Sale Under Power Of Attorney Unaffected By Subsequent Cancellation Of PoA : Supreme Court

The Supreme Court has observed that sale transactions carried out on the basis of a valid Power of Attorney (PoA) cannot be sought to be set aside later on the ground that the PoA was cancelled subsequently.

Holding so, the Court affirmed an order of the Trial Court rejecting a plaint, which sought to annul certain past sale transactions on the basis of the subsequent cancellation of the PoA.

The PoA was executed by the plaintiff in the name of the first respondent on 15.10.2004. In 2018, the plaintiff filed a suit seeking to annul certain sale transactions carried out between 2004-2006 and in 2009. The plaintiff claimed that he got knowledge about the sale transactions only on 21.09.2015 and the suit was filed within the three-year limitation period from such date. The power of attorney was cancelled on 22.09.2015. 

The defendant filed an application under Order VII Rule 11 CPC to reject the plaint as time-barred. The trial court allowed the application and rejected the plaint as time-barred, finding that the plaintiff had prior knowledge of the sale transactions entered on the basis of the PoA. However, the High Court restored the plaint on the reasoning that the limitation period has to be reckoned from the date of cancellation of the PoA.

The Supreme Court, while considering the appeal of the defendant, noted that the attempt of the plaintiff is to unsettle concluded transactions on the plea that the power of attorney granted in the year 2004 was cancelled in the year 2015.

In this regard, the bench comprising Justice Sudhanshu Dhulia and Justice K Vinod Chandran observed :

"We are clear in our minds that the cancellation does not affect the prior conveyances made which are clearly on the strength of the power conferred on the appellant. There is no contention raised as to the power of attorney having not conferred the power to enter into conveyances or that such power of attorney was executed by reason of a fraud or coercion employed on the executant. The power holder having exercised the authority conferred; to convey the properties in the name of the purchasers, the cancellation of the power of attorney will have no effect on the conveyances carried out under the valid power conferred. Nor would it confer the person who executed the power of attorney any cause of action, by virtue of a cancellation of the power conferred by a subsequent document, to challenge the valid exercise of the power when it existed."

The Supreme Court opined that the  High Court had erroneously treated the cancellation as the point of commencement of limitation. 

"The power of attorney has been executed in 2004 and the conveyances having been made in the years between 2004-09, there cannot be any cause of action ferreted out on the basis of the cancellation of the power of attorney, after more than 11 years," the Court said allowing the appeal.

Appearances :

For appellant:  Senior Advocate Haripriya Padmanabhan, dvocates Karuppaiah Meyyappan, AOR Raghunatha Sethupathy B, Advocates Kanika Kalaiyarasan, Madhav Gupta Respondent:

For respondents : Senior Advocates Raghenth Basant, G Umapathy, AOR Sabarish Subramanian, Advocates Jahnavi Taneja, Vishnu Unnikrishnan, Danish Saifi, AOR Aditya Singh-1, Advocates Tushar Nair, Sujeet Kumar

Case : V Ravikumar v S Kumar

Citation : 2025 LiveLaw (SC) 301

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