Property Law

Umadevi Nambiar v. Thamarasseri Roman Catholic Diocese

(2022) 7 SCC 90; AIR 2022 SC 1640

Facts

The suit property originally belonged to Ullattukandiyil Sankunni.
After his death, it devolved equally upon his two daughters, Umadevi Nambiar and Ranee Sidhan.
In 1971, Umadevi executed a registered general power of attorney in favour of her sister.
The power of attorney authorised the sister to:
lease the property;
borrow money and create security;
sign documents on Umadevi’s behalf; and
present documents for registration.
It did not expressly authorise her to sell the property.
Nevertheless, the sister executed documents transferring parts of the property to third parties in 1981 and 1982.
Those transferees later sold the property to the respondent Diocese.
Umadevi instituted a suit seeking partition and separate possession of her half share.
The trial court held that the sister had no authority to sell and restored Umadevi’s share.
The High Court reversed the decree, largely because Umadevi had not specifically sought cancellation of the earlier transfer documents and was considered to have constructive notice of them.

Whether a general power of attorney authorising execution and registration of documents also implied a power to sell immovable property.
Whether the respondent could claim protection as a transferee from an ostensible owner under Section 41 of the Transfer of Property Act.
Whether the unauthorised transferees could pass a valid title to the respondent.
Whether Umadevi had to seek cancellation of every transfer document before claiming partition.

A power of attorney must be strictly construed.
The power to sell immovable property cannot ordinarily be inferred from general wording permitting an agent to sign or register documents.
A valid power to sell should expressly authorise the agent to:
execute the sale deed;
present it for registration; and
admit its execution before the registering authority.
Under Section 41 TPA, a purchaser from an ostensible owner is protected only when the purchaser:
takes reasonable care to verify the transferor’s authority; and
acts in good faith.
The principle nemo dat quod non habet means that no person can transfer a better title than they possess.

The power of attorney separately and expressly mentioned leasing and creating security.
The omission of an express power of sale was therefore significant.
A general authority to “sign documents” could not be expanded into authority to permanently dispose of ownership.
Punctuation, drafting style or general clauses relating to registration could not create a substantive power of sale that the instrument did not grant.
The purchasers could have examined the registered power of attorney.
A reasonable examination would have shown immediately that the sister had no authority to sell.
Therefore, the respondent could not rely upon Section 41:
the required reasonable care had not been exercised;
the defect in authority was discoverable from the document itself.
Registration of the unauthorised sale did not validate it.
The sister possessed the property as Umadevi’s agent. The agent’s possession was legally the principal’s possession.
Therefore, the sister’s unauthorised dealings did not mean that Umadevi had voluntarily surrendered her possession or ownership.
A person claiming partition is not always required to seek cancellation of transfers made by another co-sharer or unauthorised agent. The transfer may simply be declared ineffective against that person’s share.
Since the sister had no title or authority to transfer Umadevi’s share, the intermediate purchasers acquired no valid title. They consequently had nothing valid to convey to the Diocese.

The power of attorney did not authorise the sister to sell the property.
The sales concerning Umadevi’s share were ineffective.
The respondent was not protected by Section 41 because reasonable inquiry would have revealed the absence of authority.
Applying nemo dat quod non habet, the subsequent purchasers could not acquire a better title than their vendors.
The Supreme Court allowed the appeal and restored the trial court’s preliminary decree granting Umadevi partition of her half share.