RSA No. 24 of 2004 1 In the High Court for the States of Punjab and Haryana at Chandigarh … RSA No. 24 of 2004(O&M) Date of decision: May 28,2009 Oriental Bank of Commerce and another ..Appellants. Versus Bikram Singh and others ..Respondents Coram: Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr. N.C.Sahni, Advocate for the appellants. ... Rakesh Kumar Garg,J. This judgment shall dispose of five Regular Second Appeals i.e., (i) RSA Nos. 24 of 2004(arising out of Civil Appeal No.151/9.6.2001 and 17.9.2001 in Civil Suit No. 442 of 1998-Bikram Singh Dhami Versus Manger, Oriental Bank of Commerce and others (ii)RSA No. 919 of 2005(arising out of Civil Appeal No.94/8.10.2003 in Civil Suit No. 82 of 1998-Neela Bedi Versus Oriental Bank of Commerce and others ,(iii) RSA 1429 of 2005 (arising out of Civil Appeal No.14/12.2.2004 in Civil Suit No. 72 of 1998- Renu Gupta Versus Oriental Bank of Commerce and others,(iv) RSA 1780 of 2005 (arising out of Civil Appeal No.13/12.2.2004 in Civil Suit No. 219 of 1998/2002-Baldev Singh Bedi Versus Oriental Bank of Commerce and others ,(v) RSA 3445 of 2005 (arising out of Civil Appeal No.52/24.4.2004 in Civil Suit No. 82 of 2000-Vinod Bhushan Aggarwal Versus Oriental Bank of Commerce, as in all these appeals, on similar facts, the same substantial question of law arises. All the aforesaid appeals have arisen out of the Civil Suits filed by the plaintiffs for specific performance of the agreement to sell entered into by defendant Bari Doab Bank Ltd. which was later on merged with defendant No.1 Oriental Bank of Commerce vide Notification dated 7.4.1997 issued by the Government of India. As per the averments made in the Civil Suits, Varinder Kumar Sharma Chairman of the erstwhile Bari Doab Bank held a general power of RSA No. 24 of 2004 2 attorney dated 18.10.1993 executed in his favour by Ashish Raj son of Janak Raj, Director of Bari Doab Bank who was authorized to do so vide resolution dated 25.8.1993. It is the further case of the plaintiffs that the defendant Bari Doab Bank Ltd. was owner of land situated in the revenue estate of village Premgarh as per jamabandi for the year 1991-92. It was further represented by the aforesaid Varinder Kumar Sharma to the plaintiffs that he was authorized by the General Power of Attorney dated 18.10.1993 given by the Bank to him to sell the land of the bank. The agreements to sell were executed by Varinder Kumar Sharma on behalf of defendant-Bank in favour of the plaintiffs in each case, He also received earnest money/part payment towards the sale consideration and it was agreed that the land will be sold at the rate of Rs. 15000/- per marla and the sale deeds will be executed within six months time. It was also incorporated in all the agreements that the balance sale consideration will be paid at the time of registration of the sale deeds and all the expenses for the sale deeds shall be borne by the purchaser. It was also stipulated in the agreements that in the event of failure of plaintiffs to get the sale deed executed in their favour, the earnest money shall stand forfeited and their right to purchase the land shall be extinguished and in case Bari Doab Bank Ltd. failed to execute the sale deed, the purchaser shall be at liberty to seek recourse to law and shall get the sale deed registered through the court. It was further averred in the suits that the plaintiffs approached the management of the Hoshiarpur Branch of Bari Doab Bank for execution of the sale deed as per the terms of the agreements. However, a reply was given that a moratorium has been imposed upon the Bank by the Reserve Bank of India whereby they have been debarred from sale/purchase of any estate of the Bank through the currency of moratorium period. It was further submitted in the plaint that the plaintiffs had always been ready and willing to perform their part of the agreement and were in possession of sufficient funds to pay the remaining sale consideration as well as the necessary expenses and the plaintiffs were still ready and willing to perform RSA No. 24 of 2004 3 their part of the agreement. However, none from the side of the defendants came to execute the sale deeds in favour of the plaintiffs. The plaintiffs came to know that a merger was effected whereby Bari Doab Bank Ltd. was merged into the Oriental Bank of Commerce and as per the merger, the Oriental Bank of Commerce being the successor of Bari Doab Bank was bound by the agreement executed by his predecessor. After taking over of the Bari Doab Bank by the Oriental Bank of Commerce, the plaintiffs issued notices calling upon defendant No.1 and defendant No.2 to execute the sale deeds in favour of the plaintiffs without any further delay. The said notices were duly served upon the defendant Nos.1 to 3 but none came to execute the sale deeds in favour of the plaintiffs. Hence the suit for possession by way of Specific Performance of the Agreement to Sell with an alternative prayer for liquidated damages was filed. In response to the notices issued by the Court, the defendants appeared and contested the suit by filing joint written statement raising various preliminary objections. On merits, it was submitted that Varinder Kumar Sharma/defendant No.4 had no valid authority to enter into an alleged agreement. Defendant No.3 i.e., Bari Doab Bank being a company was required to pass a resolution for empowering defendant No.4 for entering into such an agreement. It was further submitted that defendant Nos.1 and 2 were not bound by the alleged agreement executed by the defendant No.4 which was beyond his competence. However, it was admitted that moratorium was imposed on defendant No.3 and the merger has taken place vide notification dated 7.4.1997 and the defendant Oriental Bank of Commerce had taken over all the assets and liabilities of the erstwhile Bari Doab Bank. The plaintiff filed replication controverting the averments made in the written statement stating that defendant No.4 had a valid authority on behalf of defendant No.3 to enter into agreement to sell and to execute sale deed in respect of the suit property and defendant No.4 executed various sale deeds prior to the dispute of merger of Bari Doab Bank into the Oriental Bank of RSA No. 24 of 2004 4 Commerce. It was further stated that a valid resolution authorizing defendant No.4 was passed by defendant No.3 and defendant Nos.1 and 2 are bound with the acts of their predecessor which he was duly authorized and competent to do. On the basis of the pleadings, the issues were farmed in each suit and the main/basic issue in all these suits was as under:- “Whether the plaintiff is entitled to the possession of the suit land as prayed for by way of Specific Performance of the Agreement to Sell? It is relevant to point out at this stage that in all these suits, execution of the agreement to sell in question in favour of the plaintiffs by Varinder Kumar Sharma, Chairman of the erstwhile Bari Doab Bank were not disputed. What was disputed was the competence of aforesaid Varinder Kumar Sharma to execute the agreement to sell on behalf of the aforesaid Bank. In their evidence, the defendant Bank examined DW1 Dev Raj who clearly admitted that Varinder Kumar Sharma was given the power of attorney on 18.10.1993 by Bari Doab Bank to sell and it was further admitted by this witness that aforesaid Varinder Kumar Sharma had entered into an agreement to sell in question for the sale of the suit land. The receipt of earnest money/part payment by the defendant was also admitted. The trial Court on appreciation of evidence held all the issues in favour of the plaintiffs and decreed the suit with costs for possession by way of Specific Performance of the agreement to sell in question in the Civil Suit and directed the defendants to execute and register the sale deeds in favour of the plaintiffs. Feeling aggrieved there from the judgment and decree of the trial Court, the defendant Nos.1 and 2 Oriental Bank of Commerce filed appeal in all these suits, which were dismissed by the lower Appellate Court. Not satisfied, the defendant Oriental Bank of Commerce has filed RSA Nos. 24 of 2004, 919 of 2005, 1429 of 2005, 1780 of 2005 and 3445 of 2005 challenging the judgment and decrees of the courts below. Learned counsel appearing on behalf of the defendant Oriental RSA No. 24 of 2004 5 Bank of Commerce has vehemently argued that both the courts below have failed to appreciate and recognize the real controversy between the parties and have erred in not applying their mind to the only important question involved in the litigation about the competence of Varinder Kumar Sharma to sell away the property of the bank as its general attorney drawing powers by virtue of the deeds of general attorney dated 18.10.1993 (Ex.P-26 in RSA No.24 of 2004). According to the counsel for the appellants, the aforesaid document which is a special power of attorney has been misinterpreted by the courts below. As per the arguments raised by the counsel for the defendants, the aforesaid document of General Power of Attorney dated 18.10.1993 gives only limited powers to Varinder Kumar Sharma to execute the sale deed on behalf of the Bank and to tender the documents for registration before the Sub Registrar and to receive the sale consideration or the balance of it on behalf of the Bank and nothing more as he was not empowered to sell away the immoveable property of the Bank nor he was authorized to take a decision himself about the sale of immoveable property of the Bank. The right to sell immoveable property of the Bank and its decision was vested in the Bank and that judgment making power was never extended or delegated to Varinder Kumar Sharma and thus the following substantial question of law arises in all the appeals:- “Whether the Power of Attorney dated 18.10.1993 executed in favour of the defendant Varinder Kumar Sharma can be interpreted to authorize him to take a decision for selling the property of the Bank or to enter into an agreement to sell the property of the Bank or at the best be recorded as a Special Power of Attorney for limited purpose of ministerial Acts i.e., merely executing a sale deed and tendering before the Sub Registrar for registration etc.?” On the other hand, learned counsel appearing for the plaintiffs have vehemently argued that the courts below on appreciation of evidence have recorded a concurrent finding of fact that agreement to sell in question in each RSA No. 24 of 2004 6 case stood proved and further Varinder Kumar Sharma was competent to execute the agreement to sell on behalf of the defendant-Bank on the basis of the Power of Attorney dated 18.10.1993 and no substantial question of law arises in this case. It has been further argued by the learned counsel for the plaintiffs that the Bari Doab Bank erstwhile owner of the property in dispute had never disputed the authority of Varinder Kumar Sharma to execute the agreement to sell in question on behalf of the Bank and therefore, the appellant Oriental Bank who is successor in interest of the erstwhile Bari Doab Bank cannot raise any objection to the authority of Varinder Kumar Sharma and thus the appeals filed by the Oriental Babnk of Commerce are liable to be dismissed. I have heard learned counsel for the parties and perused the record. Certain facts are not in dispute. The factum of execution of agreement to sell in favour of plaintiffs by Varinder Kumar Sharma Chairman of the erstwhile Bari Doab Bank on behalf of the said Bank and acceptance of earnest money by the defendants is admitted. It is also an admitted fact that defendant Nos.1and 2 i.e., Oriental Bank of Commerce have stepped into the shoes of erstwhile Bari Doab Bank Defendant No.3 and have taken over all the assets and liabilities of the aforesaid Bank as per the scheme of the merger as notified vide Notification dated 7.4.1997 which is on the record. It is also not in dispute that on the basis of the aforesaid scheme of merger , the appellant-Bank was bound by all the contracts and agreements entered into previously by Bari Doad Bank and the Bari Doab Bank has not disputed the authority of Varinder Kumar Sharma to execute the agreement to sell in question on its behalf. Even execution of the General Power of Attorney dated 18.10.1993 given by Ashish Raj, Director of the Bari Doab Bank given to Shri Varinder Kumar Sharma has not been disputed. It has also come on the record that on the basis of the aforesaid attorney, Shri Varinder Kumar Sharma had executed many other agreements to sell and further executed the sale deeds which have never been challenged either by the defendant-Bari Doab Bank or defendant Nos.1 and 2, i.e., Oriental Bank of RSA No. 24 of 2004 7 Commerce. The only defence which has been taken up to contest the suits filed by the plaintiffs by the Oriental Bank of Commerce is that on the basis of the power of Attorney dated 18.10.1993, the attorney was authorized only to execute the sale deeds and tender them before the Registrar for registration and was not competent to take a decision to sell land or to enter into an agreement to sell. Thus, the defendants have taken a specific stand that agreement to sell executed by Varinder Kumar Sharma was beyond his competence and an argument was raised before the courts below that resolution dated 25.8.1993 passed by the Bari Doab Bank authorizing its Director Ashish Raj to execute General Power of Attorney dated 18.10.1993 in favour of Varinder Kumar Sharma was not validly passed. However, the aforesaid resolution was never produced by the defendant-Bank which was admittedly in the custody of defendants. However, in view of the aforesaid stand taken by the defendants, it was incumbent upon them, to bring on record evidence to prove that their stand. Except the objection taken, the defendants have not produced any record to show that general power of attorney dated 18.10.1993 was not validly executed in favour of Varinder Kumar Sharma. Rather, there is a clear admission by the witness(es) of defendant/appellant admitting the fact that Varinder Kumar Sharma was authorized by the Bari Doab Bank to execute the agreement to sell on behalf of the aforesaid Bank. It has also been noticed earlier that in fact the Bari Doab Bank has not disputed the competence of Varinder Kumar Sharma to execute the agreement to sell on its behalf. No doubt, the appellant-Oriental Bank of Commerce was not bound to honour the agreements of Bari Doab Bank if the same were not validly executed but it was for the appellants to show how these agreements to sell etc. were not legally and validly executed. The appellant-Bank has miserably failed to place on record any evidence in support of their case. On the other hand, as per the terms and conditions of the merger, the appellants were bound to honour all the acts and agreements executed by the erstwhile Bari Doab Bank with third parties. Faced with this situation, learned counsel for the appellant has RSA No. 24 of 2004 8 vehemently argued that even if it is assumed that General Power of Attorney was validly executed by the Bari Doab Bank in favour of Varinder Kumar Sharma yet on the basis of the aforesaid power of Attorney, Varinder Kumar Sharma was not competent to execute the agreement to sell on behalf of the Bank as from the language of the document i.e., General Power of attorney dated 18.10.1993, it is crystal clear that Varinder Kumar Sharma was authorized only to do the ministerial acts i.e., to execute the sale deeds and tender the same for registration before the Sub Registrar and was not competent to take a decision to sell the land. In support of his argument, learned counsel for the appellant has relied upon a judgment in the case of Adaikappa Chettjar Versus Thomas Cook & Son (Bankers) Ltd. AIR 1933 Privy Council 78 and has argued that the general words used in the subsequent clauses of power attorney are to be read with special powers given in the earlier clauses and cannot be considered so as to enlarge the restricted powers mentioned. The argument of the learned counsel is that clause No.5 of the Attorney is general in nature which authorizes the attorney holder only to do all the necessary acts which are necessary as per the authorization given in the specific clauses i.e., clauses 1 to 4 of the attorney and therefore, on the interpretation of the documents, it cannot be held that Varinder Kumar Sharma was authorized to execute the agreement to sell in question. There is no dispute with the law laid down by the Privy Council in the judgment relied upon by the counsel for the appellant. Rather, in this authority, it has also been observed as under:- “There is no principle of construction which permits a document contrary to its actual wording to be read as though it followed a proposed precedent unless between the parties it has been rectified or at least is such as would by the Court be rectified. In construing a power of attorney plaintiff sought to read the word “accept” in a certain clause, suggesting that it had been omitted by a copyist 's error in copying the clause from the power of attorney given to RSA No. 24 of 2004 9 another man which contained this word.” Meaning thereby that the construction of a document cannot be against the actual wording. In Dadi Reddy Sivanarayana Reddu Versus Kasi Reddy Chinnamma 2001(1) Civil Court Cases 610 (A.P.), it has been held as under:- “ It is well settled that where the document is to be construed, the document itself should be looked into to gather the intention of the parties. The document has to be construed as a whole and no clause can be read in isolation in an attempt to resort to extraneous enquiry as to what the parties thought or intended. If there is any ambiguity in the language employed it is however permissible to look to the surrounding circumstances to determine what was intended.” To decide the controversy effectively, it is necessary to refer to the various clauses of the general power of attorney dated 18.10.1993, which are as under:- “General Power of Attorney. Stamp Paper costing Rs. 15/- Sheets: Two Bearing No.14231 dt. 18.10.93 Stamp Vender: Know all men by this Power of Attorney that Bari Doab Bank Ltd., with its Registered Office at Gowshala Bazar, Hoshiarpur has vide Circulatory Resolution dated the 25th August, 1993, has authorized me, Ashish Raj son of Lala Janak Raj Ji, resident of Hoshiarpur, a Director of the Bank, to execute on behalf of the said Bank, the General Power of Attorney, in favour of Shri Virender Kumar Sharma son of late Pandit Durga Dass, resident of Hoshiarpur and Chairman and Chief Executive Officer of the Bank, to do the following acts for and on behalf of the said Bank:- RSA No. 24 of 2004 10 1. That the said Shri Virender Kumar Sharma has the right to execute the sale deed or deeds and to do other acts required for the sale of agricultural land situated at Premgarh, within the Municipal Limits of Hoshiarpur of which the Bank is the sole owner, on behalf of the said Bank. 2. That the said Shri Virender Kumar Sharma has a right to execute the sale deed or deeds of any part of the said property and to present for registration, before the Sub-Registrar concerned. 3. That the said Attorney is authorized to receive consideration of sale deed before the Sub Registrar and to give a receipt for the same to the purchaser on behalf of the Bank. 4. That the said Attorney is authorized to do any act or present any application necessary to complete the sale on behalf of the said Bank. 5. That the Bank hereby agrees that all the acts, deeds and things, lawfully done by the said attorney shall be constructed, as acts, deeds and things done by the Bank and the Bank undertakes to satisfy and confirm whatever, the said Attorney shall do or cause to be done for the bank by virtue of the powers hereby given. In witness whereof, I have signed this Power of Attorney and the Common Seal the Bank has been fixed this 18th October, the 1993 at Hoshiarpur. Sd/- Ashish Raj) Director for Bari Doab Bank Ltd. Gowshala Bazar, Hoshiarpur Witnesses: Lambardar Brijpal Prem Garh, Hoshiarpur Deepak Puri s/o Shadi Lal Puri, 248, Model Town, Hoshiarpur.” It may be noticed that in clause 1 of the said power of attorney, it has been clearly mentioned that on behalf of the said Bank, Varinder Kumar RSA No. 24 of 2004 11 Sharma has a right to execute the sale deed or deeds and to do other acts required for the sale of agricultural land situated at Prem Garh within the municipal limit of Hoshiarpur, of which the Bank is the sole owner. Thus, vide this clause a specific and clear authority has been given to Varinder Kumar Sharma to execute the sale deed or deeds and to do other acts required for the sale of agricultural land on behalf of the Bank of the land situated at Prem Garh within the limits of Hoshiarpur. This clause does not indicate that the authority of Varinder Kumar Sharma was limited only to the extent of executing the sale deed and tendering the same before the Registration authorities as argued by the learned counsel for the appellant. Rather a general and specific power has been given to Varinder Kumar Sharma to execute the sale deed or sale deeds and to do all other acts required for the sale of agricultural land situated at Prem Garh. No limitation has been placed on the authority of the attorney holder. Thus, the general power of attorney cannot be given the meaning as sought to be argued by the learned counsel for the appellant. It is relevant to point out here that Section 85 of the Indian Evidence Act, 1872 raises a presumption that every document purporting to be a power-of-attorney, and to have been executed before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated. Relying upon the provisions of Section 85 of the Evidence Act, the Delhi High Court in the case of Citibank N.A., New Delhi vs. Juggilal Kamlapat Jute Mills Co. Ltd. -AIR 1982 Delhi 487 held as under:- “20. In the absence of the provisions contained in Section 85 of the Evidence Act, any party to a suit etc. relying on a power of attorney would have to prove it like any other document by producing in a witness box the executant of the document, or the person in whose presence it was so executed or the person in whose presence it was so executed, or the person acquainted with the signatures of the executant etc. as the case may be. If that party is a company RSA No. 24 of 2004 12 corporate in India or in any other country, it would be further required to prove that the person or persons executing the power of attorney on its behalf had been duly authorized by means of a resolution duly passed in accordance with law and the articles of association. The purpose of section 85, in my view, is to eliminate all