property of the principal or to let out,
realize the rent, prevent encroachment, appear before the authority
for the benefit of principal by fixing even any remuneration, there
was no existing obligation in favour of the agent such as debt
before execution of the GPA nor such an obligation created
simultaneously with the execution of GPA nor had the principal
assigned any interest simultaneously with the execution of GPA,
the impugned GPA even contain any stipulation of any irrevocable
for a certain period, it does not make as an irrevocable GPA since
principal got power to revoke.  For that conclusion the Court
referred catena of expressions of the foreign Courts and the pre-
independent expressions of the High Court including of the Madras
High Court, Bombay High Court and 2 expressions of the Apex 
Court in 1969 in Loon Karan Sethia Vs. I.E. John  and Bharat
Nidhi Limited Vs. Takhatmal .
      10. Further more, Sections 201 & 202 of the Indian Contract
Act reads in this regard that:
       201. Termination of agency.An agency is terminated by
the principal revoking his authority, or by the agent renouncing the
business of the agency; or by the business of the agency being
completed; or by either the principal or agent dying or becoming of
unsound mind; or by the principal being adjudicated an insolvent
under the provisions of any Act for the time being in force for the
relief of insolvent debtors. An agency is terminated by the
principal revoking his authority, or by the agent renouncing the
business of the agency; or by the business of the agency being
completed; or by either the principal or agent dying or becoming of
unsound mind; or by the principal being adjudicated an insolvent
under the provisions of any Act for the time being in force for the
relief of insolvent debtors."
    202. Termination of agency, where agent has an interest in
subject-matter.Where the agent has himself an interest in the
property which forms the subject-matter of the agency, the agency
cannot, in the absence of an express contract, be terminated to the
prejudice of such interest. Where the agent has himself an
interest in the property which forms the subject-matter of the
agency, the agency cannot, in the absence of an express contract,
be terminated to the prejudice of such interest." Illustrations
    (a) A gives authority to B to sell As land, and to pay himself,
out of the proceeds, the debts due to him from A. A cannot revoke
this authority, nor can it be terminated by his insanity or death. (a)
A gives authority to B to sell As land, and to pay himself, out of the
proceeds, the debts due to him from A. A cannot revoke this
authority, nor can it be terminated by his insanity or death."
    (b) A consigns 1,000 bales of cotton to B, who has made
advances to him on such cotton, and desires B to sell the cotton,
and to repay himself out of the price the amount of his own
advances. A cannot revoke this authority, nor is it terminated by his
insanity or death. (b) A consigns 1,000 bales of cotton to B, who has
made advances to him on such cotton, and desires B to sell the
cotton, and to repay himself out of the price the amount of his own
advances. A cannot revoke this authority, nor is it terminated by his
insanity or death."
      11. Interpreting Sections 201 & 202 of the Contract Act the
Apex Court in Suraj Lamp and Industries Private Limited Vs.
State of Harayana  and Church of Christ Charitable Trust and
Educational Charitable Society represented by its Chairman
Vs. Ponniamman Educational Trust represented by its Chair 
Person  held as to when GPA is irrevocable with reference to
Section 202 of the Indian Contract Act.
      12. This case on hand from the above facts comes only
under Section 201 and not with any bar under Section 202 of the
Act to revoke the GPA.  It is thus rightly concluded by the lower
appellate Court of the GPA given for Ac.6-00 guntas of land to sell,
as already sold and the transaction is completed even with third
party and for nothing remained thereunder and from any of the
terms of the GPA there is nothing to show any consideration or
obligation of the agent involved to be fulfilled by principal with any
express contract therefrom to make it irrevocable till then and
thereby even the nomenclature mentions as irrevocable including
in the title as laid down in John Kotaiah supra that wording does
not make the GPA irrevocable for the principal got always absolute
power to revoke. Thereby there is nothing to interfere by sitting in
revision against the impugned order of the lower appellate Court.
      13. Accordingly and in the result, the revision petition is
dismissed.  However, it is made clear that in deciding the suit lis
on own merits these observations if able to show contra no way
comes in the way. 
      Consequently, miscellaneous petitions, if any shall stand
dismissed.  No costs.
_____________________________________      
JUSTICE Dr. B.SIVA SANKARA RAO       
Date: 19.01.2017

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