- In the case of Pardeep Chaudhary and another V Birwati and Ors., the issue was whether a succeeding sale deed executed by an allottee of the house in favour of the agent's children after the agent's demise would be in consonance with the previous contract of agency, giving superiority to the children's rights, if the allottee, upon receiving the entire sale consideration, delivers possession to an agent while executing a registered General Power of Attorney in his favour.
- The children of Late Sh. Prem Singh, Smt. Sheetal and Sh. Pardeep Chaudhary are the appellants who filed the first petition seeking a decree of declaration with the resultant remedy of a permanent obligatory injunction. They claimed to be joint owners in possession of a house, based on a registered sale deed made by the original allottee on September 29, 2010.
- The appellants contend that on June 11, 1980, the allottee issued a General Power of Attorney in favour of their father, late Sh. Prem Singh, over the suit property and conveyed ownership to him. Additionally, it was alleged that the respondents were granted permission to live on the first floor as licensees, which was then cancelled by notice dated October 13, 2010.
- Further, the allottee executed a General Power of Attorney in favour of Sh. Roop Singh, who is the defendant with respect to the property in issue, based on which the defendant completed a sale deed in favour of his wife Smt. Birwati on 23.02.2010.
- The appellants alleged that the General Power of Attorney and the selling agreement were both fraudulent.
- The appellant asserted that according to Sections 202 and 208 of the Indian Contract Act, 1872, the power of attorney was obtained in favour of Sh. Prem Singh and could not be repealed by the allottee.
- The respondents, Sh. Roop Singh and Smt. Birwati claimed to have filed a previous complaint in a joint written statement.
- They claimed that a conveyance deed for the house in question was registered on September 25, 2001. Further, the allottee completed a Power of Attorney in favour of the defendant, who executed a registered sale deed in favour of his wife on February 23, 2010. On January 23, 2001, the Power of Attorney granted to late Sh. Prem Singh was withdrawn.
- As a result, the defendants allege that they are the owners in possession of the property and that the licence that was granted to the appellants has expired, making them subject to be evicted.
- Additionally, the allottee, Smt. Birwati had filed a cross action in which she named Smt. Veena Chaudhary, the widow of late Sh. Prem Singh along with their children (the appellants) as defendants. The two suits were combined.
- Smt. Birwati, appearing to be the owner of the suit property, petitioned for Shri Chand's eviction from the shop. She held that as the landlady, she was entitled to take ownership of the property for a variety of reasons. However, the renter disputed any landlord-tenant connection and claimed that the property's owners were Sh. Pardeep Chaudhary and Smt. Sheetal.
- The respondents asserted that ownership for the property in question was to have passed to Smt. Birwati on the basis of the sale deed, when Sh. Roop Singh possessed a valid general power of attorney obtained in his favour by the owner. It was argued that the allottees' subsequent sale deed in favour of Sh. Pardeep Chaudhary and Smt. Sheetal would not impart any right, ownership, or interest in the land.
- It was further claimed that the appellants acknowledged that Sh. J.S.Luthra's power of attorney expired with the death of Sh. Prem Singh. Following that, the sale document was executed in favour of the defendant, and hence, the appellants no longer had any right, title, or interest in the property.
- Relying on Ramesh Mohan and another vs. Raj Kishan and ors. [1984, Punjab Law Reporter, 211], the Court determined that the sale contract, followed by Power of Attorney and delivery of ownership, rendered the power of attorney binding, and that, under Section 202 of the Indian Contract Act, 1872, which states that termination of agency where agent has an interest in subject-matter, is irrevocable. Since the agency in issue was formed with the agent having an interest in the property, the power of attorney could not be revoked. As a result, the allottees' conduct in cancelling the General Power of Attorney was invalid.
- In the court’s opinion, it was made clear that the title transferred by the allottee in favour of the appellants via registered sale deed was in acknowledgement of the receipt of the whole sale consideration from late Sh. Prem Singh and in furtherance of the execution of the General Power of Attorney dated 11.06.1980.
- Consequently, Sh. J.S.Luthra's execution of a new power of attorney in favour of the defendant was fallacious. Such an action would not give him any rights.
- Furthermore, the court stated that the defendant had failed to substantiate payment of any sale consideration to Sh. J.S.Luthra, who has clearly denied receipt of any such money while testifying.
- The court dismissed the action of SmtBirawati and held that the rights of late Sh. Prem Singh's children (the appellants) take precedence over those of Smt. Birawati, who could not claim to be a bona fide purchaser for consideration when she could neither prove payment of consideration nor was she aware of the aforementioned circumstances of the case.
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