1. This Revision Application is directed against the judgment dated 5-7-1975 passed by the learned Additional District Judge, Khairpur, whereby he set aside the judgment and decree dated 9-5-1972 passed by the learned Civil Judge, II Class, Khairpur and dismissed the suit filed by the applicant against the respondent.
2. The relevant facts, as per the pleadings of the parties, are that the respondent after surrendering 16-11 acres of agricultural land situated in dehs Baharpur and Rahoja of Tehsil and District Khairpur, under Martial Law Regulations 89/91, exercised his option and repurchased the said land at the sanctioned rates. Thereafter, on 5.7-1965, he entered into an agreement with the applicant in respect of the aforesaid land, whereby it was agreed that the applicant would pay to the Government all the instalments towards the purchase price of the land and a further sum to the respondent (described in the agreement as the first party) in consideration whereof the respondent undertook to transfer the entire land by executing absolute deed of transfer of the lands in favour of the applicant after full price was paid up and rights of absolute ownership were conferred on him. The agreement further contained that out of purchase price the applicant had paid Rs. 5,000 to the respondent under a separate receipt in lieu whereof the respondent had delivered possession of the aforesaid land to the applicant with full rights of management and enjoyment of the entire yield and produce of the said lands.
3. Simultaneously with the execution of the aforesaid agreement, the respondent, on the same day, also executed a general power of attorney in favour of the applicant in respect of the aforesaid land empowering him, inter alia, to manage, sell, mortgage, let out on lease, give on interest or otherwise transfer and dispose of the aforesaid lands in such name and on such terms as thought fit by the applicant. It was further provided in clause 16 that the power of attorney was irrevocable and was to hold good for all times even after the death of the executant respondent.
4. The applicant thereafter entered into possession of the land and paid all the instalments to the Government towards the purchase price of the land and also paid Rs. 14,870 to the respondent directly, and thereafter applied to the Rehabilitation Authorities for issuance of clearance certificate to effectuate change of khata in his name. Before it could be done, however, the respondent cancelled the power of attorney in favour of the applicant and directed the Rehabilitation Authorities not to issue the clearance certificate. Consequently, the applicant filed the suit for declaration that the power of attorney executed in favour of the applicant was irrevocable and could not be cancelled by the respondent, as the applicant had beneficial interest in the land forming the subject-matter of the power of attorney and also prayed for permanent injunction restraining the respondent from interfering with the agency rights of the applicant.
5. The respondent contested the suit and pleaded in his written statement that the suit was not maintainable under section 42 of the Specific Relief Act, that the trial Court had no jurisdiction, that the suit was time-barred and bad for non-joinder of necessary party. He however admitted execution of the agreement and the power of attorney but denied that the powers conferred by it were absolute, and pleaded that the power of attorney was legally revoked by him, as both the power of attorney and the agreement were unenforceable and void ab initio in view of the provisions of Martial Law Regulation 89/91 and the Registration Act, which prohibited such sale or transfer of the land to the applicant. He further pleaded that the applicant had committed contractual breaches on many occasions and done acts, transactions and undertakings not contemplated by the power of attorney and the agreement and, therefore, the power of attorney was rightly cancelled. He also alleged misappropriation of recovery of produce, crops and moneys by the applicant.
6. On the basis of the above pleadings, the trial Court framed the following issues on which both the parties led evidence by examining themselves only :-
(1) Is the general power of attorney executed by the defendant in favour of the plaintiff irrevocable and subsisting?
(2) Has this Court no jurisdiction?
(3) Is the suit not maintainable according to law?
(4) Is the suit barred by law as alleged in paragraph 2 of the written statement ?
(5) Is the suit barred by limitation?
(6) What should the decree be?
7. On Issue No. 1, the trial Court gave a finding in favour of the applicant and held that, as the applicant had interest in the land which formed the subject-matter of the power of attorney-which was expressly stated to be irrevocable, the same could not be revoked and cancelled in view of section 202 of the Contract Act. On the remaining issues also, he gave a finding in favour of the applicant and decreed the suit.
8. Being aggrieved, the respondent appealed against the judgment and decree passed by the trial Court. In the appeal, the learned 1st Additional District Judge agreed with the finding of the trial Court that the afore--mentioned agreement entered into between the parties was valid and that the trial Court had the jurisdiction in the suit, but he held that the declaration sought for by the applicant in the suit was beyond the scope of section 42 of the Specific Relief Act, inasmuch as, it amounted to seeking a declaration in respect of contractual relationship which could not be granted under the aforesaid section, and dismissed the suit filed by the applicant. Hence this Revision Application by the applicant.
9. Mr. Safdar Hussain Fani, learned counsel for the applicant, contended that as the applicant agent had beneficial interest in the land which formed the subject-matter of the power of attorney inasmuch as, the said land had been, on the same day, agreed to be sold by the respondent to the applicant who had paid Rs. 5,000 to the respondent towards the purchase price at the time of execution of the agreement and the power of attorney and got into possession of the land and had been cultivating it since then and enjoying its produce and had also paid all the instalments to the Government towards the purchase price of the land and the further sum to the respondent, the power of attorney was a power coupled with interest which could not be revoked and cancelled by the respondent in view of section 202 of the Contract Act.
10. Mr. S. Ali Nazar, learned counsel appearing for the respondent, in reply did not dispute execution of the agreement and the power of attorney by the respondent in favour of the applicant on the same day and his receiving Rs. 5,000 from the applicant towards the sale price of the land from the applicant at the time of execution of the aforesaid two documents. He, however, contended that as under para. 10 of the Settlement Scheme framed under M. L. R. 89/91 the respondent had no power to sell the land at the time of his executing the aforesaid agreement with the applicant, the same was illegal, void ab initio and not binding, and consequently the power of attorney which was executed in furtherance of the illegal agreement was also illegal and unenforceable in law and no suit could be filed on the basis of it. He next contended that as all the instalments in respect of the land had not been fully paid to the Government and the land had still not been transferred to the respondent and the applicant had not paid the entire agreed price to the respondent, the agreement to sale executed by the respondent in favour of the applicant stood cancelled resulting in the forfeiture of the amount already paid by the applicant and therefore no interest of the applicant remained intact and, consequently, there remained nothing to be secured by means of the power of attorney. The learned counsel lastly contended that as the power of attorney did not mention the interest of the applicant in the land in question, it was an independent document which could be legally revoked by the respondent at any time and the said agreement could not be relied upon by the applicant in support of it.
11. The question for consideration is whether the power of attorney executed by the respondent in favour of the applicant was irrevocable and could not be cancelled by the respondent.
12. The question as to when does the power of attorney become irrevocable has been considered in several English cases and by the Courts of U. S. A. And the consensus of view is that it becomes irrevocable when it is "coupled with an interest" and defining the meaning of the phrase 'coupled with an interest', in Hunt v. Ransmanier (8 Wheat 174=5 L ed, 589), Chief Justice Marshal, in a luminous statement confined it to cases where together with the power, there was vested in the donee an estate, right or interest in the subject of the power, as distinguished from an interest in the proceeds of the power when exercised, To quote the words of Chief Justice Marshal : - "It becomes necessary to inquire, what is meant by the expression 'a power coupled with an interest'? Is it an interest in the subject on which the power is to be exercised? Or is it an interest in that which is produced by the exercise of the power? We hold it to be clear that the interest which can protect a power after the death of a person who creates it must be an interest in the thing itself. In other words, the power must be ingrafted on an estate in the thing. The words themselves seem to import this meaning. 'A power coupled with an interest' is a power which accompanies or is connected with an interest. The power and the interest are united in the same person. But if we are to understand by the word 'interest' an interest in that which is to be produced by the exercise of the power, then they are never united. The power, to produce the interest, must be exercised, and by its exercise, is extinguished. The power ceases when the interest commences, and therefore cannot, in accurate law language, be said to be 'coupled' with it."
13. Relying on the above luminous statement and after referring to several other cases in which the above statement was adhered to, the Court, in the case reported as Todd v. Superior Court ((1919) 7 A L R 938 - 184 Pac. 684), summarised the principle as under :- "In order to constitute an irrevocable power of attorney there must co-exist with the power a beneficial interest in the subject-matter thereof which is enforceable I n the name of the attorney in fact, and will survive the constituent ; or the power must be given as security for the payment of a sum of money other than that which arises as compensation through the exercise of the power ; or as security for the performance of some act of value."
14. Elaborating further on the nature of `interest' necessary in the attorney to prevent its revocation, it was observed; "the interest which the attorney in fact must have in the subject-matter of the power in order to render the power irrevocable is such a beneficial interest in the thing itself, apart from the proceeds, that if the power were revoked he would b.- deprived of a substantial right. In other words, the relation of the attorney in fact to the subject---matter must be such that a revocation of the power would be inequitable."
15. Our own law on the subject is, however, contained in section 202 of the Contract Act which reads as under :- "Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract be terminated to the prejudice of such interest."
16. While dealing with the above section in the D. B. Case reported as Palani Vannan and others v.
17. Krishnaswa mi Konar and others (AIR 1946 Mad. 9), it was observed that the section did no more than state the effect of the English decisions under common law, and after citing several reported cases, concluded, the effect of all these cases appears to b., stated accurately in Bowstead on the Law of Agency, Edn. 8, p. 456. It is stated (Art. 138) "where the authority of an agent is given ---for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsisting of such security or interest".
18. Similarly, in the case reported as Garapati Venkana v. Mullapudi Atchutaramanna and others (AIR 1938 Mad. 542) it was observed that the "principle applies only to cases, where authority is given for the purpose of being a security or a part of the security, and not to cases where the interest of the donee arises afterwards and incidentally, in such cases there is no authority coupled with an interest; but an independent authority, and an interest subsequently arising".
19. The aforesaid section also came up for interpretation in the case reported as Kondayya Chetti v.
20. Narasimhulu Chetti (I L R 20 Mad. 97), and the Division Bench while explaining the true scope of the section observed that section 202 was wider in terms and "in the section itself all that is necessary is that the agent should himself have `an interest in the property' to be sold, and it seems to us that such interest may be inferred from the language of the document and from the course of dealings between the parties and need not be expressly given. It is the existence of an interest, not the mode in which it is given, that is of importance".
21. Respectfully agreeing with the above enunciation of the scope of section 202 of the Contract Act, it now remains for determination whether the applicant had interest in the land forming the subject- matter of the power of attorney, which rendered the power irrevocable and prohibited its cancella- -tion. The power of attorney reads asunder :- "General power of attorney.---Know all men by these presents that, I, Syed Qasim Naqvi son of Muhammad Kazim Naqvi, Muslim, adult, residing at House No. 59, Parsi Colony, Karachi, having agricultural lands 29 acres 18 ghuntas at Deh Baharpur, Tappa Manghawari Tehsil and District Khairpur Mirs under Surveys Nos. 74/1-28, 76/2-21, 237/0-10, 111/3/2-26, 157/6-8, 166/3-0, 168/3-12, 178/1-25/173/4-3, 73/1-25, 74/1-26 and 28/7-6 and an other 26 acres 27 ghuntas of agricultural lands at Deh Rahoja, Tappa Manghanwari. Tehsil and District Khairpur Mirs under Nos. 90/7-5, 400/1-33, 415/1-17, 451/7-1, 380/1-3-39 and 380/2-08. Now to utilize land and for the purpose do hereby appoint, nominate and constitute Mr. Syed Shafiq Hussain son of Syed Ghulam Abbas, adult, Muslim, aged 34 years, resident of House No. 274, Mohalla Luqman, Tehsil and District Khairpur Mirs (West Pakistan), my General Attorney in my name and on my behalf to do or execute all or any of the following acts, deeds and things in connection with my abovesaid agricultural lands.
(1) To appear and act in all the Courts, civil, revenue, criminal, whether original or appellate in the Registration Office and in any other Offices of the Government or District Board, Municipal Board or Notified Area or any other local authority.
(2) To sign and verify plaints, written statements, petitions, objections, memorandum of appeal, petitions and applications of all kinds to fill them and file them in such Courts and offices.
(3) To manage and deal with all my above lands situated in Deh Baharpur and Rahoja, Tappa Manghanwari Tehsil and District Khairpur Mirs.
(4) To sell, mortgage, let on lease, give on interest or otherwise transfer and dispose of my aforesaid agricultural lands in such name and in such terms and conditions as my aforesaid General Attorney may deem fit and proper.
(5) To execute any transfer or other deed himself or to admit the execution of the same by me.
(6) To take consideration, or to admit the receipt of consideration by me for any sale proceeds, advance amount, lease money, Mokata, or sub lease money from the abovesaid agricultural lands.
(7) To borrow on my behalf any money or take any advance or Taqavi, or lease from Government or any Semi-Government, Rehabilitation offices and pass receipts for the same.
(8) To sow the field or fields himself or by servants or through partner--ship or otherwise as the said Mukhtar may think fit.
(9) To apply for mutation, partition, exchange corporation of the land or part thereof.
(10) To receive rents, profits of the lands or any part of it by filing suits or taking any recovery proceedings in any Court, office or authority.
(11) To let to any person or eject him from the field or land and for this purpose to apply, move or approach any civil, revenue or Courts from lowest to the highest.
(12) To appear, defend, file any suit or any other proceedings in any office, Court or authority and to call and compound or compromise any proceedings.
(13) To engage any Advocate, Vakil or appoint one or more Special Attorney as my General Attorney shall deem fit and proper.
(14) To look after and manage my aforesaid lands and deal with full powers.
(15) And generally to manage or look after the said agricultural land in any way or manner and whereas I could act if personally present and I hereby ratify and confirm all that the said General Attorney may deem fit.
(16) This General Power of Attorney is irrevocable and will hold good for all times even after the death of the Executant.
22. In witness whereof I have set my hand hereunto this 8th day of July, 1965, at Karachi in presence of the following witnesses :- Executant (Sd.)
23. (Syed Abdul Qasim Naqvi) 9-7-1965."
24. Now, the execution of the above power of Attorney is not denied and it is also not denied that on the same day of the execution of the power of attorney, the respondent had also executed the agreement with the applicant donee whereby he had agreed to sell to him the very same land which formed the subject-matter of the power of attorney and received Rs. 5,000 from the applicant towards the sale price on the execution of the said agreement and, in lieu thereof, had delivered possession of the said land to the applicant party with full rights of management and enjoyment of any produce thereof, and that the agreement further provided that the applicant would pay all the instalments to the Government towards the purchase price and as soon as rights of absolute ownership of the said lands were conferred on the respondent, he (respondent) shall execute absolute deed of transfer of the said lands in favour of the applicant second party.
25. The evidence on record would also show that after having paid Rs. 5,000 to the respondent at the time of execution of the said agreement and the power of attorney in his favour, the applicant entered into possession of the land and since then had been cultivating it and appropriating its produce solely to himself without accounting for it to the respondent, and had also paid all the instalments to the Government towards the purchase price of the said land and also advanced Rs.
26. 14,870 to the respondent. That being so, existence of applicant's interest in the land which formed the subject--matter of the power of attorney, within the meaning of section 202 of the Contract Act, can hardly be denied and the facts would show that he bad the interest at the time the power of attorney was executed in his favour.
27. It has been, however, argued by the learned counsel for the respondent that since the power of attorney did not mention the interest of the applicant in the land, it was an independent document and therefore the agreement could not be relied upon in support of it, as the suit was not based on the agreement itself.
28. It is no doubt true that the power of attorney does not specifically mention the interest of the applicant in the land. But, as pointed out in I L R 20 Mad. 97, cited above, it is not necessary that express mention of the interest be made in document itself, as language of section 202 of the Contract Act is wider and what is necessary under the said section is that the agent should 'have an interest' in the property forming the subject-matter of the agency which may be inferred either from the document or from the course of dealings between the parties and, I would add, from the other surrounding circumstances. In other words, it is the existence of the interest, not the mode in which it is given, that is of importance. Admittedly, the agreement to sale as well as the power of attorney were executed on the same day, and the circumstances would show beyond doubt that they were executed in the course of same transaction. That being so, existence of interest of the applicant in the land could well be evidenced by the agreement, and the acknowledgment by the respondent to have received Rs. 5,000 from the applicant towards the price of the land at the time of execution of the power of attorney in favour of the applicant in respect of the same land. That the applicant had interest in the subject-matter of the power of Attorney is also shown by the power of attorney itself. It is expressly stipulated in clause 16 of the document that "this power of attorney is irrevocable and will hold good for all times even after the death of the executant". The question arises, why such a clause was inserted in the power of attorney. The answer could only be that it was inserted because the applicant had interest in the land which formed the subject- matter of the power of attorney and it was to secure that interest that the power of attorney was expressed to be irrevocable. In other words, such a clause would not have been expressly mentioned in the document, unless the applicant was admitted to have had interest in the land which was intended to be secured, and then, parties are presumed to mean and intend what they agree upon and reduce in writing and would be bound by it. Further, no explanation has been offered by the respondent in his evidence whether in spite of it being expressly stipulated in the power of attorney, it was not intended to be irrevocable. All that was argued by the learned counsel for the respondent in this behalf was that since the agreement itself was illegal, in view of the provisions of M. L. R. 89/91 which did not permit sale or transfer of surrendered land to any one until full price was paid to the Government and the land was transferred to the optee purchaser, the power of attorney executed in furtherance of such agreement also became illegal and could not be enforced in law.
29. I am not impressed with the argument. I am not dealing here with the validity, or otherwise, of the agreement to sale and also no issue regarding it had been framed by the Courts below. It will not be proper for me, therefore, to express any opinion on this aspect in these proceedings, and this position was conceded to even by the learned counsel for the respondent himself. All that has to be seen by me here, therefore, is whether the applicant had beneficial interest in the subject- matter of the power of attorney, and it is in this connection that the agreement is relied upon collaterally to show consideration for execution of the power of attorney and interest of the applicant in the land and to explain as to why it was expressly mentioned in the power of attorney that it was irrevocable, which indeed could be legitimately done, as the agreement, which was in writing, did not stand in competition with or contradict the power of attorney. Dealing with somewhat similar contention in (1906) A C 256, Lord Atkinson, while delivering the judgment for Judicial Committee, cited with approval the rule enunciated by the Vice-Chancellor (Sir L. Shad Well) in Clifford v. Turrel (lY&C138) as under :- "Rules of law may exclude parol evidence where a written instrument stands in competition with it, but it has long been settled that it is not within any rule of this nature to adduce evidence of a consi--deration additional to what is stated in a written instrument."
30. He added further :- "The rule is, that where there is one consideration stated in the deed. You may prove any other consideration which existed, not in contradiction to the instrument ; and it is not in contradiction to the instrument to prove a larger consideration than that which is stated."
31. Thus, it cannot be legitimately maintained that the agreement executed by the respondent could not be looked into in the present proceedings for such collateral purposes.
32. It may be mentioned here that this very contention regarding the agreement being void on account of the provisions of M. L. R. 89/91, was raised before the trial Court and the first appellate Court who both repelled it and the learned counsel for the respondent could not assail their finding.
33. The relevant finding by the appellate Court may be reproduced as under :- "The next point argued by the learned Advocate for the appellant/ defendant was that the contract entered into between the above parties was void ab initio in view of the provisions of section 23 of the Contract Act. He argued that the agreement to sell executed by the parties was in respect of the surrendered land under para. 8 of M. L. R. 89 and free from incumbrances in the Government of Pakistan under para. 9 of the said regulation. An option to purchase was given to the claimant surrendering such land under para. 4 of M. L. R.
91. Sale, transfer, alienation, creation of rights, interests or incumbrances in the surrendered land was declared void by M. L. R. 89, until and unless full price of the surrendered land was paid to the Government. The learned Advocate for appellant argued that agreement to sell was in contravention of the provisions of M. L. R. 89 and as such was hit by section 23 of the Contract Act, because the object of the agreement was to defeat the provisions of law. He further argued that the agreement being itself void, the power of attorney executed in favour of the respondent/plaintiff to give effect to the object of the agreement was also void and of no legal consequence. I am not at all in agreement with the above arguments. The agreement to sell was a contingent contract, dependent upon the happening of an event. No rights or interests were to pass over to the purchaser until and unless the seller was made payment of the full price of the land to the Government and had obtained the transfer documents from the Government, after which there was no prohibition to the sale and under these circumstances the agreement to sell in question cannot be deemed to be a void contract."
34. It has been finally argued by the learned counsel for the respondent that as the applicant had acted in breach of the power of attorney, in that, he misappropriated the produce of the crops and had not rendered accounts and had entered into agreements of sale with the other persons and failed to pay instalments to the Government in time andthus exposed the respondent to penal interest, the power of attorney was validly revoked by the respondent.
35. I see no substance in this contention as well. In the power of attorney, there is no provision requiring the applicant giving produce of crops or of accounting for it to the respondent. On the contrary, the power of attorney authorised the applicant to appropriate the produce, crops, incomes and to sell or do any other acts at his sole discretion as provided in clauses 4 to 12 of the power, and it has also not been shown by the respondent in his evidence as to what installments were not paid to the Government to rebut the claim of the applicant that he had paid all the instalments to the Government. That being so, it also cannot be maintained that the applicant had committed any breach of the terms of the power of attorney to merit its revocation, apart from the fact that it was expressly provided in clause 16 that the power of attorney was irrevocable and was to hold good even after the death of the executant.
36. I, therefore, agree with the trial Court that the applicant having got into possession of the land for value paid and acknowledged in the agreement and he having right to usufruct till the land was finally transferred in his name, he had beneficial interest in the land which formed the subject- matter of the power of attorney which could not be, therefore, revoked by the respondent in view of section 202 of the Contract Act.
37. For the aforesaid reasons, I allow this Revision Application with costs and set aside the judgment and decree passed by the first appellate Court and restore the decree passed by the trial Court.