S.202 Indian Contract Act | Agency In Which Agent Has Interest Is Neither Terminated By Insanity Nor Death Of Principal: Punjab & Haryana High Court

It is evident that illustration (b) to Section 202 of the Indian Contract Act, 1872, itself explains that the agency in which the agent has an interest is neither terminated by insanity nor death of the principal.

The court was dealing with a case where the plaintiff (Respondent herein) filed suit for possession by ejectment of the defendant from his shop, on the ground that defendant's tenancy has been terminated.

The defendant (Prakash Devi) on the other hand claimed ownership of the property. It was asserted that Plaintiff's father Bishamber Dass executed a registered General Power of Attorney on the basis of which Diwan Chand Chowdhary (defendant's husband) transferred the property in favour of Appellant.

The trial Court while dismissing the suit had recorded that on the death of Bishamber Dass, the General Power of Attorney ceased to be in force and consequently, the sale deed executed is without the enabling power, hence, Smt. Prakash Devi did not become the owner of the property. This was also upheld by the First Appellate Court.

The question in second appeal was- Where the agent has an interest in the subject matter, then whether, on the death of the principal, the agency created by executing General Power of Attorney with respect to the immovable property along with the agreement to sell, the Special Power of Attorney, the Will, the affidavit and the other Power of Attorney will cease to be effective?

It held,

"In the present circumstances, it is evident that the agency created in favour of late Sh. Diwan Chand Chowdhary vide registered General Power of Attorney dated 01.02.1984, continued to remain in force even after the death of late Sh. Bishamber Dass. The law on the point is clear."

Reliance was placed on Maharani Shanta Devi (her highness) Vs. Shavjibhai H. Patel and others, 1998(4) Civil Law Journal 252, where the High Court discussed the effect of death of the principal while interpreting that the death of the principal cannot bring about the termination of the agency.

"Thus, both the Courts have erred in recording the aforesaid finding," it said. The Court added that under Section 33(4) of the Registration Act, 1908, the registered power of attorney can be proved by its production without further proof when, prima facie, it suggests that it is executed in the Court before Registrar who has authenticated it.

Moreover, the court noted, according to Section 85 of the Indian Evidence Act, 1872 Court is bound to draw a presumption of authentication in favour of the power of attorney holder though it may be disproved by the other party by leading evidence.

Furthermore, Section 114 (illustration (e)) of the Indian Evidence Act, 1872, provides for presumption regarding regularity of procedure before a registration officer and that all the judicial and official acts by the Registrar have been regularly performed.

Court further held that the General Power of Attorney and Special Power of Attorney do not require attestation by witnesses.

Undoubtedly, the propounder of the documents is required to prove the same, but the registered documents carry a presumption that they were genuinely executed.

As far as the facts and circumstances of the instant case are concerned, the court noted that the defendant has discharged her primary onus by producing the documents and examining the witnesses and the onus rests on the plaintiff to prove that late Sh. Bishamber Dass never executed these documents.

As far as the argument of the learned counsel representing the respondent that the agreement to sell was compulsorily registrable under Section 17(b) and (c) of the Indian Registration Act, 1908 is concerned, the court held that Section 17(1)(b) and (c) are not applicable to an agreement to sell.

Keeping in view the aforesaid discussion, the court allowed the appeal and judgments and decrees passed by both the Courts below were set aside.

Case Title: SMT. PARKASH DEVI Versus RAJINDER KUMAR (SINCE DECEASED) THROUGH HIS LRS. AND ORS.

Citation: 2022 LiveLaw (PH) 188 

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