The Delhi High Court has dismissed an appeal filed by Bhisham Mehta against a decree directing him to pay ₹1,01,78,074 to the legal heirs of Kusum Mehta, along with 8% annual interest from April 11, 2011 until realisation.
The dispute relates to 26 bighas of agricultural land in Paprawat, Najafgarh, New Delhi. The property was jointly owned by four women, including Kusum Mehta, who held a one fourth share.
The property was sold to Agile Properties Limited for ₹6,95,11,500 in April 2011. Mehta executed the sale deed as the registered General Power of Attorney holder of three co owners.
Kusum Mehta’s one fourth share in the sale proceeds was ₹1,73,77,875. However, only ₹71,99,801 was transferred to her bank account. The remaining ₹1,01,78,074 was retained by Mehta.
The trial court had ordered recovery of the balance amount under Order XII Rule 6 of the Code of Civil Procedure, which permits judgment based on clear admissions.
Court rejects ownership claim
Mehta argued that General Powers of Attorney executed in 1985 and 1995 had transferred the property rights to him. The High Court rejected the argument.
The court noted that the registered sale deed itself identified Kusum Mehta and the other co owners as absolute owners and vendors. It also recorded that Mehta executed the sale as their General Attorney.
The court held that a General Power of Attorney is an agency document and does not transfer ownership of immovable property to the attorney.
Court rejects loan explanation
Mehta also claimed that the ₹72 lakh deposited into Kusum Mehta’s account was an interest free friendly loan.
The court found this explanation unsupported. It noted that identical amounts had been deposited into the accounts of two other co owners around the same period.
Kusum Mehta had also reported ₹71,99,801 as long term capital gains from the property sale in her income tax return and paid tax on it.
The court found no loan agreement, acknowledgement or other documentary evidence supporting Mehta’s claim.
The court also rejected the limitation objection, holding that the cause of action arose when Kusum Mehta became aware of the sale and the retained amount in April 2012.
The suit filed on April 15, 2014 was therefore within the three year limitation period. The High Court found no error in the trial court’s decision and dismissed the appeal.
What does this mean for you?
If a property is sold through a Power of Attorney holder, the attorney does not become the owner merely because they hold the authority to sell it. The sale proceeds received on behalf of the owner must be accounted for and paid to the owner.
