Even An Irrevocable Power Of Attorney Does Not Have The Effect Of Transferring Title: Delhi High Court
The Bench noted that a GPA holder cannot claim ownership of property, remains bound to remit sale proceeds to Principal.
Justice Neena Bansal Krishna, Delhi High Court
The Delhi High Court reiterated that even an irrevocable Power of Attorney does not have the effect of transferring title to the attorney.
The Court dismissed a first appeal challenging a decree on admissions passed against a General Power of Attorney holder who had sold his deceased sister-in-law's undivided share in agricultural land but withheld the bulk of her portion of the sale consideration, holding that a General Power of Attorney is not an instrument of transfer of right, title or interest in immovable property but merely a document of agency, even where it purports to be irrevocable.
The Court held that a GPA holder who receives sale proceeds on a principal's behalf cannot appropriate them as his own and remains statutorily bound to remit the principal's share to her, since the GPA never extinguished the principal's ownership so as to let the attorney treat the property or its proceeds as his own.
A Single Judge Bench of Justice Neena Bansal Krishna observed, “…A General Power of Attorney is not an instrument of transfer of right, title or interest in an immovable property, but is a document of agency. Even an irrevocable Power of Attorney does not have the effect of transferring title to the attorney…”.
“Once it stands admitted that the Appellant acted as the agent of Smt. Kusum Mehta and received the sale consideration in that capacity, the consequences under Section 218 of the Indian Contract Act, 1872, which provides that an agent is bound to pay to his principal all sums received on his account, would follow”, it further noted.
Advocate Vikas Tiwari appeared for the appellant and Advocate Vikas Arora appeared for the respondents.
In the matter, Kusum Mehta, along with three sisters-in-law, had jointly purchased agricultural land in Najafgarh in 1985, each holding a one-fourth undivided share. In 2011, the appellant, her husband's brother, sold the entire property as General Attorney for three of the four co-owners, including Kusum Mehta, for a total consideration of Rs. 6,95,11,500. Kusum Mehta's rightful share worked out to Rs. 1,73,77,875, but the appellant credited only Rs. 71,99,801 to her account in March 2012, retaining the balance of Rs. 1,01,78,074.
After her death in 2013, her three daughters, as legal heirs, sued for recovery of the shortfall, while the appellant claimed the sum paid was in fact a friendly loan and filed a separate counter-claim for its recovery.
The plaintiffs sought judgment on admissions under Order XII Rule 6 of the CPC, relying on the sale deed's recitals describing Kusum Mehta as an "absolute owner" and "Vendor," and on the appellant's own reply to a police complaint acknowledging identical deposits made to all three co-owners.
The Additional District Judge, New Delhi, decreed the suit for Rs. 1,01,78,074 with 8% interest from the date of the sale deed, a decision upheld on review. The appellant then filed the present Regular First Appeal under Section 96 CPC, contending that no unequivocal admission existed, that the suit was time-barred, and that the decree could not have been passed while his counter-claim remained pending.
The Court found the sale deed's own recitals, describing all four vendors, including Kusum Mehta, as absolute owners of self-acquired property, executed through the appellant as General Attorney, to be a clear and categorical admission binding the appellant under Sections 91 and 92 of the Evidence Act.
It rejected the appellant's contrary claim of sole ownership as an unsubstantiated attempt to resile from his own registered instrument. On the power of attorney point, the Court held that the 1985 and 1995 instruments, even carrying an irrevocable power of "gift," were documents of agency and did not extinguish Kusum Mehta's ownership, triggering the appellant's obligation under Section 218 of the Indian Contract Act to account for sums received on her behalf.
“The defence of an interest-free friendly loan, being wholly unsupported by any documentary material and being contradicted by the Appellant's own contemporaneous written Reply before the police authorities, is a moonshine defence, and cannot detain the Court from passing a decree on admissions under Order XII Rule 6 of the Code”, the Bench had noted.
Accordingly, finding no infirmity in the trial court's judgment and decree, the High Court dismissed the appeal along with all pending applications.
Cause Title: Bhisham Mehta v. Gita Vig and Ors. (Neutral Citation: 2026:DHC:7295)
Appearances:
Appellant: Vikas Tiwari, Advocate.
Respondent: Vikas Arora, Rashi Priya and Vansh Arora, Advocates.