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TMI Blog1977 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... as earnest money. The seller was to pay four Installments of the Government dues while the rest of the Government dues were to be paid by the buyer. The balance of the consideration was to be paid by the buyer to the seller at the time of the registration of the sale deed. The important part of the agreement contained in para 3 stated that in order to facilitate the transaction the seller has appointed Shri Gulati a nominee and husband of the buyer as his general as well as special attorney who will perform all acts, deeds and things which are stated to be done by the seller in connection with the management and payment to the said dues of the Government in respect of the said property . And the seller shall not be responsible for any negligence of the said attorney who is the nominee of the second party (buyer) . On the same day, the general and the special powers of attorney mentioned above were executed by the seller in favor of Shri Gulati. The special power of attorney Exhibit P-7 enabled the attorney to make payment of the Government dues. The general power of attorney Exhibit P-8 authorised the attorney to sell the appellant's shop to any purchaser and to get the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) that he actually cancelled the general and the special powers of attorney which had been given by him to Shri Gulati, and (2) that he had the power to cancel them. It is only if he succeeds in proving both these points that the sale of the shop by Shri Gulati to the respondent would beshown to be without authority and the decree of the trial Court would beshown to be wrong. Let us consider these two points separately. Point NO. 1 (5) Two separate powers of attorney for two distinct purposes had been executed by the appellant in favor of Shri Gulati on 11-1-1964. The special power of attorney enabled Shri Gulati to make payment of the Government dues on behalf of the appellant in respect of the shop in question. The general power of attorney enabled Shri Gulati to sell the shop to the respondent. The notice of cancellation addressed to Shri Gulati purported to cancel power of attorney dated 11-1-1964 and twice again referred to the said power of attorney . To what power of attorney does this notice refer ? There was not one power of attorney simpliciter executed by the appellant in favor of Shri Gulati. There were two powers of attorney executed by him in Shri Gulati's f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as himself an interest in the property which forms the subject-matter of the agency, the agency cannot. in the absence of an express contract, be terminated to the prejudice of such interest. If the agent himself had an interest in the property which formed the subject-matter of the agency, then in the absence of an express contract to the contrary these powers of attorney could not be terminated by the appellant to the prejudice of such interest. Firstly, let us consider the meaning of the expression interest in section 202. The word has not been defined in the Contract Act. It has, therefore, to be construed in the light of the situations which arise under the various provisions of the Contract Act. The Act deals with all kinds of property, movable and immovable, corporeal and incorporeal. It also deals with all kinds of rights, proprietary, non-proprietary personal and corporate. The word interest is to be applied to a wide variety of cases under the Contract Act and must, therefore, be given a wide meaning to serve these wide purposes of the Act. It is not a term of art or a technical word. In jurisprudence, the word interest simply means an advantage or a benefit. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals with the performance of contracts which includes the performance of contracts relating to immovable property also. In fact, section 4 of the Transfer of Property Act says that the chapters and sections of that Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872. Therefore, the respondent in whose favor the appellant had executed an agreement for the sale of an immovable property had an interest in the subject-matter of the contract, namely, the shop, turn the purposes of section 202 of the Contract Act if not for the purposes of the Transfer of Property and the Registration Acts. (8) In Loonkaran Sethiya v. State Bank of Jaipur, , the respondent bank was given an irrevocable power of attorney by the appellant. For, the appellant had borrowed money from the bank. He had empowered the bank to recover money due to him from his debtor by executing a decree in which he was the decree- holder. The word interest under section 202 of the Contract Act was construed as follows at page 126 of the report :- . THEREis hardly any doubt that the power given by the appellant in favor of the Bank is a power coupled with interest. That is clear both f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent to recover his out-of-pocket expenses from the decretal amount did not make the object of the power of attorney to be the benefit of the agent. Section 202 of the Contract Act, therefore, did not apply. For the same reason, section 202 was not attracted to the facts in Dalchand v. Seth Hazarimal Air 1932 Nagpur 34 (3) because the agent was merely entitled to retain a part of the price of the cloth sold by him as his remuneration but he had no interest in the cloth itself -within the meaning of section 202. The same distinction is maintained in Mutharasu Thevar v. Mayandi Thevar, . But the facts of the case before us are different. They are analogous to the facts of the Supreme Court decision referred to above and, therefore, the agent in our case had an interest in the property which was the subject-matter of the agency within the meaning of section 202. (10) The matter may be looked at from another point of view. Legally protected interest or a benefit of one party casts a corresponding obligation on the other party to the contract. If the contract of agency confers an interest or a benefit on the agent, it casts an obligation on the principal. In the present case, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igence of Shri Gulati who is the nominee of his own wife. Since Indian ladies are traditionally not transacting business activities, it is well known that their husbands figure as their representatives or agents in these activities. This is why Shri Gulati has acted for the respondent in these transactions. Ha interest in this transaction was the same as that of his wife. It was, therefore, the interest of Shri Gulati that the property which was the subject-matter of the agency .should be conveyed by the appellant to the respondent. The interest in such conveyance was not only of the respondent but also of Shri Gulati. The powers of attorney in favor of Shri Gulati were executed by the appellant on the same date on which he executed the agreement of sale in favor of the respondent. Since Shri Gulati acted for his wife, all these documents, therefore, constitute one transaction. The powers of attorney are granted to Shri Golati only because an agreement of sale is entered in favor of his wife. Shri Gulati no less than his wife is, therefore, interested in the subject- matter of the agency, namely, the shop. If the agency were to be terminated, prejudice would have been caused to t ..... 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