Supreme Court’s Ruling on Limitation Period in Cases Involving Cancellation of Power of Attorney

A Division Bench of the Supreme Court consisting of Justices Sudhanshu Dhulia and K. Vinod Chandran passed a judgment dated March 03,2025 in the case of V.Ravikumar vs. S.Kumar SLP (Civil ) No. 9472 of 2023 wherein the Supreme Court held that if the power of attorney is subsequently cancelled, it will have no effect on the transactions that have taken place earlier.

The present Appeal was filed by the Defendant in the Original Suit. The Trial Court in this case calculated and upheld limitation from the cancellation of power of attorney. The High Court reversed rejection of Plaint on the ground of limitation.

Facts:

The suit was filed by the Plaintiff on the ground of Declaration of Sale Deeds entered on the strength of Power of Attorney as null and void and injunction from restraining the Defendant from interfering with peaceful possession and enjoyment.

The first Defendant was the Power of Attorney Holder. He filed the Application under Order VII Rule 11 read with Section 10,11 and 150 of Civil Procedure Code alleging the suit was barred by limitation.

The General Power of Attorney was entered into 15.10.2004 and the Sale Deeds were entered on 2004-06 and 2009.

Verdict of the Trial Court and the High Court:

The Plaintiff claimed that he got aware of the sale deeds on 21.09.2015 and that he filed the Suit within three years i.e., 20.09.2018. The Trial Court found that the ‘Patta’ attached as Annexure to the Plaint was obtained on 10.01.2015 so the Plaintiff must have the knowledge of the transactions on that date and limitation period must have started from that 10.01.2015.

In Appeal, the High Court found the Power of Attorney stood cancelled on

22.09.2015 and limitation has to commence from the date of such cancellation.

Contention of the Appellant:

The Appellant contended that it has been more than a decade when transactions took place and the limitation cannot commence from the cancellation of Power of Attorney.

Contention of the Respondent:

The Respondent claimed that the transactions were collusive and fraudulent as the transfer was made by the Power of Attorney holder to his own wife.

Issue:

In cases of cancellation of Power of Attorney, when will limitation Period commence?

Analysis of the Hon’ble Supreme Court Judgment:

The Supreme Court held that cancellation of Power of Attorney does not affect the prior conveyances made. The Power of Attorney was executed in 2004 and the conveyances were made between 2004 and 2009.

There being no allegation of fraud or coercion in entering in the Power of Attorney, there cannot be any cause of action arising out of the Cancellation of Power of Attorney.

Conclusion:

In the case of V. Ravikumar vs. S. Kumar (SLP Civil No. 9472 of 2023), the Supreme Court clarified an important legal issue regarding the effect of the cancellation of a Power of Attorney on the transactions conducted under its authority. The Court ruled that the cancellation of the Power of Attorney does not invalidate or affect transactions completed prior to the cancellation. In this case, the Supreme Court overruled the High Court’s decision, holding that the limitation period for challenging transactions should not commence from the cancellation date of the Power of Attorney, but rather from the date when the aggrieved party gained knowledge of the transactions.

The ruling reaffirms that unless there is evidence of fraud or coercion in the transactions carried out under the Power of Attorney, the subsequent cancellation does not alter the legal standing of prior actions. Therefore, the suit filed by the Plaintiff was barred by the limitation period, as the cause of action arose well before the cancellation of the Power of Attorney. This judgment provides clarity on how limitation periods are to be calculated in cases involving powers of attorney and related transactions.

 

Trisha Saxena

Senior Legal Associate

The Indian Lawyer & Allied Services

 

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