LI Network
Published on: 22 August 2023 at 15:15 IST
The Supreme Court has ruled that if a Power of Attorney is found to be invalid, any actions carried out based on it cannot be deemed as valid.
The Court’s decision was made in response to an appeal challenging the judgment of the Madras High Court.
The High Court had allowed a second appeal, overturning the decisions of the First Appellate Court and reinstating the Trial Court’s order.
The two-Judge Bench, composed of Justice Vikram Nath and Justice Ahsanuddin Amanullah, emphasized that once the First Appellate Court had concluded that the plea of non est factum (mistake as to the nature of the document signed) was substantiated, this factual finding should not have been overturned by the High Court in the Second Appeal.
The Court stated, “The Power of Attorney, having been found to be invalid, any further action taken pursuant to it, cannot also be held to be valid. Therefore, the judgments relied upon by the defendant respondents are of no assistance to them.”
The Bench highlighted that the First Appellate Court had meticulously reviewed both oral and documentary evidence on record to arrive at its conclusion that the plea of non est factum was indeed proven.
Senior Advocate Jayanth Muth Raj and Advocate Nishe Rajen Shonkar represented the appellants, while Advocate K.K. Mani represented the respondents.
Case Background:
The case revolved around a land dispute in a Tamil Nadu village. The land initially belonged to Natchimuthu, the first plaintiff, who executed a gift deed transferring 50 cents of land to his first wife. The suit was jointly filed by the husband and wife, who were illiterate and financially constrained. They requested the deceased (respondent) to develop the land into plots and sell them after obtaining necessary governmental permissions.
As consideration, the deceased was offered five cents of land and granted a Power of Attorney by the plaintiffs. However, the plaintiffs claimed that the deceased exploited their lack of literacy and added two unauthorized clauses to the Power of Attorney.
The plaintiffs later discovered that the deceased had executed sale deeds in favor of his father and brother. The Trial Court dismissed the plaintiffs’ plea, the First Appellate Court allowed their appeal, and the High Court restored the Trial Court’s order, leading to the Supreme Court appeal.
The Supreme Court analyzed the circumstances and noted, “The market value as alleged would be more than Rs.3 Lakhs at the relevant time. The guideline value was estimated to be Rs.22,500/- whereas the transfer was affected for a consideration shown as Rs.12,000/-. The defendant failed to explain this conduct of his of being in such a haste to transfer the property on the same day to his own father and brother.”
The Court concluded that the defendant’s actions indicated a lack of intent to invest further, suggesting that they anticipated losing the case.
The Court found that the absence of documentary evidence demonstrating consideration receipt meant that possession was not validly transferred to the defendant.
The Court criticized the High Court for exceeding its jurisdiction and disturbing factual findings without proper appreciation of the pleadings.
The Apex Court ultimately allowed the appeal and set aside the High Court’s judgment.
