MRS. UMADEVI NAMBIAR versus THAMARASSERI ROMAN CATHOLIC DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER JOSEPH KAPPIL
[2022] 5 S.C.R. 579, Supreme Court of India, 2022
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
[2022] 5 S.C.R. 579
579
MRS. UMADEVI NAMBIAR
v.
THAMARASSERI ROMAN CATHOLIC DIOCESE REP BY ITS
PROCURATOR DEVSSIA’S SON REV. FATHER JOSEPH
KAPPIL
(Civil Appeal No. 2592 of 2022)
APRIL 01, 2022
[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
Transfer of Property Act, 1882: ss. 41, 3 – Power of Attorney
– Alienation of Property – In the instant case the appellant executed
a general Power of Attorney in favour of her sister – After sometime
the said power of attorney was cancelled by the appellant – But in
the meantime the appellant’s sister executed four different documents
in favour of third parties, assigning/releasing some properties –
Thereafter the appellant filed suit against the assignees/releasees
and the same was decreed but later the appellant came to know that
the latter had sold the property to the respondent – Appellant filed
another suit seeking partition and separate possession of her share
in the suit property and the same was decreed – The respondent
preferred appeal against the decision before the High Court and
the same was allowed on the ground that the appellant failed to
seek relief of setting aside the document of tranfer even though the
appellant has constructive notice of such alienation u/s 3 of the Act
and therefore the appellant was not entitled to a decree of partition
and the fact that the transferee cannot be held to have excercised
‘reasonable care’ as required by the Proviso to s. 41 of the Act is of
no help as the appellant has acquiescenced to
such alienation by
not seeking the relief of setting aside the document of transfer –
Hence instant appeal – Held: It is a fundamental principle of law
of transfer of property that ‘no one can confer a better title than
what he himself has’ (Nemo dat quod non habet) – There was
concurrent finding of both the trial court and the High Court that
the respondent did not excercise reasonable care as required by the
Proviso to s. 41, which if they had excercised they could have easily
found out that there was no power of sale with the holder of the
power of attorney – Since the drafting of power of attorney was
plain and simple by which the holder was empowered to lease out
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the property, power to execute document offering property as security
for any borrowal and there was no mention of any express power to
sell and therefore the alienation made the appellant’s sister (Holder
of Power of Attorney) was illegal and as the vendors of the
respondent did not have any title they had nothing to convey –
High Court order is set aside and order of trial court is restored.
Transfer of Property Act, 1882 – s. 3, Explanation I and II –
Interpreatation Clause – Constructive Notice – Legal Position –
Two things are important for the interpretation clause to come into
effect so far as ‘constructive notice’ is concerned (i) wilful abstention
from an enquiry or search; and (ii) gross negligence – Explanation
I and Explanation II under the 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.
Suit of Partition – Cancellation of alienation – When
necessary – Legal Position – It is not always necessary for a plaintiff
in a suit for partition to seek the cancellation of the alienations –
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.
Allowing the appeal, the Court
HELD: 1. 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
predecessor-in-interest of the respondent. It remains a plain and
simple fact that the deed of Power of Attorney executed on
21.07.1971 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
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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
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. [Paras 8, 9][585-E-F, H; 586-A-D]
2. 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. Two things are important for the
interpretation clause to 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.
[Paras 12, 13][586-H; 587-A; 588-C-D]
3. It is not always necessary for a plaintiff in a suit for
partition to seek the cancellation of the alienations. 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
MRS. UMADEVI NAMBIAR v. THAMARASSERI ROMAN CATHOLIC
DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER
JOSEPH KAPPIL
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[2022] 5 S.C.R.
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. [Para 15][588-F-G]
4. As a matter of plain and simple fact, 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. [Para 17][589-B-C]
Delhi Development Authority v. Durga Chand Kaushish
(1973) 2 SCC 825 : [1974] 1 SCR 535; Syed Abdul
Khader v. Rami Reddy and Others (1979) 2 SCC 601 :
[1979] 2 SCR 424 – held inapplicable.
5. 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. [Para 19][589-E-F]
Church of Christ Charitable Trust and Educational
Charitable Society v. Ponniamman Educational Trust
(2012) 8 SCC 706 : [2012] 6 SCR 404 – relied on.
Case Law Reference
[1974] 1 SCR 535
held inapplicable
Para 16
[1979] 2 SCR 424
held inapplicable
Para 16
[2012] 6 SCR 404
relied on
Para 18
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2592
of 2022.
From the Judgment and Order dated 23.11.2016 of the High Court
of Kerala at Ernakulam in Appeal Suit No.464 of 1997.
Dushyant A. Dave, Sr. Adv., Harish Beeran, Mushtaq Salim,
Usman Ghani Khan, Azhar Assess, Sayid Marzook Bafaki, Advs. for
the Appellant.
Thomas P. Joseph, Ramesh Babu M. R., Advs. for the
Respondent.
The Judgment of the Court was delivered by
V. RAMASUBRAMANIAN, J.
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.
2. We have heard Shri Dushyant A. Dave, learned senior counsel
for the appellant and Shri Thomas P. Joseph, learned counsel for 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 respondent herein
MRS. UMADEVI NAMBIAR v. THAMARASSERI ROMAN CATHOLIC
DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER
JOSEPH KAPPIL
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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 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 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
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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 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 A-1 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 predecessor-in- 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 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
MRS. UMADEVI NAMBIAR v. THAMARASSERI ROMAN CATHOLIC
DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER
JOSEPH KAPPIL [V. RAMASUBRAMANIAN, J.]
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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 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:
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
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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-
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“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 I-Where any transaction relating to
immoveable property is required by law to be and has been
effected by a registered instrument, any person acquiring 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
sub-district, or where the registered instrument has been registered
under sub-section (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
Sub-Registrar within whose sub-district 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.
MRS. UMADEVI NAMBIAR v. THAMARASSERI ROMAN CATHOLIC
DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER
JOSEPH KAPPIL [V. RAMASUBRAMANIAN, J.]
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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 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
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 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 A-1, the deed of general Power of
1 (1973) 2 SCC 825
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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
decisions could be applied to the advantage of the respondent. As a
matter of plain and simple fact, Exhibit A-1, 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.
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.
Devika Gujral
Appeal allowed.
(Assisted by : Mahendra Yadav, LCRA)
2 (1979) 2 SCC 601
3 (2012) 8 SCC 706
MRS. UMADEVI NAMBIAR v. THAMARASSERI ROMAN CATHOLIC
DIOCESE REP BY ITS PROCURATOR DEVSSIA’S SON REV. FATHER
JOSEPH KAPPIL [V. RAMASUBRAMANIAN, J.]