Introduction
In a recent judgment, the Supreme Court of India in V. Ravikumar v. S. Kumar has clarified that cancellation of a power of attorney does not reset or extend the limitation period for challenging transactions executed under its authority. The ruling emphasises that the limitation period begins from the date of the transaction, not from the date of cancellation of the power of attorney. This judgment provides clarity on the application of Section 3 of the Limitation Act, 1963 in property disputes involving powers of attorney.

Facts in a Nutshell
The dispute arose when the plaintiff executed a general power of attorney in 2004, under which several sale deeds were executed between 2004 and 2009. However, in 2015, the plaintiff cancelled the power of attorney and later, in 2018, filed a suit seeking to declare these sale deeds null and void. The suit also sought an injunction restraining the defendants from interfering with the suit properties.

The defendant (Constituted Attorney) filed an application under Order VII Rule 11 of the Civil Procedure Code, 1908, contending that the suit was barred by limitation as the transactions had been completed more than a decade earlier.

• The Trial Court upheld this contention and rejected the suit, holding that limitation commenced from the date of the transactions themselves.
• However, the High Court reversed this decision, ruling that the limitation period should be reckoned from the date of cancellation of the power of attorney i.e. 2015 and reinstated the suit.
• The matter was then taken to the Supreme Court.

Findings of the Supreme Court and Conclusion
The Supreme Court set aside the High Court’s ruling and upheld the rejection of the suit, making the following key observations:

• Limitation is determined by the date of the transaction, not subsequent events.
  • The Court held that the relevant limitation period starts from the date of the transaction being challenged and not from the date of cancellation of the power of attorney.
  • The cancellation of a power of attorney does not provide a fresh cause of action to challenge past transactions.
• Transactions executed under a valid power of attorney remain binding even after its cancellation.
  • A power of attorney is merely a delegation of authority, and once the power is exercised to execute valid transactions, they remain binding even if the power of attorney is subsequently revoked.
  • The revocation does not retrospectively nullify transactions lawfully executed under it.
• Cancellation of a power of attorney does not revive limitation.
  • The Court held that a party who willingly executed a power of attorney cannot later challenge transactions executed under it, unless fraud or coercion is proved.
  • In this case, the plaintiff did not dispute the execution of the power of attorney nor allege any fraud or coercion.
• Settled transactions cannot be reopened after years of inaction.
  • The Supreme Court emphasised that legal certainty requires that transactions executed under a valid power of attorney should not be unsettled years later.
  • Permitting such challenges would undermine property rights and create uncertainty in commercial and property transactions.

In light of these findings, the Supreme Court restored the Trial Court’s decision, rejecting the suit as time-barred. ¹

`

By - Chaitanyaa Bhandarkar