51-Year-Old Power of Attorney: Punctuation Marks Cannot Be Made To Convey a Power of Sale, Rules SC
Moneylife Digital Team 11 April 2022
Ruling in favour of the appellant who had created a power of attorney (PoA) in 1971, the Supreme Court says the possession of an agent under a deed of PoA is also the possession of the principal and that any unauthorised sale made by the agent will not tantamount to the principal parting with possession. 
 
In the judgement earlier this month, a bench of justice Hemant Gupta and justice V Ramasubramanian said, "...deed of PoA did not contain a clause authorising 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."
 
"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," the bench says.
 
The property, in this case, originally belonged to Ullattukandiyil Sankunni. After his death, the property devolved upon his two daughters, Umadevi Nambiar and Ranee Sidhan. On 21 July 1971, Umadevi executed a general PoA in favour of her sister Ranee. However, on 31 January 1985, Umadevi cancelled the PoA. In the meantime, Ranee was found to have executed four different documents in favour of certain third parties assigning and releasing some properties.
 
Umadevi then filed a suit in 1986, followed by another in 1988 against the assignees or releasees. On 7 January 1989, a preliminary decree was passed in the second suit. However, Umadevi came to know later that the assignees or releasees had sold the property to Thamarasseri Roman Catholic Diocese, the respondent in this case.
 
Umadevi filed another suit in the same year, seeking partition and separate possession of her half share in the property. The trial court granted a preliminary decree in her favour. However, the regular appeal filed by the Thamarasseri Roman Catholic Diocese was allowed by a division bench of the High Court by the judgement and decree impugned in this appeal.
After this, Umadevi approached the apex court through senior counsel Dushyant A Dave and challenged the judgement given by the high court.
 
During the hearing, the SC observed that the trial court upheld that the PoA document did not confer any power to sell the property and, therefore, Ranee was not entitled to alienate the property. Since the original alienations made in 1981 and 1982 by Ranee were null and void on account of lack of express power to sell, the subsequent sale made by those alienees in favour of the Diocese was also held to be invalid. Based on these findings, the trial court decreed the suit.
 
While reversing the judgement and decree of the trial court, the high court, however, held Umadevi was not entitled to a decree for partition because of her failure to seek the cancellation of the alienations, despite having constructive notice of the separations.
 
Thomas P Joseph, counsel for the Diocese, contended that while construing a document, all punctuation marks should be given due weightage. "The PoA was drafted by a doyen of the Bar. Clause 22 of the deed of PoA conferred upon Ranee the power to execute and register all documents. 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 therefore, a bonafide purchaser like the respondent should not be made to suffer," he contended.
 
The SC, however, says it does not agree with the submissions by advocate Joseph. It says, "It remains a plain and simple fact that the deed of PoA executed by Umadevi on 21 July 1971 in favour of her sister, Ranee contained provisions empowering the agent to grant leases under clause 15; 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 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 authorising and 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 (the Diocese). This is for the reason that the draftsman has chosen to include an express power to lease out the property; and 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 PoA. 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," the bench says.
 
"It is not always necessary for a plaintiff in a suit for partition to seek the cancellation of the alienations," the SC says. "There are several reasons 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 co-­sharer. 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 Umadevi, her failure to challenge the alienations."
 
While allowing the appeal filed by Umadevi, the apex court set aside the judgement of the high court and restored the judgement and preliminary decree passed by the trial court.
 
(Civil Appeal No.2592 of 2022)
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