REVOCATION OF POWER OF ATTORNEY DOES NOT ABSOLVE THE LIABILITIES OF THE ISSUER

[DR.MARIAPPAN GOVINDARAJAN]

In AKSHAY & ANR. VERSUS ADITYA & ORS. - 2024 (10) TMI 43 - SUPREME COURT, the appellant owned some immovable properties. The appellants entered into an joint venture agreement (‘JVA’ for short) with the respondent No.2, Glandstone Mahaveer Infrastructure Private Limited, for the development of land and construction of plots in the said land. The appellants executed an irrevocable power of attorney (‘IPA’ for short) in favor of respondent No. 2 in respect of the said land.

The second respondent entered into sale agreements with the complainants. They filed a complaint before State Consumer Redressal Commission (‘State Commission’ for short) seeking for the declaration that the appellants and respondent No.2 are jointly and severally liable for their unfair trade practices. They are liable to complete the construction as per the agreement entered into by them with the respondent No.2. Further they are to put the possession of the properties allotted to them and to execute sale deed for the same.

The State Commission partly allowed the complaints of the complainants on 10.07.2017. The State Commissioner further directed-

• The appellants and the respondent No.2 should provide the possession of the dwelling units as agreed by the appellants and the respondent No. 2 within six months from the date of receipt of order.
• The complainants shall pay the entire consideration of the dwelling unit to the complainants as per the stages and the final amount at the time of sale deed and possession as per the agreement.
• After this the sale deed should be executed in favor of the complainants.
• The complainants shall bear the expenses for registration of sale deed.
• The appellant shall pay compensation of Rs. 1 lakh to each complainant for physical and mental harassment within one month from the date of receipt of order.
• Failing which the appellants are liable to pay interest @ 9% per annum till the date of payment.
• The appellants and the respondent No. 2 shall pay Rs.10,000/- to each complainant till final payment.

The appellants filed an appeal before the National Consumer Disputes Redressal Commission (‘National Commission’ for short) against the order of State Commission, dated 10.07.2017. The National Commission dismissed the appeal filed by the appellants. The National Commission observed that the present appellants/respondent No. 2 and 3 had issued notice, by which they claimed that they had cancelled the JVA and the IPA. However, the said notice was issued on 12.08.2014, which was much after the agreement made by the OP-1 with the Complainants at the time of the agreement between the builder and the complainants, the JVA and IPA were very much operative. Therefore, the appellants cannot wash their hands off from the matter, as it would result in grave injustice to the complainants. the appellants were asked that in case the plea taken by them in the appeals were accepted, how shall it be possible to safeguard the interests of the consumer, who had invested in the said project, after looking at the agreement between them and the OP-1 builder. no satisfactory reply could be given by the appellants. The appellants relied on 2 Supreme Court judgments. The National Commission held that the said two case laws are not applicable to the present case.

The National Commission held that the impugned order does not suffer from any illegality, irregularity or jurisdictional error of any kind and the same is upheld. The present appeals are ordered to be dismissed in limine.

The aggrieved parties appeal before the Supreme Court against the order of National Commission, dated 28.11.2017. The appellant submitted the following before the Supreme Court-

• The appellants revoked the Irrevocable Power of Attorney executed in favor of respondent No.2 on 12.08.2014.
• Therefore, the appellant could not be held for any act done by the second respondent.
• This complaint is not maintainable before Consumer Forum since the appellants were not privy to the agreement between the second respondent and the complainants.

The respondent 2 submitted before the Supreme Court that the respondent no. 2 is still ready to complete the project if the appellants rendered their co-operation. The appellants gave irrevocable power of attorney on payment of Rs.1.51 crores. Therefore, the respondent No. 2 executed agreements with the consumers. In the revocation letter, the respondent no.2 contended that they could not be liable for the acts of the Respondent No.2 “henceforth” meaning thereby after the said letter. The respondent No.2 executed agreements with the complainants before the said letter. The Joint Venture Agreement has not been cancelled by the appellants.

The Supreme Court observed that an irrevocable power of attorney dated 6.7.2013 was executed by the appellants in favor of the Respondent No.2 along the JAV of the same date, pursuant to which the Respondent No.2 had undertaken to develop the land in question. Though allegedly the said power of attorney was revoked by the appellants vide the letter dated 12-8-2014, the JAV has not been revoked so far and the same still continues to be in force. The Supreme Court further observed that the appellants therefore were bound by the acts of the Respondent No.2 carried out pursuant to the irrevocable Power of Attorney till it was terminated, in accordance with law. the appellants have not taken any action whatsoever against the respondent No.2 with regard to the alleged non-compliance of the terms and conditions of JAV by the said Respondent. Therefore, the appellants are liable for the acts of respondent No. 2.

The Supreme Court did not find any good ground to interfere with the orders of National Commission and so dismissed the appeal filed by the appellant.