2022 (2) TMI 935 - SC - Indian Laws

Supreme Court Restores Trial Court's Validity Finding on Sale Deed

The Supreme Court set aside the High Court's judgment, restoring the Trial Court's findings that the sale deed was valid. The Plaintiff was not entitled ... Presentation and registration by the executant as effective compliance with presentation requirements - requirement of a true copy of the document presented for registration under Section 18A - distinction between agent presenting under a power-of-attorney and the executant presenting under Section 32(a) - scope of enquiry of the registering officer under Sections 34 and 35 limited to identity and admission of execution - effect of revocation of agency as against third parties - revocation operative only on notice - presumption of regularity arising from registration and the burden to prove fraud or invalid presentationPresentation and registration by the executant as effective compliance with presentation requirements - presumption of regularity arising from registration and the burden to prove fraud or invalid presentation - Whether non-production of the original power of attorney and presentation of the sale deed by the power of attorney holder rendered the registration invalid - HELD THAT: - The Court held that where the person who actually executes a document presents it for registration, he falls within the category of 'person executing' under Section 32(a) and may present the document for registration. The registering officer's duty, inquiring under the Registration Act, is to be satisfied about identity and admission of execution; the enquiry does not extend to adjudicating the antecedent validity of the agent's authority. Consequently, non production of the original power of attorney was not fatal to registration and the presentation and registration by the second Defendant as executant could not be invalidated merely on that ground. The registered sale deed therefore attracted the presumption of regularity unless fraud or invalid presentation was proved, which was not established on the record. [Paras 22, 25, 26, 32, 54]Non production of the original power of attorney did not vitiate the registration; the sale deed was validly presented and registered.Requirement of a true copy of the document presented for registration under Section 18A - distinction between Section 18A's object and proof of authority to execute - Whether Section 18A required production of the original power of attorney at the time of registering the sale deed - HELD THAT: - The Court explained that Section 18A (a state amendment) mandates production of a true copy of the document presented for registration to avoid delay in copying for the register; it was enacted to expedite registry work and does not mandate production of the original power of attorney where the document presented for registration is the sale deed. The High Court's reliance on Section 18A as requiring the original power of attorney was held to be erroneous. [Paras 12, 15, 16, 32]Section 18A does not require production of the original power of attorney; it concerns the true copy of the document presented for registration.Effect of revocation of agency as against third parties - revocation operative only on notice - termination of agency and its effect under the Contract Act - Whether the alleged cancellation/surrender of the power of attorney before registration revoked the agent's authority as against the purchaser who dealt with the agent - HELD THAT: - Applying principles of agency and Sections of the Contract Act, the Court reiterated that revocation of an agent's authority takes effect as to the agent when known to him and as to third parties when made known to them. The plaintiff's evidence of surrender/cancellation on the alleged date was discredited by contemporaneous documentary correspondence (Exhibit DX) and by the absence of notice to the purchaser. On the material, cancellation was not established so as to affect the purchaser; even if cancellation had occurred, it was not shown to have become known to the first Defendant prior to the sale. [Paras 52, 53, 54, 57, 59]The alleged cancellation of the power of attorney was not made out as against the purchaser; revocation did not operate to invalidate the sale in favour of the first Defendant.Presumption of regularity arising from registration and the burden to prove fraud or invalid presentation - Whether the High Court was justified in interfering in the second appeal by reappreciating the evidence and setting aside concurrent findings - HELD THAT: - The Court observed that the High Court, in a second appeal under Section 100 CPC, overstepped by reappreciating evidence and substituting its own view on matters of fact which were the province of the trial and first appellate courts. Although the first appellate court's order did not fully comply with the formal requirements of Order XLI Rule 31, the High Court's reversal on factual appreciation was impermissible absent a substantial question of law or perversity. The material documents and correspondence supported the concurrent findings which the High Court had disturbed. [Paras 48, 58, 63]High Court's interference in reappreciating facts was unjustified; its decree setting aside the registered sale was set aside.Final Conclusion: The appeal is allowed. The judgment of the High Court setting aside the sale and declaring the mutation null and void is set aside; the findings of the Trial and First Appellate Courts that the sale deed was validly executed and registered are upheld. The plaintiff failed to prove cancellation of the power of attorney or notice to the purchaser; parties to bear their own costs. Issues Involved:1. Validity of the sale deed and consideration.2. Entitlement to relief of declaration and permanent injunction.3. Entitlement to rendition of accounts from the second Defendant.4. Estoppel from filing the suit.5. Proper valuation for court fee and jurisdiction.Issue-wise Detailed Analysis:1. Validity of the Sale Deed and Consideration:The Plaintiff claimed that the sale deed executed by the second Defendant was fraudulent and void, alleging it was done without proper authority and for a lesser consideration of Rs. 30,000 instead of the agreed Rs. 55,000. The Plaintiff argued that the power of attorney was canceled before the sale deed execution. The High Court found that the power of attorney was indeed canceled on 02.02.1987, and thus, the second Defendant was not competent to execute the sale deed. The Trial Court, however, found the sale deed valid, supported by the sub-registrar's testimony and the marginal witnesses, and concluded that the sale was conducted legally for Rs. 30,000.2. Entitlement to Relief of Declaration and Permanent Injunction:The Plaintiff sought a declaration that he was the owner in possession of the property and that the mutation showing the sale in favor of the first Defendant was null and void. The High Court decreed the suit, declaring the Plaintiff as the owner and invalidating the mutation. The Trial Court, however, declined the relief of declaration by way of permanent injunction, concluding that the Plaintiff was not the owner in possession.3. Entitlement to Rendition of Accounts from the Second Defendant:The Plaintiff alternatively sought rendition of accounts from the second Defendant. The Trial Court found the Plaintiff entitled to this relief, ordering the second Defendant to pay Rs. 55,000 based on the agreement (P1). The agreement controlled the power of attorney, and the agent could not act against the principal's interest.4. Estoppel from Filing the Suit:The issue of estoppel was raised, questioning whether the Plaintiff's conduct barred him from filing the suit. The Trial Court did not find the Plaintiff estopped from filing the suit, focusing instead on the validity of the power of attorney and the sale transaction.5. Proper Valuation for Court Fee and Jurisdiction:The Trial Court found that the court fee of Rs. 19.50 was correctly fixed, addressing the issue of proper valuation for court fee and jurisdiction.Analysis and Conclusion:The Supreme Court analyzed the provisions of the Registration Act, particularly Sections 32, 33, and 34, and concluded that the production of the original power of attorney was not necessary for the sale deed's registration. The Court found that the Plaintiff's claim of canceling the power of attorney on 02.02.1987 was not credible, especially in light of the correspondence (Exhibit-DX) indicating the Plaintiff's continued recognition of the power of attorney. The High Court's reappreciation of evidence was deemed inappropriate under Section 100 of the Code of Civil Procedure, as it overstepped its jurisdiction. The Supreme Court set aside the High Court's judgment, restoring the Trial Court's findings that the sale deed was valid and the Plaintiff was not entitled to the relief of declaration and permanent injunction but was entitled to rendition of accounts from the second Defendant. The appeal was allowed, and the impugned judgment was set aside, with parties bearing their respective costs.