Dismissed

M/S. Vilas Constructions v. M.a.Kharim and Others

Kerala HC22 Mar 2022RFA/7/2010

Case brief

AI extract

What is this about?

The High Court of Kerala allowed appeals challenging the lower court's decree in a suit for declaration of title. The court held that assignment deeds executed by five partners of a firm via power of attorney were valid, binding on the firm, and conferred title on the purchasers, overriding the respondents' claim based on a subsequent judicial sale.

What the court decided

AI extract

M/S. Vilas Constructions Vs M.a.Kharim and… — Contract and Commercial Disputes | Kerala HC (2022)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN

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TUESDAY, THE 22^ND DAY OF MARCH 2022 / 1ST CHAITHRA, 1944

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RFA NO. 7 OF 2010

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AGAINST THE ORDER/JUDGMENT IN OS 456/2007 OF II ADDITIONAL SUB COURT,ERNAKULAM

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APPELLANTS/DEFENDANTS 3, 4, 5 & 6:

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1 M/S. VILAS CONSTRUCTIONS,

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NO.38, 4TH FLOOR,G.C.D.A COMMERCIAL COMPLEX, MARINE DRIVE, COCHI, N-31, A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNERS MRS. SUKUMARI

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MURALIDHARAN, W/O. MURALIDHARAN, 31/234 A, PUSHPANJALI, VYTILA, POONITHURA VILLAGE, KANAYANNUR TALUK, SRI.T.P.MURALIDHARAN, AGED 55 YEARS,31/234 A,PUSHPANJALI, VYTILA, POONITHURA

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VILLAGE, KANAYANNUR TALUK.

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2 LOTUS CONSTRUCTIONS NO.38, 4TH FLOOR, G.C.D.A COMMERCIAL COMPLEX, MARINE DRIVE, COCHIN-31, A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER SRI. T.P. MURALIDHARAN, AGED 55 YEARS,31/234 A, PUSHPANJALI, VYTILA,

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POONITHURA VILLAGE, KANAYANNUR TALUK.

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3 MRS. SUKUMARI MURALIDHARAN W/O. MURALIDHARAN, 31/234 A, PUSHPANJALI, VYTILA, POONITHURA VILLAGE, KANAYANNUR TALUK.

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4 SRI. T.P. MURALIDHARAN AGED 55 YEARS 31/234, A PUSHPANJALI, VYTILA, POONITHURA, VILLAGE, KANAYANNUR TALUK.

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BY ADVS.

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SRI.E.K.NANDAKUMAR SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN

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RFA Nos.7 & 8 of 2010

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..2..

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RESPONDENT/PLAINTIFFS & DEFENDANTS 1, 2 & 7:

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1 M.A.KHARIM, AGED 66 YEARS, S/O. MOHAMMED KASSIM AL-AMAN, RESIDENCY AVENUE, ASRAMAM CHERRY, ASARAMAM P.O., KOLLAM-691002.

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2 H. SHEREEFA @ H. SHEREEFA BEEVI AGED 61 YEARS, W/O. M.A. KHARIM, RESIDENCY AVENUE, ASRAMAM CHERRY, ASARAMAM P.O., KOLLAM-691002.

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3 SEEYAL A KHARIM, AGED 36 YEARS S/O. M.A. KHARIM, RESIDENCY AVENUE, ASRAMAM CHERRY, ASARAMAM P.O., KOLLAM-691002.

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4 SEEYAS A KHARIM, AGED 36 YEARS, S/O. M.A. KHARIM, RESIDENCY AVENUE, ASRAMAM CHERRY, ASARAMAM P.O., KOLLAM-691002.

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5 SINJU A KHARIM, AGED 36 YEARS, S/O. M.A. KHARIM, RESIDENCY AVENUE, ASRAMAM CHERRY, ASARAMAM P.O., KOLLAM-691002.

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6 SRI. E.G.MANOJ, AGED 44 YEARS S/O. E.G. GOPINATHAN, “AATHIRA”, SOUTH NALUVAZHY, NORTH PARUR, ERNAKULAM DISTRICT.

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7 MRS. SALINA MANOJ, AGED 39 YEARS S/O. E.G.GOPINATHAN, “AATHIRA”, SOUTH NALUVAZHY, NORTH PARUR, ERNAKULAM DISTRICT.

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8 SHONEY SANIL AGED 45 YEARS, W/O. T.S.SANAL, THANDASSERY HOUSE, VADUTHALA DESOM, CHERANALLOOR VILLAGE, KANAYANNOOR TALUK, ERNAKULAM DIST.

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BY ADVS.

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SRI.S.SREEKUMAR (SR.) (CAVEATOR) FOR R1 TO R5 SRI.PRAMOD KOCHUTHOMMEN E. FOR R8

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 22.03.2022, ALONG WITH RFA.8/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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RFA Nos.7 & 8 of 2010

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..3..

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN

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TUESDAY, THE 22^ND DAY OF MARCH 2022 / 1ST CHAITHRA, 1944

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RFA NO. 8 OF 2010

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AGAINST THE ORDER/JUDGMENT IN OS 456/2007 OF II

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ADDITIONAL SUB COURT,ERNAKULAM

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APPELLANT/7TH DEFENDANT:

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SHONEY SANIL, AGED 37 YEARS, W/O. T.S.SANIL, THANDASSERY HOUSE, VADUTHALA DESOM, CHERANALLOOR VILLAGE, KANAYANNOOR TALUK, ERNAKULAM DISTRICT.

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BY ADV.SRI.PRAMOD KOCHUTHOMMEN E.

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RESPONDENTS/PLAINTIFFS & DEFENDANTS 1 TO 6:

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1 M.A.KHARIM, AGED 67 YEARS, S/O. MOHAMMED KASSIM, AL-AMAN RESIDENCY AVENUE, ASRAMAM CHERRY, ASRAMAM.P.O., KOLLAM-691002.

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2 H.SHEREEFA @ H. SHEREEFA BEEVI AGED 62 YEARS, W/O. M.A.KARIM, AL-AMAN RESIDENCY AVENUE, ASRAMAM CHERRY, ASRAMAM.P.O. KOLLAM-691002.

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3 SEEYAL.A.KHARIM, AGED 37 YEARS S/O. M.A.KARIM, AL-AMAN RESIDENCY AVENUE, ASRAMAM CHERRY, ASRAMAM.P.O., KOLLAM-691002.

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4 SEEYAS.A.KHARIM, AGED 33 YEARS S/O,. M.A. KARIM, AL-AMAN RESIDENCY AVENUE, ASRAMAM CHERRY, ASRAMAM.P.O., KOLLAM-691002.

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RFA Nos.7 & 8 of 2010

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..4..

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5 SINJU A. KHARIM, AGED 38 YEARS S/O. M.A.KARIM, AL-AMAN RESIDENCY AVENUE, ASRAMAM CHERRY, ASRAMAM.P.O., KOLLAM-691002.

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6 E.G.MANOJ, AGED 45 YEARS S/O. E.G.GOPINATHAN, "AATHIRA", SOUTH NALUVAZHY, NORTH PARUR, ERNAKULAM DISTRICT.

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7 SALINA MANOJ, AGED 40 YEARS W/O. E.G.MANOJ, "AATHIRA" SOUTH NALUVAZHY, NORTH PARUR, ERNAKULAM DISTRICT.

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8 VILAS CONSTRUCTIONS, NO.38, 4^th FLOOR, G.C.D.A. COMMERCIAL COMPLEX, MARINE DRIVE, COCHIN-, 31, A PARTNERSHIP FIRM REP. BY ITS PARTNERS, MRS.SUKUMARI MURALIDHARAN, 31/234 A, PUSHPANJALI, VYTTILA, POONITHURA VILLAGE, KANAYANNUR TALUK. T.P.MURALIDHARAN, AGED 64 YEARS, 31/234 A, PUSHPANJALI, VYTTILA, POONITHURA VILLAGE, KANAYANNUR TALUK.

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9 LOTUS CONSTRUCTIONS NO.38, 4^th FLOOR G.C.D.A.COMMERCIAL COMPLEX, MARINE DRIVE, COCHIN-31, A PARTNERSHIP FIRM REP. BY ITS PARTNER, T.P.MURALIDHARAN, AGED 64 YEARS, 31/234 A,PUSHPANJALI, VYTTILA POONITHURA VILLAGE, KANAYANNUR TALUK.

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10 MRS. SUKUMARI MURALIDHARAN W/O. MURALIDHARAN, 31/234 A, PUSHPANJALI, VYTTILA, POONITHURA VILLAGE, KANAYANNUR TALUK.

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11 T.P.MURALIDHARAN, FATHERS NAME NOT KNOWN, 31/234 A, PUSHPANJALI, VYTTILA, POONITHURA VILLAGE, KANAYANNUR TALUK.

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RFA Nos.7 & 8 of 2010

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..5..

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BY ADVS. SRI.S.SREEKUMAR (SR.) (CAVEATOR) FOR R1 TO R5 SRI.E.K.NANDAKUMAR (SR.) FOR R8 TO R11 (B/O) SRI.M.GOPIKRISHNAN NAMBIAR FOR R8 TO R11 SRI.K.JOHN MATHAI FOR R8 TO R11 SRI.JOSON MANAVALAN FOR R8 TO R11 SRI.KURYAN THOMAS FOR R8 TO R11 SRI.PAULOSE C. ABRAHAM FOR R8 TO R11

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 22.03.2022, ALONG WITH RFA.7/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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RFA Nos.7 & 8 of 2010

..6..

P.B.SURESH KUMAR

MURALI PURUSHOTHAMAN, JJ.

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R.F.A. Nos.7 & 8 of 2010

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Dated this the 22^nd day of March, 2022

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JUDGMENT

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P.B.Suresh Kumar, J.

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These appeals are directed against the judgment and decree dated 26.9.2009 in O.S.No.456 of 2007 on the files of the Court of the II Additional Sub Court, Ernakulam. The appellants in R.F.A.No.7 of 2010 are defendants 3 to 6 in the suit and the appellant in R.F.A.No.8 of 2010 is the seventh defendant in the suit.

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The second plaintiff in the suit is the wife of the first plaintiff and plaintiffs 3 to 5 are the children of plaintiffs 1 and 2. The suit was one instituted for declaration of the title of the plaintiffs over the plaint schedule property and for recovery of possession of the same from the seventh defendant. The plaint schedule property is an item measuring

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RFA Nos.7 & 8 of 2010

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..7..

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46.500 cents in Sy.Nos.142/2 and 142/3 of Ernakulam Village, originally belonged to the fourth defendant, a partnership firm.

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The plaintiffs claim title to the plaint schedule property on the strength of Exts.A6 to A13 assignment deeds executed in respect of distinct portions of the plaint schedule property by five among the seven partners of the fourth defendant firm through their power of attorney holder on 16.07.1993 and 17.07.1993. A few years after Exts.A6 to A13 assignment deeds, defendants 1 and 2 instituted a suit as O.S.No.665 of 1999 on the files of the Court of the Subordinate Judge, Ernakulam against defendants 3 to 6 for realisation of money and obtained an ex-parte decree. Later, on 11.07.2003, the seventh defendant got the said decree assigned in her favour and purchased the plaint schedule property in execution of the decree in the said suit. The case set out by the plaintiffs in the suit is that the fourth defendant firm did not have any right over the plaint schedule property on the date of the court sale in O.S.No.665 of 1999; that the seventh defendant has not acquired any right therefore in the plaint schedule property by virtue of the court sale in the said suit and that she is asserting title to the plaint schedule property, after trespassing into the

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RFA Nos.7 & 8 of 2010

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same.

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Defendants 1 and 2 remained ex-parte.

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Defendants 3 to 6 filed a written statement contending, among others, that the fourth defendant firm has not executed any document in respect of the plaint schedule property in favour of the plaintiffs. The seventh defendant has filed a written statement denying the title and possession of the plaintiffs over the plaint schedule property and asserting title and possession over the same on the strength of the court sale in O.S.No.665 of 1999.

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On an appraisal of the materials on record, the court below found that the plaintiffs obtained title to the plaint schedule property by virtue of Exts.A6 to A13 assignment deeds and the seventh defendant did not therefore acquire any right in the said property by virtue of the court sale in O.S.No.665 of 1999. The suit was consequently decreed declaring the title of the plaintiffs over the plaint schedule property and permitting the plaintiffs to recover the same from the seventh defendant with mesne profits. Defendants 3 to 7 are aggrieved by the said decision of the court below.

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Heard Sri.P.Viswanathan, learned Senior

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RFA Nos.7 & 8 of 2010

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Counsel for the seventh defendant, Sri.Chethan, learned counsel for defendants 3 to 6 and Sri.S.Sreekumar, learned Senior Counsel for the plaintiffs.

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The learned Senior Counsel for the seventh defendant at the outset submitted that in the absence of any document executed by the fourth defendant firm in favour of the plaintiffs in respect of the plaint schedule property, the claim of title of the plaintiffs over the plaint schedule property is without any basis. The learned counsel has reinforced the said submission pointing out that the power of attorneys, on the strength of which Exts.A6 to A13 assignment deeds were executed, would show that the partners of the fourth defendant firm have only authorised their power of attorney holder to sell their undivided right in the plaint schedule property and Exts.A6 to A13 assignment deeds were however executed without authority of law in as much as the same recite that they are executed on behalf of the fourth defendant firm. Placing reliance on the decision of this Court in Thamarasseri Roman Catholic Diocese v. Umadevi

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Nambiar, 2017 (1) KLT 71, the learned counsel submitted that there is a lot of difference between documents executed in

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RFA Nos.7 & 8 of 2010

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excess of the power and the documents executed without power, and documents like Exts.A6 to A13 assignment deeds executed without power are only to be ignored as void. It was also argued by the learned counsel that partners of a firm cannot claim undivided rights in the properties of the firm and the assignment deeds executed by the partners of the fourth defendant firm in favour of the plaintiffs are void, even if they are construed as documents executed within the power conferred in terms of the power of attorneys. He relied on various provisions in the Indian Partnership Act, 1932 (the Act) as also on the decision of the Apex Court in Addanki Narayanappa v. Bhaskara Krishtappa , AIR 1966 SC 1300, in support of the said proposition. It was also contended by the learned counsel that Exts.A6 to A13 assignment deeds executed by five among the seven partners of the fourth defendant firm do not, at any rate, confer any title on the plaintiffs over the plaint schedule property in as much as the said conduct of the partners does not fall within the scope of the implied authority of the partners to bind the firm. Section 19(2)(g) of the Act was relied on by the learned counsel in support of the said contention. It was argued by the learned

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RFA Nos.7 & 8 of 2010

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counsel that if the plaintiffs have not acquired any right over the plaint schedule property by virtue of Exts.A6 to A13 assignment deeds, it cannot be said that the seventh defendant has not acquired title to the plaint schedule property by virtue of the court sale in O.S.No.665 of 1999 and if that be so, the court below ought to have non-suited the plaintiffs.

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The learned counsel for defendants 3 to 6

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supported the arguments advanced by the learned Senior Counsel for the seventh defendant.

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The learned Senior Counsel for the plaintiffs contended that the recitals in the power of attorneys as also Exts.A6 to A13 assignment deeds would indicate that there was a decision by the fourth defendant firm to sell the plaint schedule property to the plaintiffs after having received consideration for the same in advance, and the assignment deeds executed by five among the partners of the firm in furtherance to the said decision cannot be said to be invalid on any ground and are to be construed as assignment deeds executed by the fourth defendant firm itself. It was pointed out by the learned counsel that the statement in the power of attorneys that the executants of the power of attorneys have

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RFA Nos.7 & 8 of 2010

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..12..

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undivided rights in the plaint schedule property is a misnomer.

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In reply to the submissions made by the learned Senior Counsel for the plaintiffs, the learned Senior Counsel for the seventh defendant submitted that the argument that the recital in the power of attorneys that the executants thereof have undivided rights in the plaint schedule property is a misnomer, cannot be accepted in the light of Section 92 of the Indian Evidence Act, 1872.

¶106

The plaintiffs do not dispute the fact that the plaint schedule property belonged to the fourth defendant. As such, in the light of the submissions made by the learned counsel for the parties, the question arises for consideration is as to whether the plaintiffs have acquired right, title and interest in the plaint schedule property by virtue of Exts.A6 to A13 assignment deeds, for if the plaintiffs have acquired right, title and interest in the plaint schedule property by virtue of the said documents, the seventh defendant cannot claim any right over the same by virtue of the subsequent court sale.

¶107

It is fundamental that every partner being the general and accredited agent of the partnership in contemplation of law, may bind all other partners by his acts in

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RFA Nos.7 & 8 of 2010 ..13..

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all matters which are within the scope and objects of the partnership. In the light of Section 22 of the Act, in order to bind a firm, an instrument executed by a partner on behalf of the firm need not be in the name of the firm and it would suffice that the instrument expresses or implies an intention to bind the firm.

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Let us consider the question keeping in mind the principles referred to above. Exts.A6 to A13 assignment deeds in favour of the plaintiffs are similarly worded. The differences in the recitals therein are only as regards the description of the properties and the particulars of the purchaser. The said documents are styled as assignment deeds in respect of portions of the plaint schedule property executed by the fourth defendant firm represented by its five partners in favour of the respective purchasers mentioned therein. It is recited in the said documents that the fourth defendant firm agreed to sell the properties mentioned therein which would together constitute the plaint schedule property and received the sale consideration in advance and has put the purchasers in possession of their respective portion of the property. It is also recited in the said documents that they are executed for

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RFA Nos.7 & 8 of 2010

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conveying title of the properties to the purchasers in furtherance to the said arrangement. The relevant recitals in one among the assignment deeds, viz, Ext.A6 assignment deed reads thus:

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“THIS DEED OF SALE MADE AND EXECUTED AT KOCHI on this the sixteenth day of July, Nineteen Ninety Three (16-7-1993) BY

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M/S. LOTUS CONSTRUCTIONS, Asoka Flats, A/73, 7th floor, Marine Drive, Kochi 31, a Partnership firm represented by its Partners on the One part

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T.P.MURALEEEDHARAN, aged 30 (Thirty eight) years, s/o. late Narayana Menon, resident of 31/224 A, Pushpanjali. Vyttila Desom, Poonithura Village, Kanayannur Taluk,

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L.SREEDEVI, aged 76 (seventy six) years, wife of late P.M.Pillai, residing at No. 5 HIG, Panampallynagar, Perumanoor Desom, Emakulam Village, Kanayannur Taluk,

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USHA PILLAI, aged 40 (forty) years, D/o late P.M.Pillai, residing at No. 5 HIG, Panampallynagar, Perumanoor Desom, Ernakulam Village, Kanayannur Taluk,

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K.P.BASHEER, aged 34 (thirty four) years, s/o Pareekutty, Kalappat house, Edappally, South Village, Kanayannur Taluk, and

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JOSEPH PUDUSSERRY, aged 51 (fifty One) years, S/o late Ittiavra, Pudusserry house, Edappally South

¶121

RFA Nos.7 & 8 of 2010

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Village, Kanayannur Taluk;

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all Business persons, hereinafter referred to as ‘VENDORS' (which expression shall wherever the context so permits mean and include their assigns and persons deriving authority under them and Attorney (who caused to) executes this deed for and on behalf of them) acting through their duly constituted attorney (being conferred upon him the authority and power as per the following power of attomeys) MR. M.G.MALAKHI, aged 40 (forty) years, Business, s/o M.L.Gerald, residing at Manna Bhavan, Perinad Village, Madilil P.O., Kollam Taluk

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TO AND IN FAVOUR OF

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SRI. M.A.KHARIM, aged 53 (Fifty three) years, Business, S/o Mohammad Kassim, residing at Al-aman, Residency Avenue, Asramam Village, Kollam Taluk;

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hereinafter called the ‘Purchaser’ (which expression shall wherever the context so permits mean and include his heirs, executors and assigns) ON the Other Part.

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WHEREAS 6.250 cents of property more particularly described in schedule 1 hereunder along with the pathway more particularly described in schedule 2 hereunder were purchased as per document No. 3003 of 1991 registered in Book 1, volume No. 904 pages 214 onwards of the Sub Registry Office, Ernakulam by the Partnership firm by name M/s. LOTUS CONSTRUCTIONS, Asoka Flats, A/73, 7th floor, Marine Drive, Kochi of which the Vendors are the Partners and accordingly the scheduled items are owned, possessed and enjoyed by the partners who constitute the above said Partnership.

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WHEREAS the Partners representing the said firm have

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RFA Nos.7 & 8 of 2010

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..16..

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agreed to sell schedule 1 & 2 properties in favour of Sri. M.A.Kharim, the Purchaser for valid consideration,

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WHEREAS the Purchaser Sri. M.A.Kharim has paid the full value of the said property in advance to the said firm and in consideration of the payment of the full value of the property, the Purchaser has been put in possession of the properties viz. scheduled in items 1 & 2 by the Vendor firm and the Purchaser has assummed possession thereof.

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AND WHEREAS the said Partnership firm is indebted to Sri. M.A.Kharim in having received the entire sale consideration of the properties mentioned in schedule 1 & 2 hereunder entered into an agreement to sell the same to him.

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IN PURSUANCE of the agreement as stated above between the Vendor firm and the Purchaser, the Vendors as Partners of the firm hereby sell the undermentioned properties to the Purchaser in lieu of the entire sale consideration; receipt where by the Vendors have acknowledged the same in full satisfaction for the ownership of the said properties of the partnership firm LOTUS CONSTRUCTIONS over the land and premises which have been put in possession of the Purchaser in pursuance of the aforementioned agreement. Owing to some matters which are of technical nature all partners could not join together to execute the sale deed under reference and accordingly each of the partners for full filling their obligations granted their respective power of attorney to Mr. M.G.Malakhi to execute and register the sale deed, and acknowledge the receipt of the consideration formerly received by the Vendor/Firm and discharge the liability of the Vendors as aforesaid.”

¶136

As revealed from the recitals in Exts.A6 to A13

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assignment deeds, the said documents are executed on the

¶138

RFA Nos.7 & 8 of 2010

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..17..

¶140

strength of power of attorneys given by the partners of the fourth defendant firm who represented the firm in the said documents. Exts.A14 to A17 and B6 to B10 are some of the power of attorneys. The rest of the power of attorneys are Exts.X2 series, X3 series and X4 to X17. Like the assignment deeds, the power of attorneys are also similarly worded. The differences in the recitals therein are only as regards the description of the properties and the particulars of the executant partner of the fourth defendant firm. The relevant recitals in Ext.A14 power of attorney read thus:

¶141

“THIS POWER OF ATTORNEY executed by JOSEPH PUDUSSERY aged 51 (fiftyone) years, S/o late Ittiyavira, Business residing at Pudusserry House, Edappally North Village, Kanayannur Taluk, Cochin IN FAVOUR OF M.G.Malakhi, S/o M.L.Gerald, aged 40 (forty) years business, residing at Manna Bhavan, Madilil P.O., Perinad Village, Kollam Taluk on this the 19th day of June 1993.

¶142

WHEREAS 7.316 Cents property more particularly described in schedule 1 hereunder along with the pathway more particularly (described in schedule 1 hereunder along with the pathway more particularly) described in schedule 2 hereinafter were purchased by a partnership firm by name LOTUS CONSTRUCTIONS, Asoka Flats, A/73, 7th floor, Marine Drive, Cochin 31 of which myself and six others are the partners and accordingly the scheduled items are owned, possessed and enjoyed by the seven partners who constitute the above said partnership

¶143

AND WHEREAS myself and the other partners

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RFA Nos.7 & 8 of 2010

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representing the said firm have agreed to sell schedule 1 and 2 properties in favour of H.Shereefa and Sinju A. Kharim both residing at Al-aman, Residency Avenue, Asramam, Kollam, for valid consideration.

¶147

AND WHEREAS the proposed Vendee viz. H.Shereefa and Sinju A. Kharim has paid the full value of the said property in advance to the said firm constituted by myself and the other six partners and in consideration of the full value of the properties paid by the above Vendee, the Vendee has been put in possession of properties viz. Schedule in items 1 and 2 by all the seven partners including me and has assumed possession thereof.

¶148

AND WHEREAS the said partnership, myself and the other six partners are indebted to the Vendee having received the entire sale consideration of the properties mentioned in schedule 1 and 2 hereunder and whereas the entire consideration of the land has been paid by him and whereas it has become imperative on my part to convey my undivided ownership and right over the schedules 1 and 2 to the extent of my liability to the Vendee without waiting for the convenience of the other partners to discharge their obligation and for effective implementation of my desire, I wish to nominate and appoint Sri.M.G.Malakhi, S/o M.L.Gerald, aged 40 (forty) years business, residing at Manna Bhavan, Madilil P.O., Perinad Village, Kollam Taluk as my lawful attorney for which he has also agreed to act for and on behalf of me. Hence I hereby appoint the aforementioned Sri. M.G.Malakhi as my attorney to act for and on behalf of me to do the following as the partner of LOTUS CONSTRUCTIONS.

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To sell, convey my undivided right and ownership of the properties i.e. 1/7the undivided right over schedules

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RFA Nos.7 & 8 of 2010

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1 and 2 which I own along with the rest of the partners of the partnership firm to the Vendee or his nominee/nominees or assign or assigns.

¶153

To execute any agreement for sale, sale deed or other documents necessary in respect of my right, title, interest and share in respect of the scheduled properties described as item No. 1 and 2 to effectuate the above said purpose or purposes and to cause the same to be stamped, registered or authenticated as the case may be and to acknowledge that in part performance of the agreement for ale to the above mentioned Vendee whom already been put in possession of items 1 & 2.

¶154

To sign, execute and deliver any deed or deeds of sale or conveyance or conveyances of my share, right, title in respect of the said properties mentioned in schedules 1 & 2 hereunder in my name and on my behalf and as my act and deed in favour of the Vendee or his nominee or nominees or assignee.

¶155

To present such deed or deeds of sale, conveyance or conveyances for registration and admit the execution thereof and to acknowledge receipt of consideration already paid to me as mentioned in the sale deed before the sub Registrar or Registrar having authority to do and to have the said conveyance registered and to do all acts, deeds and things which my said attorney shall consider proper and necessary for conveying my right over the said properties to the said purchaser or purchasers as fully and effectually in all respects as I could do the same by myself.

¶156

To cause mutation effected in the Revenue records and make such statements personally or through pleader or other agent to effectuate the aforesaid purpose. And generally to do all acts, deeds and things which my said attorney may think fit and necessary for the

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RFA Nos.7 & 8 of 2010

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purpose of aforesaid as fully and effectually in all respects as I could do the same myself as partner of Lotus construction

¶160

AND I DO HEREBY agree, ratify and confirm all and whatsoever other act, or acts my said attorney shall lawfully do, execute or perform or cause to be done, executed or performed in connection with the sale or sales of my share, rights, title and interest in respect of the schedule properties here under done by virtue of this IRREVOCABLE POWER OF ATTORNEY NOTWITHSTANDING no express power on that behalf is hereinbefore provided.” As noted, it is recited in the power of attorneys also that the fourth defendant firm has agreed to sell the plaint schedule property to the plaintiffs and received the sale consideration in advance and has put the plaintiffs in possession of the same and that the power of attorneys are executed to give effect to the said arrangement.

¶161

At the outset, we are of the view that we must consider the effect of the recitals in Exts.A6 to A13 assignment deeds and power of attorneys as referred to in paragraphs 13 and 14 above. It is interesting to note that the sixth defendant who represents the fourth defendant firm in the suit is one among the executants in Exts.A6 to A13 assignment deeds. The contention raised by the sixth defendant in the written statement to justify the said conduct is that the power of

¶162

RFA Nos.7 & 8 of 2010

¶163

..21..

¶164

attorneys executed by him are vitiated by coercion, fraud etc. and the said contention was repelled by the court below. The fourth defendant firm has no case in the written statement that the power of attorneys of its partners other than that of the sixth defendant as referred to in Exts.A6 to A13 assignment deeds are not genuine. In other words, the power of attorneys, on the basis of which Exts.A6 to A13 assignment deeds are executed, are to be taken as genuine documents. Section 23 of the Act provides that an admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business. Neither the fourth defendant firm nor the sixth defendant has a case that Exts.A6 to A13 assignment deeds executed by their power holder are not documents executed in the ordinary course of business of the firm. Be that as it may, it has come out that the fourth defendant is a firm engaged in real estate business and it is admitted by the fourth defendant in the written statement that the plaint schedule property is one acquired by them for the business of the firm. The relevant recital in the written statement filed by defendants 3 to 6 reads thus:

¶165

RFA Nos.7 & 8 of 2010

¶166

..22..

¶167

“The fourth defendant partnership firm had acquired ownership and possession in respect of a total extent of 45.316 cents of land in Sy.No.142/2 and 3 of Ernakulam Village as per separate sale deed Nos.2574, 2729, 2830, 2967, 3003, 3029 and 3049 of 1991 of SRO, Ernakulam. The property was purchased for the business of the firm and the firm was in possession and enjoyment of the said property until 08.04.2005 when the amin of the District Court took possession of the said property from the 4^th defendant and handed over the same to the 7^th defendant, who purchased the property in a court auction in E.P.No.174/2003 in O.S.No.665/1999 of the Sub Court, Ernakulam.” (underline supplied)

¶168

It was brought to our notice that after the execution of Exts.A6

¶169

to A13 assignment deeds, the two partners of the fourth defendant firm who were not signatories to the assignment deeds instituted a suit as O.S.No.311 of 1995 before the Ist Additional Sub Court, Ernakulam for dissolution of the fourth defendant firm and for other ancillary reliefs. The said suit was decreed by the trial court and the decision therein was modified in appeal by this Court in R.F.A.No.355 of 2005 preferred by the sixth defendant. The records in the said case which were made available by the counsel for the plaintiffs also indicate that the fourth defendant firm is one constituted for doing business in real estate and construction. In other words, the conduct of the partners of a firm engaged in real

¶170

RFA Nos.7 & 8 of 2010

¶171

..23..

¶172

estate business in dealing with a property purchased by them for their business cannot be said to be not in the ordinary course of business. If that be so, the representation in Exts.A6 to A13 assignment deeds and the power of attorneys referred to above that the fourth defendant firm has agreed to sell the plaint schedule property to the plaintiffs and has received the sale consideration in advance and that they have put the plaintiffs in possession of their respective portions of the property, is evidence against the fourth defendant firm and if that be so, the fourth defendant firm is precluded from denying the same.

¶173

Even otherwise, the materials on record would show that the recitals aforesaid in the power of attorneys and assignment deeds are correct, for if as a matter of fact, there was no decision by the fourth defendant firm to sell the plaint schedule property in favour of the plaintiffs, the fourth defendant firm would have been in possession of the original documents of the plaint schedule property and the fourth defendant firm do not state in the written statement as to whether they are holding title deeds of the plaint schedule property. We are fortified in this conclusion also for the reason

¶174

RFA Nos.7 & 8 of 2010

¶175

..24..

¶176

that the fourth defendant firm who does not have a case that they are not aware of the assignment deeds and power of attorneys in favour of the plaintiffs, have not challenged the said documents in a manner known to law. There is yet another reason also for us to come to the conclusion. A certified copy of the order in W.P.(C) No.1909 of 2011 before the High Court of Delhi has been produced by the plaintiffs in the appeal along with I.A.No.1 of 2019, invoking Order 41 Rule 27 of the Code of Civil Procedure. The said document would show that the husband of the seventh defendant, Sri.T.S.Sanil, is a close business partner of the sixth defendant, the partner of the fourth defendant firm who represents the fourth defendant firm in the suit. Though the seventh defendant has filed a counter affidavit in I.A No.1 of 2019, the business relationship between the husband of the seventh defendant and the sixth defendant is not denied by the seventh defendant. In other words, the seventh defendant who has got the decree obtained by defendants 1 and 2 against the fourth defendant firm assigned in her favour and bought the plaint schedule property in a court sale is a close associate of the fourth defendant firm. The materials on record disclose that the decree obtained by

¶177

..25..

¶178

RFA Nos.7 & 8 of 2010

¶179

defendants 1 and 2 against the fourth defendant firm in O.S.No.665 of 1999 is for recovery of a trivial amount when compared to the value of the plaint schedule property at the time when proceedings have been initiated for execution of the said decree. If as a matter of fact, there was no sale of the plaint schedule property in favour of the plaintiffs, there is no reason at all for the fourth defendant to refrain from raising any objection to the sale of the plaint schedule property in execution of the said decree. The materials disclose that the fourth defendant firm remained as a mute spectator to the proceedings in execution of the decree so as to enable the seventh defendant to purchase the plaint schedule property in court sale. Needless to say, the aforesaid materials would also demonstrate that the recitals in the power of attorneys and assignment deeds referred to in paragraphs 13 and 14 are correct.

¶180

If there was already a decision by the fourth defendant firm to sell the plaint schedule property to the plaintiffs after receiving the sale consideration in advance and after putting the plaintiffs in possession of the plaint schedule property, the power of attorneys on the basis of which Exts.A6

¶181

RFA Nos.7 & 8 of 2010

¶182

..26..

¶183

to A13 assignment deeds were executed which contain recitals to that effect could be understood in the light of Section 22 of the Act only as documents executed by the partners on behalf of the firm to give effect to the said decision and if that be so, on execution of Exts.A6 to A13 assignment deeds, the plaintiffs have acquired title to the plaint schedule property. It is necessary to note in this regard that in O.S.No.311 of 1995 instituted after Exts.A6 to A13 assignment deeds, the partners of the fourth defendant firm who were not signatories to Exts.A6 to A13 assignment deeds have set out a case, among others, that Exts.A6 to A13 assignment deeds do not bind them in as much as they are not parties to the said documents. The said case was denied by the sixth defendant in the said suit contending that Exts.A6 to A13 assignment deeds were executed on behalf of the fourth defendant firm and the same are binding on the firm and all its partners. Even though the said case of the plaintiffs therein was accepted by the trial court, the decision of the trial court was reversed in appeal by this Court in R.F.A. No.355 of 2005 accepting the case of the sixth defendant that the partnership no longer holds the plaint schedule property. The decision of this Court in R.F.A. No.355 of

¶184

RFA Nos.7 & 8 of 2010

¶185

..27..

¶186

2005 also therefore fortifies our view that on execution of Exts.A6 to A13 assignment deeds, the plaintiffs have acquired title to the plaint schedule property.

¶187

We shall now deal with the contentions raised

¶188

by the learned counsel for the seventh defendant. As noted, the main contention was that the power of attorneys on the strength of which Exts.A6 to A13 assignment deeds have been executed would show that the partners of the fourth defendant firm have only authorised their power of attorney holder to sell their undivided rights in the plaint schedule property and Exts.A6 to A13 assignment deeds executed purportedly to transfer the plaint schedule property on behalf of the fourth defendant firm are void for want of authority for the power of attorney holder to execute such documents on behalf of the firm or its partners. It is also the contention of the seventh defendant that even if the documents are construed as documents executed within the scope of the power conferred on the power of attorney holder by the partners of the fourth defendant firm, the documents do not confer title to the plaint schedule property on the plaintiffs. No doubt, since a firm has no legal existence, the partnership property will vest in all the

¶189

RFA Nos.7 & 8 of 2010

¶190

..28..

¶191

partners and in that sense, every partner has an interest in the property of the partnership, but the same does not mean that a partner can deal with any portion of the property of the firm as his own, nor can he assign his interest in a specific item of the partnership property to anyone. As found in the preceding paragraphs, the power of attorneys are documents executed by the partners on behalf of the firm for the purpose of executing necessary documents to confer title to the plaint schedule property on the plaintiffs, although it is shown therein inadvertently that power is given for the purpose of transferring the undivided rights of the partners. Section 92 of the Indian Evidence Act also does not preclude the Court from interpreting the recitals in the power of attorneys in the aforesaid fashion.

¶192

There is also no merit in the contention raised by the learned counsel for the seventh defendant that the conduct of five among the seven partners of the fourth defendant firm in executing the assignment deeds in favour of the plaintiffs on behalf of the firm does not fall within the scope of implied authority of the partners to bind the firm. In the light of the finding that the power of attorneys, on the basis of

¶193

RFA Nos.7 & 8 of 2010

¶194

..29..

¶195

which Exts.A6 to A13 assignment deeds were executed, have been executed by the partners of the fourth defendant firm to transfer the plaint schedule property to the plaintiffs on behalf of the fourth defendant firm, Section 19 has no application.

¶196

In the light of the aforesaid discussion, the appeals are devoid of merits and are accordingly dismissed.

¶197

Sd/P.B.SURESH KUMAR, JUDGE

¶198

Sd/MURALI PURUSHOTHAMAN, JUDGE

¶199

ds 09.03.2022

M/S. Vilas Constructions v. M.a.Kharim and Others

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M/S. Vilas Constructions v. M.a.Kharim and Others

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