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Scheme Providing Backdoor Entry into Service Violates Article 16: Supreme Court on Railways LARGESS Scheme

Team SoOLEGAL 31 Jan 2022 3:21pm

Scheme Providing Backdoor Entry into Service Violates Article 16: Supreme Court on Railways LARGESS Scheme

NEW DELHI: The Supreme Court stated that if the document is presented for registration by the power of attorney holder who executed the document on the strength of it, the original power of attorney is not required.

“The inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not”, the bench comprising Justices KM Joseph and PS Narasimha observed in a judgment delivered last week.

In this case, the plaintiff filed a suit seeking a declaration that he is the owner and possessor of that property, as well as a mutation indicating that the sale in favor of the first defendant by the second defendant was null and void, and that the second defendant lacked the authority to sell the land owned by the plaintiff, and thus the defendant be restrained from interfering with the plaintiff's ownership and possession.

According to the plaintiff, he duly executed a special power of attorney in favor of the second defendant for the purpose of selling the property for Rs. 55,000/-. Because the first defendant was unable to arrange the money, the second defendant, to whom the power of attorney was executed, surrendered the original to the plaintiff, and the plaintiff informed the first defendant that the same was cancelled. Thus, in the absence of the original power of attorney, the second defendant, according to the plaintiff, could not execute the sale deed, and the sub-registrar was supposed to verify the aspect from the second defendant under Sections 32, 33, and 34 of the Registration Act. The Trial Court dismissed the suit and the same was upheld by the First Appellate Court.

Allowing the second appeal, the High Court observed that In view of the cancellation of the original power of attorney, the same could not be relied upon by the Registering Authority for the purpose of execution of the sale deed. The High Court also held that as per Section 18 of the Registration Act, it was necessary for the Registering Authority to see the true copy of the special power of attorney.

Disagreeing with the High Court, the Supreme Court pointed out that Section 18A requires the production of a true copy of the document sought to be registered, rather than the true copy of the power of attorney.

“The understanding of the Courts regarding Section 18A was enacted only to ensure that the copying process is hastened, as noticed from the objects and Reasons. The Trial Court was right when it held that Section 18A is concerned only with the document which is presented for registration. The trial court clearly erred relying upon Section 18A to hold that certified copy however being produced of the power of attorney was in conformity with section 18A and the High Court was equally in error to hold that Section 18A contemplated production of true copy of the power of attorney.”

The court then considered the plaintiff's contention that, in accordance with Sections 32 and 33 of the Act, the original power of attorney should be produced. The following were noted by the bench:

1.     When a person delegates authority to another to execute a document and the power of attorney, acting on that authority, executes the document, the power of attorney holder may present the document for registration pursuant to Section 32. (a). Section 32(a) of the Registration Act addresses both the person who executes a document and the person who claims under it. It also states that anyone claiming under a decree or order has the right to present documentation.

2.     Section 32(b) refers to a 'such a person's' representative or assignee. The term "such a person" in Section 32(b) refers to the individuals covered by Section 32. (a).

3.     Section 32(c) provides for the agent of 'such a person' which necessarily means the persons who are encompassed by Section 32(a). Besides agent of the person covered by Section 32(a), Section 32(c) also takes in the agent of the representative or assignee. Now the words representative or assignee are to be found in Section 32(b). Thus, Section 32(c) deals with agents of the persons covered by Section 32(a) and agents of the representative or assignee falling under Section 32(b). It is in respect of such an agent that there must be due authorisation by a power of attorney, which in turn, is to be executed and authenticated in the manner provided for in Section 33.

4.     The person who signed or executed the document for the purposes of Section 32(a) does not need a power of attorney to present the document. It may be possible for the principal, who has entered into obligations under the document, to present it.

5.     Section 32(c) must be read in conjunction with Section 33 of the Act.

6.     Thus, when Section 32(c) of the Registration Act states that a document, whether compulsorily or optionally registrable, must be presented, among other things, by the agent of such a person, representative, or assignee, duly authorized by power of attorney, it must be executed and authenticated in the manner and hereinafter mentioned immediately in the following section.

7.     Section 34 requires the Registering Office to conduct an investigation before issuing a registration order. It declares that no document shall be registered under the Act unless the persons executing such document, or their representatives, assigns, or agents authorized as aforesaid, appear before the Registering Authority within the time specified in Sections 23, 24, 25, and 26. Sections 41, 43, 45, 69, 75, 77, 83, and 89 apply to this.

8.     Appearances under Section 34(1) may occur at the same time or at different times. Section 34(3)(a) requires the Registering Officer to investigate whether or not the document was signed by the people who claim to have signed it. Section 34(3)(b) adds that it is his responsibility to ascertain the identity of anyone who appears before him and claims to have executed the document. It must be understood and read in conjunction with Section 32. (a). Section 32(a) requires that the document be presented for registration by someone who is executing or claiming under it, among other things. In the case of a person who presents the document and claims to have executed it, not only is he entitled to present the document for registration, but the Registering Officer's duty in the inquiry under Section 34 34(3)(a) and 3(b) is only to enquire and find that such person is the person who has executed the document he has presented and to be satisfied about the person's identity.

9.     When it comes to Section 34(3)(c), the Registering Officer is required to satisfy himself of the right of any person appearing as a representative, assign, or agent. Section 34(3)(c) applies to individuals covered by Sections 32(b) and 32(c) of the Act.

10.  The term "agent" refers to a person who is authorized to present the document for registration. Section 32 would apply to such an agent (c). Thus, in the case of persons falling under Section 34(3)(c), it would be incumbent on the agent, among other things, to produce the power of attorney as such.

The court also noted that, in this case, the second defendant was armed with a power of attorney dated 28.01.1987, and if it had not been cancelled and he had executed the sale deed on 28.04.1987, he would be well within his rights to present the document for registration under Section 32(a) of the Act. As a result, the bench made the following observations:

“25. For reasons, which we have indicated, Section 32(c) read with Section 33 and Section 34(2)(c) are interrelated and they would have no application in regard to the document presented for registration by a power of attorney holder who is also the executants of the document. In other words, there is really no need for the production of the original power of attorney, when the document is presented for registration by the person standing in the shoes of the second defendant in this case as he would be covered by the provisions of Section 32(a) as he has executed the document though on the strength of the power of attorney. To make it even further clear, the inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not.”

Concerning the plaintiff's contention that the power of attorney was revoked, the court noted that there is no mention in the plaint of the plaintiff cancelling it in the manner that he has deposed to in the evidence? While allowing the appeal and restoring the Trial Court's decision, the bench made the following observations:

“At any rate, we find it difficult to accept the case of the plaintiff that the first defendant, who is the third party, could be attributed any knowledge of the surrender or the alleged cancellation on 02.02.1987, even assuming for a moment that we could lend credence to the plaintiff's version in this regard that the second defendant surrendered the power of attorney. We need not pronounce on the question whether the power of attorney being registered, it could be cancelled only by a registered power of attorney. This we say as even in the absence of a registered cancellation of the power of attorney, there must be cancellation and it must further be brought to the notice of the third party at any rate as already noticed. Such a cancellation is not made out"



Tagged: Supreme Court   Justice KM Joseph   Justice PS Narasimha  
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