2011 (3) TMI 720 - SC - Indian Laws

Whether the defendants prove that the agreement of sale dated 25-6-1979 was taken by the plaintiff by practicing fraud on the II defendant as per the written statement of D1 and D2 - The High Court failed to realise that it was deciding the First Appeal and that it had to be decided strictly in adherence with the provisions contained in Order XLI Rule 31 of the Code of Civil Procedure 1908 (hereinafter called CPC) and once the issue of alleged power of attorney was also raised as is evident from the point (a) formulated by the High Court the Court should not have proceeded to point (b) without dealing with the relevant issues involved in the case particularly as to whether the power of attorney had been executed by the respondent in favour of his brother enabling him to alienate his share in the property - the matter to the High Court setting aside its judgment and decree (impugned) and request the High Court to decide the same afresh in accordance with law as explained hereinabove - As the case has been pending for three long decades request the High Court to decide it expeditiously - However it is clarified that any observation made herein shall not adversely affect the cause of either parties.

Issues Involved:
1. Execution and validity of the power of attorney.
2. Payment and consideration under the agreement.
3. Non-joinder of necessary parties.
4. Enforceability of the agreement dated 25-6-1979.
5. Admissibility and probative value of secondary evidence.
6. Adequacy of consideration and rise in property value.
7. Compliance with procedural requirements by the appellate court.

Detailed Analysis:

1. Execution and Validity of the Power of Attorney:
The respondent denied executing a power of attorney authorizing his brother to sell the property. The Trial Court inferred the existence of such power based on the respondent's admission of his signature on a photocopy. However, the Supreme Court highlighted that merely admitting a signature does not prove the contents or validity of the document, especially when the original was not produced or authenticated as required by Sections 65 and 66 of the Indian Evidence Act, 1872. The Court emphasized that secondary evidence must be authenticated by foundational evidence proving it is a true copy of the original.

2. Payment and Consideration Under the Agreement:
The appellant claimed to have paid Rs. 65,500/- against the agreed Rs. 40,000/-. The Trial Court accepted this without requiring an explanation for the excess payment. The Supreme Court found this improbable and highlighted that any deviation from the agreed terms without proper justification is not natural human conduct in business transactions.

3. Non-Joinder of Necessary Parties:
The Trial Court did not address the issue of non-joinder of necessary parties adequately. The Supreme Court noted that the alleged power of attorney holder, R. Viswanathan, was not impleaded in the Supreme Court appeal, which could affect the adjudication process.

4. Enforceability of the Agreement Dated 25-6-1979:
The Trial Court decreed specific performance based on the agreement, while the High Court reversed this decision. The Supreme Court noted that the enforceability of the agreement should consider Clause 11, which provided for the refund of earnest money with damages in case of non-execution of the sale deed.

5. Admissibility and Probative Value of Secondary Evidence:
The Supreme Court stressed that the Trial Court erred in admitting the photocopy of the power of attorney without proper authentication. Admissibility does not equate to probative value, and the contents of the document must have probative value to be considered valid evidence.

6. Adequacy of Consideration and Rise in Property Value:
The appellant argued that the High Court erred in setting aside the Trial Court's decree based on inadequate consideration and rise in property value. The Supreme Court refrained from delving into this issue, focusing instead on procedural and evidentiary lapses.

7. Compliance with Procedural Requirements by the Appellate Court:
The Supreme Court criticized the High Court for not adhering to Order XLI Rule 31 of the Code of Civil Procedure, 1908, which mandates a detailed assessment of evidence and independent findings on all issues. The High Court failed to address the critical issue of the power of attorney adequately.

Conclusion:
The Supreme Court set aside the High Court's judgment and remitted the matter for fresh adjudication, emphasizing the need for a thorough and lawful examination of all relevant issues, particularly the validity of the power of attorney and the procedural compliance by the appellate court. The case was remanded to the High Court for expedited resolution, considering its prolonged pendency.

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