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Civil Property & InheritanceSupreme Court of India

Amar Nath vs Gian Chand and Anr.

Civil AppealDecided 28 Jan 2022
Civil Appeal No. 5797 of 2009
K.M. Joseph · Pamidighantam Sri Narasimha

Background

Gian Chand, a junior engineer, owned a plot of land and orally agreed to sell it to Amar Nath (the first defendant) for Rs. 55,000. When Amar Nath allegedly could not arrange the full amount, Gian Chand executed a registered special power of attorney in favour of a second defendant (a deed writer) to sell the land on his behalf. Gian Chand later claimed he had cancelled and taken back this power of attorney after the deal with Amar Nath fell through, but the second defendant went on to execute a sale deed to Amar Nath for Rs. 30,000. Gian Chand sued, claiming the sale was fraudulent and void since the power of attorney had already been cancelled; both the Trial Court and the first Appellate Court rejected this claim and upheld the sale, but the High Court, in a second appeal, reversed those concurrent findings and declared Gian Chand the owner, prompting Amar Nath's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court examined the actual documentary evidence, including two letters exchanged between Gian Chand and the second defendant months after the claimed cancellation date, and found they directly contradicted Gian Chand's story: in one letter he asked the second defendant to find a buyer and send money urgently, with no mention of any cancellation, and in the other the second defendant openly referred to having executed the sale as power of attorney holder. The Court held that Gian Chand had not proved he ever validly cancelled the power of attorney (he never got it cancelled at the Sub-Registrar's office or gave notice of cancellation to anyone), and even if he had informally revoked it, there was no proof this was ever communicated to Amar Nath, an unconnected third party who could not be bound by an undisclosed private arrangement. The Court criticized the High Court for disturbing concurrent factual findings of two lower courts in a second appeal, which under Section 100 CPC is meant only for genuine questions of law, not re-appreciation of evidence. The Court also noted the power of attorney contained no restriction on the minimum sale price, so a separate side-agreement about a Rs. 55,000 floor price could not by itself invalidate the sale deed. The appeal was allowed, the High Court's judgment was set aside, and each party was left to bear its own costs.

Lesson Learnt

A person who wants to revoke a power of attorney must do so formally and, crucially, communicate that revocation to anyone dealing with the attorney-holder: an undisclosed or merely private cancellation cannot be used to undo a sale made to an innocent third party; and appellate courts hearing a "second appeal" on a point of law should not casually overturn factual findings that two lower courts had already agreed on.

Amar Nath vs Gian Chand and Anr. – Legal Case Shots | LegalAware