A Criticism on Shri Mukund Bhavan Trust v. Shrimant Chhatrapati Udayan Raje Pratapsinh Maharaj Bhonsle: Rejection of Plaint on ‘Bar of Limitation’ on Plea of Fraud

Saji Koduvath, Advocate, Kottayam.

Abstract

On December 20, 2024 our Apex Court, in Shri Mukund Bhavan Trust v. Shrimant Chhatrapati Udayan Raje Pratapsinh Maharaj Bhonsle, held –

  • a plaint deserves rejection under Order VII rule 11, CPC if the pleadings contained therein is founded on forgery or fabrication (of documents) that came to the knowledge of the plaintiff decades back,
  • for, such a claim would be hopelessly barred by limitation (as it is governed under Article 59, Limitation Act which fixes period of limitation as 3 years) [Paras 18, 20, 22, 26].

In paragraph 23 of the Judgment, while dealing with ‘adverse possession’, the Court observed as under:

  • “As per Article 65 of the Limitation Act, 1963, the possession of immovable property or any interest therein, based on title can be sought within twelve years. …. The plaintiff has failed to sue the appellant/defendant or the State for possession within twelve years.”

Facts of the Case, in Brief

  • The plaintiff alleged that the defendants have played systematic fraud on various courts, and without any judicial pronouncements they usurped the lands, under suspicious compromises arrived at before the Court.
  • Though the alleged forgery or fabrication had been come to the knowledge of the plaintiff and his predecessors long back (more than 50 years), they did not take any step to assert their title and rights.
  • The defendant filed application under Order VII Rule 11(d) of CPC r/w Articles 58, 59 and 65 of the Limitation Act, 1963, seeking rejection of the plaint.
  • The trial Court rejected the application. It observed that the issue of limitation is a mixed question of law and facts, for which, the parties will have to lead evidence.
  • The High Court dismissed the Civil Revision Application. Hence the SLP.

Analysis

The Court specifically considered the effect of (i) not seeking cancellation of the disputed deeds in the light of Sec. 31 of the Specific Relief Act (ii) not challenging a sale by the court in 1952 and that by the predecessors of the plaintiff and (iii) the averments in the plaint as regards fraud in relation to the compromise decrees.

  • As regards Section 31 of the Specific Relief Act, 1963, the Apex Court found that a declaration to adjudge the sale deeds voidable must have been sought as it stood “adverse to the interest and right of the plaintiff” and caused a serious injury. (Para 19)
  • As regards the conveyance in 1952, it was found that the right to sue had first accrued to the predecessors of the plaintiff, when the properties were brought for sale by the court in1952; and that “no challenge was made to the court auction”. (Para 19.1)
  • As regards fraud in relation to the compromise decrees, the Apex Court pointed out that the averments in the plaint are “vague and general, besides baseless and unsubstantiated”; and, it was found that “no case can be culled out from the averments made in the plaint” in this respect.  It was further observed that the Plaintiff was a stranger to the suits which ended in compromise. Therefore, in view of the direct bar under Order XXIII Rule 3A of CPC, applicable to third parties as well, the plaintiff could not have sought a declaration theron (Triloki Nath Singh v. Anirudh Singh, (2020) 6 SCC 629), and the only remedy available was to approach the same court. (Para25)

Analysing the legal principles the Court held –

  • As settled in law, when an application to reject the plaint is filed, the averments in the plaint and the documents annexed therewith alone are germane (Para 11, 12).
  • Though limitation is a mixed question of fact and law and question of ‘limitation’ has to be decided after weighing the evidence on record, if the averments made in the plaint, on a bare perusal, disclosed that the reliefs were hopelessly barred by limitation, the Courts should not be hesitant to reject the suit under Order VII Rule 11 (Para 18, 26).
  • A suit founded on fraud, must be proceeded with a ‘declaration’. Period of limitation for such a declaration (governed under under Article 58, Limitation Act) as well as that for cancellation of a decree (governed under under Article 59, Limitation Act) is 3 years (Para 19.1, 20).

The Apex Court Rejected the Plaint for the Following:

  • Plaintiff is a stranger. The relief of title (founded on a plea of fraud) had to be established by the plaintiff, by a ‘declaration’ (Para 24, 25).
  • The plaintiff is to be non-suited on the ground of limitation; because, the limitation period is 3 years for both Article 58 (declaration) and Article 59 (cancellation of a decree) Limitation Act (Para 19.1, 20).
  • The case put forwarded by the Plaintiff as to fraud and compromise decrees are “vague and general, besides baseless and unsubstantiated” (only remedy on such situation lies in the same court) (Para 25).
  • It is not correct to contend that the provisions of the Limitation Act would have no application at all in the event the transaction is held to be void. [Relied on: Prem Singh v. Birbal, (2006) 5 SCC 353.]

Nevertheless, allowing the appeal, the Apex Court observed in the penultimate paragraph as under:

  • “26. At this juncture, we wish to observe that we are not unmindful of the position of law that limitation is a mixed question of fact and law and the question of rejecting the plaint on that score has to be decided after weighing the evidence on record. However, in cases like this, where it is glaring from the plaint averments that the suit is hopelessly barred by limitation, the Courts should not be hesitant in granting the relief and drive the parties back to the trial Court.
  • We again place it on record that this is not a case where any forgery or fabrication is committed which had recently come to the knowledge of the plaintiff. Rather, the plaintiff and his predecessors did not take any steps to assert their title and rights in time. The alleged cause of action is also found to be creation of fiction. However, the trial Court erroneously dismissed the application filed by the appellants under Order VII Rule 11(d) of CPC.
  • The High Court also erred in affirming the same, keeping the question of limitation open to be considered by the trial Court after considering the evidence along with other issues, without deciding the core issue on the basis of the averments made by the Respondent No.1 in the Plaint as mandated by Order VII Rule 11 (d) of CPC.
  • The spirit and intention of Order VII Rule 11(d) of CPC is only for the Courts to nip at its bud when any litigation ex facie appears to be a clear abuse of process. The Courts by being reluctant only cause more harm to the defendants by forcing them to undergo the ordeal of leading evidence. Therefore, we hold that the plaint is liable to be rejected at the threshold.”

A Criticism

Finding in Shri Mukund Bhavan Trust v. Shrimant Chhatrapati as to Recovery of Possession – Appears to be Incorrect

After definitely holding that the title claim of the plaintiff is barred by limitation under Article 58 (declaration) and Article 59 (cancellation of a decree) of the Limitation Act, the Apex Court considered, in paragraph 23 of the Judgment, as an additional ground, whether the suit is barred under Article 65 of the Limitation Act that deals with ‘adverse possession’. It is observed that the plaintiff has failed to sue the appellant/defendant or the State, for possession, within twelve years. (Therefore the suit is liable to be rejected on this ground also.)

Para 23, reads as under:

  • “23. Further, in the aforesaid suit, the Respondent No.1 also sought possession of the suit properties based on title. As per Article 65 of the Limitation Act, 1963, the possession of immovable property or any interest therein, based on title can be sought within twelve years. From the records, it is evident that the possession of the subject properties was initially with the Government of Maharashtra, then with the Gonsavis and thereafter with the Defendant No.1 and it can be safely said that at least for a century, the Respondent No.1 nor his predecessors have been in possession of the properties after the grant of Inam. The plaintiff has failed to sue the appellant/defendant or the State for possession within twelve years. We have already held that the title claim of the plaintiff is barred by limitation and therefore, the claim for possession is also barred and consequently, the relief of recovery of possession is also hopelessly barred by limitation.”

But it is trite law – to attract ‘Adverse Possession’ mere possession, however long,  is insufficient; it must be ‘adverse‘.

Adverse Possession ‘Drastic’ Change of Law by 1963 Limitation Act

Article 65 of the Limitation Act, 1963 primarily governs the Law on Adverse Possession. According to this Article –

  • the starting point of Limitation is “When the possession of the defendant becomes adverse to the plaintiff.”

Articles 65 of the Limitation Act, 1963 reads as under:

65. For possession of immovable property or any interest therein based on title.12 yearsWhen the possession of Defendant becomes
adverse to the plaintiff.

Complete change insofar as the Onus Under 1963 Limitation Act

Art. 65 underwent complete change insofar as the onus is concerned (from 1908 Limitation Act). It casts the entire burden on the claimant/trespasser to plead and prove adverse possession.

Plaintiff need not have filed the suit within 12 years of losing possession

It is noteworthy – under Article 65, the plaintiff need not have come before the court within 12 years of losing possession; the period of 12 years has significance only if the defendant asserts “adverse possession”.

  • Because, the 12-year-period stated in Article 65 is not the period of
    • “mere losing possession” by the plaintiff;
  • on the contrary, what is stated is 12 years of
    • “adverse possession”
  • from the part of the defendant (with the required animus).

Limitation Act underwent Complete Change insofar as the ‘Onus’ 

In Government of Kerala v. Joseph, AIR 2023  SC 3988, our Apex Court (following P.T. Munichikkanna Reddy v. Revamma, (2007) 6 SCC 59) pointed out that that the Limitation Act 1963 underwent complete change insofar as the onus is concerned (from 1908 Limitation Act). The Court observed as under:

  • “34. The law in this behalf has undergone a change. In terms of Articles 142 and 144 of the Limitation Act, 1908, the burden of proof was on the plaintiff to show within 12 years from the date of institution of the suit that he had title and possession of the land, whereas in terms of Articles 64 and 65 of the Limitation Act, 1963, the legal position has underwent complete change insofar as the onus is concerned : once a party proves its title, the onus of proof would be on the other party to prove claims of title by adverse possession….”

The authoritative decisions say – mere possession, however long,  is insufficient; it must be adverse (to attract ‘Adverse Possession’). The law on this point (not mere long possession, but ‘Adverse Possession’ required by the drastic change in 1963 Act) is clearly laid down in the following decisions also:

  • Government of Kerala v. Joseph, AIR 2023  SC 3988
  • Uttam Chand v. Nathu Ram, 2020-11 SCC 263, AIR  2020 SC 461,
  • Ravinder Kaur Grewal v. Manjit Kaur (2019) 8 SCC 729
  • Ram Nagina Rai v. Deo Kumar Rai, 2019-13 SCC 324
  • Mallikarjunaiah v. Nanjaiah, 2019-15 SCC 756
  • Chatti Konati Rao v. Palle Venkata Subba  Rao, 2010-14 SCC 316
  • T. Anjanappa v. Somalingappa – 2006(7) SCC 570.
  • Karnataka Board of Wakf v. Govt. of India – (2004) 10 SCC 779
  • Thakur Kishan Singh v. Arvind Kumar, 1994-6 SCC 591
  • Gaya Prasad Dikshit v. Dr. Nirmal Chandar 1984(2) SCC 286.

In T. Anjanappa v. Somalingappa, (2006) 7 SCC 570, it has been held as under:

  • “20. It is well-recognised proposition in law that mere possession however long does not necessarily mean that it is adverse to the true owner. Adverse possession really means the hostile possession which is expressly or impliedly in denial of title of the true owner and in order to constitute adverse possession the possession proved must be adequate in continuity, in publicity and in extent so as to show that it is adverse to the true owner. The classical requirements of acquisition of title by adverse possession are that such possession in denial of the true owner’s title must be peaceful, open and continuous. The possession must be open and hostile enough to be capable of being known by the parties interested in the property, though it is not necessary that there should be evidence of the adverse possessor actually informing the real owner of the former’s hostile action.” (Quoted in: Chatti Konati Rao v. Palle Venkata Subba Rao, AIR 2011 SC 1480, 2010 14 SCC 316)

In Mallikarjunaiah v. Nanjaiah, 2019-15 SCC 756, it is held as under:

  • “It is a settled principle of law that mere continuous possession howsoever long it may have been qua its true owner is not enough to sustain the plea of adverse possession unless it is further proved that such possession was open, hostile, exclusive and with the assertion of ownership right over the property to the knowledge of its true owner.”

A Brief Note on Article 65

As per Article 65 of the Limitation Act, 1963, starting point of Limitation is “When the possession of the defendant becomes adverse to the plaintiff.”

  • Article 65 deals with recovery based on title.
  • Under Article 65, in a suit on title, previous period in dispossession of plaintiff is immaterial. The onus is no longer on the plaintiff to prove that his dispossession took place within the period of limitation. (Jagannath Garnaik v. Sankar Samal, AIR 1990 Ori 124; State of Orissa v Jhunjhunwalla, 1986 CLT 55)  
  • Under Article 65, if plaintiff could establish his title, it would fail only if the defendant proves adverse possession over twelve years. (Indira v. Arumugam, AIR 1999 SC 1549; Bhushan Lal v. Suresh Kumar, AIR 1987 All 25,  Manikyala Rao v. Narasimhaswami, AIR 1996 SC 470; Mallavva v. Kalsammanavara Kalamma, 2024 INSC 1021.)
  • Under Article 65, if plaintiff could not prove his title, he will fail; and in such a case, whether the defendant proves title (or not) is immaterial. (Ranjit Kumar Bhowmik v.  Subodh Kumar Roy, (2004) I WBLR 228: (2004) 2 CHN 180).

Conclusion

The Apex Court vividly expounded the law as regards adjudging the documents as void or voidable invoking Section 31 of the Specific Relief Act, 1963. The Court pointed out that the plaintiff being challenged (i) the sale made by his predecessor itself, and also (ii) the auction sale conducted by a Civil Court, it was necessary to seek declarations in those regard.

Nonetheless, as shown above, it is indisputable that mere possession, however long, is not sufficient to bring home the doctrine of adverse possession; rather, it must be shown that such possession was held “adverse” to the interests of the rightful owner for the prescribed period and it must have been endured with the requisite animus on the part of the claimant.

Therefore, it can be stated that in accordance with Article 65 of the Limitation Act, 1963, unless the defendant asserts and proves ‘adverse possession’ –

  • the possession of immovable property or any interest therein, based on title need not have been sought (by the plaintiff) within twelve years of losing possession.

Read Blog: How to Plead Adverse Possession? Adverse Possession: An Evolving Concept

End Notes:

Order VII rule 11 CPC reads as under:

“11. Rejection of plaint.- The plaint shall be rejected in the following cases-

  • (a) where it does not disclose a cause of action;
  • (b) where the relief claimed in undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;
  • (c) where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;
  • (d) where the suit appears from the statement in the plaint to be barred by any law;
  • (e) where it is not filed in duplicate;
  • (f) where the plaintiff fails to comply with the provisions of rule 9:
  • Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevent by any cause of exceptional nature for correction the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.”

Section 3 of the Transfer of Property Act, 1882:

“3. Interpretation clause.

  • “a person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.
  • Explanation I.- Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:
  • Provided that-(1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and(3)the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act.
  • Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.
  • Explanation III.-A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material: Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.”

Rulings relied on:

Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra), (2020) 7 SCC 366

  • “23.2. The remedy under Order VII Rule 11 is an independent and special remedy, wherein the Court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision.
  • 23.3. The underlying object of Order VII Rule 11 (a) is that if in a suit,
    • no cause of action is disclosed, or
    • the suit is barred by limitation under Rule 11 (d),
  • the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted.
  • 23.4. In Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315 (Followed in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2 GLH 823) this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the court, in the following words : (SCC p.324, para 12)
  • 23.5. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.
  • 23.6. Under Order VII Rule 11, a duty is cast on the Court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint (Liverpool & London S.P. & I Assn. Ltd. V. M.V. Sea Success I, (2004) 9 SCC 512), read in conjunction with the documents relied upon, or whether the suit is barred by any law.
  • 23.7. Order VII Rule 14(1) provides for production of documents, on which the plaintiff places reliance in his suit, which reads as under:
    • “14. Production of document on which plaintiff sues or relies.-
    • Where a plaintiff sues upon a document or relies upon document in his possession or power in support of his claim, he shall enter such documents in a list, and shall produce it in Court when the plaint is presented by him and shall, at the same time deliver the document and a copy thereof, to be filed with the plaint.
    • Where any such document is not in the possession or power of the plaintiff, he shall, wherever possible, state in whose possession or power it is.
    • A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.
    • Nothing in this rule shall apply to document produced for the cross examination of the plaintiff’s witnesses, or, handed over to a witness merely to refresh his memory.”(emphasis supplied)
  • 23.8. Having regard to Order VII Rule 14 CPC, the documents filed along with the plaint, are required to be taken into consideration for deciding the application under Order VII Rule 11 (a). When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.
  • 23.9. In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.
  • 23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration (Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137).
  • 23.11. The test for exercising the power under Order VII Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I which reads as : (SCC p.562, para 139)
    • “139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.”
  • 23.12. In Hardesh Ores (P.) Ltd. v. Hede & Co., (2007) 5 SCC 614, the Court further held that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact. D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267).
  • 23.13. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 CPC.
  • 23.14. The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557. The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain (supra).
  • 23.15. The provision of Order VII Rule 11 is mandatory in nature. It states that the plaint “shall” be rejected if any of the grounds specified in clause (a) to (e) are made out. If the Court finds that the plaint does not disclose a cause of action, or that the suit is barred by any law, the Court has no option, but to reject the plaint.
  • 24. “Cause of action” means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. It consists of a bundle of material facts, which are necessary for the plaintiff to prove in order to entitle him to the reliefs claimed in the suit.
  • 24.1. In Swamy Atmanand v. Sri Ramakrishna Tapovanam, (2005) 10 SCC 51, this Court held:
    • “24. A cause of action, thus, means every fact, which if traversed, it would be necessary for the plaintiff to prove an order to support his right to a judgment of the court. In other words, it is a bundle of facts, which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded”(emphasis supplied)
  • 24.2. In T. Arivanandam v. T.V. Satyapal, (1977) 4 SCC 467, this Court held that while considering an application under Order VII Rule 11 CPC what is required to be decided is whether the plaint discloses a real cause of action, or something purely illusory, in the following words: (SCC p. 470, para 5)
    • “5. The learned Munsif must remember that if on a meaningful – not formal – reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VII, Rule 11 C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing.”(emphasis supplied)
  • 24.3. Subsequently, in I.T.C. Ltd. v. Debt Recovery Appellate Tribunal, (1998) 2 SCC 170, this Court held that law cannot permit clever drafting which creates illusions of a cause of action. What is required is that a clear right must be made out in the plaint.
  • 24.4. If, however, by clever drafting of the plaint, it has created the illusion of a cause of action, this Court in Madanuri Sri Ramachandra Murthy v. Syed Jalal, (2017) 13 SCC 174, held that it should be nipped in the bud, so that bogus litigation will end at the earliest stage. The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of the court.
  • 25. The Limitation Act, 1963 prescribes a time-limit for the institution of all suits, appeals, and applications. Section 2(j) defines the expression “period of limitation” to mean the period of limitation prescribed in the Schedule for suits, appeals or applications. Section 3 lays down that every suit instituted after the prescribed period, shall be dismissed even though limitation may not have been set up as a defence. If a suit is not covered by any specific article, then it would fall within the residuary article.
Description of suitPeriod of limitationTime from which period begins to run
58. To obtain any other declarationThree yearsWhen the right to sue first accrues
59. To cancel or set aside an instrument or decree or for the rescission of a contractThree yearsWhen the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first become known to him.
  • The period of limitation prescribed under Articles 58 and 59 of the 1963 Act is three years, which commences from the date when the right to sue first accrues.
  • 27. In Khatri Hotels Pvt. Ltd. v. Union of India, (2011) 9 SCC 126, this Court held that the use of the word ‘first’ between the words ‘sue’ and ‘accrued’, would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues. That is, if there are successive violations of the right, it would not give rise to a fresh cause of action, and the suit will be liable to be dismissed, if it is beyond the period of limitation counted from the date when the right to sue first accrued.
  • 28. A three-Judge Bench of this Court in State of Punjab v. Gurdev Singh, (1991) 4 SCC 1 : 1991 SCC (L&S) 1082, held that the Court must examine the plaint and determine when the right to sue first accrued to the plaintiff, and whether on the assumed facts, the plaint is within time. The words “right to sue” means the right to seek relief by means of legal proceedings. The right to sue accrues only when the cause of action arises. The suit must be instituted when the right asserted in the suit is infringed, or when there is a clear and unequivocal threat to infringe such right by the defendant against whom the suit is instituted. Order VII Rule 11(d) provides that where a suit appears from the averments in the plaint to be barred by any law, the plaint shall be rejected.”

R.K. Mohd. Ubaidullah v. Hajee C. Abdul Wahab, (2000) 6 SCC 402

  • “15. Notice is defined in Section 3 of the Transfer of Property Act. It may be actual where the party has actual knowledge of the fact or constructive. “A person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it.
  • Explanation II of said Section 3 reads:
    • “Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.”

Ningawwa v. Byrappa Shiddappa Hireknrabar, (1968) 2 SCJ 555 : AIR 1968 SC 956

  • “5. The legal position will be different if there is a fraudulent misrepresentation not merely as to the contents of the document but as to its character. The authorities make a clear distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresentation as to the contents thereof. With reference to the former, it has been held that the transaction is void, while in the case of the latter, it is merely voidable. In Foster v. Mackinon [(1869) 4 CP 704] the action was by the endorsee of a bill of exchange. The defendant pleaded that he endorsed the bill on a fraudulent representation by the acceptor that he was signing a guarantee. In holding that such a plea was admissible, the Court observed:
    • “It (signature) is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended. The defendant never intended to sign that contract or any such contract. He never intended to put his name to any instrument that then was or thereafter might become negotiable. He was deceived, not merely as to the legal effect, but as to the ‘actual contents’ of the instrument.”
  • This decision has been followed by the Indian courts Sanni Bibi v. Siddik Hossain [AIR 1919 Cal 728], and Brindaban v. Dhurba Charan [AIR 1929 Cal 606]. It is not the contention of the appellant in the present case that there was any fraudulent misrepresentation as to the character of the gift deed but Shiddappa fraudulently included in the gift deed plots 91 and 92 of Lingadahalli village without her knowledge. We are accordingly of the opinion that the transaction of gift was voidable and not void and the suit must be brought within the time prescribed under Article 95 of the Limitation Act.”

Dilboo v. Dhanraji, (2000) 7 SCC 702

  • “20. Whenever a document is registered the date of registration becomes the date of deemed knowledge. In other cases where a fact could be discovered by due diligence then deemed knowledge would be attributed to the plaintiff because a party cannot be allowed to extend the period of limitation by merely claiming that he had no knowledge”

Mohd. Noorul Hoda v. Bibi Raifunnisa, (1996) 7 SCC 767

  • “5. Section 55(1) of the Transfer of Property Act, 1882 regulates rights and liabilities of the buyer and seller. The seller is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover. The seller is to answer, to the best of his information, all relevant questions put to him by the buyer in respect of the property or the title thereto. The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same.
  • Section 3 provides that “a person is said to have a notice of a fact when he actually knows the fact, or when but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it”. Explanation II amplifies that “any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof”. Constructive notice in equity treats a man who ought to have known a fact, as if he actually knows it. Generally speaking, constructive notice may not be inferred unless some specific circumstances can be shown as a starting point of enquiry which if pursued would have led to the discovery of the fact.
  • As a fact it is found that Rafique filed the sale deed dated 1-12- 1959 executed in his favour by Mahangu, in Title Suit No. 220 of 1969 for which the petitioner claims to have derivative title through Rafique. Rafique had full knowledge that despite the purported sale, Bibi Raifunnisa got the preliminary decree passed in 1973 and in 1974 under the final decree the right, title and interest in the suit property passed on to her. Under Section 55 when second sale deed dated 6-9-1980 was got executed by the petitioner from Rafique, it is imputable that Rafique had conveyed all the knowledge of the defects in title and he no longer had title to the property.
  • It is also a finding of fact recorded by the appellate court and affirmed by the High Court that the petitioner was in know of full facts of the preliminary decree and the final decree passed and execution thereof. In other words, the finding is that he had full knowledge, from the inception of Title Suit No. 220 of 1969 from his benamidar. Having had that knowledge, he got the second sale deed executed and registered on 6-9-1980. Oblivious to these facts, he did not produce the second original sale deed nor is an attempt made to produce secondary evidence on proof of the loss of original sale deed.
  • 6. The question, therefore, is as to whether Article 59 or Article 113 of the Schedule to the Act is applicable to the facts in this case. Article 59 of the Schedule to the Limitation Act, 1908 had provided inter alia for suits to set aside decree obtained by fraud. There was no specific article to set aside a decree on any other ground. In such a case, the residuary Article 120 in Schedule III was attracted. The present Article 59 of the Schedule to the Act will govern any suit to set aside a decree either on fraud or any other ground. Therefore, Article 59 would be applicable to any suit to set aside a decree either on fraud or any other ground.
  • It is true that Article 59 would be applicable if a person affected is a party to a decree or an instrument or a contract. There is no dispute that Article 59 would apply to set aside the instrument, decree or contract between the inter se parties. The question is whether in case of person claiming title through the party to the decree or instrument or having knowledge of the instrument or decree or contract and seeking to avoid the decree by a specific declaration, whether Article 59 gets attracted? As stated earlier, Article 59 is a general provision. In a suit to set aside or cancel an instrument, a contract or a decree on the ground of fraud, Article 59 is attracted. The starting point of limitation is the date of knowledge of the alleged fraud.
  • When the plaintiff seeks to establish his title to the property which cannot be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded. Section 31 of the Specific Relief Act, 1963 regulates suits for cancellation of an instrument which lays down that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled.
  • It would thus be clear that the word ‘person’ in Section 31 of the Specific Relief Act is wide enough to encompass a person seeking derivative title from his seller. It would, therefore, be clear that if he seeks avoidance of the instrument, decree or contract and seeks a declaration to have the decrees set aside or cancelled he is necessarily bound to lay the suit within three years from the date when the facts entitling the plaintiff to have the decree set aside, first became known to him.
  • 7. The question, therefore, is as to when the facts of granting preliminary and final decrees touching upon the suit land first became known to him. As seen, when he claimed title to the property as owner and Rafique to be his benamidar, as admitted by Rafique, the title deed dated 1-12-1959 was filed in Title Suit No. 220 of 1969. Thereby Rafique had first known about the passing of the preliminary decree in 1973 and final decree in 1974 as referred to earlier. Under all these circumstances, Article 113 is inapplicable to the facts on hand.
  • Since the petitioner claimed derivative title from him but for his wilful abstention from making enquiry or his omission to file the second sale deed dated 6-9-1980, an irresistible inference was rightly drawn by the courts below that the petitioner had full knowledge of the fact right from the beginning; in other words right from the date when title deed was filed in Title Suit No. 220 of 1969 and preliminary decree was passed on 2-1-1973 and final decree was passed on 5-2-1974. Admittedly, the suit was filed in 1981 beyond three years from the date of knowledge. Thereby, the suit is hopelessly barred by limitation. The decree of the appellate court and the order of the High Court, therefore, are not illegal warranting interference.”

Prem Singh v. Birbal, (2006) 5 SCC 353

  • “11. Limitation is a statute of repose. It ordinarily bars a remedy, but, does not extinguish a right. The only exception to the said rule is to be found in Section 27 of the Limitation Act, 1963 which provides that at the determination of the period prescribed thereby, limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.
  • 12. An extinction of right, as contemplated by the provisions of the Limitation Act, prima facie would be attracted in all types of suits. The Schedule appended to the Limitation Act, as prescribed by the articles, provides that upon lapse of the prescribed period, the institution of a suit will be barred. Section 3 of the Limitation Act provides that irrespective of the fact as to whether any defence is set out or is raised by the defendant or not, in the event a suit is found to be barred by limitation, every suit instituted, appeal preferred and every application made after the prescribed period shall be dismissed.
  • 13. Article 59 of the Limitation Act applies specially when a relief is claimed on the ground of fraud or mistake. It only encompasses within its fold fraudulent transactions which are voidable transactions.
  • 14. A suit for cancellation of instrument is based on the provisions of Section 31 of the Specific Relief Act, which reads as under:
    • “31. When cancellation may be ordered.-Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.
    • If the instrument has been registered under the Indian Registration Act, 1908 (16 of 1908), the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.”
  • 15. Section 31 of the Specific Relief Act, 1963 thus, refers to both void and voidable documents. It provides for a discretionary relief.
  • 16. When a document is valid, no question arises of its cancellation. When a document is void ab initio, a decree for setting aside the same would not be necessary as the same is non est in the eye of the law, as it would be a nullity.
  • 17. Once, however, a suit is filed by a plaintiff for cancellation of a transaction, it would be governed by Article 59. Even if Article 59 is not attracted, the residuary article would be.
  • 18. Article 59 would be attracted when coercion, undue influence, misappropriation or fraud which the plaintiff asserts is required to be proved. Article 59 would apply to the case of such instruments. It would, therefore, apply where a document is prima facie valid. It would not apply only to instruments which are presumptively invalid. (See Unni v. Kunchi Amma [ILR (1891) 14 Mad 26] and Sheo Shankar Gir v. Ram Shewak Chowdhri [ILR (1897) 24 Cal 77].)
  • 19. It is not in dispute that by reason of Article 59 of the Limitation Act, the scope has been enlarged from the old Article 91 of the 1908 Act. By reason of Article 59, the provisions contained in Articles 91 and 114 of the 1908 Act had been combined.
  • 20. If the plaintiff is in possession of a property, he may file a suit for declaration that the deed is not binding upon him but if he is not in possession thereof, even under a void transaction, the right by way of adverse possession may be claimed. Thus, it is not correct to contend that the provisions of the Limitation Act would have no application at all in the event the transaction is held to be void.
  • 21. Respondent 1 has not alleged that fraudulent misrepresentation was made to him as regards the character of the document. According to him, there had been a fraudulent misrepresentation as regards its contents.
  • 22. In Ningawwa v. Byrappa [(1968) 2 SCR 797 : AIR 1968 SC 956] this Court held that the fraudulent misrepresentation as regards character of a document is void but fraudulent misrepresentation as regards contents of a document is voidable stating: (SCR p. 801 C-D)
    • “The legal position will be different if there is a fraudulent misrepresentation not merely as to the contents of the document but as to its character. The authorities make a clear distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresentation as to the contents thereof. With reference to the former, it has been held that the transaction is void, while in the case of the latter, it is merely voidable.”
  • In that case, a fraud was found to have been played and it was held that as the suit was instituted within a few days after the appellant therein came to know of the fraud practised on her, the same was void. It was, however, held: (SCR p. 803 B-E)
    • “Article 91 of the Limitation Act provides that a suit to set aside an instrument not otherwise provided for (and no other provision of the Act applies to the circumstances of the case) shall be subject to a three years’ limitation which begins to run when the facts entitling the plaintiff to have the instrument cancelled or set aside are known to him.
    • In the present case, the trial court has found, upon examination of the evidence, that at the very time of the execution of the gift deed, Ext. 45 the appellant knew that her husband prevailed upon her to convey Surveys Plots Nos. 407/1 and 409/1 of Tadavalga village to him by undue influence. The finding of the trial court is based upon the admission of the appellant herself in the course of her evidence. In view of this finding of the trial court it is manifest that the suit of the appellant is barred under Article 91 of the Limitation Act so far as Plots Nos. 407/1 and 409/1 of Tadavalga village are concerned.”
  • “27. There is a presumption that a registered document is validly executed. A registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption. In the instant case, Respondent 1 has not been able to rebut the said presumption.
  • 28. If a deed was executed by the plaintiff when he was a minor and it was void, he had two options to file a suit to get the property purportedly conveyed thereunder. He could either file the suit within 12 years of the deed or within 3 years of attaining majority. Here, the plaintiff did not either sue within 12 years of the deed or within 3 years of attaining majority. Therefore, the suit was rightly held to be barred by limitation by the trial court.”

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