Saji Koduvath Associates

What are Arbitrable Disputes?What are Non-Arbitrable Disputes? When does a Dispute, in spite of Arbitration Clause, Not Referred to Arbitration?

Jojy George Koduvath.

Introspection

1. For referring the parties to arbitration, as per Sec. 8(1) and appointing arbitrator under Sec. 11 of the Arbitration Conciliation Act (as amended in 2015), the court has to (“prima facie“) find that a “valid arbitration agreement exists“.
- That is, the Arbitration agreement should be one that is ‘binding’ and ‘subsisting’.
2. SBP & Co. v. Patel Engg. Ltd., 2005-8 SCC 618 (seven-Judge Bench decision), conferred larger powers to arbitrators, it being held –
- it was the Arbitral Tribunal that had to decide, whether there existed a live claim.
- Note: It was prior to 2015 Amendment in the Arbitration Act. (After the Amendment it is not in the exclusive domain of the Arbitrator.)
3. The legislative policy, as revealed from Sect. 11(6) of the Arbitration Act, is to minimise court’s interference at the pre-arbitral stage.
- (See: SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618, National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267, Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, and Pravin Electricals v. Alaxy Infra and Engineering Pvt. Ltd., (2021) 5 SCC 671)
4. Sec. 11(6A) was inserted (in 2015) also with a view to minimise judicial interference at the pre-arbitral stage.
- It said – Courts jurisdiction, while considering arbitration-application, shall stand confined to the examination of the “existence of an arbitration agreement“.
5. The scope of the judicial interference was (indirectly) increased for the following-
- (i) under Sec. 8(1) of the Arbitration Conciliation Act (as amended in 2015), the court has to (prima facie) “find” that a “valid arbitration agreement exists“.
- (ii) the insertion of Sec. 11(6A) directed – Courts shall examine as to “existence of an arbitration agreement“.
6. Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, made it clear – Courts shall make a Prima Facie finding under Sec. 11(6A) – as to “NonArbitrability of disputes”.
- It is held that it is to make a “check” and to protect parties from being forced to arbitrate when the matter is demonstrably “nonarbitrable”, and it is also to cut off the deadwood.
7. The limited scrutiny, “through the eye of the needle”, is necessary and compelling. “If there is the slightest doubt, the rule is to refer the dispute to arbitration” (NTPC Ltd. v. SPML Infra Ltd., 2023 SCC OnLine SC 389).

Non-arbitrable matters

Existence of a valid, binding and concluded arbitration agreement is necessary for appointment of an arbitrator by the court.

Sundaram Finance Ltd. v NEPC India Ltd., 1999 2 SCC 479
Wellington Associates Limited v. Kirit Mehta, 2000 4 SCC 272
Panchsheel Constructions v. Davinder Pal Singh Chauhan, 2019 SCCOnlineDel 7176
Quick Heal Technologies Limited v. NCS Computech Private Limited and another, 2020 SCCOnlineBom 693

Following are non-arbitrable matters –

(i) criminal offences
(ii) matrimonial disputes
(iii) guardianship matters
(ix) discharge of the contract – National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd, (2009) 1 SCC 267; New India Assurance Co. Ltd. v. Genus Power Infrastructure Ltd.[2015) 2 SCC 424
(x) disputes between licensor/ landlord and licensee/ tenant – Natraj Studios (P) Ltd. v. Navrang Studios, 1981-1 SCC 523
(xi) obtained by fraud, coercion, duress or undue influence, and prima facie, appears it to be lacking in credibility – Union of India v. Master Construction Co.[(2011) 12 SCC 349.
(xii) time-expired contract – Arshad Hussain v. General Officer Commanding , (2022, J&K High Court); Royal Orchid Associated Hotels Private Limited Vs. Kesho Lal Goyal, 2021-276 DLT 713,
(iv) testamentary matters
(v) eviction or tenancy matters (Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., 2011-5 SCC 532)
(vi) absence of a concluded contract (Enercon (India) Ltd. v. Enercon GMBH, 2014-5 SCC 1)
(vii) dead claim and long-barred claim
(viii) insolvency and winding-up matters

Sec. 7(3) of the Arbitration Act – Arbitration arises from a Specific Written Contract

In Harsha Construction v. Union of India, (2014) 9 SCC 246, it is held as under:

“18. Arbitration arises from a contract and unless there is a specific written contract, a contract with regard to arbitration cannot be presumed. Sec. 7(3) of the Act clearly specifies that the contract with regard to arbitration must be in writing. Thus, so far as the disputes which have been referred to in Clause 39 of the contract are concerned, it was not open to the Arbitrator to arbitrate upon the said disputes as there was a specific clause whereby the said disputes had been “excepted “. Moreover, when the law specifically makes a provision with regard to formation of a contract in a particular manner, there cannot be any presumption with regard to a contract if the contract is not entered into by the mode prescribed under the Act.

Arbitrator NOT to decide Matters which are Not Arbitrable, even if an Issue framed

In Harsha Construction v. Union of India, (2014) 9 SCC 246, it is held as under:

“19. If a nonarbitrable dispute is referred to an Arbitrator and even if an issue is framed by the Arbitrator in relation to such a dispute, in our opinion, there cannot be a presumption or a conclusion to the effect that the parties had agreed to refer the issue to the Arbitrator. In the instant case, the respondent authorities had raised an objection relating to the arbitrability of the aforestated issue before the Arbitrator and yet the Arbitrator had rendered his decision on the said “excepted ” dispute. In our opinion, the Arbitrator could not have decided the said “excepted ” dispute. We, therefore, hold that it was not open to the Arbitrator to decide the issues which were not arbitrable; and the award, so far as it relates to disputes regarding nonarbitrable disputes is concerned, is bad in law and is hereby quashed. ” (Referred to in- Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678)

Sec. 8(1) – Existence of a Valid Arbitration Agreement must be “Found”

Sec. 8(1) of the Arbitration Conciliation Act reads (after 2015 Amendment) as under:

“(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”

Sec. 11(6A) Amendment – Courts are bound to decide on “Nonarbitrability”

Sec. 11(6A) of the Arbitration Act reads as under:

“(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.”

An Arbitral Tribunal may lack jurisdiction for several reasons and nonarbitrability has multiple meanings. (See: Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678)

If only there is an arbitrable dispute, on the facet of the matter, then only the dispute should be left to the arbitrator. (See: Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1)

It is with a view to protect parties from being forced to undergo an empty formality and a cumbersome procedure.
When it is manifestly and ex facie NOT certain – whether the dispute is arbitrable or not, it should be best left to the arbitrator in an application under Sec. 16 of the Arbitration Act
That is, if it is found at Sec. 8 or 11 stage that it requires further/deeper consideration, it should be best left to the arbitrator.
In such a case, it is for the arbitrator to decide the arbitrability of the dispute, first.

Non-Arbitrable Dispute – After Sec. 11(6A) Amendment, in 2015

NTPC Ltd. v. SPML Infra Ltd. (2023 SCC OnLine SC 389) – discharge of the contract, (i) for, the SPML had withdrawn the Writ Petition, and therefore, there was discharge of the contract by accord and satisfaction, and (ii) for the Contract stood discharged/novated in terms of the Settlement Agreement.
VGP Marine Kingdom Pvt Ltd v. Kay Ellen Arnold, 2023-1 SCC 597 – unless on the facet it is found that the dispute is not arbitrable, and if it requires further/deeper consideration, the dispute with respect to the arbitrability should be left to the arbitrator.
Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1 – the court should determine the level and nature of judicial scrutiny as to the arbitrability. It should not be left to the arbitrator when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are nonarbitrable. At the stage of Sec. 11, a preliminary inquiry is permissible if a dispute is raised with respect to the arbitrability.
Arshad Hussain v. General Officer Commanding , (2022, J&K High Court) it is pointed out that for appointing an arbitrator under Sec. 11, there should be a live dispute/claim subsisting which is capable of being arbitrated upon; and the Chief Justice or his designate in appointing an arbitrator under Sec. 11(6) of the Act was enjoined upon to examine the existence of the arbitration agreement between the parties and whether there existed a live arbitral claim/dispute. In this case the petition for appointment of an independent arbitrator to resolve the dispute regarding renewal of allotment of shop was dismissed, inter alia, for the agreement clearly provided that it was valid only for a period of one year and be renewed for the next year. It was not mandatory to renew the agreement and it was not renewed. Therefore, it was held that the petitioner was not entitled for appointment of an arbitrator for want of an arbitration agreement, existence of arbitral dispute.

Expiry of Contract by Efflux of Time – Arbitration Clause Cannot be Invoked

It was held by the Supreme Court, in Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362, as under:

“10. The following principles relevant to the present case emerge from the aforesaid discussion:
- (1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but nonetheless it is an integral part of it;
- (2) however comprehensive the terms of an arbitration clause may be, the existence of the contract is a necessary condition for its operation; it perishes with the contract;
- (3) … (4) … (5) … (6) …..”

The aforesaid Apex Court decision, Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362, was referred to in Union of India v. Jagdish Kaur, AIR 2007 All- 67 as under:

“20. The suit was instituted by the landlady on 1 -7-2004 after expiry of term of agreement. Courts below have rightly held that after expiry of five years, the agreement was non- existent and the arbitration clause was not applicable. This view finds support from the law laid down by Hon’ble the Apex Court in Union of India v. Kishori Lal Gupta and Brothers, (1959) AIR SC 1362.”

See also: Cosme Farma Laboratories Ltd. Vs. Shwarde Pharmaceutical Pvt. Ltd., 2013-2 GoaLR 559.

Expiry of Contract by Efflux of Time – Can Arbitration Clause be Invoked?

It is beyond doubt that the arbitration clause cannot be invoked in a case where the period of limitation provided for suits is elapsed.

If the period fixed in a contract for sale of a property (where time is essence of contract) is over and the vendor alleges breach from the part of purchaser, there will not be a valid and subsisting contract from the view of the vendor. In such a case –

if a dispute arises (even within the limitation period for taking legal action), the “existence or validity of an arbitration agreement” has to be decided by the Court, for referring the parties to arbitration, under Sec. 8(1), and appointing arbitrator under Sec. 11, of the Arbitration Conciliation Act.

Arbitration Clause in an Expired Contract, Cannot be invoked

Relying on Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362 it is held in Eigen Technical Service Pvt. Ltd. v. Vatika Limited, 2013-172 Pun LR 27: 2013-4 Arb LR 367, that one cannot invoke arbitration clause in a redundant, and perished contract by efflux of time. The court relied on an Allahabad decision stating as under:

“ High Court of Allahabad in a judgment dated 10.11.2006 passed in Writ Petition No. 21275 of 2006 titled as Union of India Thru’ Secry., Ministry of Postal v. Jagdish Kaur has also observed that arbitration clause contained in an expired agreement is also deemed as expired and is no more valid.”

Validity of Arbn. Agmnt. Decided by Court; Arbitrators have no Conclusive Power

In Uttar Pradesh Rajkiya Nirman Nigam Limited v. Indure Private Limited, 1996-2 SCC 667: AIR 1996 SC 1373, it is held as under:

14. In “Law of Arbitration” by Justice Bachawat (2nd Edn.) at page 155 it is stated that
- “the question whether matters referred to were within the ambit of clause for reference of any difference or dispute which may arise between the parties, it is for the Court to decide”. ….
15. The clear settled law thus is that the existence or validity of an arbitration agreement shall be decided by the Court alone. Arbitrators, therefore, have no power or jurisdiction to decide or adjudicate conclusively by themselves the question since it is the very foundation on which the arbitrators proceed to adjudicate the disputes.”

An arbitration clause is to be strictly construed

The parties are bound by the clauses in the agreement. The Court will not rewrite any clause in equity. An arbitration clause is required to be strictly construed. (See: Oriental Insurance Co Ltd. v. Narbheram Power and Steel (P) Ltd., (2018) 6 SCC 534; (Referred to in- Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678)).

In Rajasthan State Industrial Development and Investment Corporation v. Diamond and Gem Development Corporation Ltd.; (2013) 5 SCC 470, it is held that a party cannot claim anything more than what is covered by the terms of the contract, for the reason that the contract is a transaction between two parties and has been entered into with open eyes and by understanding the nature of contract; and that thus the contract being a creature of an agreement between two or more parties has to be interpreted giving literal meanings unless there is some ambiguity therein. The contract is to be interpreted giving the actual meaning to the words contained in the contract and it is not permissible for the Court to make a new contract, however reasonable, if the parties have not made it themselves. It is further observed that the terms of the contract have to be construed strictly without altering the nature of a contract as it may affect the interest of either of the parties adversely. (Referred to in- Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678)

Different Facets of Non-Arbitrability

In Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, (on a reference to three-judge-bench) referring Booz Allen and Hamiltan Inc. Vs. SBI Home Finance Ltd., (2011) 5 SCC 532, it is held that there are facets of nonarbitrability, as under:

“(i) Whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes, having regard to their nature, could be resolved by a private forum chosen by the parties (the Arbitral Tribunal) or whether they would exclusively fall within the domain of public fora (courts).
(ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes fall under the “excepted matters ” excluded from the purview of the arbitration agreement.
(iii) Whether the parties have referred the disputes to arbitration? That is, whether the disputes fall under the scope of the submission to the Arbitral Tribunal, or whether they do not arise out of the statement of claim and the counterclaim filed before the Arbitral Tribunal.
A dispute, even if it is capable of being decided by arbitration and falling within the scope of an arbitration agreement, will not be “arbitrable ” if it is not enumerated in the joint list of disputes referred to arbitration, or in the absence of such a joint list of disputes, does not form part of the disputes raised in the pleadings before the Arbitral Tribunal. “

It is ultimately concluded in Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, in para 76 as under:

“45. In view of the above discussion, we would like to propound a fourfold test for determining when the subject matter of a dispute in an arbitration agreement is not arbitrable:
(1) When cause of action and subject-matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem.
(2) When cause of action and subject-matter of the dispute affects thirdparty rights; have erga omnes effect; require centralized adjudication, and mutual adjudication would not be appropriate and enforceable;
(3) When cause of action and subject-matter of the dispute relates to inalienable sovereign and public interest functions of the State and hence mutual adjudication would be unenforceable;
(4) When the subject-matter of the dispute is expressly or by necessary implication nonarbitrable as per mandatory statute(s).
These tests are not watertight compartments; they dovetail and overlap, albeit when applied holistically and pragmatically will help and assist in determining and ascertaining with great degree of certainty when as per law in India, a dispute or subject matter is nonarbitrable. Only when the answer is affirmative that the subject matter of the dispute would be nonarbitrable.
However, the aforesaid principles have to be applied with care and caution as observed in Olympus Superstructures (P) Ltd. Vs. Meena Vijay Khetan and Ors.; (1999) 5 SCC 651: (SCC p. 669, para 35)
“35. …Reference is made there to certain disputes like criminal offences of a public nature, disputes arising out of illegal agreements and disputes relating to status, such as divorce, which cannot be referred to arbitration.
It has, however, been held that if in respect of facts relating to a criminal matter, say, physical injury, if there is a right to damages for personal injury, then such a dispute can be referred to arbitration (Keir v. Leeman). Similarly, it has been held that a husband and a wife may refer to arbitration the terms on which they shall separate, because they can make a valid agreement between themselves on that matter (Soilleux v. Herbst, Wilson v. Wilson and Cahill v. Cahill). ” (Quoted in- Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678)

As regards the Prima facie examination of Courts, it is held in Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, as under:

“87. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable disputes. The prima facie review at the reference stage is to cut the deadwood and trim off the side branches in straight forward cases where dismissal is barefaced and pellucid and when on the facts and law the litigation must stop at the first stage.”

In Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, our Apex Court overruled two decisions.

1. N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72 (which, inter alia, observed that allegations of fraud can be made a subject matter of arbitration when they relate to a civil dispute).
2. Himangni Enterprises v. Kamaljeet Singh Ahluwalia, (2017) 10 SCC 706 (which held that landlord-tenant disputes are arbitrable as the Transfer of Property Act does not forbid or foreclose arbitration).

It was pointed out in Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, (i) that fraud, which would vitiate and invalidate the arbitration clause, is an aspect relating to non- arbitrability; they are non-arbitrable; and (ii) that the landlord-tenant disputes covered and governed by rent control legislation would not be arbitrable when specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations. Such rights and obligations can only be adjudicated and enforced by the specified court/forum, and not through arbitration.

Who Decides Nonarbitrability – Prima Facie Test by Court

As to ‘who decides on nonarbitrability of the dispute’, it is observed in Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1, there is only limited scope for review by the court. It is to check and protect parties from being forced to arbitrate when the matter is demonstrably “nonarbitrable” and to cut off the deadwood. It is held in Vidya Drolia v. Durga Trading Corporation as under:

“96. Discussion under the heading ‘Who decides Arbitrability?’ can be crystallized as under:
(a) Ratio of the decision in Patel Engineering Ltd. (SBP & Co. v. Patel Engg. Ltd., 2005 8 SCC 618) on the scope of judicial review by the court while deciding an application under Sections 8 or 11 of the Arbitration Act, post the amendments by Act 3 of 2016 (with retrospective effect from 23.10.2015) and even post the amendments vide Act 33 of 2019 (with effect from 9.8.2019), is no longer applicable.
(b) Scope of judicial review and jurisdiction of the court under Section 8 and 11 of the Arbitration Act is identical but extremely limited and restricted.
(c) The general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence competence, is that the arbitral tribunal is the preferred first authority to determine and decide all questions of non arbitrability. The court has been conferred power of “second look” on aspects of nonarbitrability post the award in terms of-
- subclauses (i), (ii) or (iv) of Section 34(2)(a) or
- subclause (i) of Section 34(2)(b) of the Arbitration Act.
(d) Rarely as a demurrer the court may interfere at the Section 8 or 11 stage when it is manifestly and ex facie certain that–
- the arbitration agreement is nonexistent,
- invalid or
- the disputes are nonarbitrable,
though the nature and facet of nonarbitrability would, to some extent, determine the level and nature of judicial scrutiny.
The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably “nonarbitrable”, and to cut off the deadwood. The court by default would refer the matter when contentions relating to nonarbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the arbitral tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism.” (Quoted in: Emaar India Ltd. v. Tarun Aggarwal Projects, AIR 2022 SC 4678; NTPC Ltd. v. SPML Infra Ltd., 2023 SCC OnLine SC 389)

In NTPC Ltd. v. SPML Infra Ltd., 2023 SCC OnLine SC 389, it is held (Dr. Dhananjaya Y. Chandrachud; CJI) as under:

“25. Eye of the Needle: The above-referred precedents crystallise the position of law that the pre-referral jurisdiction of the courts under Section 11(6) of the Act is very narrow and inheres two inquiries. The primary inquiry is about the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to the agreement and the applicant’s privity to the said agreement. These are matters which require a thorough examination by the referral court. The secondary inquiry that may arise at the reference stage itself is with respect to the nonarbitrability of the dispute.”

In NTPC Ltd. v. SPML Infra Ltd., 2023 SCC OnLine SC 389, sub-section (6A) added to Section 11, with respect to “pre-referral jurisdiction”, was referred to, and the following decisions were relied on-

Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1,
National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267,
Union of India v. Master Construction Co., (2011) 12 SCC 349,
New India Assurance Co. Ltd. v. Genus Power Infrastructure Ltd., (2015) 2 SCC 424,
United India Insurance Co. Ltd. v. Antique Art Exports Pvt. Ltd., (2019) 5 SCC 362.

In Union of India v. Master Construction Co., (2011) 12 SCC 349, it was observed as under:

“18. In our opinion, there is no rule of the absolute kind. In a case where the claimant contends that a discharge voucher or no-claim certificate has been obtained by fraud, coercion, duress or undue influence and the other side contests the correctness thereof, the Chief Justice/his designate must look into this aspect to find out at least, prima facie, whether or not the dispute is bona fide and genuine. Where the dispute raised by the claimant with regard to validity of the discharge voucher or no-claim certificate or settlement agreement, prima facie, appears to be lacking in credibility, there may not be a necessity to refer the dispute for arbitration at all.”

In New India Assurance Co. Ltd. v. Genus Power Infrastructure Ltd., (2015) 2 SCC 424, it was observed as under:

“10. In our considered view, the plea raised by the respondent is bereft of any details and particulars, and cannot be anything but a bald assertion. Given the fact that there was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice dated 31-3-2011 itself was nearly after three weeks and that the financial condition of the respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence. Such discharge and signing of letter of subrogation was voluntary and free from any coercion or undue influence. In the circumstances, we hold that upon execution of the letter of subrogation, there was full and final settlement of the claim. Since our answer to the question, whether there was really accord and satisfaction, is in the affirmative, in our view no arbitrable dispute existed so as to exercise power under Section 11 of the Act. The High Court was not therefore justified in exercising power under Section 11 of the Act.”

In United India Insurance Co. Ltd. v. Antique Art Exports Pvt. Ltd., (2019) 5 SCC 362, it was observed as under:

“21. In the instant case, prima facie no dispute subsisted after the discharge voucher being signed by the respondent without any demur or protest and claim being finally settled with accord and satisfaction and after 11 weeks of the settlement of claim a letter was sent on 27-7-2016 for the first time raising a voice in the form of protest that the discharge voucher was signed under undue influence and coercion with no supportive prima facie evidence being placed on record in absence thereof, it must follow that the claim had been settled with accord and satisfaction leaving no arbitral dispute subsisting under the agreement to be referred to the arbitrator for adjudication.
22. In our considered view, the High Court has committed a manifest error in passing the impugned order and adopting a mechanical process in appointing the arbitrator without any supportive evidence on record to prima facie substantiate that an arbitral dispute subsisted under the agreement which needed to be referred to the arbitrator for adjudication.”

Earlier View

Arbitrator to decide – whether valid arbitration agreement, claim barred

In SBP & Co. v. Patel Engg. Ltd., 2005 8 SCC 618, a seven-Judge Bench of the Apex Court held as under:

“39. It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense, whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection.”

Matters that Require Evidence

In SBP & Co. v. Patel Engg. Ltd., 2005 8 SCC 618, a seven-Judge Bench of the Apex Court held further as under:

“It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be necessary. We think that adoption of this procedure in the context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the court at various stages of the proceedings before the Arbitral Tribunal. (quoted in: Ashapura Mine -Chem Ltd. v. Gujarat Mineral Development Corporation, 2015-8 SCC 193)

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End Notes:

Sec. 8 of the Arbitration And Conciliation Act, 1996 (after 2015 Amendment)
Power to refer parties to arbitration where there is an arbitration agreement.
 (1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:
Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.


Sec. 11 A of the Arbitration And Conciliation Act, 1996
11. Appointment of arbitrators.
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment,
the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court.
(6) Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,
a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court is final and no appeal including Letters Patent Appeal shall lie against such decision.
(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to—
(a) any qualifications required for the arbitrator by the agreement of the parties; and
(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Supreme Court or the person or institution designated by that Court may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.
(10) The Supreme Court or, as the case may be, the High Court, may make such scheme as the said Court may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6), to it.
(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates, different High Courts or their designates, the High Court or its designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in an international commercial arbitration, the reference to the "Supreme Court or, as the case may be, the High Court" in those sub-sections shall be construed as a reference to the "Supreme Court"; and
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to the Supreme Court or, as the case may be, the High Court in those sub-sections shall be construed as a reference to the "High Court" within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate, and where the High Court itself is the Court referred to in that clause, to that High Court.
(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case may be, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule.
Explanation.— For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) in case where parties have agreed for determination of fees as per the rules of an arbitral institution.

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Termination or Nullity of Contract Will Not Cease Efficacy of the Arbitration Clause

Jojy George Koduvath.

PART – I

Introspection

Will the arbitration clause survive, on the termination of the agreement/contract?
Will the arbitration clause survive, notwithstanding a declaration of the contract being null and void?

Arbitration clause is treated as an independent contract

Sec. 16(1)(a) of the Arbitration and Conciliation Act, 1996 provides that the arbitration clause forming part of a contract shall be treated as an agreement independent of such a contract. (Enercon (India) Ltd. v. Enercon GMBH, 2014-5 SCC 1).

Therefore-
Even on the termination of the agreement/contract, the arbitration clause will survive.
Even when the agreement/contract comes to an end by efflux of time, the arbitration clause will not come to an end.
In spite of the declaration that a contract is null and void, the arbitration clause continues to be enforceable.

Sec. 16(1) of the Arbitration and Conciliation Act, 1996 provides as under:

“16. Competence of arbitral tribunal to rule on its jurisdiction – (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose –
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.”

Sec. 16(1) of the Arbitration and Conciliation Act, 1996 has been enacted in the light of Article 16 of the UNCITRAL Model Law. It reads as under:

“Article 16 – Competence of arbitral tribunal to rule on its jurisdiction –
(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) …… (3) ……..”

In Everest Holding Limited Vs. Shyam Kumar Shrivastava, 2008 (16) SCC 774, it is held as under:

“Though the JVA (Joint Venture Agreement) may have been terminated and cancelled as stated but it was a valid JVA containing a valid arbitration agreement for settlement of disputes arising out of or in relation to the subject matter of the JVA. The argument of the respondent that the disputes cannot be referred to the arbitration as the agreement is not in existence as of today is therefore devoid of merit.”

Referring Everest Holding Limited Vs. Shyam Kumar Shrivastava, 2008 (16) SCC 774, it is held in Reva Electric Car Co. Ltd v. Green Mobil, (2012) 2 SCC 93, it is held as under:

“Section 16(1)(a) presumes the existence of a valid arbitration clause and mandates the same to be treated as an agreement independent of the other terms of the contract. By virtue of Section 16(1)(b), it continues to be enforceable notwithstanding a declaration of the contract being null and void. In view of the provisions contained in Section 16(1) of the Arbitration and Conciliation Act, 1996, it would not be possible to accept the submission of Ms.Ahmadi that with the termination of the MOU on 31st December, 2007, the arbitration clause would also cease to exist.”

In Reliance Industries Limited v. Union of India, 2014-7 SCC 603, referring Sec. 16 of the Arbitration and Conciliation Act, 1996 it is held as under:

“61. A bare perusal of the aforesaid would show that the arbitration agreement is independent of the other terms of the contract. Further, even if the contract is declared null and void, it would not lead to the foregone conclusion that the arbitration clause in invalid. The aforesaid provision has been considered by this Court in a number of cases, which are as follows-
- Reva Electric Car Company P. Ltd. v. Green Mobil, 2012-2 SCC 93,
- Today Homes and Infrastructure Pvt. Ltd . v. Ludhiana Improvement Trust and Anr., 2013-7 SCALE 327,
- Enercon (India) Ltd. v. Enercon GMBH, 2014-1 ArbLR 257,
- World Sport Group (Mauritius) Ltd . v. MSM Satellite (Singapore) PTC Ltd. [Civil Appeal No. 895 of 2014]”

Arbitration Clause Forms Independent Contract

In Enercon (India) Ltd. v. Enercon GMBH, 2014-5 SCC 1, it is held as under:

83. The concept of separability of the arbitration clause/agreement from the underlying contract is a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract. The Indian Arbitration Act, 1996, as noticed above, under Section 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts. Commercial rights and obligations are contained in the underlying, substantive, or the main contract. It is followed by a second contract, which expresses the agreement and the intention of the parties to resolve the disputes relating to the underlying contract through arbitration. A remedy is elected by parties outside the normal civil court remedy. It is true that support of the national courts would be required to ensure the success of arbitration, but this would not detract from the legitimacy or independence of the collateral arbitration agreement, even if it is contained in a contract, which is claimed to be void or voidable or unconcluded by one of the parties.” (Quoted in: Ashapura Mine -Chem Ltd. v. Gujarat Mineral Development Corporation, 2015-8 SCC 193).

Note: It is beyond doubt that the intention of Sec. 16(1) the Act is not-

to resurrect an arbitration clause that cannot be invoked in cases (i) where the period of limitation provided for suits is elapsed; or (ii) where there is a rescission or alteration of contract under Sec. 62 of the Contract Act, and thereby the parties need not have performed the original contract (as shown below).

PART – II

Sea Change by 2015 Amendment on Arbitration and Conciliation Act, 1996

There is a sea change by 2015 Amendment on Arbitration and Conciliation Act, 1996 (i) as regards reference for arbitration under Sec. 8, and (ii) for appointment of arbitrator under Sec. 11.
After 2015 Amendment, for referring parties to arbitration and for appointing arbitrator, the courts should have “FOND“ ‘PRIMA FACIE’ –
- (i) the EXISTENCE of the arbitration agreement and
- (ii) the VALIDITY thereof
- (in short, legitimacy of arbitrability).
Sec. 8(1), as amended, reads as under:
- “A judicial authority …. shall … refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”
The arbitration agreement should be a ‘binding’ and ‘subsisting’ one, for qualifying it to be “valid” and “existing”.
Referral proceedings are preliminary and summary and not a “mini trial”. But, there are certain cases where the prima facie examination may require a deeper consideration. This prima facie examination is to make a “check” and to protect parties from being forced to arbitrate when the matter is demonstrably “non-arbitrable” (See: Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1).
The limited scrutiny, “through the eye of the needle”, is necessary and compelling. “If there is the slightest doubt, the rule is to refer the dispute to arbitration” (NTPC Ltd. v. SPML Infra Ltd., 2023 SCC OnLine SC 389).

Expiry of Contract by Efflux of Time – Can Arbitration Clause be Invoked?

It is beyond doubt that the arbitration clause cannot be invoked in a case where the period of limitation provided for suits is elapsed.

if a dispute arises (even within the limitation period for taking legal action), the “existence or validity of an arbitration agreement” has to be decided by the Court.

Existence of Contract – Necessary Condition for Operation of Arbitration Clause

It was held by the Supreme Court, in Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362 (a case on rescission or alteration of contract under Sec. 62 of the Contract Act – where the parties to need not have performed the original contract), as under:

“10. The following principles relevant to the present case emerge from the aforesaid discussion:
- (1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but nonetheless it is an integral part of it;
- (2) however comprehensive the terms of an arbitration clause may be, the existence of the contract is a necessary condition for its operation; it perishes with the contract;
- (3) … (4) … (5) … (6) …..”
(The aforestated passage in Union of India v. Kishorilal Gupta is quoted in: Indian Drugs and Pharmaceuticals Limited v. Indo Swiss Synthetics Gem Manufacture Company Limited, 1996-1 SCC 54; Sanjiv Prakash v. Seema Kukreja, 2021-9 SCC 732; Vidya Drolia v. Durga Trading Corporation, 2021-2 SCC 1)

Dispute Mut have been covered by the arbitration clause

It is held by the Supreme Court, in Zenith Drugs & Allied Agencies Pvt. Ltd. v. Nicholas Piramal India Ltd., AIR 2019 SC 3785, 2020-17 SCC 419, that for appointment of an arbitrator, there must have been an arbitration agreement, and the existence of the arbitration dispute must have been covered by an arbitration clause.

Effect of Fraud on Arbitration Agreement

In A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386, it was held as under:

“25. ……..It is only in those cases where the court, while dealing with Section 8 of the Act, finds that there are very serious allegations of fraud which make a virtual case of criminal offence or where allegations of fraud are so complicated that it becomes absolutely essential that such complex issues can be decided only by the civil court on the appreciation of the voluminous evidence that needs to be produced, the court can sidetrack the agreement by dismissing the application under Section 8 and proceed with the suit on merits. It can be so done also in those cases where there are serious allegations of forgery/fabrication of documents in support of the plea of fraud or where fraud is alleged against the arbitration provision itself or is of such a nature that permeates the entire contract, including the agreement to arbitrate, meaning thereby in those cases where fraud goes to the validity of the contract itself of the entire contract which contains the arbitration clause or the validity of the arbitration clause itself…….”. (Quoted in: Zenith Drugs & Allied Agencies Pvt. Ltd. v. Nicholas Piramal India Ltd., AIR 2019 SC 3785, 2020-17 SCC 419)

It was pointed out in Zenith Drugs & Allied Agencies Pvt. Ltd. v. Nicholas Piramal India Ltd., AIR 2019 SC 3785, 2020-17 SCC 419, that the plea of fraud being raised in entering the compromise, the merits of such a plea could be decided only by the Civil Court upon consideration of the evidence adduced by the parties.

Arbitration Clause in a Perished/Expired Contract, Arbitrator Not Appointed

Relying on Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362 it is held in Eigen Technical Service Pvt. Ltd. v. Vatika Limited, 2013-172 Pun LR 27: 2013-4 Arb LR 367, that arbitration clause in a redundant and perished contract by efflux of time, cannot be invoked. The court relied on an Allahabad decision stating as under:

“ High Court of Allahabad in a judgment dated 10.11.2006 passed in Writ Petition No. 21275 of 2006 titled as Union of India Thru’ Secry., Ministry of Postal v. Jagdish Kaur has also observed that arbitration clause contained in an expired agreement is also deemed as expired and is no more valid.”

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Is Certified Copy of Registered Deed a Public Document? Is it Admissible in Evidence Under S. 65(e) or S. 65(f)?

Jojy George Koduvath

Contents in Nutshell

Certified copy of registered (sale/gift) deed is NOT a public document under section 74.
Original of a (sale/gift) deed being not a public document, it does not fall under S. 65(e).
Original of a (sale/gift) deed is a NOT a document of which a certified copy is permitted by this Act (or by any other law in force in India) to be given in evidence. Hence it does not fall Under S. 65(f) also.
A registered (sale/gift) deed being not a document that falls under S. 65(e) and 65(f), any kind of its secondary evidence (including certified copy) can be given in evidence.
A registered (sale/gift) deed being not a document that falls under S. 65(e) and 65(f), secondary evidence of it cannot be given in evidence without ‘laying of foundation for acceptance of secondary evidence’ under Section 65(a), 65(b) or 65(c).
The courts being required to examine the probative value of admissibility of a secondary evidence, in a proper case (like a collusive suit), the court can take the view that the probative value of (other kinds of) secondary evidence of a deed (certified copy of which is provided) is low or nil.

Public and Private Documents

Sec. 74 of the Evidence Act enumerates the documents that are accepted as public documents. All other documents are identified as private, as laid down in Sec. 75.

Sec. 74 and 75 read as under:

Sec. 74. Public documents—

“The following documents are public documents-
Documents forming the acts, or records of the acts—
- of the sovereign authority,of official bodies and tribunals, and
- of public officers, legislative, judicial and executive, of any part of India or of the Commonwealth, or of a foreign country; of any part of India or of the Commonwealth, or of a foreign country;”
Public records kept in any State of private documents.”

Sec. 75. Private Documents—

“All other documents are private.”

Characteristics of Public Documents

It is held by the Madras High Court in Rangaraju v. Kannayal, 2012 SCC Online Mad. 138, as under:

“22. It has to be pointed out that a document cannot be said to be a public document within Section 74 of the Indian Evidence Act, unless it is shown to have been prepared by a public servant in discharge of his official duty as per the decision rendered in S.V. Chimanlal’s case reported in AIR 1942 Bombay 161.
23. Whenever there is a duty to record official doings, the record thus kept is admissible. As a general principle, it may be laid down that wherever there is a duty to do so, then there is also a duty to record the things done (Wigmore S 1639).
24. A public document is one made by a public officer for the purpose of the public making use of it and being able to refer it as per the decision made in Sturla v. Ferriccia (1882) 5 App Cas 623 HL at 643 per Lord Blackburn.
25. The rule as to public document is that the publicity must be contemporaneous and publicity means such publicity as would afford an opportunity of correcting anything that is wrong.
26. The test of publicity is that the public are interested in it and entitled to see it so that if there is anything wrong in it, they are entitled to protest.
27. When a public has a right to inspect an official document, it becomes a public document and the certified copy of the same will be given to that person who has applied for it, provided his right of inspection is not taken away by any other provisions of the Indian Evidence Act or by any other law, as opined by this court.
28. As a matter of fact, a certified copy of a public document need not be proved by calling a witness as per the decision of the Honourable Supreme Court reported in AIR 1963 SC 1633 in the case of Madamanchi Ramappa and another v. Muthalur Bojjappa.”

Proof of Public Documents by Certified Copies

76. Certified copies of public documents—

Every 1public officer having the custody of a public document, which any person has a right to inspect, shall give that person on demand a copy of it on payment of the legal fees therefor, together with a certificate written at the foot of such copy that it is a true copy of such document or part thereof, as the case may be, and such certificate shall be dated and subscribed by such officer with his name and his official title, and shall be sealed, whenever such officer is authorized by law to make use of a seal; and such copies so certified shall be called certified copies
Explanation.—Any officer who, by the ordinary course of official duty, is authorized to deliver such copies, shall be deemed to have the custody of such documents within the meaning of this section.

77. Proof of documents by production of certified copies—

Such certified copies may be produced in proof of the contents of the public documents or parts of the public documents of which they purport to be copies.
- Madamanchi Ramappa v. Muthalur Bojjappa, AIR 1963 SC 1633, it is held as under:
  - “The document in question being a certified copy of a public document need not have been proved by calling a witness.”

78. Proof of other official documents—

The following public documents may be proved as follows:—

1. Acts, orders or notifications of the Central Government in any of its departments, or of the Crown Representative or of any State Government or any department of any State Government—
by the records of the departments, certified by the head of those departments respectively, or by any document purporting to be printed by order of any such Government or as the case may be, of the Crown Representative;
2. The proceedings of the Legislatures—
by the journals of those bodies respectively, or by published Acts or abstracts, or by copies purporting to be printed by order of the Government concerned;
3. Proclamations, orders or regulations issued by Her Majesty or by the Privy Council, or by any department of Her Majesty’s Government—
by copies or extracts contained in the London Gazette, or purporting to be printed by the Queen’s printer;
4. The acts of the Executive or the proceedings of the Legislature of a foreign country—
by journals published by their authority, or commonly received in that country as such, or by a copy certified under the seal of the country or sovereign, or by a recognition thereof in some Central Act;
5. The proceedings of a municipal body in a State—
by a copy of such proceedings, certified by the legal keeper thereof, or by a printed book purporting to be published by the authority of such body;
6. Public documents of any other class in a foreign country—
by the original, or by a copy certified by the legal keeper thereof, with a certificate under the seal of a Notary Public, or of an Indian Consul or diplomatic agent that the copy is duly certified by the officer having the legal custody of the original, and upon proof of the character of the document according to the law of the foreign country.

Presumption as To Genuineness of Certified Copies

79. Presumption as to genuineness of certified copies.—

The Court shall presume to be genuine every document purporting to be a certificate, certified copy, or other document, which is by law declared to be admissible as evidence of any particular fact and which purports to be duly certified by any officer of the Central Government or of a State Government, or by any officer in the State of Jammu and Kashmir who is duly authorized thereto by the Central Government:
Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf. The Court shall also presume that any officer by whom any such document purports to be signed or certified held, when he signed it, the official character which he claims in such paper.

Is Certified Copy of a Sale Deed, Public Document that fall u/S. 65(e) or 65(f)

No.

Section 65 Evd. Act states as to the cases in which secondary evidence as to the documents may be given. It says-

65. Cases in which secondary evidence relating to documents may be given—Secondary evidence may be given of the existence, condition, or contents of a document in the following cases:—
(a) When the original is shown or appears to be in the possession or power— of the person against whom the document is sought to be proved, or of any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it, and when, after the notice mentioned in section 66, such person does not produce it;
(b) when the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;
(c) when the original has been destroyed or lost, or when the party offering evidence of its contents cannot, for any other reason not arising from his own default or neglect, produce it in reasonable time;
(d) when the original is of such a nature as not to be easily movable;
(e) when the original is a public document within the meaning of section 74;
(f) when the original is a document of which a certified copy is permitted by this Act, or by any other law in force in India to be given in evidence;
(g) when the originals consists of numerous accounts or other documents which cannot conveniently be examined in Court, and the fact to be proved is the general result of the whole collection.
In cases (a), (c) and (d), any secondary evidence of the contents of the document is admissible.
In case (b), the written admission is admissible.
In case (e) or (f), a certified copy of the document, but no other kind of secondary evidence, is admissible.
In case (g), evidence may be given as to the general result of the documents by any person who has examined them, and who is skilled in the examination of such documents.

“Original is a document of which a Certified Copy is Permitted by this Act …. to be given in evidence” – Meaning

It means the following-

Certified copy of a document is permitted (by the Evid. Act, or by any other law in force) to be given in evidence ‘without laying of any foundation for acceptance of secondary evidence’ [as provided in Sec. 65 (a), (b) and (c) ].
- Note: 1. A sale deed or gift deed continues to be a private document , even if it is registered.
- 2. The Evid. Act, or by any other law in force does not allow to give such a deed (its original) ‘to be given in evidence’ – without ‘laying of any foundation for acceptance of secondary evidence’.

In Rekha Rana v. Ratnashree Jain, AIR 2006 MP 107, RV Raveendran, J., scholarly considered whether certified copy of a sale deed (which is always a private document), obtained from the sub-registrar’s office is a public document, so that its certified copy can be given in evidence without ‘laying of any foundation for acceptance of secondary evidence’ under Section 65(e) or 65(f). It was authoritatively pointed out-

If the original is a public document, secondary evidence by way of certified copy can be (Sec. 65 says – certified copy alone has to be) given in evidence to prove the contents of the original document without ‘laying of foundation for acceptance of secondary evidence’, under Section 65(e) or 65(f).
But, where the original is a private document, secondary evidence (by way of certified copy) can be given in evidence only after ‘laying of any foundation for acceptance of secondary evidence’. Such ‘laying of foundation’ for admitting certified copy must be according to Section 65, clause (a), (b) or (c).

Reveendran, J. held as under:

“8. A deed of sale is a conveyance. A deed of conveyance or other document executed by any person is not an act nor record of an act of any sovereign authority or of any official body or tribunal, or of any public officer, legislative, judicial and executive. Nor is it a public record kept in a State of any private documents. A sale deed (or any other deed of conveyance) when presented for registration under the Registration Act, is not retained or kept in any public office of a State after registration, but is returned to the person who presented such document for registration, on completion of the process of registration. An original registered document is not therefore a public record kept in a state of a private document. Consequently, a deed of sale or other registered document will not fall under either of the two classes of documents described in Section 74, as ‘public documents’. Any document which is not a public document is a private document. We therefore have no hesitation in holding that a registered sale deed (or any other registered document) is not a public document but a private document.
9. This position is made abundantly clear in Gopal Das v. Shri Thakurji AIR 1943 Privy Council 83, wherein the Privy Council considering the question whether a registered receipt is a public document observed thus:
“It was contended by Sir Thomas Strongman for the respondents that the receipt comes within para 2 of Section 74, Evidence Act, and was a ‘public document’; hence under Section 65(e) no such foundation is required as In cases coming within Clauses (a), (b) and (c) of that section. Their Lordships cannot accept this argument since the original receipt, of 1881 is not ‘a public record of a private document’. The original has to be returned to the party. A similar argument would appear at one time to have had some acceptance in India but it Involves a misconstruction of the Evidence Act and Registration Act and later decisions have abandoned it.” (Emphasis supplied)
We may also refer to the following passage from Ratanlal’s Law of Evidence’ (19th Edition page 237):
“Public document, (clause (e)] – This clause is intended to protect the originals of public records from the danger to which they would be exposed by constant production in evidence. Secondary evidence is admissible in the case of public documents mentioned in Section 74. What Section 74 provides is that public records kept in any state of private documents are public documents, but private documents of which public records are kept are not in themselves public documents. A registered document, therefore, does not fall under either Clause (e) or (f). The entry in the register book is a public document, but the original is a private document.”
- The above passage from Rekha Rana v. Ratnashree Jain is quoted in: Deccan Paper Mills Co. Ltd. Vs. Regency Mahavir Properties. 2021-4 SCC 786, AIR 2020 SC 4047.

Raveendran, J. cogently held as to the status of the certified copy of a sale as under:

• “A certified copy of a registered document, copied from Book 1 and issued by the Registering Officer, is neither a pubic document, nor a certified copy of a private document, but is a certified copy of a public document.”

Proof of Certified Copies Permitted by S. 77; Correctness Presumed by S. 79

As shown earlier, Sec. 77 of the Evidence Act permits to produce certified copies of public documents in proof of its contents.

In Kalyan Singh v. Chhoti, AIR 1990 SC 396, our Apex Court did not act upon the ‘just an ordinary copy‘, for, there was “also no evidence regarding content of the original sale deed”. It reads as under:

“Section 63 of the Evidence Act mentions five kinds of secondary evidences. Clause (1), (2) and (3) refer to copies of documents; clause (4) refers to counterparts of documents and clause (5) refers to oral accounts of the contents of documents. Correctness of certified copies referred to in clause (1) is presumed under Section 79; but that of other copies must be proved by proper evidence. A certified copy of a registered sale deed may be produced as secondary evidence in the absence of the original. But in the present case Ex. 3 is not certified copy. It is just an ordinary copy. There is also no evidence regarding content of the original sale deed. Ex. 3 cannot, therefore, be considered as secondary evidence. The appellate Court has a right and duty to exclude such evidence.”

Referring relevant provisions of Himachal Land Revenue Act, 1954 and Sec. 35 of the Indian Evidence Act, 1872, it is held in Partap Singh v. Shiv Ram: AIR 2020 SC 1382, that Record-of-rights (Revenue document) carries the ‘presumption of correctness‘.

Certified Copy alone Admitted for Equitable Mortgage, Not Xerox Copy

Relying on Kalyan Singh v. Chhoti, AIR 1990 SC 396, the Madras High Court, in Ananthkrishnan V. K G Rangasamy, 2020-1 Mad LW 355, observed that when a document was a registered one, the xerox copy of the same was not admissible as secondary evidence; and the court found it bad to create an equitable mortgage with xerox copy. The same view is taken by the Kerala High Court in Syndicate Bank v. Modern Tile and Clay Works, 1980 KLT 550. It is followed in Biju Paul Vs. Nedungadi Bank,2012-245 KerLR 291.

But, the AP High Court observed in G Balamani v. Parimi Manga Devi, 2019-4 ALD 401,
2019-3 CIVCC 590, 2019-4 ALT 203, that a valid equitable mortgage could be created by deposit of photostat copies of title deeds.

Best Evidence Rule insists Evidence of High Probative Value

Though various kinds of secondary evidences are provided under Sec. 63, the probative value of one kind (say, a photograph of an original, as stated in Illustration (a) of Sec. 63) will definitely be higher when compared with another (say, oral account). The best evidence rule insists evidence bearing high probative value.

The Calcutta High Court quoting Life Insurance Corporation of India Vs. Ram Pal Singh Bisen [2010-4 SCC 491] it is observed in Bajaj Allianz General Insurance Company Vs. Smt. Santa (2019-2 ACC 36) that ‘even if the document had been marked as Exhibit-A without objection, without a formal proof thereof in accordance with the provisions of the Evidence Act, such document lost its credibility and is of no probative value’.

Admission of contents: may dispense proof; but probative value may be less or nil

Admissibility & probative value – two matters. State of Bihar Vs. Radha Krishna Singh (AIR 1983 SC 684) it is observed:

“Admissibility of a document is one thing and its probative value quite another—these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and weight or its probative value may be nil.”

Court examines probative value of secondary evidence

It is well settled that if a party wishes to lead secondary evidence, the Court is obliged to examine the probative value of the document produced in the Court or their contents and decide the question of admissibility of a document in secondary evidence [Rakesh Mohindra Vs. Anita Beri: 2015 AIR(SCW) 6271].

Court is obliged to examine the Probative Value

In Kaliya Vs. State of MP: 2013-10 SCC 758 (relying on H. Siddiqui Vs. A. Ramalingam: AIR 2011 SC 1492, and Rasiklal Manikchand Vs. MSS Food Products: 2012-2 SCC 196) held as under:

“The court is obliged to examine the probative value of documents produced in court or their contents and decide the question of admissibility of a document in secondary evidence.”
[Note: Further held: “In case, an objection is not raised at that point of time, it is precluded from being raised at a belated stage.”]

Is ‘Registration’, “Proof” of ‘Execution’?

There is a presumption – registered document is validly executed.

Prem Singh v. Birbal, AIR 2006 SC 3608;
Abdul Rahim v. Abdul Zabar, AIR 2010 SC 211
Jamila Begum v. Shami Mohd., AIR 2019 SC 72;
Manik Majumder v. Dipak Kumar Saha, AIR 2023 SC 506.
A registered document carries with it a presumption that it was executed in accordance with law – Bellachi v. Pakeeran, AIR 2009 SC 3293.
The facts spelled out by the endorsements made under Sections 58 and 59 of the Registration Act may be presumed to be correct without formal proof thereof – Bhagat Ram v. Suresh, AIR 2004 SC 43.
The certificate endorsed on a registered deed by the registering officer is a relevant piece of evidence for proving its execution – Piara v. Fatnu, AIR 1929 Lah 711.

‘Presumption’ in Law – Is it Truth of a Fact Alleged?

Two views exist-

First, Presumption is an inference of a fact. This, by itself (invariably) embraces ‘truth’.
Second (and more cogent), under Sec. 114 of the Evidence Act, court may presume the existence of any fact. The inference, in most cases, will be the subsistence of a fact, like existence of a document or its authorship (rather than its truth). In proper cases, a further presumption could be added – so that the ‘truth’ may also be deduced (Eg. regularity of official acts, sale under a registered sale deed).

Is there presumption as to “Truth” in ‘Presumption’ under the Indian Evidence Act?

The Indian Evidence Act does not specifically correlate “truth” or “correctness” with ‘presumption’. But, ‘any fact’ stated in Sec. 114 of the Evidence Act (Court may presume the existence of any fact) includes ‘truth’. As shown above, it is clear from the Stroud’s Legal Dictionary that presumption is a probable consequence drawn from facts as to the truth of a fact alleged. It is clear that, in presumption, the existence or truth of a fact, otherwise doubtful, is inferred from certain other proved facts. Here, the Court exercises a process of reasoning and reach a logical conclusion as the most probable position (See: St. of West Bengal Vs. Mir Mohammad Omar, AIR 2000 SC 2988).

It is observed in Izhar Ahmad Khan v. Union of India, AIR 1962 SC 1052, that the term ‘presumption’ in its largest and most comprehensive signification, may be defined to bear inference, affirmative or disaffirmative of the truth or falsehood of a doubtful fact or proposition drawn by a process of probable reasoning from something proved or taken for granted. Our courts usually draw presumptions as to truth or correctness in documents covered by Sec. 35 Evd. Act and Registered deeds, as detailed below.

Section 67, Evid. Act requires – facts to be proved; It includes invocation of ‘Presumption‘

Section 35 in the Registration Act, 1908 reads as under:

“35. Procedure on admission and denial of execution respectively—(1) (a) If all the persons executing the document appear personally before the registering officer and are personally known to him, or if he be otherwise satisfied that they are the person they represent themselves to be, and if they all admit the execution of the document, or ….”

In Sumathi Amma v. Kunjuleskhmi Amma (1964 Ker LT 945) it was observed that Section 67, Evidence Act only says that facts have to be proved, and, unlike Section 68, does not prescribe any particular mode of proof. The facts required to be proved under Section 67 can be proved by any kind of evidence, and there is nothing in the section to indicate that the evidence furnished by the registration certificate by virtue of Sub-section (2) of Section 60 of the Registration Act and by the presumption in Illustration (e) of Section 114 of the Evidence Act, is to be excluded.’

In Kunhamina Umma v. Special Tahsildar, AIR 1977 Ker 41, the Kerala High Court observed that the facts required to be proved under Section 67 could be proved by any kind of evidence, and there was nothing in the section to indicate that the evidence furnished by the registration certificate by virtue of Sub-section (2) of Section 60 of the Registration Act and by the presumption in Illustration (e) of Section 114 of the Evidence Act, was to be excluded. It is held as under:

“The Privy Council said in Gangamoy Debi v. Troilukhya Nath (1906) 33 Ind App 60 : ILR 33 Cal 537 (PC)–‘The registration is a solemn act, to be performed in the presence of a competent official appointed to act as registrar, whose duty it is to attend the parties during the registration and see that the proper persons are present and are competent to act, and are identified to his satisfaction; and all things done before him in his official capacity and verified by his signature will be presumed to be duly and in order‘.
15. On the strength of this observation of the Privy Council and on a consideration of Section 60 of the Registration Act, the Lahore High Court held in Piara v. Fatnu (AIR 1929 Lah 711) that the certificate endorsed on a registered deed by the registering officer is a relevant piece of evidence for proving its execution. … …..
19. The question has been considered in depth by Justice Raman Nair (as he then was) in Sumathi Amma v. Kunjuleskhmi Amma (1964 Ker LT 945). The learned Judge observed (at pages 946 and 947) :
- “… It (Section 67 Evidence Act) only says that facts have to be proved, and, unlike Section 68, does not prescribe any particular mode of proof. The facts required to be proved under Section 67 can be proved by any kind of evidence, and there is nothing in the section to indicate that the evidence furnished by the registration certificate by virtue of Sub-section (2) of Section 60 of the Registration Act and by the presumption in Illustration (e) of Section 114 of the Evidence Act, is to be excluded.’
- We have no hesitation in endorsing the view of the learned Judge as laying down the correct law on the question if we may say so with respect.”

In Vimal Chand Ghevarchand Jain v. Ramakant Eknath Jajoo, (2009) 5 SCC 713, it is held as under:

“The deed of sale dated 29.6.1978 was a registered one. It, therefore, carries a presumption that the transaction was a genuine one.”

Read Blog: Proof and Truth of Documents
Presumptions on Registered Documents & Collateral Purpose

RV Raveendran, J., took a discordant stand as to Proof Invoking Registration

In Rekha Rana v. Ratnashree Jain, AIR 2006 MP 107, RV Raveendran, J., took a discordant stand as to proof invoking the factum of registration of the document. His Lordship held as under:

“But then it will only prove the contents of the original document, and not be proof of execution of the original document. (Vide Section 57(5) of Registration Act read with Section 77 of Evidence Act). This is because registration of a document is proof that someone purporting to be ‘X’ the executant admitted execution, but is not proof that ‘X’ executed the document.”
“Such certified copy marked without laying foundation for receiving secondary evidence, though admissible for the purpose of proving the contents of the original document, will not be proof of execution of the original document.”

Conclusion

It took a long journey to come to the conclusion as to-
- (i) whether no other kind of secondary evidence, but a certified copy alone (under clause ‘e’ and ‘f’ of Sec. 65) is acceptable to prove a registered sale/gift deed;
- (ii) whether proof of execution of a document can be proved by ‘registration and registration certificate’ (invoking presumption)?
Now it is concluded-
- (i) All kinds of secondary evidence (not confined to certified copy) is acceptable to prove a registered sale/gift deed. But, in a proper case, the court can take the view that the probative value of (other kinds of) secondary evidence of a deed (certified copy of which is provided) is low or nil.
- (ii) ‘Fact of registration and registration certificate’ can be used to prove the execution of a document.

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Book No, 1 – Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act & Registration

Will

Divorce

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

General Principles
Dedication and Vesting
Trustees and Management
Breach of Trust
- Breach of Trust and Removal of Trustees
Suits by or against Trusts
- Suits By or Against Trusts and Trustees
- Remedies Under Sec. 92 CPC
Law on Hindu Religious Endowments
- Philosophy of Idol Worship
Temples, Gurudwaras, Churches and Mosques – General
- Legal Personality of Temples, Gurudwaras, Churches and Mosques
Constitutional Principles
Ayodhya and Sabarimala Disputes
- Ayodhya Disputes: M. Siddiq case – Pragmatic Verdict
- Sabarimala Review Petitions & Reference to 9-Judge Bench
- SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
General

Cancellation of Sale Deeds, Settlement Deeds and Trust Deeds

Powers of Sub-Registrar in (Registering and) Cancelling Deeds

Saji Koduvath, Advocate, Kottayam

PART I

Key Takeaways

A party to a (void or voidable) document alone need to get it cancelled; other persons can ignore it.
The true owner of a property cannot seek cancellation of a deed, executed by a stranger to the property.
When the plaintiff cannot establish his title without avoiding an instrument that stands as an insurmountable obstacle, the plaintiff has to seek a declaration.
A registered deed cannot be unilaterally cancelled by its executant. The only remedy available is to invoke Sec. 31, Sp. Relief Act.
If a person is aggrieved by a deed, the remedy open for him is to seek appropriate relief in the civil Court.
Registrar is not competent to cancel the registered document.
Does the Registering Authority hold Quasi-Judicial power? No.
Does the Registrar has duty to see – document is presented in accordance with law? Yes.
Does the Registrar hold power to desist from registering a document, submitted along with the necessary documents? No.
It forms no part of a Registering Officer’s duty to enquire into the validity of a document [except documents styled as marriage agreement] brought to him for registration (Rule 67 of the Kerala Registration Rules).

Read also:

Cancellation of Sale Deeds and Settlement Deeds

Section 31 of the Specific Relief Act provides for cancellation of deeds by the civil court. The grant of such a decree is discretionary. The court can adjudge an instrument void or voidable, partially or completely. To attract Sec. 31-

(i) The instrument in question must be a written one.
(ii) It must be a void or voidable one as against the plaintiff.
(iii) The plaintiff must have reasonable apprehension that such instrument, if left outstanding, may cause him serious injury.

When Declaration (other than Cancellation) is to be sought for

Declaration of Title – When required?

Declaration is to make clear what is doubtful.
Declaration is needed when serious denial or cloud on title (Anathula Sudhakar v. P. Buchi Reddy, 2008-4 SCC 594: 2008 SC 2033, Jharkhand State Housing Board v. Didar Singh , (2019) 17 SCC 692 . Referred to in: Padhiyar Prahladji Chenaji vs Maniben Jagmalbhai: 2022 SCC OnLine SC 258, serious cloud: Kurella Naga Druva Vudaya Bhaskara Rao v. Galla Jani Kamma (2008) 15 SCC 150: (Quoted in Muddasani Venkata Narsaiah v. Muddasani Sarojana: AIR 2016 SC 2250: 2016-12 SCC 288).
Declaration is needed as an ‘introduction’ to grant Injunction and Recovery.
Declaration is also to tide over Insurmountable obstacle (Noorul Hoda v. Bibi Rafiunnisa, 1996 (7) SCC 767).
Injunction is granted without declaration, when plaintiff has well established title, or settled lawful possession.
No declaration is needed when title claimed by the defendant is null or void.
If a person is aggrieved by a deed, the remedy for him is to seek appropriate relief in the civil Court (Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57)
No declaration is needed when a person sells away the property belonging to other, as it would certainly be fraud on the statute (Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57).
No declaration is needed when – Plaintiff is not a party to the sale deed (Usman Kurikkal v. Parappur Achuthan Nair, ILR 2012-3 Ker 343; 2012 3 KHC 89)
No declaration is needed when – Document ex-facie reveals no title – specific declaration as to invalidity not necessary.
A complete stranger whose interest is in no way affected by another’s legal character is not entitled for a declaration.

Rectification Not the Only Remedy; Can Sue for Declaration

In Sambhu Nath Dalal v. Radharaman Middya, 2003-1 CalLT 301; 2002-4 CHN 537, it is pointed out as under:

“( 8 ) Section 26 is an enabling provision. It enables a transferee to seek relief by rectification. But such rectification is not the only remedy (Palani Velappa v. Nachappa, AIR 1919 Mad. 247). He can sue for a declaration that the property belongs to him without seeking rectification. In such a case he can avail himself of the benefit of the provisions of sections 95 to 97 of the Evidence Act. …
A suit for declaration can be maintained without rectification of khasra number mentioned in the sale deed (Vaikunthi Bai v. State of MP, 1987 MPLJ 469 ). If the plaintiff can prove his title to the property, he can seek a decree for declaration of title without seeking the relief of rectification of the document of title….
In William Charles Bunns v. W. N. T. Avery Limited, AIR 1934 Cal. 778, it was held that a purchaser is not bound to institute a suit for rectification since this section is an enabling one. If a purchaser does not utilise the benefit of this section, it would not deprive him of the rights conveyed to him.”

Failure To Resort S. 26 Cannot Deprive Rights Under The Deed

In Sambhu Nath Dalal v. Radharaman Middya, 2003-1 CalLT 301; 2002-4 CHN 537, it is further pointed out as under:

“The failure to resort to section 26 cannot deprive the purchaser of the rights conveyed to him by the sale deed (Barsati v. Sarju Prasad, AIR 1939 Oudh 10; Rikhiram v. Ghasiram, AIR 1978 M. P. 189).”

U/S. 26, Court Can Give Effect To Intention Before Writing

Under section 26, it is open to the Court to give effect to the real intention of the parties that was arranged and arrived at by agreement between them before it was reduced into writing (Shanti Ranjan Das v. Dasuram, AIR 1957 Assam 49 ). In Rangaswami v. Souri Aiyangar, ILR 39 Mad. 792; Abdul Hakim Khan v. Ramgopal, AIR 1922 A11. 42; Sovhaji v. Nawal Singh, AIR 1928 Nag. 4; Nandarani v. Jagandra, AIR 1923 Cal. 53 ).”

Sambhu Nath Dalal v. Radharaman Middya, 2003-1 CalLT 301; 2002-4 CHN 537, explored Section 26 and held as under:

“The scope:
8. 3. Section 26 makes it clear that (1) it can either be pleaded in the pleadings; or (2) such pleadings can be brought about at any stage of the suit by way of amendment; (3) the relief can be sought for by either of the parties; (4) the relief can be had at any stage of the suit; (5) even if it is not asked for, the Court is not precluded from granting such relief after allowing leave to ask for such relief to the parties.
Available to representative in interest:
8. 4. It is not only the parties to the document, who can take advantage of such relief available under section 26. Such relief is available also to the ‘representative in interest’. This expression includes not only heirs, executors, administrators or assignees but also transferees. The Court can interfere not only in a case between the parties to the document, but also between those claiming under them in privity. The expression is wide enough to include all personal representatives. However, it restricts the operation in between the parties or their representatives in interest and not to others.
Limitation:
8. 5. The limitation with regard to the relief is related to person, who has come to the Court. The limitation is governed under Article 113 of the Limitation Act, 1963, which is three years either from the execution of the document or from the date of notice or knowledge about the mistake. The time would commence to run from the date of discovery of the mistake. There cannot be any time limit for discovery of the mistake (Gerela Kalita v. Dhanneswar, AIR 1961 Ass 14 ).
The limitation is to be computed from the date on which the cause of action arises. Cause of action arises only when the person suing comes to know about the mutual mistake in the instrument that it does not express the real intention of the parties.”

No Cause of Action Until the Right is Denied

“In Balo v. Kuklan, AIR 1930 PC 270, the Privy Council had held that there can be no right to sue until there is accrual of the right asserted in the suit and its infringement, or at least a clear and unequivocal threat to infringe the right by the defendant against whom the suit is instituted.”

Analysing the situation on facts the High Court held as under::

“8. 6. In the present case, the suit is for a different relief in which this question comes for scrutiny. As such it is dependent on the cause of action for which the suit is filed. Until the right is denied, there cannot be any cause of action. The vendor did not deny the title passed through the conveyance. It is a purchaser of a different share from the same vendor, who is raising this dispute. Such a party cannot take advantage, when such party itself had derived title to another part of the same property from the same vendor.”

When a Plaintiff can Ignore a Deed

(i) When Not a Party to the Deed (ii) Third Party Sells Property of Another

V. Kalyanaswamy v. L. Bakthavatsalam, 2020 9 Scale 367
Also in Sankaran v. Velukutty, 1986 KLT 794
SR Suresh Babu v. Beena, 2022 KHC OnLine 196.
Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57.

Unilateral Cancellation by Regd. Deed, Stands Against Sec. 31

Pavakkal Noble John v. Kerala State, 2010 (3) Ker LT 941,
Latif Estate Line India Ltd. v. Hadeeja Ammal, AIR 2011 Mad 66,
Sudhakar Reddy v. Lakshmamma, 2014 (4) ALT 404, 2011 (4) ALD 325 (DB),
Asset Reconstruction Company v. SP Velayutham (2022) 8 SCC 210.
Sudhakar Reddy v. Lakshmamma, 2014 (4) ALT 404, 2011 (4) ALD 325 (DB)

Cancellation can be equated to Rescission in Contract

A deed of cancellation amounts to rescission of contract. (In contractual matters the term recession is used to denote cancellation.) If it is viewed in the light of Section 62 of the Indian Contract Act, the cancellation (being a recession) must be done bilaterally.

Who can seek Cancellation

Section 31 makes it clear – one can seek Cancellation if –

the written instrument stands against his interest
the instrument is void or voidable (or void so far as that person is concerned)
he has a reasonable apprehension that the instrument, if left outstanding may cause serious injury to him.

Can the True Owner Seek Cancellation of a Deed, Executed by a Stranger to the Property

No.

Sect. 31 of the Specific Relief Act does not give a right to a stranger to a document (including the true owner of the property) to sue for cancellation. That is, when an immovable property is transferred by a person without authority to a third person, the true owner cannot file a suit under Sec. 31 of the Specific Relief Act; such a suit is not maintainable. See:

Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1
Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57,
Deccan Paper Mills Co. Ltd. Versus Regency Mahavir Properties; (2021) 4 SCC 786,
Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330.

The Full Bench of the Madras High Court, in Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1, said analysing Sec. 39 of the Specific Relief Act, 1877 (pari materia provision to Sec. 31 of the 1963 Act) as follows:

“13. … The provisions of Section 39 make it clear that three conditions are requisite for the exercise of the jurisdiction to cancel an instrument :
- (1) the instrument is void or voidable against the plaintiff;
- (2) plaintiff may reasonably apprehend serious injury by the instrument being left outstanding;
- (3) in the circumstances of the case the court considers it proper to grant this relief of preventive justice.
On the third aspect of the question the English and American authorities hold that where the document is void on its face the court would not exercise its jurisdiction while it would if it were not so apparent. In India it is a matter entirely for the discretion of the court.
14. The question that has to be considered depends on the first and second conditions set out above. As the principle is one of potential mischief, by the document remaining outstanding, it stands to reason the executant of the document should be either the plaintiff or a person who can in certain circumstances bind him. It is only then it could be said that the instrument is voidable by or void against him. The second aspect of the matter emphasises that principle. For there can be no apprehension if a mere third party asserting a hostile title creates a document. Thus relief under S. 39 would be granted only in respect of an instrument likely to affect the title of the plaintiff and not of an instrument executed by a stranger to that title.”

After quoting Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1, it was held (R.F. Nariman, J.) in Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, AIR 2020 SC 4047, as under:

“A reading of the aforesaid judgment of the Full Bench would make the position in law crystal clear. The expression “any person” does not include a third party, but is restricted to a party to the written instrument or any person who can bind such party….
… A reading of section 31(1) then shows that when a written instrument is adjudged void or voidable, the Court may then order it to be delivered up to the plaintiff and cancelled – in exactly the same way as a suit for rescission of a contract under section 29. Thus far, it is clear that the action under section 31(1) is strictly an action inter parties or by persons who obtained derivative title from the parties, and is thus in personam.”

In Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57, it is held as under:

“36. What would be the remedy for the person who actually and factually holds a valid title to a property in respect of which a fraudulent transfer was effected by deceitful vendors and vendees or deceitful vendors and genuine vendees, who parted with consideration. The legal maxims ‘nemo dat quod non habet’ and ‘nemo plus juris ad alium transferee potest quam ipse habet’ postulate that where property is sold by a person who is not the owner and who does not sell under the authority or consent of the real owner, the buyer acquires no title to the property than the seller had. The Indian law recognizes this principle in various provisions of various statutes which in pith and substance deal with Contracts, Transfer of property and Specific relief (See Sections 17, 18, 19, 20, 23, 25 and 29 of the Contract Act; Sections 6(h), 7, 25, 38, 42 to 48, 52, 53 and 55 of TP Act and Sections 13, 15, 17, 21, 31 and 34 of the Specific Relief Act)…..
77. In the considered opinion of this Court if a person sells away the property belonging to other, it would certainly be fraud on the statute. It would be adding insult to injury, if such person is asked to go to civil Court and get the subsequent sale deed cancelled or seek a declaration. Be it also noted that under common law, as discussed supra, the title of a person remains intact even if a stranger conveys that title to another stranger, which is ineffective”

In Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330, after considering all the above decisions, it is held as under:

“34. What follows from the above settled position of law, is that an executant can seek cancellation of a registered instrument on the ground of fraud, by a suit filed under Section 31 of the Specific Relief Act. In case, where a stranger without any title has executed a sale, such a suit will not lie under Section 31. Real owner may file a suit under Section 34, if his peaceful enjoyment of ownership right is impinged due to the said sale.”

Also Read: Can the True Owner Seek Cancellation of a Deed, Executed by a Stranger to the Property

When one is NOT PARTY to Document, No Need to Annul by Cancellation

It is held in Y. G. Gurukul v. Y. Subrahmanyam, AIR 1957 AP 955, as under:

“When a person is not eo-nomine a party to a suit or a document, it is unnecessary for him to have the deed or the decree annulled, and he can proceed on the assumption that there was no such document or decree. (Followed in Sankaran v. Velukutty, 1986 Ker LT 794.)

In Usman Kurikkal v. Parappur Achuthan Nair, ILR 2012-3 Ker 343; 2012 3 KHC 89, it is held as under:

“Plaintiff is neither a party to the sale deed nor a party to the resolution empowering the Board to execute the sale deed. The prayer in the plaint is essentially for a declaration that the sale deed is not valid and binding on the plaintiff. The plaintiff has not sought for a cancellation of the sale deed obviously because he was not an executant thereto. The plaintiff can very well ignore the sale deed and need not seek its annulment as has been held in Sankaran v. Velukutty (1986 KLT 794).”
See also: SR Suresh Babu v. Beena, 2022 KHC OnLine 196.

The Supreme Court observed in V. Kalyanaswamy v. L. Bakthavatsalam, 2020 3 RCR(Civ) 404; 2020 9 Scale 367, as under:

“Plaintiffs-appellants in OS No. 36 of 1963 were not parties to the suit in 1958 and the compromise in OS No. 71 of 1958 will not bind the appellants.”

Incumbent for the Executant to Seek Cancellation of Sale Deeds

It is held in Chellakannu v. Kolanji (R. Banumathi, J.), AIR 2005 Mad 405, that the word “Cancellation” implies that the persons suing should be a party to the document; and that it is incumbent on the executant of the document (for avoiding its binding nature) to seek cancellation of sale deeds, and a prayer to declare the sale deeds as invalid tantamount to cancellation; and therefore, court fee applicable to cancellation has to be paid. Our Apex Court approved this decision (Chellakannu v. Kolanji) in J. Vasanthi v. N. Ramani Kanthammal, AIR 2017 SC 3813.

Cancellation of alienations in Partition Suits

In Umadevi Nambiar v. Thamarasseri Roman Catholic Diocese, AIR 2022 SC 1640; 2022-7 SCC 90, it is held that in Partition of property, it is not always necessary for a plaintiff in a suit for partition to seek cancellation of alienations.

Propositions as to Questioning a Deed WHERE ONE is NOT a Party

In Noorul Hoda v. Bibi Rafiunnisa, 1996 (7) SCC 767, our Apex Court held as follows:

“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.”

In Chellakannuv. Kolanji (R. Banumathi, J.), AIR 2005 Mad 405, it is observed as under:

“12. The word “Cancellation” implies that the persons suing should be a party to the document. Strangers are not bound by the documents and are not obliged to sue for cancellation. When the party to the document is suing, challenging the document, he must first obtain cancellation before getting any further relief. Whether cancellation is prayed for or not or even it is impliedly sought for in substance, the suit is one for cancellation. In the present case, when the Plaintiff attacks the Sale Deeds as having been obtained from him under fraud and mis-representation the Plaintiff cannot seek for any further relief without setting aside the Sale Deeds.

Where one person is not a party to a deed, following propositions can be laid down:

Where a deed is ‘null and wholly void‘ (e.g., unregistered sale/gift), he can simply avoid the deed and advance with other reliefs.
- Limitation statute will have no application in such cases.
If it is not ‘null and wholly void‘, he cannot simply avoid the deed and advance with other reliefs.
- But, in such cases, it is not mandatory to seek ‘annulment’ of the deed – by ‘setting it aside’ or ‘cancelling it’.
- It will be sufficient – to resort to “appropriate proceeding”, for avoiding the same, before a court of law, seeking proper declaration or otherwise.
- It must be done within the limitation period prescribed.
- In such cases the plaintiff need not pay Court Fee for ‘cancellation’ of a deed; it will be sufficient to pay the fee for ‘declaration’.

Partial or Complete Cancellation

In a proper case it may be possible to cancel a part of the document. But, if it is an indivisible agreement such bifurcation is not possible. It is held in Laxmanlal K. Pandit v. Mulshankar Pitambardas, (1908) 10 BomLR 553 7, as under:

“Finally, it was urged that even if part of the consideration for the rent note failed, yet part of it should be held not to fail, and to the extent of the part held good relief should be allowed to the plaintiff in this suit. It is, however, clear to us that the agreement was an indivisible agreement. Part of a single consideration for one object was unlawful, and therefore the whole agreement is void under Section 24 of the Contract Act. As was said by Mr. Justice Chitty in Baker v. Hedgecock (1888) 39 Ch. D. 520 it is not possible for the Court to “create or carve out a new covenant for the sake of validating an instrument which would otherwise be void.” The suit is a suit for rent, and is based upon a rent note which is void.”

PART II

Unilateral Cancellation of Title Deeds

Abstract

A registered deed cannot be unilaterally cancelled by its executant. The only remedy available is to invoke Sec. 31, Sp. Relief Act.
- Latif Estate Line India Ltd. v. Hadeeja Ammal, AIR 2011 Mad 66 (FB),
- Sudhakar Reddy v. Lakshmamma, 2014 (4) ALT 404, 2011 (4) ALD 325 (DB),
- KV Sudha Rani v. Vijayawada, Guntu, Tenali, 2008(4) ALD 545,
- Hayagreeva Farms and Developers, Visakhapatnam, v. Govt. of AP, 2014 (3) ALT 3 : 2014 (2) ALD 250
If a person is aggrieved by a cancellation deed, the remedy open for him is to seek appropriate relief in the civil Court.
- Yanala Malleswari v. Ananthula Sayamma, 2006 (6) ALT 523: 2007 (1) CTC 97.
Registrar is not competent to cancel the registered document.
Does the Registering Authority hold a Quasi-Judicial power?
- No. (See: Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767. (Approved in Park View Enterprises v. State Government of Tamil Nadu, AIR 1990 Mad 251.)
Does the Registrar hold power to desist from registering a document, submitted along with the necessary documents?
- No. (See: Madras High Court – D. Sachidhanandam v. The Registrar/ Inspector General – 2022, April)
Does the Registrar has duty to ensure – Document is presented in accordance with law?
- Yes. (See: Asset Reconstruction Company v. SP Velayutham, 2022-8 SCC 210.)

Person aggrieved by a deed has to seek relief in Civil Court

Full Bench of Andhra High Court, in Yanala Malleswari v. Ananthula Sayamma, 2006 (6) ALT 523: 2007 (1) CTC 97, held that an if a person is aggrieved by a deed, the remedy for hism is to seek appropriate relief in the civil Court. It was observed as under:

“26. It is a misconception that in every situation, a person who suffers injury by reason of a document can file a suit for cancellation of such written instrument. Two conditions must exist before one invokes Section 31 of Specific Relief Act. These are: the written instrument is void or voidable against such person; and such person must have reasonable apprehension that such instrument if left outstanding may cause him serious injury.
Insofar as Section 34 of the Specific Relief Act is concerned, it is no doubt true that a person entitled to any right as to any property can seek declaration that he is so entitled to such right. Here again, the person who claims the right to property can institute a declaration suit only when the defendant denies or interested to deny the title of the plaintiff.
The difference between the two situations is glaring. In one case, cancellation of deed can be sought in a Court only by a person who executed document and who perceives that such document is void or voidable. In the other case, even if a person is not a party to the document, he can maintain a suit for declaration.”

It was also observed as to questioning a cancellation deed as under:

“We, therefore, hold that whenever a person is aggrieved by a cancellation deed, the remedy is to seek appropriate relief in the civil Court and writ petition is not proper remedy.

Declaration of Title – When required?

Declaration is to make clear what is doubtful.
Declaration is needed when serious denial or cloud on title.
Declaration is needed as an ‘introduction’ to grant Injunction and Recovery.
Declaration is also to tide over Insurmountable obstacle.
Injunction is granted without declaration, when plaintiff has well established title, or settled lawful possession.
No declaration is needed when title claimed by the defendant is null or void.
Document ex-facie reveals no title – specific declaration as to invalidity not necessary.
A complete stranger whose interest is in no way affected by another’s legal character is not entitled for a declaration.

Read Blog: Declaration and Injunction

Unilateral Cancellation by Regd. Deed, Stands Against Sec. 31

Pavakkal Noble John v. Kerala State, 2010 (3) Ker LT 941,
Latif Estate Line India Ltd. v. Hadeeja Ammal, AIR 2011 Mad 66,
Sudhakar Reddy v. Lakshmamma, 2014 (4) ALT 404, 2011 (4) ALD 325 (DB),
Asset Reconstruction Company v. SP Velayutham (2022) 8 SCC 210.

In Sudhakar Reddy v. Lakshmamma, 2014 (4) ALT 404, 2011 (4) ALD 325 (DB), the High Court after quoting the aforesaid passage from Yanala Malleswari v. Ananthula Sayamma, it was held as under:

“15. In view of the principle enunciated in the case cited supra, the finding of the trial Court that the Ex.B1 gift deed executed in favour of the defendant was cancelled is not sustainable. The only remedy available to the donor is to file a suit for cancellation of Ex.B1 gift deed, as provided Section 31 of the Specific Relief Act.”

In Sudhakara Reddy v. Lakshmamma, (supra), the High Court found fault with the lower courts for framing an issue so as to embrace a declaration. The High Court held as under:

“The plaintiff filed the suit seeking injunction simpliciter. In such circumstances, the trial Court ought not to have framed the issue, which is in the nature of a declaration. The trial Court decreed the suit basing on oral evidence of PWs.1 to 3 and also on a wrong premise that Ex.B.1 gift deed was cancelled by late Gowramma, during her life time.”

The Andhra High Court held in KV Sudha Rani v. Vijayawada, Guntu, Tenali, Mangalagiri UDA, 2008(4) ALD 545, on an analysis of the provisions of the Transfer of Property Act, 1882, and the Registration Act, 1908, that when once the sale deed is executed, the title in the property passes to the purchaser forthwith. The person who seeks cancellation of the registered document has two remedies available to him under law, namely (1) to seek invalidation under Section 31 of the Specific Relief Act, and (2) to seek cancellation following rule 26(k)(i) of the Rules framed by the State of Andhra Pradesh.

Note: Similar provision that of rule 26(k)(i) of the AP Rules is not in all other States.

It was further held that except those two remedies, no person or authority has the right to unilaterally invalidate a registered document on any ground. (Followed in: Hayagreeva Farms and Developers, Visakhapatnam, v. Govt. of AP, 2014 (3) ALT 3 : 2014 (2) ALD 250.)

Unilateral Cancellation of a Sale Deed Bad in Law

Unilateral cancellation of a deed of sale is bad (Full Bench in Latif Estate Line India Ltd. v. Hadeeja Ammal, AIR 2011 Mad 66; Latif Estate Line India Ltd. Vs Hadeeja Ammal, AIR 2011 Mad 66; KV Sudha Rani v. Vijayawada, Guntu, Tenali, Mangalagiri UDA, 2008(4) ALD 545). Such a cancellation deed cannot be accepted for registration.

Our Apex Court analysed the Madras decision in Latif Estate Line India Ltd. v. Hadeeja Ammal, in the following words in Asset Reconstruction Company v. SP Velayutham (2022) 8 SCC 210:

“41. The Full Bench decision of the Madras High Court in Latif Estate Line India Ltd. Vs Hadeeja Ammal, AIR 2011 Mad 66, arose out of a controversy as to whether a deed of cancellation of sale can or cannot be accepted for registration. The Full Bench explained the circumstances under which a deed of cancellation, presented by both the vendor and the purchaser, can be accepted. But the Full Bench categorically held that a deed of unilateral cancellation cannot even be accepted for registration.
This proposition actually goes in support of the contention of the appellant that the Registering Officer has a duty to see whether the document presented for registration has been presented in accordance with law or not. In fact the decision of the Full Bench itself arose out of a writ petition challenging the act of the Registering Authority in allowing the registration of the deeds of unilateral cancellation of sale deeds.”

Cancellation of a deed on the Ground, ‘Fraud’

Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, is an authority on the following mayyers:

Some irregularity, by itself, cannot result in a fraudulent action of the State Authority;
Allegations relating to ‘fraud’ are questions of fact which must be pleaded and proved.
An aggrieved person by registration of a (fraudulent) document is free to challenge its validity before the civil court.

It is held as under:

“36. If the document is required to be compulsorily registered, but while doing so some irregularity creeps in, that, by itself, cannot result in a fraudulent action of the State Authority. Non-presence of the other party to the extinguishment deed presented by the Society before the Registering Officer by no standard can be said to be a fraudulent action per se. The fact whether that was done deceitfully to cause loss and harm to the other party to the deed, is a question of fact which must be pleaded and proved by the party making such allegation. That fact cannot be presumed. Suffice it to observe that since the provisions in the 1908 Act enables the Registering Officer to register the documents presented for registration by one party and execution thereof to be admitted or denied by the other party thereafter, it is unfathomable as to how the registration of the document by following procedure specified in the 1908 Act can be said to be fraudulent. As aforementioned, some irregularity in the procedure committed during the registration process would not lead to a fraudulent execution and registration of the document, but a case of mere irregularity. In either case, the party aggrieved by such registration of document is free to challenge its validity before the civil court.”

Pleadings on Cancellation of a deed on the Ground, ‘Fraud’

The Supreme Court held in CS Ramaswamy v. VK Senthil, 2022 SCC OnLine SC 1330, as under:

“7.8 Even the averments and allegations in the plaint with respect to fraud are not supported by any further averments and allegations how the fraud has been committed/played. Mere stating in the plaint that a fraud has been played is not enough and the allegations of fraud must be specifically averred in the plaint, otherwise merely by using the word “fraud”, the plaintiffs would try to get the suits within the limitation, which otherwise may be barred by limitation. Therefore, even if the submission on behalf of the respondents – original plaintiffs that only the averments and allegations in the plaints are required to be considered at the time of deciding the application under Order VII Rule 11 CPC is accepted, in that case also by such vague allegations with respect to the date of knowledge, the plaintiffs cannot be permitted to challenge the documents after a period of 10 years. By such a clever drafting and using the word “fraud”, the plaintiffs have tried to bring the suits within the period of limitation invoking Section 17 of the limitation Act. The plaintiffs cannot be permitted to bring the suits within the period of limitation by clever drafting, which otherwise is barred by limitation.”

Cancellation of a Regd. deed on Ground, ‘Undue Influence’ – Presumption

In Bellachi v. Pakeeran (2009) 12 SCC 95, our Apex Court held as under:

“15. Section 16 of the Indian Contract Act provides for as to what constitutes undue influence. Relationship between the parties so as to enable one of them to dominate the will of the other is a sine qua non for constitution of undue influence …..
16. In a given case it is possible to hold that when an illiterate, pardanashin woman executes a deed of sale, the burden would be on the vendee to prove that it was the deed of sale was a genuine document. It is, however, a registered document. It carries with it a presumption that it was executed in accordance with law. Again a concurrent finding of fact has been arrived at that she was not an illiterate woman or she was incapable of understanding as to what she had done.”

The Apex Court quoted the following from Afsar Sheikh v. Soleman Bibi, 1976 (2) SCC 142-:

“4. In his written statement, Afsar defendant denied the allegations of fraud and misrepresentation. He averred that his grandmother was the sister of the plaintiff’s mother. The defendant’s father died when he was an infant. The plaintiff brought him up as a son. Since his very infancy, the defendant has been living with the plaintiff, managing his affairs and treating him as his father. The defendant further stated that the plaintiff has transferred 10 to 12 bighas of land to his natural son and an equal area to his second wife. Out of love and affection, the plaintiff conferred a similar benefit on the defendant and voluntarily executed the hiba-bil-ewaz after receiving from the donee a dhoti as a symbolic consideration therefor. He denied that the plaintiff at the time of the gift was too old and infirm. According to him, the plaintiff was not more than 75 years of age. He further averred that he was in possession of the suit lands ever since the execution of the hiba.”
“20. It is well-settled that a question whether a person was in a position to dominate the will of another and procured a certain deed by undue influence, is a question of fact, and a finding thereon is a finding of fact, and if arrived at fairly, in accordance with the procedure prescribed. is not liable to be reopened in second appeal (Satgur Prasad v. Har Narain Das; Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. ).”
Bellachi v. Pakeeran (2009) 12 SCC 95 is referred to in: Keshav v. Gian Chand, AIR 2022 SC 678.

Does Registering Authority hold a Quasi-Judicial power?

No. (Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767.)

In the authoritative pronouncement in Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, our Apex Court held in para 41 as under:

“Section 35 of the Act does not confer a quasi-judicial power on the Registering Authority.
The Registering Officer is expected to reassure that the document to be registered is accompanied by supporting documents.
He is not expected to evaluate the title or irregularity in the document as such.
The examination to be done by him is incidental, to ascertain that there is no violation of provisions of the Act of 1908.
In the case of Park View Enterprises (Park View Enterprises v. State Government of Tamil Nadu, AIR 1990 Mad 251) it has been observed that the function of the Registering Officer is purely administrative and not quasi-judicial. He cannot decide as to whether a document presented for registration is executed by person having title, as mentioned in the instrument. We agree with that exposition.”

In Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, the Apex Court did not consider whether the executants of a deed can ‘unilaterally cancel’ it. It was held-

“It is open to the appellant to contend in those (civil court) proceedings that the Extinguishment Deed could not have been unilaterally executed by the Society.”

Does Registrar has duty to see – Document presented in accordance with law?

Yes. (Asset Reconstruction Co. v. SP Velayutham, 2022-8 SCC 210.)

In Asset Reconstruction Company v. SP Velayutham (2022) 8 SCC 210, the Supreme Court made the following observation as to Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767.

42. … The decision in Satya Pal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, arose out a case where the allotment of a plot made by a cooperative society was cancelled unilaterally by a deed of extinguishment, by the society. The allottee raised a dispute which ended in a compromise but notwithstanding the compromise the allottee raised a dispute under the relevant provisions of the Madhya Pradesh Cooperative Societies Act, 1960. When the dispute was pending, the allottee moved the Registering Officer for the cancellation of the deed of transfer executed in favour of the subsequent purchasers. When the Registering Authority refused to comply with the demand, a writ petition was moved seeking a declaration that the deed of extinguishment and the subsequent sales were null and void. The High Court dismissed the writ petition on the ground that a dispute was already pending before the competent authority under the Cooperative Societies Act. When the order of dismissal passed by the High Court was challenged before this Court, there was a difference of opinion as to whether the issue was directly covered by the decision of this Court in Thota Ganga Laxmi and Another v. Government of Andhra Pradesh and Others, (2010) 15 SCC 206 . Therefore, the matter was placed before a three Judge Bench. While upholding the decision of the High Court, the three member Bench held in Satya Pal Anand (supra) that there was no rule in the State of Madhya Pradesh similar to Rule 26(k)(i) of the Rules issued by the State of Andhra Pradesh under Section 69 of the Registration Act, 1908 and that therefore the decision in Thota Ganga Laxmi (supra) cannot be invoked.
43. The decision in Satya Pal Anand (supra) cannot go to the rescue of the contesting respondents, for the simple reason that the writ petitioner in that case, first accepted a compromise and then raised a dispute under the Cooperative Societies Act (which is akin to a civil suit) and thereafter approached the High Court under Article 226 for a declaration, which he could have sought only in the already instituted proceedings. The very fact that Thota Ganga Laxmi was sought to be distinguished on the basis of the express provision contained in the Rules of the State of A.P., would indicate that there is no absolute bar for the High Court to exercise jurisdiction under Article 226.”

Asset Reconstruction Company v. SP Velayutham, (2022) 8 SCC 210

It was a case concerning Government properties. The sale deed came for consideration in the case was executed by a Power of Attorney. The Apex Court said as to the PoA as under:

“35. Apart from the fact that clause 7 extracted above expressly prohibited the power to encumber, there was also no stipulation authorising S.P. Velayutham to appear before any Registering Officer for the purpose of sale, as an agent.”

The Apex Court upheld the authority of the Sub Registrar observing the following-

“46. But we are not concerned in this case with the question whether the PoA relied upon by the power agent S.P. Velayutham in the sale deed executed by him, required authentication and whether the Registering Authority committed a blunder in accepting the sale deed presented by him for registration, without verifying the authentication of the PoA or not. We are concerned in this case with the most fundamental question whether the Registering Authority could have turned a blind eye to the fact that the deed of PoA on the basis of which the sale deed was executed as well as presented for registration by S.P. Velayutham contained an express prohibition for the power agent to create an encumbrance on the property, especially in the light of the Rules framed under section 69 of the Act. The decision in Thota Ganga Laxmi, was in a way approved by a 3 member Bench in Satya Pal Anand, on the basis of the rules in the State of Andhra Pradesh, showing thereby that statutory rules also play a crucial role. Rajni Tandon is not an authority for holding that the registering Authority has no duty even to verify the presence or absence of a power of sale in the deed of PoA, especially in the light of the rules.”

Finally allowing the appeal the Supreme Court held as under:

“58. … If the Registering Officer under the Act is construed as performing only a mechanical role without any independent mind of his own, then even Government properties may be sold and the documents registered by unscrupulous persons driving the parties to go to civil court. Such an interpretation may not advance the cause of justice.”

Presumption on Registered Document

It is held in Prem Singh v. Birbal, (2006) 5 SCC 353, that there is a presumption that a registered document is validly executed.

Court Proceeding Essential for Determining Registration Vitiated

It is pointed out in Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330, that the complex questions of title of the executant, can only be adjudicated in a civil suit; and that in cases where title of an executant of a deed is disputed, based on genealogy or a right of inheritance, cannot be decided by a Registrar. It is also observed as under:

“Under Section 48 of the Registration Act, title passes in a property on the registration of the deed of conveyance witnessing the transfer. Annulment of the registration therefore, will entail legal consequences affecting the title which had passed on its registration. Whether such a registration was valid or was vitiated by fraud is a triable issue which can be determined only in a civil or criminal proceeding by a Court of competent jurisdiction.”

Power of Registrar to Cancel a Deed – Not quasi judicial but Administrative

It is held in Satya Pal Anand v. State of M.P., (2016) 10 SCC 767, as under:

“There is no express provision in the 1908 Act which empowers the Registrar to recall such registration. The fact whether the document was properly presented for registration cannot be reopened by the Registrar after its registration. The power to cancel the registration is a substantive matter. In absence of any express provision in that behalf, it is not open to assume that the Sub-Registrar (Registration) would be competent to cancel the registration of the documents in question. Similarly, the power of the Inspector General is limited to do superintendence of Registration Offices and make rules in that behalf. Even the Inspector General has no power to cancel the registration of any document which has already been registered”. (Quoted to in: Vinod Shankar Jha v. State of Jharkhand, 2024 1 CurCC 330.)

It is observed in Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330, as under:

There cannot be two views that existing provisions of the Registration Act, do not confer the Registrar with power to cancel a document which has been already registered. Even in cases of fraud or forgery, Registration Act, does not confer such a power on the Registrar to cancel a registered instrument. Under the scheme of the Registration Act, 1908, Registrar has a power to refuse the registration of deed under different provisions of the Act, but does not extend to cancellation of it. Scope of scrutiny by the registering authority, is confined to the pre-registration stage and not after the document is executed and registered.

But, the TN Government being found that the then existing provisions of the Registration Act failed to curb fraudulent registrations, powers were conferred on the Registrar, by an executive order, to cancel such deeds. The Tamil Nadu circular was challenged before the High Court and in Ramasamy v. State of Tamil Nadu, 2014 (4) CTC 627, wherein the Madras High Court (Madurai Bench) upheld that Circular held that power of cancellation is not quasi-judicial in nature but administrative and the procedure for registration as laid down under Section 68 of the Registration Act mandates the registration that he will perform read with Section 34 of the said Act, that the Registering Officer shall enquire whether or not such document was executed by the persons by whom in purported to have been executed by satisfying himself to be identity of the person executing the same. (Referred to in: Vinod Shankar Jha v. State of Jharkhand, 2024 1 CurCC 330.)

The Court in Ramasamy v. State of Tamil Nadu, 2014 (4) CTC 627, relied the Supreme Court decision in Indian Bank v. Satyam Fibers (India) Pvt. Ltd., (1996) 5 SCC 550, wherein it has been held that fraud which vitiates the entire proceeding and he can very well recall or rescinded the order on being satisfied after due enquiry that a particular document was registered after playing fraud under the inherent power of Court under Section 21 of the General Classes Act.

Unilateral Cancellation of SETTLEMENT DEED When there was No Reservation

In Pavakkal Noble John v. Kerala State, 2010 (3) Ker LT 941 (upheld in Santhosh Antonio S. Netto v. Joshy Thomas, 2020-3 Ker LT 408), the Kerala High Court pointed out that the Registrar must refuse to register the cancellation of sale deed executed unilaterally.

In Sreedevi v. The Inspector General of Registration (January, 2020, Kerala High Court), it was found that there was no reservation in the settlement deed for cancellation by the executant unilaterally. Then it was pointed out as under:

“In such circumstances, the registration of cancellation deed is illegal. Once the subject matter of the settlement deed is conveyed to the donee, the donee becomes the absolute owner. The cancellation of a registered deed executed unilaterally will create impediment in the enjoyment of the property. No doubt, the executant of such deed is having a remedy under the Specific Relief Act to cancel such deed before the Civil Court. But they cannot execute a cancellation deed and cancel the settlement deed executed in favour of the donee.”

The Kerala High Court repeated the above view in SR Suresh Babu v. Beena, 2022 KHC OnLine 196, as regards a settlement deed, in the following words:

“In the absence of any right for revocation of the deed in the deed itself, unilateral execution of the cancellation deed according to us is bad in law and is legally unsustainable.

Cancellation of SETTLEMENT DEED – Cannot be Challenged by Writ Petition

In the decision of the Madras High Court in D. Sachidhanandam v. The Registrar/ Inspector General (2022, April), a settlement deed was cancelled by the settleor by a registered cancellation deed. It was challenged by the settlee in a writ petition. Dismissing the writ petition the High Court held as under:

“The registering authority has no power to desist from registering a document, once it is submitted to him along with the necessary documents, which are mandated under the Act and once the document is properly registered, the registering authority, in the absence of any express provision under the Act or the Rules, is not competent to cancel the registered document.
The writ petitions, at the instance of the petitioners are wholly misconceived and the writ jurisdiction cannot be invoked seeking cancellation of the respective cancellation deeds and this Court, sitting under Article 226 of the Constitution, cannot issue a writ directing the registering authority to cancel the registered document, when it involves disputed questions of fact between the parties. Further, the remedy open to the petitioners/aggrieved party is only to file a civil suit before the appropriate jurisdictional court and a writ petition is not maintainable.

See also: Gunmala Jain v. GNCT of Delhi, 2021 SCC OnLine Del 5484.

Cancellation of TRUST DEED – Cannot be Challenged by Writ Petition

In CK Saseendran v. Inspector General of Registration, 2021-6 Ker LT 382, one cancel-deed was registered, cancelling a trust deed. The reason for revoking the trust deed stated in the cancellation deed was that the general body of the Association did not ratify the registration of the trust deed and the general body resolved to cancel the trust deed. The legality of the cancellation deed and its registration was challenged in the Writ Petition.

Registering Officer cannot enquire about the legal validity of a document

The High Court (in CK Saseendran v. Inspector General of Registration, 2021-6 Ker LT 382) accepted the contention of the Respondents that (i) the Registering Officer cannot enquire about the legal validity of a document (as stated in Rule 67^#* of the Kerala Registration Rules, 1958), and (ii) that the Registering Officer can refuse a document only under Rule 191*^* (read with Rule 67); and that none of such heads/ conditions existed to refuse registration of the cancellation deed.

^#* ^{See End Notes- 4}
*^*^{See End Notes- 5}

Pavakkal Noble John v. Kerala State, 2010 3 Ker LT 941 (upheld in Santhosh Antonio S. Netto v. Joshy Thomas, 2020-3 Ker LT 408), was distinguished pointing out that it was a case of cancellation of (i) a sale deed (ii) unilaterally executed without the knowledge and consent of the other parties and without complying with Section 32A of the Registration Act, 1908. The writ petition, CK Saseendran v. Inspector General, was dismissed ‘without prejudice to the petitioners’ right, if any, to take recourse to any legal remedies as may be available in law’.

End Notes: 1

Sec.31 of the Specific Relief Act

Sec.31 of the Specific Relief Act reads as under:

When cancellation may be ordered- (1) Any person against whom a written instrument if 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.
(2) 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.

Illustrations

(a) A, the owner of a ship, by fraudulently representing her to be seaworthy induces B an underwriter, to insure her. B may obtain the cancellation of the policy.
(b) A conveys land to B who bequeaths it to C and dies. Thereupon D gets possession of the land and produces a forged instrument stating that the conveyance was made to B in trust for him C may obtain the cancellation of the forged instrument.
(c) A, representing that the tenants of his land were all at Will, sells it to B and conveys it to him by an instrument, dated the 1st January, 1877 soon, after that day. A fraudulently grants to C a lease of part of the lands, dated the 1st October, 1876 and procures the land to be registered under the Indian Registration Act. B may obtain the cancellation of this lease.
(d) A agrees to sell and deliver a ship to B, to be paid for by D’s acceptance of four bills of exchange, for sums accounting to Rs. 30,000 to be drawn by A or B. The bill are drawn and accepted, but the ship is not delivered according to the agreement. A sues B on one of the Bills. B may obtain the cancellation of all the bills.

End Notes: 2

Section 62, Contract Act reads as under:

62. Effect of novation, rescission, and alteration of contract – If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed.

End Notes: 3

Sec. 39, Contract Act says as to ‘putting an end’ to the contract. It reads as under:

39. Effect of refusal of party to perform promise wholly – When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.

End Notes: 4

Rule 67 of the Kerala Registration Rules

Rule 67- It forms no part of a Registering Officer’s duty to enquire into the validity of a document [except documents styled as marriage agreement] brought to him for registration or to attend any written or verbal protest against the registration of a document based on the ground that the executing party had no right to execute the document; but he is bound to consider objections raised on any of the grounds stated below—
- (a) That the parties appearing or about to appear before him are not the persons they profess to be;
  (b) That the document is forged;
  (c) That the person appearing as a representative, assign or agent, has no right to appear in that capacity;
  (d) That the executing party is not really dead, as alleged by the party applying for registration; or
  (e) That the executing party is minor or an idiot or a lunatic.

End Notes: 5

Rule 191 of the Kerala Registration Rules

Rule 191. The reasons for refusal will usually come under one or more of the heads mentioned below; which should invariably be quoted as authority for refusal.
Section 19
- I. That the document is written in a language which the Registering Officer does not understand and which is not commonly used in the district, and that it is unaccompanied by a true translation and a true copy.
Section 20
- II. That it contains unattested interlineations, blanks, erasures, o/ alterations which in the opinion of the Registering Officer require to be attested.
Section 21(1-3) and Section 22
- III. That the description of the property is insufficient to identify it.
Section 21(4)
- IV. That the document is unaccompanied by a copy or copies of any map or plan which it contains.
Rule 42
- V. That the date of execution is not stated in the document or that the correct date is not ascertainable.
Sections 23, 24, 25, 26, 72, 75 and 77
- VI. That it is presented after the prescribed time.
Sections 32, 33, 40 and 43
- VII. That it is presented by a person who has no right to present it.
43[Section 32A
- VIIA. That the document is not affixed with the Passport size photographs and impression/impressions of the left thumb or any of the fingers in the absence of left thumb as prescribed in Rule 30A(i) and (ii).]
Section 34
- VIII. That the executing parties or their representatives, assigns, or agents have failed to appear within the prescribed time.
Note.— ‘Prescribed time’, shall mean the time allowed for presentation under Sections 23, 24, 25 and 26 and not the delay of four months in appearance which may be condoned under the proviso to Section 34, unless the presentant or the executing party concerned applies for extension of the period on proper grounds or takes action under Section 36.
Sections 34 and 43
- IX. That the Registering Officer is not satisfied as to the identity of a person appearing before him who alleges that he has executed the document.
Sections 34 and 40
- X. That the Registering Officer is not satisfied as to the right of a person appearing as a representative, assign or agent so to appear.
Section 35
- XI. That execution is denied by any person purporting to be an executing party or by his agent.
Note.— When a Registering Officer is satisfied that an executant is purposely keeping out Of the way with a view to evade registration of a document or has gone to a distant Place and is not likely to return to admit execution within the prescribed time, registration may be refused, the non-appearance being treated as tantamount to denial of execution.
Section 35
- XII. That the person purporting to have executed the document is a minor, an idiot or a lunatic.
Note.— When the executant of a document who is examined under a commission under Section 38 of the Act is reported by the Commissioner to be a minor, an idiot or a lunatic, registration may be refused, and it is not necessary that the Registering Officer should personally examine the executant to satisfy himself as to the existence of the disqualification.
Section 35
- XIII. That execution is denied by the representative or assign of a deceased person by whom the documents purports to have been executed.
Note.— When some of the representatives of a deceased executant admit and others deny execution, the registration of the document shall be refused in toto, the persons interested being let to apply to the Registrar for an enquiry into the fact of execution.
Sections 35 and 41
- XIV. That the alleged death of a person by whom the document purports to have been executed has not been proved.
Section 41
- XV. That the Registering Officer is not satisfied as to the fact of execution in the case of a will or of an authority to adopt presented after the death of the testator or donor.
Sections 25, 34 and 80
- XVI. That the prescribed fee or fine has not been paid.
- XVII. That the full additions of all persons executing and of all persons claiming under the document are not given.
- XVIII. A Kanam demise or a renewal thereof shall be refused registrations if it does not contain the following particulars:
  - (i) The name if any, the description and the extent of each item of holding;
  - (ii) The Government tax payable on each item;
  - (iii) The renewal fee if any paid. If no renewal fee is paid the fact should be stated; and
  - (iv) The settlement pattam, the settlement patta, michavaram, the Jenmivaram and the Jenmikaram in respect of the land or each of the several parcels of land comprised in the holding.
[Rule 67
- XIX. That the executing parties do not get the status of married couple as per the document styled as marriage agreement.]

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Read in this Cluster (Click on the topic):

Book No, 1 – Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act & Registration

Will

Arbitration

Divorce

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

General Principles
Dedication and Vesting
Trustees and Management
Breach of Trust
- Breach of Trust and Removal of Trustees
Suits by or against Trusts
- Suits By or Against Trusts and Trustees
- Remedies Under Sec. 92 CPC
Law on Hindu Religious Endowments
- Philosophy of Idol Worship
Temples, Gurudwaras, Churches and Mosques – General
- Legal Personality of Temples, Gurudwaras, Churches and Mosques
Constitutional Principles
Ayodhya and Sabarimala Disputes
- Ayodhya Disputes: M. Siddiq case – Pragmatic Verdict
- Sabarimala Review Petitions & Reference to 9-Judge Bench
- SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
General

Time-Limit For Adjudication of Unstamped Documents, before Collector

Jojy George Koduvath.

Introspection

Can an unstamped or insufficiently stamped document be stamped subsequent-to-its-execution?
- Answer: Yes, under Sec. 31 of the Indian Stamp Act.
What is the time-limit prescribed for adjudication, without being fined (or impounded)?
- Answer: Within one month (if executed in India); and
- three months (of receiving it in India, if executed out of India), under Sec. 32 of the Indian Stamp Act.
What is the effect of not adjudicating the document within the time allowed?
- Answer: The document will be impounded (seized for levying the penalty), under Sec. 33 of the Indian Stamp Act.

The Relevant provisions of the Stamp Act can be summarised as under:

Sec. in Stamp Act	Entailed	Time limit
31	When any instrument is brought to the Collector, and the person bringing it applies and pays a fee of one hundred rupees, the Collector shall determine the duty.	No time limit prescribed in Sec. 31.
32	Collector may certify – full stamp-duty has been paid – if (a) already fully stamped or (b) paid the duty or deficit, after adjudication under Sec. 31.	Within one month of execution – if executed in India. Within three months of receiving documents in India – if executed out side India. If the document is – (a) an insufficiently stamped one and (b) not produced within the time provided – the Certificate under Sec. 32 cannot be granted (but, the document has to be impounded for levying penalty).
33	If document not duly stamped, impound it. (i.e., take steps to pay penalty under Sec. 39, 40 or 41)^.	No time limit prescribed

Read Blog: Adjudication as to Proper Stamp under Stamp Act

Sec. 31, 32 and 33 Stamp Act Analysed

1. Any person can apply for ‘adjudication’ by Collector. (See: Gujarat Ambuja Cements Limited (Ambuja Cements Limited) v. State of Chhattisgarh (2018).
2. Adjudication can be sought for even after the expiry of one month from the date of its execution (or three months of receipt in India, if executed outside India).
3. If the holder of the document pays the penalty (on its impounding), the document will be treated as a sufficiently stamped document.

4. Effect of Limitation Prescribed Under Proviso to Sect. 32:
- (i) Under Sec. 32, if the instrument is brought to the Collector within one month of its execution (or three months, as stated above), the Collector has to endorse the certificate, on payment of the deficit duty, if any; but, without levying any penalty.
- (ii) What is ‘not authorised’, in Sec. 32 Proviso, is that “in this section“; that is, the endorsement under Section 32 – without imposing any penalty and impounding.
  - (Note: This interdiction will not affect grant of certificate even after the stipulated time, if the document is sufficiently stamped, as shown below).
- (iii) The question of proceeding against a document for levying penalty or impounding comes only if it is
  - (i) produced after the time limit prescribed
  - and
  - (ii) insufficiently stamped (because, for impounding and imposing penalty, the collector has to invoke Sec. 33; it is not done under Sec. 32).
5. The Collector has to grant the certificate as to proper stamp even if the document is produced after one month (or three months, as stated above) if the document is a sufficiently stamped document (without imposing any penalty)-
because,
- if only the document is an insufficiently stamped one, then only the question of levying penalty or impounding comes for consideration (even under Sec. 33);
- no time limit for applying adjudication under Sec. 31; and
- (as already stated) the interdiction (‘not authorised’) in Sec. 32 Proviso, is as to making the endorsement under Section 32 – without imposing any penalty and impounding – for, the proviso speaks as to the actions “in this section” alone.

The afore-stated propositions are explained in the following decisions-

Relying on Government of Uttar Pradesh v. Raja Mohammed Amir Ahmad Khan, AIR 1961 SC 787, The Secretary to Government v. The Gwalior Rayon Silk, 1971 Ker LJ 309] and Sethuraman v. Ramanathan, AIR (33) 1946 Mad 437, it is held in M.P. Rajeswaran Nair vs The District Collector, 2009 (3) Ker LT 56, as under:

“ … if an executed instrument is produced before the Collector under Section 31, within one month, even if the Collector finds that the instrument is insufficiently stamped, the instrument would not attract penalty, and the Collector shall make the endorsement under Section 32, if the party pays the deficit stamp
whereas if it is produced after one month, it would, and the Collector cannot make the endorsement which is the effect of the limitation prescribed under the proviso to Section 32, instead the Collector has to, after adjudication of the proper stamp, proceed either under Sections 33 and 39 read with Section 41 or under Section 40 read with Section 41.”
Also see: Ambat Aboobacker v. District Collector (2012, Kerala High Court)
Wilson and Company Private Limited v. K. S. Lokavinayagam, AIR 1992 Mad 100, (A. R. Lakshmanan, J.)

In Sethuraman Chettiar v. Ramanathan Chettiar, AIR 1946 Mad 437, it is held as under:

“It cannot be said that Sections 31 and 32 contained in Chapter III form one integrated procedure for adjudication to stamps and that the limit referred to in proviso (a) to Section 32 governs applications made under Section 31. Section 31 provides no time limit for an application to the Collector for adjudication as to the proper stamp duty payable in respect of an instrument. There is nothing in the section to prevent a person from resorting to the Collector for an adjudication as to the proper stamp even after the expiry of one month from the date of its execution. If the instrument is brought to the Collector within one month of its execution, the applicant would be entitled to have the Collector’s certificate endorsed on the instrument on payment of the deficit duty, if any, but without having to pay any penalty. But if he seeks the Collector’s adjudication beyond the limit specified in Section 32. The Collector has, under Section 33, to impound the instrument and proceed under Section 40 to decide whether the instrument is duly stamped and to require the payment of the additional duty chargeable in respect of the instrument together with the prescribed penalty in case he is of opinion that it is not duly stamped. On payment of such duty and penalty, a certificate that the proper duty and penalty have been paid has to be endorsed under Section 42 on the instrument which becomes thereupon admissible in evidence and may be acted upon as if it had been duly stamped” (Quoted in: A. Karuppanna Pillai v. Nallathambi, 2000-3 CCC 35, 2000-1 CTC 341.)

Read Blogs:

Provisions of the Indian Stamp Act

Sec. 31-

“31. Adjudication as to proper stamp.
(1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than [fifty naye paise]) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable.
(2) For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove that all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly:
Provided that–
(a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceeding, except in an inquiry as to the duty with which the instrument to which it relates is chargeable; and
(b) every person by whom any such evidence is furnished, shall, on payment of the full duty with which the instrument to which it relates, is chargeable, be relieved from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.”

Sec. 32

32. Certificate by Collector—
(1) When an instrument brought to the Collector under section 31 is, in his opinion, one of a description chargeable with duty, and—
(a) the Collector determines that it is already fully stamped, or
(b) the duty determined by the Collector under section 31, or such a sum as, with the duty already paid in respect of the instrument, is equal to the duty so determined, has been paid, the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with which it is chargeable has been paid.
(2) When such instrument is, in his opinion, not chargeable with duty, the Collector shall certify in manner aforesaid that such instrument is not so chargeable.
(3) Any instrument upon which an endorsement has been made under this section, shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duty, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it had been originally duly stamped:
Provided that nothing in this section shall authorise the Collector to endorse—
(a) any instrument executed or first executed in [India] and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be;
(b) any instrument executed or first executed out of [India] and brought to him after the expiration of three months after it has been first received in [India]; or
(c) any instrument chargeable [with a duty not exceeding ten naye paise], or any bill of exchange or promissory note, when brought to him, after the drawing or execution thereof, on paper not duly stamped.

Sec. 33

33. Examination and impounding of instruments.
(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police or any other officer empowered by law to investigate offences], before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the Union territory of Jammu and Kashmir when such instrument was executed or first executed:
Provided that––
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973 (2 of 1974) ;
(b) in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this section, in case of doubt, the Government of the Union territory of Jammu and Kashmir may determine what offices should be public offices and who shall be deemed to be persons in charge of such public offices.
(4) Where a person referred to in sub-section (1), during the course of inspection or otherwise, detects from an instrument or copy thereof that the instrument is not duly stamped, such person shall forthwith make a reference to the Collector in the matter.
(5) The Collector may, either suo motu or on a reference, call for the original instrument for ascertaining whether it is duly stamped and the instrument so produced shall be deemed to have been produced or come before him in the performance of his functions, and in case the original instrument is not produced within the period specified by the Collector, he may require the payment of the proper duty or the amount required to make up the same together with the penalty under section 40 from the person liable to pay the duty.

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Read in this Cluster (Click on the topic):

Book No, 1 – Civil Procedure Code

Power of attorney

Title, ownership and Possession

Principles and Procedure

Land Laws/ Transfer of Property Act

Evidence Act – General

Contract Act

Easement

Stamp Act & Registration

Will

Divorce

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

General Principles
Dedication and Vesting
Trustees and Management
Breach of Trust
- Breach of Trust and Removal of Trustees
Suits by or against Trusts
- Suits By or Against Trusts and Trustees
- Remedies Under Sec. 92 CPC
Law on Hindu Religious Endowments
- Philosophy of Idol Worship
Temples, Gurudwaras, Churches and Mosques – General
- Legal Personality of Temples, Gurudwaras, Churches and Mosques
Constitutional Principles
Ayodhya and Sabarimala Disputes
- Ayodhya Disputes: M. Siddiq case – Pragmatic Verdict
- Sabarimala Review Petitions & Reference to 9-Judge Bench
- SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
General

UNDUE INFLUENCE and PLEADINGS thereof in Indian Law

Jojy George Koduvath, Kottayam, Kerala.

Introspection: Is there incongruity between-

Order 6 Rule 4 CPC (requires specific pleading on Undue Influence), and
Sec. 16 Contract Act (full particulars need not be pleaded to attract Undue Influence, for the statute itself stipulates that-
- (i) a person is DEEMED to be in a position to dominate the will of another if he holds a an authority over the other, or stands in a fiduciary relation to the other [Sec. 16(2) ] ; and,
- (ii) the BURDEN OF PROVING that there was no undue influence will be upon the ‘person who is in a position to dominate the will of the other‘ [Sec. 16(3) ] ).

Contents in Nutshell

Though statutory-laxity allowed in pleading on Undue Influence–
- (i) Sec. 16 itself calls for pleading and evidence as to-
  - (one person’s) authority over the other, or fiduciary relation so as to have a ‘position to dominate the will of another’, and
- (ii) to attract Sec. 16, it must appear–
  - on the face of the transaction that it is unconscionable.

PART I – ‘UNDUE INFLUENCE’

‘Undue Influence’ in Indian Contract Act, 1872

Sec. 16 defines ‘Undue influence’. It can be simplified as under:

1. A Contract will be induced by ‘undue influence’ if-
- one of the parties dominates the will of the other, and
- the dominating party uses that position to obtain an unfair advantage.
2. A person is deemed to dominate the will of another—
- (a) where he holds a an authority over the other (e.g., employer and employee, a police officer and an accused), or where he stands in a fiduciary relation to the other (e.g., lawyer and client, doctor and patient); or
- (b) where the mental capacity of one is affected by reason of age, illness, or mental or bodily distress.

3. The burden of proving that there was no undue influence will be upon the person who dominates the will of the other, where-
- the transaction appears, on the face of it or on evidence, to be unconscionable.

‘Undue influence’ defined in Sec. 16 of the Indian Contract Act, 1872.

“16. “Undue influence” defined. (1) A contract is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another—
- (a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
- (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
Nothing in this sub-section shall affect the provisions of section 111 of the Indian Evidence Act, 1872 (1 of 1872).”

Section 111 of the Indian Evidence Act, 1872 reads-

Sec. 111. Proof of good faith in transactions where one party is in relation of active confidence. Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence.”

Dominate the Will- Instances

In Diala Ram v Sarga, AIR 1927 Lahore 536, the plaintiff was a money-lender. The defendant was indebted to the plaintiff. He again took a loan from plaintiff and executed a bond agreeing to pay interest. The court found that the contract was unconscionable; and therefore, the burden of proof was put on the plaintiff to show that there was no undue influence.
In Sher Singh v. Pirthi Singh, AIR 1975 All 259, an illiterate man of about 90 years, physically in firm and mentally in distress, executed a gift deed of his properties in favour of his nearest relative who was looking after him and managing his cultivation. The court held that donee was in a position to dominate the will of the donor.
In Krishna Mohan Kul @ Nani Charal Kul v. Pratima Maity, AIR 2003 SC 4351, the executant was more than 100 years of age at the time of alleged registration of the deed in question. He was paralytic and furthermore his mental and physical condition was not in order. He was also completely bed-ridden and though his left thumb impression was taken, there was no witness who could substantiate that he had put his thumb impression.

Undue Influence and Coercion

Undue influence (Sec. 16 Contract Act)

The position to dominate his will of another is the criterion.
No force or criminal force is envisaged.

Coercion (Sec. 15 Contract Act defines it) is attracted on-

Committing any criminal act or unlawful detaining of any property with the intention of causing any person to enter into an agreement, or
threatening to commit such acts with the said intention.

Effects of Undue Influence – Agreement Becomes Voidable

According to 14, Contract Act, consent is said to be free when it is not caused by-

(1) coercion, as defined in section 15, or
(2) undue influence, as defined in section 16,or
(3) fraud, as defined in section 17, or
(4) misrepresentation, as defined in section 18, or
(5) mistake, subject to the provisions of sections 20, 21 and 22.

Sec. 19. Voidability of agreements without free consent.—

When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.

Sec. 19A. Power to set aside contract induced by undue influence.—

When consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused.
Any such contract may be set aside either absolutely or, if the party who was entitled to avoid it has received any benefit thereunder, upon such terms and conditions as to the Court may seem just.

PART II – ‘UNDUE INFLUENCE’ and PLEADINGS

Basic Principles of Pleading

Order VI, rule 1 and 2 of Code of Civil Procedure 1908 lay down the basic principles of pleading. They read as under:

Rule 1: Pleading: “Pleading” shall mean plaint or written statement.
Rule 2: Pleading to state material facts and not evidence:
(1) Every pleading shall contain, and contain only a statement in a concise form of the material facts on which the party pleading relies for his claim or defence as the case may be, but not the evidence by which they are to be proved.
(2) Every pleading shall, when necessary, be divided into paragraphs, numbered consecutively, each allegation being, so far as is convenient, contained in a separate paragraph.
(3) Dates, sums and numbers shall be expressed in a pleading in figures as well as in words.

Pleadings – Particulars to be given where necessary

Order 6 rule 4 of the Civil Procedure Code stipulates guidelines for precise pleadings. Order 6 Rule 4 CPC reads as under:

“Rule 4. Particulars to be given where necessary: In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, willful default, or undue influence and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading.”

Under Order 6 rule 4, CPC, vague or general allegations are insufficient in pleading with respect to the matters laid down in this rule_{(f.n. 1)} and it requires ‘full‘ particulars of such matters in pleadings_{(f.n. 2)}.

“All other cases in which particulars may be necessary“

Order 6 rule 4 of the CPC enumerates the following:

misrepresentation,
fraud,
breach of trust,
willful default,
undue influence and
“all other cases in which particulars may be necessary”.

Following are the matters that commonly come for consideration of court under the head, “other cases in which particulars may be necessary”:

Injury,
Damages,
Illegality,
Collusion,
Victimisation,
Mala-fides,
Bias,
Unconstitutionality,
Trust,
Consent,
Irregularity.

In short, in pleadings, wherever it is required to make clear ‘abstract’ propositions, it must have been done; otherwise it will be termed ‘vague pleading’.

Guidelines for Precise Pleading undue influence

From the above it is clear that, to attract Sec. 16 of the Indian Contract Act, there should be proper pleading [particulars – with dates and items if necessary] as to-

1. (one person’s) ‘position to dominate the will‘ of another by-
- (first) one’s authority over the other, or
- from out of the fiduciary relation between the two; and
2. the transaction must appear to be unconscionable.

Illegality

While dealing with a matter pertaining to recount of votes, referring Apex Court decisions_(f.n.3), it was held in Indira Devi v. State of Bihar, 2019-1 Pat LJR 670, that the vague pleadings that illegality was committed while counting the ballot papers and that there were improper acceptance of invalid votes and improper rejection of valid votes, were not sufficient to invoke the jurisdiction of the court.

Coercion

When collusion is taken as a ground in a case, full particulars thereof are to be pleaded. In Varanaseya Sanskrit Vishwavidyalaya v. Rajkishore Tripathi, AIR 1977 SC 615, invoking Order VI, Rule 4, CPC and referring Bishundeo v. Seogeni Rai, AIR 1951 SC 280, it was held as under:

“General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice, however strong the language in which they are couched may be, and the same applies to undue influence and coercion.”

Fraud and Collusion

While considering Order VI Rule 4 of CPC in K.S. Mariyappa v. K.R. Siddalinga Setty, AIR 1989 Kar 425, it was observed that in the absence of necessary particulars pleaded by the plaintiffs regarding fraud and collusion, it was not possible to hold that the plaint contains necessary averments as to fraud and collusion.

If Insufficient Pleadings – No Investigation

In Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280: 1951 SCR 548, it was observed as under:

“… In cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice however strong the language in which they are couched may be and the same applies to undue influence and coercion.” : Quoted in Raja Ram v. Jai Prakash Singh, AIR 2019 SC 4374; 2019-8 SCC 701).

In Kamalakanta Mohapatra Vs. Pratap Chandra Mohapatra, AIR 2010 Ori 13, it is held as under:

The words “undue influence”, “fraud” and “misrepresentation” are cognate vices and may in part overlap in some cases, they are in law distinct categories and in view of Order 6, Rule 4 read with Order 6, Rule 2 of the Code of Civil Procedure required to be separately pleaded, with specificity, particularity and precision. In other words general allegations made in the plaint does not tantamount to particulars required to be pleaded under the said provision of the Code. …
In the case of Afsar Shaikh v. Soleman Bibi, reported in AIR 1976 SC 163, the Supreme Court has reiterated the same principle and had clearly held that in a case where there are allegations with regard to fraud, undue influence and misrepresentation the said allegation/facts must be specifically indicated in the pleadings. Keeping in mind the provision of Order 6, Rule 4 of the Code of Civil Procedure, if the averments made in the plaint are examined it reveals that the basic requirement of Order 6, Rule 4 of the Code of Civil Procedure was not kept in mind while making the allegations and the same appear to be more on the basis of surmises and conjectures rather than cogent facts.
So far as the nature of proof of undue influence, fraud or misrepresentation are concerned in he case of Balabhadra Nisanka v. Suka Dibya, reported in 38 (1972) CLT 325, it was held by this Court that ‘fraud’ in a civil proceeding must be established beyond reasonable doubt as in a criminal proceeding. So far as the evidence to establish fraud is concerned, it is held by this Court in the case of Bira Jena v. Tauli Dei, respondent in 38 (1972) CLT 39 : (AIR 1972 Ori 143) that unless the particulars of fraud are pleaded in the plaint, no evidence should be allowed to be led in the suit and if any such evidence has unwittingly been introduced without any pleading, it must be ruled out of consideration. In other words, the standard of proof to establish fraud should be beyond all reasonable doubt. After discussing the evidence threadbare the appellate Court had clearly come to a conclusion that the same does not satisfy the basic requirement of mandatory requirement of law. Even otherwise in the absence of pleadings, the evidence adduced had to be ignored.”

Undue Influence – Presumption, Onus and Lack of Pleadings

It may appear that there is incongruity between-

Order 6 Rule 4 CPC (requires specific pleading on undue influence), and
Sec. 16(2) and (3) Contract Act (statutory-laxity in pleading as to undue influence).

Sec. 16 (2) and (3) Contract Act itself stipulates conditions to attract – the burden upon the ‘person in a position to dominate the will of the other‘.

That is, (i)there must be pleading and evidence as to-
- (one person’s) authority over the other, or fiduciary relation so as to have a ‘position to dominate the will of another’,
(ii) the transaction must appear–
- on the face of it, or on the evidence adduced, to be unconscionable.

Why presumption Under Sec. 16(3) – “Person dominating may suppress evidence“

The Constitution Bench of the Supreme Court, in Laldi Parshad Jaiswal v. The Karnal Distillery Co. Ltd. Karnal, reported in AIR 1963 SC 1279, observed that under Order 6, Rule 4 of the Code of Civil Procedure, in all cases where a party takes a plea of undue influence, particulars thereof should be unambiguously stated in the pleadings so as to enable the adversary to controvert the same. A vague and general plea to that effect would not serve the purpose and the pleading must be always very specific and precise in nature. This rule has been evolved with a view to narrow down the controversy and protect the party charged with improper conduct from being taken by surprise. (See: Kamalakanta Mohapatra Vs. Pratap Chandra Mohapatra, AIR 2010 Ori 13).

The Supreme Court held in Ladli Parshad Jaiswal as under:

“The doctrine of ‘undue influence’ under the common law was evolved by the Courts in England for granting protection against transactions procured by the exercise of insidious forms of influence spiritual and temporal. The doctrine applies to acts of bounty as well as to other transactions in which one party by exercising his position of dominance obtains an unfair advantage over another. The Indian enactment is founded substantially on the rules of English common law. The first sub-section of S.16 lays down the principle in general terms. By sub-section (2) a presumption arises that a person shall be deemed to be in a position to dominate the will of another if the conditions set out therein are fulfilled. Sub-section (3) lays down the conditions for raising a rebuttable presumption that a transaction is procured by the exercise of undue influence. The reason for the rule in the third sub-section is that a person who has obtained an advantage over another by dominating his will may also remain in a position to suppress the requisite evidence in support of the plea of undue influence.” (Quoted in Joseph Johan Peter Sandy vs Veronica Thomas Rajkumar, AIR 2013 SC 2028)

Onus probandi ‘arises’ on proving relations between the donor and the donee

In Subhash Chandra Das Mushib v. Ganga Prasad Das Mushib, AIR 1967 SC 878, it was held that the Court trying the case of undue influence must consider two things to start with, namely,

(1) are the relations between the donor and the donee, such that the donee is in a position to dominate the Will of the donor, and
(2) has the donee used that position to obtain an unfair advantage over the donor?
Upon the determination of these two issues a third point emerges, which is that of the onus probandi.

Merely because donor was old, no presumption of undue influence

It is held further in Subhash Chandra Das Mushib v. Ganga Prasad Das Mushib, AIR 1967 SC 878 that, if the transaction appears to be unconscionable then, the burden of proving that the contract was not induced by undue influence lies upon the person who is in a position to dominate the Will of the other. It was further said that merely because the parties were nearly related to each other or merely because the donor was old or of weak character, no presumption of undue influence can arise. Generally speaking the relations of solicitor and client, trustee and cestui que trust, spiritual adviser and devotee, medical attendant and patient, parent and child are those in which such a presumption arises.

If transaction unconscionable, burden upon person dominate

In Afsar Shaikh v. Soleman Bibi, AIR 1976 SC 163, our Apex Court held:

“The law as to undue influence in the case of a gift inter vivos is the same as in the case of a contract. Sub-section (3) of Section 16 contains a rule of evidence. According to this rule, if a person seeking to avoid a transaction on the ground of undue influence proves-
(a) that the party who had obtained the benefit was, at the material time, in a position to dominate the will of the other conferring the benefit, and
(b) that the transaction is unconscionable, the burden shifts on the party benefiting by the transaction to show that it was not induced by undue influence. If either of these two conditions is not established the burden will not shift. As shall be discussed presently, in the instant case the first condition had not been established; and consequently, the burden never shifted on the defendant. The Privy Council in Raghunath Prasad v. Sarju Prasad, (AIR 1924 PC 60) expounded three stages for consideration of a case of undue influence. It was pointed out that the first thing to be considered is, whether the plaintiff or the party seeking relief on the ground of undue influence has proved that the relations between the parties to each other are such that one is in a position to dominate the will of the other. Upto this point, ‘influence’ alone has been made out. Once that position is substantiated, the second stage has been reached – namely, the issue whether the transaction has been induced by undue influence. That is to say, it is not sufficient for the person seeking the relief to show that the relations of the parties have been such that the one naturally relied upon the other for advice, and the other was in a position to dominate the will of the first in giving it. Upon a determination of the issue at the second stage, a third point emerges, which is of the onus probandi. If the transaction appears to be unconscionable, then the burden of proving that it was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the other. Error is almost sure to arise if the order of these propositions be changed. The unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relation of the parties. Were they such as to put one in a position to dominate the will of the other.”

If facts justify, Omission (to make allegation of undue influence) is not fatal

In Joseph Johan Peter Sandy vs Veronica Thomas Rajkumar, AIR 2013 SC 2028, after quoting the above passage from Afsar Shaikh v. Soleman Bibi, AIR 1976 SC 163, it was observed as under:

“13. If there are facts on the record to justify the inference of undue influence, the omission to make an allegation of undue influence specifically, is not fatal to the plaintiff being entitled to relief on that ground; all that the Court has to see is that there is no surprise to the defendant. In Hari Singh v. Kanhaiya Lal, AIR 1999 SC 3325, it was held that mere lack of details in the pleadings cannot be a ground to reject a case for the reason that it can be supplemented through evidence by the parties.”

Undue Influence: Simple Pleading by Plaintiff MAY NOT cast Burden on Defendant

In Chandrika Babu v. Sudhakaran, 2013 4 KLT(SN) 103 it is pointed out that the Apex Court’s judgment in Joseph John Peter Sandy’s case, AIR 2013 SC 2028; (2013) 3 SCC 801, would show that the required materials should be placed before the court in support of the plea to draw an inference of undue influence.

Even if a person is in a fiduciary relationship with another and his conduct in looking after the other in old age may have influenced the thinking of the other, that per se cannot lead to the only irresistible conclusion that the person was therefore in a position to dominate the will of the deceased. The onus would shift only after the plaintiff would have established a prima-facie case under Section 16 of the Contract Act read with Section 111 of the Evidence Act.

In Subhas Chandra Das Mushib v. Ganga Prosad Das Mushib, AIR 1967 SC 878; 1967 (1) SCR 331, it was observed that there was no presumption of imposition merely because a donor was old and weak. Mere close relation also was insufficient to presume undue influence. Influence and undue influence were distinguished in this decision as under:

“It must also be noted that merely because the parties were nearly related to each other no presumption of undue influence can arise. As was pointed out by the Judicial Committee of the Privy Council in Poosathurai v. Kappanna Chettiar, (1919) 47 IA 1, AIR 1920 PC 65.
- “It is a mistake (of which there are a good many traces in these proceedings) to treat undue influence as having been established by a proof of the relations of the parties having been such that the one naturally relied upon the other for advice and the other was in a position to dominate the will of the first in giving it. Up to that point “influence” alone has been made out. Such influence may be used wisely, judiciously and helpfully. But whether by the law of India or the law of England, more than mere influence must be proved so as to render influence, in the language of the law, undue.”
“Before, however, a court is called upon to examine whether undue influence was exercised or not, it must scrutinise the pleadings to find out that such a case has been made out and that full particulars of undue influence have been given as in the case of fraud. See Order 6, Rule 4 of the Code of Civil Procedure. This aspect of the pleading was also given great stress in the case of Ladli Prasad Jaiswal v. Karnal Distillery, Co., AIR 1963 SC 1279; (1964) 1 SCR 270 above referred to. In that case it was observed (at p. 295):
- “A vague or general plea can never serve this purpose; the party pleading must therefore be required to plead the precise nature of the influence exercised, the manner of use of the influence and the unfair advantage obtained by the other.”

(Quoted in Raja Ram v. Jai Prakash Singh, AIR 2019 SC 4374; 2019-8 SCC 701)

Krishna Mohan Kul , AIR 2003 SC 4351, Stands distinguished

In Krishna Mohan Kul @ Nani Charal Kul v. Pratima Maity, AIR 2003 SC 4351; 2004 KHC 903 (SC), the Supreme Court held that ‘when the party complaining shows such relation, the law presums everything against the transaction and the onus is cast upon the person holding the position of confidence or trust to show that the transaction is perfectly fair and reasonable, that no advantage has been taken of his position’. The relevant passage reads as under:

“When fraud, misrepresentation or undue influence is alleged by a party in a suit, normally, the burden is on him to prove such fraud, undue influence or misrepresentation. But, when a person is in a fiduciary relationship with another and the letter is in a position of active confidence the burden of proving the absence of fraud, misrepresentation or undue influence is upon the person in the dominating position, he has to prove that there was fair play in the transaction and that the apparent is the real, in other words, that the transaction is genuine and bona fide. In such a case the burden of the proving the good faith of the transaction is thrown upon the dominant, party, that is to say, the party who is in a position of active confidence. A person standing in a fiduciary relation to another has a duty to protect the interest given to his care and the Court watches with jealousy all transactions between such persons so that the protector may not use his influence or the confidence to his advantage. When the party complaining shows such relation, the law presums everything against the transaction and the onus is cast upon the person holding the position of confidence or trust to show that the transaction is perfectly fair and reasonable, that no advantage has been taken of his position.
This principle has been engrained in Section 111 of the Indian Evidence Act, 1872 …. …..
- ”When the relation between the donor and donee at or shortly before the execution of the gift has been such as to raise a presumption that the donee had influence over the donor, the Court sets aside the gift unless the donee can prove that the gift was the result of a free exercise of the donors will….
15. The corollary to that principle is contained in Clause (3) of Section 16 of the Indian Contract Act, 1872 (in short Contract Act).

Pratima Chowdhury v. Kalpana Mukherjee, AIR 2014 SC 1304, followed Krishna Mohan Kul @ Nani Charal Kul v. Pratima Maity, AIR 2003 SC 4351; but, specifically ‘illustrating instances of the authority, command and influence’ as under:

“31. … we must keep in mind the law declared by this Court on the subject of fiduciary relationship. We will also proceed by keeping in mind, … that relationship between Partha Mukherjee and Pratima Chowdhury was a relationship of faith, trust and confidence. Partha Mukherjee was in a domineering position.
- He was married to Sova Mukherjee. Sova Mukherjee is the daughter of H.P. Roy. Pratima Chowdhury has lived for a very long time in the house of H.P. Roy.
- During that period (after his marriage) Partha Mukherjee also shared the residential accommodation in the same house with Pratima Chowdhury, for over a decade.
- In Indian society the relationship between Partha Mukherjee and Pratima Chowdhury, is a very delicate and sensitive one.
- It is therefore, that Pratima Chowdhury extended all help and support to him, at all times.
- She gave him her flat when he was transferred to Calcutta.
- She also extended loans to him, when he wanted to set up an independent business at Bombay.
- These are illustrative instances of his authority, command and influence.
- Instances of his enjoying the trust and confidence of Pratima Chowdhury include, amongst others, the joint account of Pratima Chowdhury with Partha Mukherjee, which the latter operated exclusively, and the drafting of the letters on behalf of Pratima Chowdhury.
In such fact situation, we are of the view, that the onus of substantiating the validity and genuineness of the transfer of flat no. 5D, by Pratima Chowdhury, through the letter dated 11.11.1992 and the document dated 13.11.1992, rested squarely on the shoulders of Kalpana Mukherjee. …”

But, Krishna Mohan Kul (supra) is distinguished in subsequent decisions in Anil Rishi v. Gurbaksh Singh, AIR 2006 SC 1971; (2006) 5 SCC 558, and Raja Ram v. Jai Prakash Singh, AIR 2019 SC 4374; 2019-8 SCC 701, on facts of Krishna Mohan Kul–

It was brought on record that the witnesses whose names appeared in the impugned deed and which was said to have been created to grab the property of the plaintiffs were not in existence.
The executant was more than 100 years of age at the time of alleged registration of the deed in question.
He was paralytic and furthermore his mental and physical condition was not in order.
He was also completely bed-ridden and though his left thumb impression was taken, there was no witness who could substantiate that he had put his thumb impression.

Fiduciary relation and active confidence be established to draw undue influence

After quoting the aforesaid portion from Krishna Mohan Kul @ Nani Charal Kul v. Pratima Maity, AIR 2003 SC 4351, it was pointed out in Anil Rishi v. Gurbaksh Singh, AIR 2006 SC 1971; (2006) 5 SCC 558 (S.B. Sinha, P.K. Balasubramanyan, JJ.), as under:

“But before such a finding is arrived at, the averments as regard alleged fiduciary relationship must be established before a presumption of undue influence against a person in position of active confidence is drawn. The factum of active confidence should also be established.”
Anil Rishi v. Gurbaksh Singh, AIR 2006 SC 1971; (2006) 5 SCC 558 is referred to in Raja Ram v. Jai Prakash Singh, AIR 2019 SC 4374; 2019-8 SCC 701.

In Keshav v. Gian Chand, AIR 2022 SC 678 (relying on Ladli Parshad Jaiswal v. The Karnal Distillery Co. Ltd., Karnal, AIR 1963 SC 1279; and Bellachi v. Pakeeran, (2009) 12 SCC 95), it is held as under:

“The question whether a person was in a position to dominate the will of the other and procure a certain deed by undue influence is a question of fact, and a finding thereon is a finding of fact, and if arrived at fairly in accordance with the procedure prescribed, it is not liable to be reopened in second appeal.”

Read Blog: Pleadings Should be Specific; Why?

Foot Notes:

Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280; Ladli Prashad Jaiswal v. Karnal Distillery, Co., AIR 1963 SC 1279; Subhash Chandra Das v. Ganga Parsad Das, AIR 1967 SC 878; Varanasaya Sanskrit Vishwavidalaya v. Dr. Raj Kishore Tripathi, AIR 1977 SC 615; Jai Parkash Power Ventures v. State of HP, ILR 2017-6 HP 210.
Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280; Raja Ram v. Jai Prakash Singh, AIR 2019 SC 4374; Ladli Prasad Jaiswal v. Karnal Distillery, Co., AIR 1963 SC 1279.
Ram Sewak Yadav v. Hussain Kamil Kidwai, AIR 1964 SC 1249, Dr. Jagjit Singh v. Giani Kartar Singh, AIR 1966 SC 773, Beliram Bhalaik v. Jai Beharilal Khachi, (1975) 4 SCC 417, Suresh Prasad Yadav v. Jai Prakash Mishra, (1975) 4 SCC 822, Bhabhi v. Sheo Govind, (1976) 1 SCC 687, S. Raghbir Singh Gill v. S. Gurcharan Singh Tohra, (1980) Supp1 SCC 53, P.K.K. Shamsudeen v. K.A.M. Mappillai Mohindeen, (1989) 1 SCC 526, Vadivelu v. Sundaram, (2000) 8 SCC 355, VS Achuthanandan v. P J Francis (2001) 3 SCC 81, andM. Chinnasamy v. K. C. Palanisamy, (2003) 10 SCALE 103.

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General

Law on Acquisition of Private (Leasehold) Plantation Land in Kerala

Government Need Not Pay ‘Land-Value‘, as such, if (Leasehold) Plantation Land Acquired.

Exemption does not Confer any vested Right or Ownership

Tenant cannot ‘Sell’ Plantation Land as his absolute property.

Saji Koduvath, Advocate, Kottayam.

Who is the OWNER of Exempted (Leasehold) Plantation Lands in Kerala?

It is the Government itself. Reasons:

1. Plantation (lease) lands VEST in GOVT, under S. 72 automatically
2. ‘Vesting’ in Govt. is ‘Vesting of Ownership‘
- Sec. 72 speaks about ‘Vesting of landlord s fights its Government’. It pertains to –
  - “all right, title and interest of the landowners and intermediaries in respect of holdings held by cultivating tenants”.
3. Tenant to Pay Rent to the Govt.
- Sec. 72E directs – such a cultivating tenant is liable to pay ‘Rent ’ to the Government.
4. Government Need Not Pay ‘Land-Value‘, as such, if Acquired
- Sec. 112(5A) provides that the Government need not pay ‘Land-Value‘, as such, to the tenant, or the former owner, if such Lands are Acquired. (It is for the reason that such plantation-land vest in Govt.)
5. Proviso to Article 31A(1) of the Constitution of India
Proviso to Article 31A(1) reads as under:
- “Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.”

Tenant cannot ‘Sell’ Plantation Land as his Absolute Property

A tenant who got ‘fixity’ over such land cannot ‘sell’ this land as his absolute (ownership) property.

‘Exemption’ in Chapter III Cannot be read into Sec. 72B(2)

The provision of law for giving Purchase-Certificate under Sec. 72B specifies that the provisions of Sec. 82 (as to ceiling limit) shall apply for the calculation of the ceiling area alone. Sec. 72B(2) reads-
- “(2) The provisions of Section 82 shall, so far as may be, apply to the calculation of the ceiling area for the purposes of the proviso to Sub-section (1)”
The exemption provision (that exempts plantation lands etc. from ceiling limit) in Sec. 81 (Chapter III) cannot be brought-forth or read-into Sec. 72B (provision for giving/assignment of purchase-certificate) in Chapter II.
Because,
- Sec. 72B(1), in Chapter II shows – Sec. 72B(1) is an an independent provision (though the Proviso says – no cultivating tenant shall be entitled to assignment of the right, title and interest … (more than) … the ceiling area, mentioned in Sec. 82 in Chapter III)
- When a provision in a latter Chapter of an Act (here, Sec. 81 that deals with exemption to ceiling limit, in Chapter III) is referred to in a section in an independent provision in an earlier Chapter (here, Sec. 72B, as regards issuing purchase certificate, in Chapter II), for a limited purpose (here, to state the limit in area alone), it cannot be said – the colour or smell of the provision in the latter chapter (here, Sec. 81), will be reflected on the provision in the earlier chapter (here, Sec. 72B).
Further:
- Chapter II of the KLR Act (dealing with ‘Tenancy’) is exclusive and exhaustive as to ‘fixity’, and ‘vesting’ of land in Government.
- It is not stated anywhere in the Act – the right and title of the (leased-plantation) land legitimately vested in Government under Sec. 72, will be divested in any manner (to the previous owner, or to the tenant or to anybody else), in any circumstance.
- Sec. 72E provides for collection of ‘rent‘ from the holders of the plantation. It is for the reason that (ownership of) the land vests in Govt.
- Note: Proceedings initiated by Taluk Land Board under Chapter III (in respect of plantation) do not confer title.

Is there Fixity (Rights to Remain) for the ‘Plantation-Tenants‘

Sec. 3(1)(viii) of the KLR Act (in Chapter II – Provisions regarding tenancies), says as to Plantation exemption.
By virtue of this provision if the landlord leased a plantation-land (already a plantation leased) and the extent is above 30 years, it is exempted. There will be no fixity (and other protections) to such tenants. If the extent of such plantation land is below 30 years provisions of Chapter II (which says as to fixity and purchase certificate) apply.
Chapter III is relating to ceiling area. Section 81(1)(e) exempts plantation from ceiling restrictions.
Therefore, if the extent of property is more than 15 acres (ceiling limit) no purchase certificate can be issued. It is because,
- (i) by virtue of Sec. 72B & C (under which a cultivating tenant can obtain purchase certificate) the maximum extent is 15 acres, below the ceiling limit.
- (ii) under Sec. 13, fixity of tenure is given to the tenant (that is, he can continue)
- (iii) as regards plantations above 7.5 or 15 acres, a tenant has fixity, but is not entitled to a purchase certificate.
Note: 1. Section 81(1) exempts Government lands from the provisions of Chapter III. The Proviso says that the following Government lands will not stand exempted.
- 1. Government-lease-lands
- 2. Lands that fall under Section 13 (Fixity) and
- 3. Lands that fall under Section 72 (Lease lands vest in Government).
2. The effect of Chapter III on Government-lease-lands and on the lands that fall under Section 13 (Fixity) and 72 (vest in Government) is that the tenants (both Government’s tenants and the erstwhile Private landholders’ tenants) have to pay ‘rent‘ to the Government under Sec. 72F(h).
3. Section 81(4) “permits” use of the land not exceeding 5% of the extent of such holding for floriculture, dairy farms, hotels, restaurants, etc.
4. Under Sec. 112 (5A) of the KLR Act, on acquisition, the cultivating tenants are entitled to compensation for improvements (only) for the land vested in the Government under Sec. 72.
Sec. 112 (5A)(a) says that the compensation for any building or other improvements belonging to the landowner shall be awarded to the Government; and clause (b) says that the balance remaining after deducting the compensation referred to in clause (a) and the value of the land occupied by the homestead or hut, if any, shall be apportioned between the cultivating tenant and the Government in proportion to the profits derivable by them from the land.

What is the legal right attached to former ‘tenants’ of Plantations, after vesting the land with Govt. under Sec. 72?

It is not Tenancy – For no landlord-tenant relation with the Govt.
Not Grant or Licence/Permission – For Grant as well as Licence/Permission arise from a contract (express or implied).
Therefore, it can termed only as a “Legal Right conferred by Statute“, that is, the KLR Act.
What are the Stipulations attached to that “Legal Right conferred by Statute” to tenants (of Plantation land) having fixity?
- 1. Liable to pay ‘Rent’ (under Sec.72E)
- 2. Subject to the condition – not to “convert” it for any other use, other than the specific plantation (Sec. 87).
- 3. From Sec. 112(5A)(b) it is clear that the tenant will be entitled (on acquisition of the land) for the compensation for his homestead or hut, if any, and the value of his improvements (alone).

Sec. 72A – Compensation to land owner for vesting under Sec. 72 in Govt. – No right remains with (erstwhile owner) thereafter.

It is 16 times fare rent for land plus (+) value of structures of land owner plus (+) half value of timber trees._{Note: Same rate under Sec. 55 & 72D(2)} Land above ceiling limit payment is only under Sec. 88 – on surrendering land. (It is paid by Govt.)

Sec. 72D – Cultivating tenant to pay purchase price (for getting assignment).
Sec. 72D(1A)- No purchase price is land below One Hect.
Sec. 72D(2) – Purchase price to Govt. – 16 times fare rent for land plus (+) value of structures of land owner plus (+) half value of timber trees) _{Note: Same rate under Sec. 72A & 55}

When Such a land (Vested In Govt. under S. 72) is Required for Govt., Should it be Acquired? Is the landowner Entitled for any Compensation? What is the Compensation Entitled to by the Tenant?

When Such a land (Vested In Govt. under S. 72) is Required for Govt., Should it be Acquired?
- The ownership being vested in Govt. it need not be ‘strictly’ “acquired”. But no specific provision in Sec. 72 for ‘resuming’, if and when Govt. needs it. Sec. 112 (5A) of the KLR Act uses the term ‘acquisition’ itself (for the possessory rights remain with the tenant).

Is the landowner Entitled for any Compensation?
- Sec. 112(5A) deals with the land acquired that has been vested in the Government under Section 72. From the sub section (5A) it is clear that the entire rights of the (former) landowner is vested with the Govt. and he cannot claim any right over the land (when it is acquired).
What is the Compensation Entitled to by the Tenant?
- Sec. 112(5A)(a) says that the compensation for any building or other improvements belonged to such land owner and intermediaries shall be awarded (?) to the Government ; and
- from Sec. 112(5A)(b) it is clear that the tenant will be entitled for the compensation for his homestead or hut, if any, and the value of his improvements (alone).

Apportionment of land value in cases of Acquisition

Sec. 112 of the KLR Act reads –

“112. Apportionment of land value in cases of acquisition – (1) Where any land is acquired under the law for the time being in force providing for the compulsory acquisition of land for public purposes, the compensation awarded under such law in respect of the land acquired shall be apportioned among the landowner, intermediaries, cultivating tenant and the kudikidappukaran in the manner specified in this Section.
(2) The compensation for any building or other improvements shall be awarded to the person entitled to such building or other improvements.
(3) The kudikidappukaran shall be entitled to the value of the land occupied by his homestead or hut subject to a minimum of-
- three cents in a city or major municipality; or
- five cents in any other municipally; or
- ten cents in a panchayat area or township.
(4) The difference between the value of three cents or five cents or ten cents, as the case may be, and the value of the extent of the land occupied by the homestead or hut shall, notwithstanding anything contained in the Kerala Land Acquisition Act, 1961, be borne by the Government or the local authority or the company or other person on whose behalf the land is acquired.
(5) The balance remaining after deducting the compensation referred to in Sub-section (2) and the value of the land occupied by the homestead or hut shall he apportioned among the landowner, the intermediaries and the cultivating tenant in proportion to the profits derivable by them from the land acquired immediately before such acquisition .
- Explanation. – “Profits derivable from the land” shall be deemed to be equal to (i) in the case of a landowner, the rent which he was entitled to get from the tenant holding immediately under him; (ii) in the case of an intermediary, the difference between the rent which he was entitled to get from his tenant and the rent for which he was liable to his landlord; and (iii) in the case of a cultivating tenant, the difference between the net income and the rent payable by him; and the rent payable by the cultivating tenant and the intermediary for the purposes of this Explanation shall be as calculated under the provisions of this Act.
(5A) Notwithstanding anything contained in Sub-sections (2) and (5), where there the right, title and interest of the landowner and the intermediaries in respect of the land acquired have vested in the Government under Section 72, –
(a) the compensation for any building or other improvements belonging to such land owner and intermediaries shall be awarded to the Government ; and
(b) the balance remaining after deducting the compensation referred to in clause (a) and the value of the land occupied by the homestead or hut, if any, shall be apportioned between the cultivating tenant and the Government in proportion to the profits derivable by them from the land.
Explanation. – “Profits derivable from the land” shall be deemed to be equal to-
- in the case of the cultivating tenant, the difference between the net income immediately before the acquisition and the rent which he was liable to pay immediately before the date on which the right, title and interest of the landowner and the intermediaries have vested in the Government; and
- in the case of the Government, such rent.
(7) In this Section, “homestead” includes a dwelling house occupied by a person who is deemed to be a kudikidappukaran under Explanation IIA to clause (25) of Section 2.”

Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-4 Ker LT 121

In Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-4 Ker LT 121, the question as to ‘rival claims raised by the cultivating tenant and landlord for compensation on acquisition’ arose. The land was leased out by landlords. The lease-rights came in the cultivating tenants by transfer. The Government contended that the tenant was a cultivating tenant and the land is vested upon the Govt. under Sec. 72 KLR Act. Hence tenant alone would be entitled to get compensation for the improvements to be determined under the Kerala Compensation for Tenants Improvements Act, 1958, in view of Section 20(1) of the KLR Act.

The landlords argued that the land was a plantation (over 30 acres) when it was (originally) leased, and therefore, they are entitled to claim exemption and benefits in the light of the exemption under clause (viii) of Section 3 (1) of the KLR Act. Since there would be no fixity of tenure, it being a plantation, there would not be vesting of rights of the land owner in the Government. Hence, there should be the apportionment of the compensation between the lessor and the lessee and it should be decided in the acquisition proceedings.
The single Judge dismissed the writ petition, ‘leaving open the liberty of the lessee as well as the landlords, to approach the civil court seeking relief against the Government, and also to resolve the inter se dispute by and between the tenant and the landlords’.
The Division Bench, in appeal held that ‘land acquisition’ proceedings are to be initiated. It is pointed out that (even if it is a land vested in Govt.) there is no provision in Sec. 72 for ‘resuming’ if and when Govt. needed it.

The court also observed as under –

“31. On an analysis of the provisions of Section 72(1) of the Act, 1963, it is clear that when the Government notified the said provision with effect from 01.01.1970, all right, title and interest of the landowners and intermediaries in respect of holdings held by cultivating tenants (including holders of kudiyirippus and holders karaimas) entitled to fixity of tenure under Section 13, and in respect of which certificates of purchase under sub-Section (2) of Section 59 have not been issued, vested in the Government.
32. Therefore, it is clear from Section 72 that what is vested with the Government is the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants. It is nothing but a legal fiction by which the interest held by a cultivating tenant in a property of a landlord or intermediary is protected from 01.01.1970 .
34. On a conjoint reading of Sections 72 and 72A, it can be seen that vesting of rights in the Government contained under Section 72 is the rights held by the landlord and the intermediary in respect of holdings held by the cultivating tenants. However, the same will not, in any manner, interfere with the rights enjoyed by a cultivating tenant in contemplation of the provisions of the Act, 1963.”
42. Therefore, we have no doubt in our mind to hold that Section 72 of Act, 1963 would only deal with the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants free from encumbrances created by the land owners and intermediaries. However, the legal provisions discussed above would make it clear that insofar as the cultivating tenant is concerned, an absolute right is vested with him to seek assignment subject to the payment of purchase price in contemplation of Section 72D of the Act, 1963.”

While considering the right of landlord, it is pointed out (basing on the principle, or scheme of the KLR Act, especially pointing out Section 72BB) that the landlord may have right for compensation.

Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-4 Ker LT 121 Not Correctly Decided

It is held as under:

“Therefore, it is clear from Section 72 that what is vested with the Government is the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants. It is nothing but a legal fiction by which the interest held by a cultivating tenant in a property of a landlord or intermediary is protected from 01.01.1970.“

In this decision the Division Bench failed to note –

The right, title and interest of the land (above ceiling limit) ‘vest’ with the Government under Sec. 72. It is absolute. It is not a ‘fiction‘; but, it is real and actual (as seen from Sec. 72E and Sec. 112(5A).
The nature of this statutory ‘vesting in Govt’ (under Sec. 72) is further clear from – Sec. 72E (tenant has to pay rent for the unassigned land – that is, no purchase certificate is given) .
Sec. 112(5A) deals with unassigned land (that is, no purchase certificate is given). Under this sub section land-value need not be given (even) to the land-owner or the tenant_{(tenant has no right above that of land owner in this regard)} over and above the “value of the land occupied by the homestead or hut” – that is, the actual area where the ‘homestead or hut’ is situated; whatever may be the area of land outside it.
This provision is applied to lease-lands vested in Govt. under Sec. 72 and no purchase certificate is given (to the tenant)., in case of acquisition).
Sec. 72B(2) KLR Act spells-out that a cultivating tenant will get Purchase Certificate for the extent below the ‘ceiling limit’ alone. That is, the tenant has no “absolute rights” above the ceiling limit.
Plantation-lands, usually, involve Hundreds or Thousands of Acres of “excess” land. The assignment-possible-land (within ceiling limit) may be miniscule (7.5 acres or 15 acres). Therefore, the analogy drawn by the Bench (tenant has a right seek assignment) is not apt at all.
When land vested in Govt. under Sec. 72 is acquired, in the light of Sec. 112(5A) land-value need not be given to the land-owner or the tenant, over and above the “value of the land occupied by the homestead or hut” – that is, the actual area where the ‘homestead or hut’ is situated; whatever may be the area of land outside it.
The aforesaid provision of law in the KLR Act is legislated following Proviso to Article 31A(1) of the Constitution which says that the State need not pay compensation to the land owners (when land is acquired) above the ‘ceiling limit‘.
The rights of ‘tenants’ of Plantations, to continue in the land till the plantation exists, after vesting the land with Govt., is a ‘Legal Right conferred by Statute’. It is not Tenancy – for no landlord-tenant relation with the Govt. It is not a Grant or Licence/Permission – for such rights arise from a contract (express or implied). Therefore, it can be termed only as a “Legal Right conferred by Statute“, the KLR Act.
It goes without saying – If no compensation is payable to the land-owners above the ceiling limit, it need not be given to tenants.
It is most unjustifiable to confer undue rights or benefits to the plantation-tenants (majority are BIG Companies) which had not been given to Maharaja of Travancore (whose 191 acres of lands in Thiruvananthapuram – above the ceiling limit, 15 acres – in the City was ‘mercilessly’ taken under the Orders of the Land Board Trivandrum, No. LB(B)2-18919/70, dated 15.01.1972). It is a sheer fact that lands of thousands of middleclass property owners was also harshly taken by under the provisions of the Act. (Note: Only limited right to continue the specified plantation-crop alone is given by the ‘exemption’; and, according to law, in case the land is ‘converted’, the exemption-benefit would be lost.)

No Land value to be given for the “excess” land (Beyond Ceiling Limit)

From the following words in Sect. 112, it is beyond doubt that no Land value to be given for the “excess” land (Beyond Ceiling Limit).

“building or other improvements“
“land occupied by the homestead or hut”
“any building or other improvements“.

It is true, “exemption” is given to plantation, to hold land over and above ceiling limit. It is only a statutory permission to continue, subject to conditions. It will be lost when it is “fragmented” or the crop is abandoned. As stated elsewhere, it is also most unjustifiable to confer undue rights or benefits to the plantation owners or tenants (majority are BIG Companies) which had not been given to thousands of middleclass property owners whose property had been harshly sized or expropriated under the provisions of the KLR Act.

Effect of Travancore Govt. Leases after Royal Pattom Proclamations of 1040 and 1061

Now a question arises: What is the impact of ‘Government Land Leases’ (with strict conditions) after 1061 (1886)? Do such leased lands qualify as “estate” under Article 31A of the Constitution?

The legitimate answer is that the lands leased out after 1061 (1886) do not inherit the rights granted by the Pattom Proclamations of 1040 and 1061. If we look at it differently it would mean, or tantamount to say, that the Government cannot ‘lease’ lands after the Proclamations (for, by virtue of the Proclamations it would lose the lease-character at the moment it is made).

In Rev. Fr. Victor Fernandez v. Albert Fernandez (five Judge Bench), 1971 Ker LT 1, AIR 1971 Ker 168 (Per PT Raman Nayar, CJ, T Krishnamoorthy Iyer, P Unnikrishna Kurup, JJ.), concluded that the land covered by the Royal Proclamations of 1040 and 1061 were “estates” falling under Art. 31A of the Constitution. It was on the finding that the Proclamation “secured permanency of tenure”, and “proprietary interest” in the soil. It was observed as under:

“7. It is impossible to accept the contention advanced on behalf of the plaintiff in this case that,even after the Proclamation of 1040, the holders of these lands had no proprietary interest whatsoever in the soil and remained tenants in the strict sense of that term, with only the right of enjoyment, the only difference being that they secured permanency of tenure, the Government still remaining the full and absolute proprietor of the soil.”

Therefore, there is a clear difference between leases made before and after the Proclamations, and the rights conferred by the Proclamations do not apply to leases made after them.

CAN AN EXEMPTED PLANTATION LAND BE SOLD AS AN ABSOLUTE PRIVATE PROPERTY?Exemption does not Confer any vested Right or Ownership

No.

Sec. 82 deals with ceiling area. Sec. 83 mandates surrender of excess land. Sec. 85 directs that excess land shall be surrendered to government (accepting the compensation fixed under Sec. 88).
But it is not made applicable to the plantations.
Nevertheless, Sec. 87 mandates that the protection of plantation is available only so long as the plantation subsists.
Therefore, if no plantation, plantation lands would also have been treated in the same way – as any other excess land that had been (forcibly) got surrendered by virtue of the KLR Act. The law has given only a sanction to the planters to continue because of the existence of the plantation. Therefore ‘exemption’ does not confer a vested right or ownership.

ACQUISITION OF PLANTATION-LANDS OWNED BY PRIVATE PERSONS

1. Proviso to Article 31A(1) of the Constitution of India

It is plain – No compensation is payable to the land-owners, for the lands ‘above the ceiling limit’, according to the Constitution of India. If any authority gives it, it will be sheer unscrupulous act.

The provisions of the KLR Act as regards ‘vesting’, ‘excess land’ etc. are legislated predicating upon Proviso to Article 31A(1) of the Constitution which states that the State need not pay compensation to the former land owners (when land is acquired) above the ‘ceiling limit‘.
Proviso to Article 31A(1) of the Constitution of India reads as under:
- “Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limitapplicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.”.

2. Exemption of ‘Plantation’ Does Not Cover Exemption of ‘Plantation LAND’

It is for the following reasons –

1. The exemption is to the ‘plantation’, and not to the ‘LAND‘.
2. Exemption is conditional – for it exists (only) as long as the plantation exists or continues;
Because,
- (a) S. 2(44) defines ‘plantation’ as land used principally for the cultivation of a specific ‘plantation crop‘ like tea, coffee, cocoa, rubber etc.
- (b) Section 87, Explanation II states that if a plantation for which exemption is given on recognition of a specific ‘plantation-crop’ is converted into any other ‘plantation-crop’ or the plantation activity is not continued, the exemption may be lost; and the land will be taken for considering the ceiling limit.

Effect of Conversion or Sale of A Portion of Exempted Land

Section 87 reads as under:

“S.87. Excess land obtained by gift, etc. to be surrendered – (1) Where any person acquires any land dafter the date notified under Section 83 by gift, purchase, mortgage with possession, lease, surrender or any other kind of transfer inter vivos or by bequest or inheritance or otherwise and in consequence thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess shall be surrendered to such authority as may be prescribed.
Explanation 1 – Where any land is exempted by or under Section 81 and such exemption is in force on the date notified under Section 83, such land shall, with effect from the date on which it ceases to be exempted, be deemed to be land acquired after the date notified under Section 83.
Explanation II – Where, after the date notified under Section 83, any class of land specified in Schedule II has been converted into any other class of land specified in that Schedule or any land exempt under Section 81 from the provisions of this Chapter is converted into any class of land not so exempt and in consequence thereof the total extent of land owned or held by a person exceeds the ceiling area, so much extent of land as is in excess of the ceiling area, shall be deemed to be land acquired after the said date.

Explanation II is explained by the Full Bench of the Kerala High Court in Mathew K. Jacob v. District Environmental Impact Assessment Authority,2018-4 KLT 913, as under:

“The consequence is that the benefit of the exemption would be lost and the extent added to the account of the assessee or the declarant in determination of his ceiling area.”

That is, if a person converts any portion of his exempted land to any other class, that converted extent will be added to his account in determining his ceiling limit; and the Taluk Land Board can proceed upon that (excess) land. In short, the exemption will be lost for that portion.

Also Read: Plantation-Tenants Not Approached The Land Tribunal are Ineligible for Plantation-Exemption-Orders from the Land Board

Fragmentation has to be Treated as Conversion for Non-exempted Category

The decision in One Earth One Life v. State of Kerala, 2019-2 KHC(SN) 10; 2019-1 KLT 985, arose from the Writ Petition filed for a declaration that the fragmentation and sale of a Rubber Plantation for non-plantation purposes was illegal as it defeated the purpose of the Kerala Land Reforms Act. When the matter was placed before the Taluk Land Board under Sec 87, KLR Act, it found that there was no change in classification of the land and therefore dropped the proceedings. The High Court held as under:

“34. Section 81 of the KLR Act is in pith and substance a special provision, with its main objective of giving exemption to certain lands including the lands maintained as plantations is to prevent fragmentation of the land and to keep it as plantation itself to improve the economy of the state for welfare of people as a whole while the Act creates a regime, the State is under an obligation to safeguard, the intended purpose of the provisions of the Act in its spirit. ….. …… It could be gathered from the records that the proposal to transfer 1.03 acres of land to each workers in discharge of their service or retrenchment benefits will definitely divide the plantation into separate slots and that would definitely change the character/nature of the plantation, which could be termed as ‘conversion’ and that will be against the provisions of the Act.”
“37. …. Fragmentation of the estate and transfer of it has to be treated as a case of conversion of plantation into some other category of land. Such being the scenario, fragmentation amounts to serious violation of the provisions of KLR Act. Hence, we are not impressed by the argument of the learned counsel for the respondent No.18 that the fragmented plots will be maintained as plantation by the transferees, so as to extend/avail the benefit of HMT’s case (supra). Taking into account of all the relevant aspects, we have no hesitation in holding that dropping of the suo motu proceedings initiated under Section 87 of KLR Act by the TLB in a cursory manner, is not at all reasonable or justifiable when tested on the touchstone of the object and intention, which the legislation seeks to achieve and beyond what is required, in the interest of the public.”

Purport of Sec. 87 and the Explanations in S.87(1)

Section 87 reflects the legislative intention in protecting plantations. The protection is on economic grounds. That is, certain crops and cultivations that made the land of Kerala renowned from ancient times were to be protected. Section 87 and the Explanations are to be read and interpreted in the light of their intentions. The Kerala High Court aptly appreciated these provisions in this background in One Earth One Life v. State of Kerala, 2019-2 KHC(SN) 10; 2019-1 KLT 985.

In State Human Rights Protection Centre, Thrissur v. State of Kerala, 2009(3)KLJ 110, it is held as under:

“19.There is no restriction on alienation of lands exempted under Section 81 (1)(a) of the Land Reforms Act ,since such lands are exempted from the operation of Chapter III of the Kerala Land Reforms Act dealing with ceiling on holding. It is not the excess land that is alienated but the exempted land………”

It was further held in para 21-

”……Any exemption from ceiling provision under the Kerala Land Reforms Act has a purpose and the purpose in the present case is public interest and that public interest is the use of land for industrial purpose. Since under the Kerala Land Reforms Act there is no restriction on alienation of the exempted category of lands and since the transferee is subjected to the acid test of eligibility and entitlement for exemption in terms of use of the land, the transfer made by the HMT will also be subjected to the same test, namely use of the transferred land for industrial purpose. In other words, HMT is legally entitled to transfer 100 acres of land notified under Ext.R1(i) notification, but the transferee will have to use that land for industrial purpose and that purpose only. Therefore, the transfer is not vitiated in any way; but the transferee will have to use the land only for industrial purpose. That is a covenant on the land.” (Quoted in: One Earth One Life v. State of Kerala, 2019-2 KHC(SN) 10; 2019-1 KLT 985)

In Everest Stone Crusher and Granites v. District Collector, District Collectorate, Kannur, 2020-6 KHC 289, it is held as under:

“Therefore, Ext.P13 prohibitory order issued by the 1st respondent District Collector, during the pendency of suo motu proceedings under Section 87 of the Act, cannot be said to be one issued without reasonable grounds to believe that any document relating to transfer of land of the land owned by the petitioner, which may be presented before the 3rd respondent registering officer, is intended to defeat the provisions of the said Act. The said order warrants no interference in this writ petition, invoking the extra ordinary jurisdiction of this Court under Article 226 of the Constitution of India.”

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End Notes

Relevant provisions of KLR Act, in a Nutshell

Section	Provisions in a Nutshell
Chap. II 3(1)	Exemptions – (i) Nothing in this Chapter shall apply to – (viii) Tenancies of plantations exceeding 30 acres. “Provided that the provisions of this chapter, other than sections 53 to 72S, shall apply to tenancies in respect of agricultural lands which are treated as plantations under sub clause (c) of clause (44) of Section 2”.
7 E	Persons acquired lands (before 2005 amendment in KLR Act) for consideration below 1 Ha. 61 Are 87 Sq.m. (4 acre) will be deemed to be tenants .
13	Fixity: “Every tenant, shall have fixity of tenure in respect of his holding.”
22	*Landlord* desiring to *resume* any land shall apply to the Land Tribunal.
31	Fair rent determined by Land Tribunal.
51B.	Landlord not to enter on land surrendered or abandoned by the tenant. Contravention is made punishable.
54(1) 55 57 57 (3) 57 (6) 61	54(1). A cultivating tenant (to purchase the right) has to apply Land Tribunal. 55. Purchase price is fixed by LT (on fair rent u/s. 31) to be paid u/s. 59 57. The LT after enquiries, pass orders determining purchase price. (3). The Land Tribunal allows the purchase of the land it determines. (6). The *Land Tribunal* *forwards* *orders to the Land Board. 61. Tenant to pay rent* (under orders of LT) pending proceedings.
59	When Sec. 54 application is allowed _{(by the LT)}, the purchase price _{(determined u/s. 57 by the LT)} shall be deposited with the Land Tribunal to the *credit of the Land Board* and issue of *certificate* – to cultivating tenant.
72	Sec. 72 provides for automatic vesting of lease-properties held by cultivating tenants in Govt. ILR 2010(2) Ker. 845. 72(1) says: Holdings upon which tenanat entilted fixity under sec. 13 vest in govt.
72B	Cultivating-tenant “shall be entitled to assignment” of land vested in Govt. under Sec. 72 –within ceiling area and get purchase certificate (through LT) (2 years from 1-1-1970). Effect of non-filing (See Balanoor Plantations case. 2018(3) KLT 283.)
72D	The cultivating tenant has to pay the purchase price to the Government on the assignment to him of the right, title and interest of the landowner. (If the extent of land is one hectare or below, he shall not be liable to pay.)
72E	Such a tenant is liable to pay rent to the Govt. for the unassigned land – under Purchase Certificate _{(E.g., exempted-plantation-land)}. The Land Tribunal fixes the rent under Sec. 72F(5)(h).
72C	Provides for suo moto action by LT. (No time limit). Rule 5 of the Vesting & Assignment Rules provides – LT may suo moto – notwithstanding no application – assign to cultivating tenant. (See S.72C also).
72K	LT shall issue purchase certificate. It shall be conclusive proof of assignment.
74	Prohibition of future tenancies.
Chap. III 81	Exemption from ceiling and excess for Govt. lands, private forests, plantations, industrial or commercial undertakings, etc. _Proviso_{– There will be an exemption (as plantation, land given to educational institution, trust, etc.) on Government lands, given under grant, lease, etc.}_{See: HMT (Machine Tools) Limited v. Taluk Land Board, 2009 (3) KLJ 110; MT Joseph v. State of Kerala, AIR 1974 Ker 28.}
82	Ceiling area – 5/10 standard acres.
83	No person can hold or possess excess of ceiling area. (Holding is by tenant.) It is a total bar. (Note: plantations, industrial area etc. are exempted.) Apply to tenant also. 1980 KLT 259 (Gopalan Nair Vs. State), 1976 KLT 306 (Thomas Mariamma Vs. TLB), Raghunath Laxman Wani v. The State of Maharashtra (AIR 1971 SC 2137) The policy of the Act – no person –“be permitted to hold any land in excess of the ceiling area.” Raghunath Laxman Wani v. State of Maharashtra, 1971-3 SCC 391, Bhikoba Shankar Dhumal v. Mohan Lal Punchand Tatbed, 1982-1 SCC 680, State of U.P v. Civil Judge, Nainital, AIR 1987 SC 16, State Vs. Puliyangattu, 2008(1) KLJ 571.
84	Certain transfers – void.
85(1)	Surrender excess.
85(2)	Owners and Tenants _{(having land in excess of the ceiling area)} should furnish ceiling return to Land Board before March31, 1971, before the Land Board _{(including lands exempted under S. 81)}. Note: Effect of non-filing: See – Balanoor Plantations case – 2018(3) KLT 283.State of Kerala Vs. Varkey Mathew, AIR 1996 SC 1009. According to S. 3(1) (viii), “tenancies of plantations exceeding 30 acres” is exempted from Chapter II. Therefore, the landlord can recover such plantation lands after the period of tenancy. Such landlords also had to file a ceiling return within the time stipulated.
85(3)	Excess shall be surrendered. *Note*: Tenant must have approached the LT _{(with respect to each plantation, if he has more plantations)} (He cannot declare himself a tenant) It is clear from the following provisions: 54(1) – A cultivating tenant has to apply to LT_{(or the purchase of right, title and interest}_.) 55 – Purchase price and fair rent fixed by LT 57 – LT after giving notice and enquiries, pass orders _{(on the} _{application for the purchase of right, title and interest)}. 57(3) – LT allots the purchase land it determines. 57(6) – The *Land Tribunal* *forwards* a copy of the *orders to the Land Board. 61 – Cultivating tenant to pay rent (under orders of LT) 59 – The purchase price shall be deposited with the LT _{(to the credit of the Land Board)}* and issue of certificate – to cultivating tenant. It is *not* lawful to initiate Suo Motu proceedings (under Section 72C) by the Government for the benefit of a Plantation Tenant (entitled, within the time allowed, to purchase a certificate below the ceiling limit), because Explanation II to Section 87 disfavours the fragmentation of the plantation land. Still, because of subsection (3) of Section 85, the tenant could have obtained a purchase certificate (under Section 72B) within the statutory period. It is the principle applied in the Balanoor case. *Note:* (i) The sub-section (3) itself says as to the settlement of claims for resumption and purchase of the right, title, and interest of the landowner by the cultivating tenant, (ii) LT is the only authority to determine tenancy (Land Board cannot determine it), and (iii) it is clear that even if it is a plantation-exemption-land (beyond ceiling limit), the tenant has to file petition under Section 54 – for fixing Purchase price and fair rent fixed by LT and for allotting the land under section 57(3) and for effecting the payments of ‘rent’ and ‘purchase price’_{(to the credit of the Land Board)} under sec. 61 and 59.
85(3A)	The person bound to file a statement under sub-section (2) _{(that is, Owners and Tenants – having land in excess of the ceiling area)} shall, within a period of three months from the date of final settlement or purchase, file a statement before the Land Board, and the provisions of the said Sub-section shall, as far as may he, apply in regard to the particulars to be contained in such statement, the calculation of the excess land and for the procedure for the surrender of the same.
85(5)	On receipt of the statement under Sub-section (2) or Sub-section (3A), the Land Board shall transfer the statement to such Taluk Land Board and such Taluk LandBoard shall determine the extent and identity of the land to be surrendered.
85(7)	Whereon a person fails to file statement under 85(2) or (3A), LB shall intimate that fact to TLB – TLB shall determine land to be surrendered. It is obvious – The LB can intimate TLB as to non-filing, on the basis of the records it obtained under Sec. 57(6) and 59. That is, those tenants who are not entitled to get a purchase certificate also has to file an application under Sec. 54(1) and 85(2) or (3A). Effect of non-filing: See – Balanur Plantations case (With respect to Sec. 72B application) – 2018(3) KLT 283. Statute prescribes liability on the person who owes or hold the land in excess of the ceiling limit to file statement: State of Kerala Vs. Varkey Mathew, AIR 1996 SC 1009. [TLB not to do, suo motu, without direction from LB. 1980 KLT 120, referred to in 2019(1) KLT 985.]
85A	File ceiling return within March 2, 1973 before Land Board..
86(1)	On determination of the extent to be surrendered under S. 85- Excess vests in Govt. and Taluk Land Board shall issue an order accordingly.
86(3)	Where any person fails to surrender as demanded, the TLB may order an officer to take possession
86(4)	Where any land, vests in the Govt, under s. 86(1) (including that of cultivating tenant) the ownership of such land shall vest in the Govt.
86(6)	Nothing applies to property of Govt. under KLC Act.
87 Exp. II	If a person converts any portion of exempted land for any other class, that converted extent will be added to his account in determining his ceiling limit. That is, the exemption will be lost for the portion that exceeds the ceiling limit. (Mathew K Jacob v. District Environmental Impact Assessment Authority, 2018-4 KLT 913)

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General

Marumakkathayam – A System of Law and Way of Life Prevailed in Kerala

Jojy George Koduvath.

Introduction

The word “Marumakkathayam” means the system of inheritance through nephews and nieces; or descent-through-sisters’-children.

It was essentially a way of life perfected into a custom among Hindus of ancient Kerala.
The individuals, especially men, bound by this system officially accepted their parentage from their maternal uncle. That is, a man who follow Marumakkathayam would identify himself as the nephew of so-and-so, rather than son of so-and-so.

The vast majority of Hindus in Kerala were the followers of customary laws like the Marumakkathayam Law, the Nambudiri Law or the Aliyasanthana law. Among them, Marumakkathayam system was of primary importance (See: Leela Amma v. Aravindaksha Menon, 2012-2 KHC 169).

Marumakkathayam – the Common Ancestor was a Female

Almost all legal systems round the world, throughout history, claimed descent from their male ancestors. The peculiar characteristic of ‘Marumakkathayam’ is that the common ancestors in this system were females.

“Marumakkathayam” – a Body of Custom Received Judicial Recognition

Marumakkathayam, as a system of inheritance, eventually received judicial recognition as a body of custom. In K. K. Kochuni v. States of Madras and Kerala AIR 1960 SC 1080 at p. 1099 Subba Rao, J. observed thus:

“Marumakkathayam law governs a large section of people inhabiting the West Coast of South India Marumakkathayam literally means descent through sisters’ children. It is a body of custom and usage which have received judicial recognition. Though Sundara Aiyar, J., in Krishnan Nair v. Damodaran Nair. ILR 38 Mad. 48: (AIR 1916 Mad. 751) (FB) suggested that ‘Malabar Law is really only a school of Hindu Law’. It has not been accepted by others.” (Quoted in Mary Cheriyan v. Bhargavi Pillai Bhasura Devi, AIR 1968 Ker 82)

Characteristics of a Marumakkathaym Law

Joint Family System was the essential feature of Marumakkathayam, as a way of life. Joint Family was referred to as “Tarwad”. Other characteristics of a Marumakkathaym system were the following-

The property belonging to the Marumakkathayam tarwad was the property of all the males and females who composed of it.
Tarwad composed of all children (both male and female) of the common ancestress; and all children of the females in the female line (that is, all children, both male and female, of the daughters of the common ancestress, and all children, both male and female, of the grand-daughters of the common ancestress and so on).
- Though tarwad consisted of a mother and her male and female children (and the sons and daughters of those female children and so on), the the children of the male members were not considered as members of the the tarwad (at least for claiming shares).
When a partition is effected in the Tarwad, the number of shares was fixed on the basis of the the number of the daughters in the female line and the sons of each female member alone – who were the members of Tarwad (and not the children of the male members).
Every member of a tarwad (members in the female line and their children – both male and female; and not the children of the male members) had equal rights in the property (Kavalappara Kottarathil Kochunni @ Mooppil Nayar v. States of Madras and Kerala, AIR 1960 SC 1080).
The aforesaid right of those members were obtained by reason of his or her birth in the tarwad.
Partition could have been effected only by the consent or concurrence of all the members of the tarwad. One or more members of a tarwad could not have claimed partition and separate possession of his or their share in the tarwad property. (Legislation made changes to it. See- M. K. Balakrishna Menon v. Assistant Controller of Estate Duty -cum –lTO, AIR 1971 SC 2392).
The affairs of the family were administered by one of the male members, usually the eldest one, called the “Karanavan”. (See: Leela Amma v. Aravindaksha Menon, 2012-2 KHC 169)

PR Sundara Aiyar on Malabar & Aliyasanthana Law, is a locus classicus on the subject of Marumakkathayam Law, as pointed out by K.M. Joseph, J., in Kunhipappada Beefathummabi v. Kunhipappada Kunhikoya, AIR 2006 Ker 345 (FB) . The learned Author would state as follows:

“The joint family in a Marumakkathayam Nayar tarwad consists of a mother and her male and female children, and the children of those female children, and so on. The issue of the male children do not belong to their tarwad but to the tarwad of their consorts. The property belonging to the tarwad is the property of all the males and females that compose it. Its affairs are administered by one of those persons, usually the eldest male, called the karnavan. The individual members are not entitled to enforce partition but a partition may be effected by common consent. The rights of the junior members are stated to be
- (1) if males, to succeed to management in their turn
- (2) to be maintained at the family house
- (3) to object to an improper alienation or administration of the family property
- (4) to see that the property is duly conserved
- (5) to bar an adoption and
- (6) to get a share at any partition that may take place.
These are what may be called effective rights. Otherwise everyone is a proprietor and has equal rights.”

Quantum of Share allotted to each Thavazhi

The quantum of share allotted to each thavazhi depended on thetotal number of members in each thavazhi; and not on the number of ‘daughters’ taken into consideration for fixing number of thavazhies. (Sreedevi Nethiar v. Peruvunni AIR 1935 Madras 71; Kunhipappada Beefathummabi v. Kunhipappada Kunhikoya, AIR 2006 Ker 345)

Legislations

As shown earlier, the Marumakkattayam laws were codified in the form of statutes. But, the erudite class considered it as an antiquated and anachronistic practice. This archaic system had paved way to as-of-right-marriages (against the wishes of the parties to the marriage) between the cousins! (It had been developed into a custom!!) It continued in spite of the codification of the Hindu Succession Act, 1956!!!

All those statutes that supported Marumakkathayam were done-away-with-in-one-shot, with effect from 01-12-1976 by the Kerala Joint Hindu Family System (Abolition) Act, 1975. The repealed Acts were the following:

(1) The Madras Marumakkathayam Act, 1932 (XXII of 1933),
(2) The Madras Aliyasanthana Act 1949 (IX of 1949),
(3) The Travancore Nayar Act, II of 1100,
(4) The Travancore Ezhava Act, III of 1100,
(5) The Nanjmad Vellala Act of 1101 (VI of 1101),
(6) The Travancore Kshatrlya Act of 1108 (VII of 1108),
(7) The Travancore Krlshnanvaka Marumakkathayee Act, VII of 1115,
(8) The Cochin Thiyya Act, VIII of 1107,
(9) The Cochin Makkathayam Thlyya Act, XVII of 1115 ,
(10) The Cochin Nayar Act, XXIX of 1113,
(11) The Cochin Marumakkathayam Act, XXXIII of 1113,
(12) The Kerala Nambudiri Act, 1958 (27 of 1958)

One of the important and progressive effects of these legislations was that it conferred on the members the right to demand partition in the tarwad property and to get their separate share allotted to them. After partition, each group of sharers got joint shares independent of other groups. If it was to an individual sharer, he/she got the share as his or her individual property free of all incidents of tarwad property. It was the converse implication of Sec. 39 Nair Act, which reads-

“39. Nature of right to tarwad property before partition–Until partition, no member of the tarwad shall be deemed to have a definite share in tarwad property liable to be seized in execution nor shall such member be deemed to have any alienable or heritable interest therein.”

Marumakkathayam System of Inheritance Among Muslims

In Kunhipappada Beefathummabi v. Kunhipappada Kunhikoya, AIR 2006 Ker 345 (FB), it is stated as under:

“The settlers in the Lakshadweep Islands including Kalpeni migrated to the said Islands from the North Malabar area, as also from South Canara. Even though embraced Islam, they continued to follow the Marumakkathayam system of inheritance. Under the same, as we have already noted, the tarawad properties were impartible. The Mappilla Marumakkattayam Act (Act XVII of 1939) was enacted in the year 1939. Now, it applies to all Muslims following the Marumakkattayam Law who are either domiciled in the State of Kerala or have property situated within the State of Kerala. Section 13 provided an individual member of a Tarawad to claim his or her share of the properties of the Tarawad over which the Tarawad had power of disposal and separate from the Tarawad. Section 14 of the said Act reads as follows:
- ‘Two or more members belonging to the same tavazhi, may claim to take their share of the properties of the tarwad over which the tarwad has power of disposal, separate from the tarwad, and enjoy the same jointly, with all the incidents of the tarwad property’.”

Tarwad and Tavazhi

In Eravipillai Parameswaran Pillai v. Mathevan Pillai Ramakrishna Pillai, AIR 1955 TC 55, a Full Bench of the Travancore Cochin High Court held that property obtained by a Nair female towards her share under an outright partition in her tarwad would be her separate property but retained the character of a tarwad property and became the property of her tavazhi on the birth of a child to her. The birth of a child destroys her absolute powers of disposal in respect of such property.

Whether a subsequently born member in a unit acquired right by birth in that unit (and thereby, began a tavazhi) was came for consideration before the Five Judge Bench of the Kerala High Court in Mary Cheriyan v. Bhargavi Pillai Bhasura Devi, AIR 1968 Ker 82.

The majority took the same view taken by Eravipillai Parameswaran Pillai v. Mathevan Pillai Ramakrishna Pillai, AIR 1955 TC 55. The substance of the view of the Majority (PT Raman Nayar, TC Raghavan, Gopalan Nambiar,JJ) in Mary Cheriyan v. Bhargavi Pillai Bhasura Devi, AIR 1968 Ker 82, was as under-

So long as the property belongs to a single-member unit, that member has an alienable and heritable interest therein, liable to be seized in execution because he or she constitutes the unit. But, the moment another member is born in that single member unit, the single member ceases to be the sole owner and the single member unit turns into a joint family.

But, the minority (Govindan Nair, J. Krishnamoorthy Iyer, J.), applying the converse implication of Sec. 39 Nair Act, 1100, took the view that if a woman got share on partition in a Marumakkathayam tarwad, her subsequent born child would not get an interest by birth. The findings of the Minority was to the following effect-

If individual partition and allotment of property separately to each member in a tarwad was possible such partition should bring about a severance of the community of rights among the members of the tarwad with the result that the property allotted to the separate share of each member was neither tarwad property (nor tavazhi property, by the birth of a new member) in the hands of the sharer.
Such separate property could not again be converted into tavazhi property by the birth of a child to a female member or even by adoption by the male member.
The intention and purpose of the enactment in conferring that right was to make the share separately allotted to the member heritable and alienable in his hands.
The decision in 1963 Ker LT 859 (AIR 1963 Ker 358) laid down the correct law – that, the share obtained by a Nair female in an outright partition in her tarwad continued to be her separate property notwithstanding the birth of a child to her after the date of the partition.

The majority view in the Five Judge Bench in Mary Cheriyan v. Bhargavi Pillai Bhasura Devi, AIR 1968 Ker 82, was followed in subsequent decisions including Remadevi v. A S R Gopalakrishnan,2008-2 KLT 757. It is held in Remadevi v. A S R Gopalakrishnan,2008-2 KLT 757 as under:

“The property obtained by a Marumakkathayee female towards her share under an outright partition in the tharavad or thavazhi will be her absolute property just like that of a male. So long as she remains single, she can alienate it just like a male member and no one could question it. But the property retains the character of tharavad or thavazhi property and becomes the property of the thavazhi on the birth of a child to her so as to destroy her absolute powers of disposal in respect of it when in the partition property was allotted to the mother and her then existing children, which is a natural tavazhy the allotment could only be taken as to that tavazhy.”

Partition by ‘per stirpes’ and ‘per capita’

Marumakathayam system, in its pristine form, stood for partition by per stripes (per group – thavazhi). This was, mainly, because, it was not open to overturn the minors, in the partition. Ormsby who was Chief Justice of Travancore, in his book on Marumakathayam Law, says at p. 2, para 4:

“Where division takes place it will usually be according to the taivaries, or number of daughters of the original ancestress. Each taivari may similarly be subdivided, should the members consent thereto and so on, until individual proprietorship is arrived at. I am not aware that this rule has ever been questioned.” (Quoted in Kunhipappada Beefathummabi v. Kunhipappada Kunhikoya, AIR 2006 Ker 345.)

However, the courts differed, in case to case, as to the principles to be adopted in partition – whether ‘per stripes’ or ‘per capita’ (as pointed out in detail in Kunhipappada Beefathummabi v. Kunhipappada Kunhikoya, AIR 2006 Ker 345).

No Presumption As To Joint Family Property

Following Srinivas Krishnarao Kango v. Narayan Devli Kango, AIR 1954 SC 379, and Surendra Kumar v. Phoolchand, AIR 1996 SC 1148, 1996 SCC (2) 491, the Supreme Court in Appasaheb Peerappa Chandgade v. Devendra Peerappa Chandgade, AIR 2007 SC 218, (2007) 1 SCC 521, held that there was no presumption as to joint family property, and who alleges the existence of joint family property must prove it.

If Sufficient Joint Family Nucleus, the Burden Would Shift

Following Mst. Rukhmabai v. Lala Laxminarayan, AIR 1960 SC 335, and Achuthan Nair v. Chinnammu Amma, AIR 1966 SC 411, it was held in held Appasaheb Peerappa Chandgade v. Devendra Peerappa Chandgade, AIR 2007 SC 218, that if one proves that there was sufficient joint family nucleus out of which the property under consideration could have been acquired, the burden would shift to the member of the family setting up the claim that it was his personal property to establish that the said property had been acquired without any assistance from the joint family property.

It is held in Achuthan Nair v. Chinnammu Amma, AIR 1966 SC 411, it is held as under:

“Under Hindu law, when a property stands in the name of a member of a joint family, it is incumbent upon those asserting that it is a joint family property to establish it. When it is proved or admitted that a family possessed sufficient nucleus with the aid of which the member might have made the acquisition, the law raises a presumption that it is a joint family property and the onus is shifted to the individual member to establish that the property was acquired by him without the aid of the said nucleus. This is a well settled proposition of law.”

Unilateral Act of One Did Not Change the Character of Joint Family Property

Following Bhagwant P. Sulakhe v. Digambar Gopal Sulakhe, AIR 1986 SC 79; 1986-1 SCC 366, it was pointed out in Appasaheb Peerappa Chandgade v. Devendra Peerappa Chandgade, AIR 2007 SC 218, that the character of the joint family property did not change with the severance of the status of the joint family and a joint family property continued to retain its joint family character so long as the joint family property was in existence and was not partitioned amongst the co-sharers; and that by a unilateral act it was not open to any member of the joint family to convert any joint family property into his personal property.

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How ‘Discovery’ under Section 27, Evidence Act, Proved?

Taken from the Blog: What is Section 27 Evidence Act – Recovery or Discovery?

Jojy George Koduvath.

Section 27 of the Evidence Act

Section 27 of the Evidence Act reads-

“27. How much of information received from accused may be proved. Provided that, when any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved.”

Sec. 27, Evidence Act substantially directs–

The ‘information‘ (or disclosure) from the accused that led to “discovery” may “be proved“.

How the substantial part be introduced in court is stated in the first portion of Sec. 27. It says-

What is to be proved by Sec. 27 is the fact deposed by the IO in court; and
it must be as to the discovery on ‘information‘ (or disclosure) from the accused.

Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, the locus-classicus decision on this subject says what are the facts to be deposed by the IO and what are to be Discovered or Proved under Sec. 27.

They are-
- (a) Place (Place of concealment of object – a tangible matter) and
- (b) Knowledge (knowledge of accused as to concealment– an intangible matter.)

“Discovery” under Sec. 27 is to be Proved (primarily) by the Deposition of IO

‘Information‘ (given by the accused) and the ‘fact‘ (of discovery) required under Sec. 27 are to be proved in a court (primarily) by the deposition of the IO, before the court–
- (a) as to the information given by the accused to him (IO) and
- (b) as to discovery of the (i) place, (ii) object and (iii) knowledge of the accused,
supported by-
- (1) disclosure statement of accused (written by IO) and
- (2) proof as to two tangible things –
  - (i) place (by mahazar prepared in presence of witnesses) and
  - (ii) object (recovery of original object or other proper evidence).

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Contract Act

Easement

Stamp Act

Will

Divorce

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

General Principles
Dedication and Vesting
Trustees and Management
Breach of Trust
- Breach of Trust and Removal of Trustees
Suits by or against Trusts
- Suits By or Against Trusts and Trustees
- Remedies Under Sec. 92 CPC
Law on Hindu Religious Endowments
- Philosophy of Idol Worship
Temples, Gurudwaras, Churches and Mosques – General
- Legal Personality of Temples, Gurudwaras, Churches and Mosques
Constitutional Principles
Ayodhya and Sabarimala Disputes
- Ayodhya Disputes: M. Siddiq case – Pragmatic Verdict
- Sabarimala Review Petitions & Reference to 9-Judge Bench
- SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
General

What is in Section 27 Evidence Act – Recovery or Discovery?

Should the ‘Object’ Necessarily be ‘Recovered‘ (from the Concealed Place) to attract Sec. 27?
Answer – No.

Saji Koduvath, Advocate, Kottayam & Jojy George Koduvath.

Abstract

1. Sec. 27 says Only as to Discovery; Not Recovery.
2. Sec. 27 – Discovery Embraces (i) Place from where the Object Produced and (ii) Knowledge of Accused.
3. No Witnesses needed for Recording Accused’s Statement u/s 27. Contra-Observation is laid down in Boby v. State of Kerala, 2023-1 Ker LT 543 (SC).

Section 27 of the Evidence Act

Section 27 of the Evidence Act reads-

“27. How much of information received from accused may be proved. Provided that, when any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved.”

Section 27 is Not Artistically Worded

The Privy Council, in Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, the ‘Best Known and Most Authoritative Decision’ in this subject, as shown below, observed that the Section 27 was not artistically worded. It is because of the hardheadedness of the following words in this Section, and they raise the following questions:

1. “Any fact is deposed to” – Who has to depose; and where?	It is by the Police Officer, Before the Court
2. What is to be deposed?	It is the fact he discovered, as disclosed by the Accused.
3. “Fact discovered” – What are they?	(i) The Place from where the Object was produced, and (ii) the knowledge of the Accused as to it.

“Fact .. Deposed“

In Sunil @ Chunnan v. State of Kerala, 2019-2 Crimes 1, after quoting Sec. 27, Evd. Act, it was observed as under:

“Therefore what is substantive evidence is the disclosure statement deposed to by the investigating officer in court and not what he had extracted in the seizure mahazar.”

“As Discovered” (in consequence of information from accused)

It is the Fact Deposed to*^* by the Police Officer before the Court. It should have been ‘discovered’ from the “Place of Concealment” mentioned below.
- *^*^{as disclosed by the accused.}

‘Fact discovered‘ embraces Place of Concealment and Knowledge of Accused

The classic Privy Council verdict, Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, made it clear, as regards the concealment of a knife, as under-

“In their Lordships’ view it is fallacious to treat the “fact discovered” within the section as equivalent to the object produced; the fact discovered embraces the place from which the object is produced and the knowledge of the accused as to this, and the information given must relate distinctly to this fact. Information as to past user, or the past history, of the object produced is not related to its discovery in the setting in which it is discovered. Information supplied by a person in custody that “I will produce a knife concealed in the roof of my house” does not lead to the discovery of a knife; knives were discovered many years ago. It leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge; and if the knife is proved to have been used in the commission of the offence, the fact discovered is very relevant. If the statement of the accused contains the words ‘with which I stabbed A’, these words are inadmissible since they do not relate to the discovery of the knife in the house of the informant.”

Pulukuri Kottaya – Locus Classicus (Best Known and Most Authoritative) Decision

In Anter Singh v. State of Rajasthan, 2004-10 SCC 657, Supreme Court of India pointed out that the scope and ambit of Section 27 of the Evidence Act were illuminatingly stated in Pulukuri Kottaya v. Emperor; and that it has become locus classicus on this subject. (See also: Amitsingh Bhikamsing Thakur v. State of Maharashtra, AIR 2007 SC 676; Ramanand@ Nandlal Bharti v. State of Uttar Pradesh, AIR 2022 SC 5273.)

Pulukuri Kotayya v. King Emperor – Analysed

Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, on analysis, states the following-

It is fallacious to treat the “fact discovered” as equivalent to the object produced.
The fact discovered embraces the place from which the object is produced _{(Note – Not ‘recovered’)} and the knowledge of the accused as to this.
The information given must relate distinctly to this fact (place from which the object is produced and the knowledge of the accused as to this).
Information as to past user, or the past history, of the object produced is not related to its discovery in the setting in which it is discovered.
Information supplied by a person in custody that “I will produce a knife concealed in the roof of my house” does not lead to the discovery of a knife; _(because)knives were discovered many years ago.
^{(Nevertheless)} it leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge;
and if the knife is proved_{(in Court)}to have been used in the commission of the offence, the fact discovered is very relevant.

‘Fact Discovered’ is the “Place to the Knowledge of the Accused”

From Pulukuri Kotayya v. King Emperor

It is clear –
- even if the knife was discovered many years ago,
- if the fact that the knife was concealed in a place (to the knowledge of the accused) is discovered,
- it is relevant and admissible under Sec. 27 Evd. Act.

How the “Discovery” under Sec. 27 Proved?

Sec. 27 substantially directs-

The ‘information‘ (or disclosure) from the accused that led to “discovery” may “be proved“.

How the substantial part be introduced in court is stated in the first portion of Sec. 27. It says-

What is to be proved by Sec. 27 is the fact deposed by the IO in court; and
it must be as to the discovery on ‘information‘ (or disclosure) from the accused.

Pulukuri Kotayya v. King Emperor, says what are the facts to be deposed by the IO and what are to be Discovered or Proved under Sec. 27.

They are-
- (a) place (Place of concealment of object – a tangible matter) and
- (b) knowledge (knowledge of accused as to concealment– an intangible matter.)

“Discovery” under Sec. 27 is to be Proved (primarily) by the Deposition of IO

‘Information‘ (given by the accused) and the ‘fact‘ (of discovery) required under Sec. 27 are to be proved in a court (primarily) by the deposition of the IO, before the court–
- (a) as to the information given by the accused to him (IO) and
- (b) as to discovery of the (i) place, (ii) object and (iii) knowledge of the accused,
supported by-
- (1) disclosure statement of accused (written by IO) and
- (2) proof as to two tangible things –
  - (i) place (by mahazar prepared in presence of witnesses) and
  - (ii) object (recovery of original object or other proper evidence).

The Object Need Not be Recovered from “Concealed–place“, under Law in India

Sec. 27 says that “any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer“. Going by the section, the following are not a necessary components to bring-in Sec. 27-

‘recovery’,
‘concealment’ and
‘information from an “accused who faces trial”.

No doubt, true, Sec. 27 is laid down as an exemption to Sec. 25 and 26, which states as to ‘confession to police’; and Sec. 27 says as to “how much of information received from accused may be proved”. Still, from the words employed in Sec. 27, it is definite that this section will be attracted even if the “person accused of“ the offence is (i) found innocent and set-free without being charge sheeted in that case and (ii) he “deposed” the “fact” while he was in custody in another case.

It must also be taken note of the fact that the leading section of Chapter II of the Evidence Act (wherein Sec. 27 falls), viz., Sec. 5, lays down as to matters on which ‘evidence may be given’. Merely because evidence under Sec. 27 is relevant, it could not be taken as ‘binding’. The probative value thereof will be a matter for the court to determine. In State of Bihar v. Radha Krishna Singh, AIR 1983 SC 684, it is observed as regards admissibility of document as under:

“Admissibility of a document is one thing and its probative value quite another—these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and weight or its probative value may be nil.”

Sec. 5 Evidence Act reads as under:

“Evidence may be given of facts in issue and relevant facts. Evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and of such other facts as are hereinafter declared to be relevant, and of no others.”

From Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, it is clear that the words,

“the fact discovered embraces the place from which the object is produced” (as used in Pulukuri Kotayya v. King)

cannot be equated, always, as-

“the fact discovered embraces the place from which the object is recovered“.

True, in most cases where Sec. 27 is attracted, the relevant place may be the “concealed-place” from which the object is recovered. Referring Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, it is seen observed in State of Himachal Pradesh v. Jeet Singh, AIR 1999 SC 1293, as under:

“It is now well settled that the discovery of fact referred to in Section 27 of the Evidence Act is not the object recovered but the fact embraces the place from which the object is recovered and the knowledge of the accused as to it.” (quoted in State of Maharashtra v. Bharat Fakira Dhiwar, AIR 2002 SC 16.)

In Anter Singh v. State of Rajasthan, 2004-10 SCC 657, it is observed as under:

“At one time it was held that the expression “fact discovered” in the section is restricted to a physical or material fact which can be perceived by the senses, and that it does not include a mental fact, now it is fairly settled that the expression “fact discovered” includes not only the physical object produced, but also the place from which it is produced and the knowledge of the accused as to this, as noted in Palukuri Kotayya’s case (supra) and in Udai Bhan v. State of Uttar Pradesh (AIR 1962 SC 1116).” (Quoted in Amitsingh Bhikamsing Thakur v. State of Maharashtra, AIR 2007 SC 676.)

The proposition that ‘the object (as such) must have been recovered from the place where the accused concealed it’ is against the law accepted in India. That is, there may be cases where the place of recovery of the object and the place relevant under Sec. 27 may be different.

It can be demonstrated by the following Illustrations–

First illustration–

An accused buried and hided certain material objects in a place.
Some how or other (say, because of the acts of certain animal) those articles were taken out and placed in a far away ‘public place’. The investigating officer ‘recovers’ it.
After arrest of the accused, thereafter, the accused reveals, to the I.O, the place the material objects were actually concealed by him.
The I.O. caused to make a scientific examination. It is proved (discovered) that the material objects were buried in the place, as ‘disclosed’ by the accused.
In such a circumstance, the fact discovered (Place and Knowledge of the accused) falls under Sec. 27 (though no material object as such, is “recovered” from that place).

Second illustration (no concealment or hiding of a fact)-

An accused pushed down a victim into water from a bridge. The dead body is recovered from some distance away, from the bank of the river. The investigating officer ‘recovers’ it.
After arrest of the accused, some time thereafter, the accused reveals, to the I.O, the place of pushing down the victim from the bridge.
The I.O. caused to make a scientific examination. It is proved (discovered) that the the accused and the victim had a scuffle at the bridge, as ‘disclosed’ by the accused.
In such a circumstance, the fact discovered (Place and Knowledge of the accused) falls under Sec. 27 (though no material object as such, is “recovered” from that place).

Third illustration (not an accused and no concealment)-

‘A person accused of an offence, in the custody of a police officer‘ reveals, to the I.O, that the shop where he sold the gold ornaments he “found in a lost/abandoned state” (actually involved in theft case); and he informed the IO that he could identify the ‘sales-man’ to whom he had ‘sold’ the ornaments.
It is proved (discovered) that he ‘sold’ the gold ornaments to the ‘sales-man’ in the said jewellery.
In such a circumstance, the fact discovered (Place and Knowledge of the accused) falls under Sec. 27 (though (i) the person was subsequently set-free from that case without framing a ‘charge’ against him and (ii) no material object as such, was “recovered”).

Pulukuri Kotayya v. King Emperor is Consistently Considered as the Authority

In State of Himachal Pradesh v. Jeet Singh, AIR 1999 SC 1293, it was pointed out that the principles in Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, was followed in-

K. Chinnaswamy Reddy v. State of Andhra Pradesh, AIR 1962 SC 1788,
Jaffar Hussain Dastagir v. State of Maharashtra, (1969)2 SCC 872,
Earabhadrappa @ Krishnappa v. State of Karnataka, (1983) 2 SCC 330,
Shamshul Kanwar v. State of U.P., (1995) 4 SCC 430,
State of Rajasthan v. Bhup Singh, (1997) 10 SCC 675.

Pulukuri Kotayya v. King Emperor, AIR 1947 PC 67, is the most read and mot valuable decision on Sec. 27, Evd. Act. It is consistently considered as the authority in this subject, as revealed from the following Apex Court decisions also-

Boby v. State of Kerala, 2023-1 Ker LT 543 (SC),
Jafarudheen v. State of Kerala, AIR 2022 SC 3627
Venkatesh v. State of Karnataka, (SC), 2022 April, 19
Kusal Topo v. State of Jharkhand,2019-13 SCC 676,
Asar Mohammed v. State of UP, AIR 2018 SC 5264,
Charandas Swami v. State of Gujrat, AIR 2017 SC 1761,
Vasanth Sampath State of Maharashtra, 2015-1 SCC 253,
C. Muniappan v. State of TN, AIR 2010 SC 3718,
Limbaji v. State of Maharashtra, AIR 2002 SC 491

Sec. 27 is an Exception to Sec. 25 and 26

Sec. 27 is an exception to the two preceding sections, Sec. 25 and 26. They are as to-

No confession made to a Police officer shall be proved as against a person accused of any offence (Sec. 25).
No confession made by any person whilst he is in the custody of a Police officer, unless it be made in the immediate presence of a Magistrate, shall be proved as against such person (Sec. 26).

Sec. 162 CrPC is also relevant here. It says as to-

No statement made by any person to a police-officer in the course of an investigation be used for any purpose at any inquiry or trial (except for contradiction under Sec. 145 Evd. Act).

If “place” already known, and not exclusively in knowledge of Accused, No Sec. 27 Recovery

It is trite law, as shown in recent decisions of our Apex Court, Subramanya v. State of Karnataka, AIR 2022 SC 5110, and Boby v. State of Kerala, 2023-1 Ker LT 543, that Sec. 27 would not be attracted if the recovery was from a place which was already known and not exclusively within the knowledge of accused.

“Any object can be ‘concealed’ in places which are open or accessible to others”

In State of Himachal Pradesh v. Jeet Singh, AIR 1999 SC 1293, it is pointed out that it may be possible to hide articles in a place ‘open or accessible to others’. It is said, “For Example, if the article is buried on the main roadside or if it is concealed beneath dry leaves lying on public places or kept hidden in a public office, the article would remain out of the visibility of others in normal circumstances.” (Quoted in- Ibrahim Musa Chauhan v. State of Maharashtra, 2013-13 SCC 689; Lochan Shrivas v. State of Chhattisgarh, AIR 2022 SC 252.)

Credibility of the Investigating Officer, Important

But, in several cases it is emphasised that the credibility of the evidence of the investigating officer was really important (See- Mohd. Arif @ Ashfaq v. State (NCT) of Delhi, (2011) 13 SCC 621, Himachal Pradesh Administration v. Om Prakash, AIR 1972 SC 975.)

Failure to Record Information of the Accused, Not Fatal

It was pointed out in Suresh Chandra Bahri v. State of Bihar, AIR 1994 SC 2420, that failure to record the information given by the accused and failure to examine public witnesses, are not fatal to the prosecution.

Exact Statement of the Accused must be deposed by the Police Officer

Courts in India insists (unduly?) that the exact disclosure statement of the accused should be stated by the police officer, in the “Recovery Mahazar” and before the court. In Subramanya v. State of Karnataka, AIR 2022 SC 5110, it is observed as under:

“83. The first and the basic infirmity in the evidence of all the aforesaid prosecution witnesses is that none of them have deposed the exact statement said to have been made by the appellant herein which ultimately led to the discovery of a fact relevant under Section 27 of the Evidence Act.

Disclosure Statement under Sec. 27 Need Not be in Presence of Witnesses

In Praveen Kumar v. State of Karnataka, (2003) 12 SCC 199, our Apex Court held that Section 27 does not lay down that the statement made to a Police Officer should always be in the presence of independent witnesses. It reads-

“21. Section 27 does not lay down that the statement made to a Police Officer should always be in the presence of independent witnesses. Normally in cases where the evidence led by the prosecution as to a fact depends solely on the Police witnesses, the courts seek corroboration as a matter of caution and not as a matter of rule. Thus it is only a rule of prudence which makes the court to seek corroboration from independent source, in such cases while assessing the evidence of Police. But in cases where the court is satisfied that the evidence of the Police can be independently relied upon then in such cases there is no prohibition in law that the same cannot be accepted without independent corroboration. In the instant case nothing is brought on record to show why evidence of PW-33 I.O. should be disbelieved in regard to the statement made by the accused as per Ex. P-35. Therefore, the argument that statement of the appellant as per Ex.P-35 should be rejected because the same is not made in the presence of independent witness has to be rejected.”
Also see- State of Himachal Pradesh v. Jeet Singh: AIR 1999 SC 1293.

In Nisar Khan @ Guddu v. State of Uttaranchal, (2006) 9 SCC 386, it was held that the discovery statement and the recovery memo need not bear the signature of the accused.

Subramanya v. State – Witnesses needed for Accused’s Information, Only Obiter

Subramanya v. State of Karnataka, AIR 2022 SC 5110, reads as under:

84. If, it is say of the investigating officer that the accused appellant while in custody on his own free will and volition made a statement that he would lead to the place where he had hidden the weapon of offence, the site of burial of the dead body, clothes etc., then the first thing that the investigating officer should have done was to call for two independent witnesses at the police station itself. Once the two independent witnesses would arrive at the police station thereafter in their presence the accused should be asked to make an appropriate statement as he may desire in regard to pointing out the place where he is said to have hidden the weapon of offence etc. When the accused while in custody makes such statement before the two independent witnesses (panch-witnesses) the exact statement or rather the exact words uttered by the accused should be incorporated in the first part of the panchnama that the investigating officer may draw in accordance with law. This first part of the panchnama for the purpose of Section 27 of the Evidence Act is always drawn at the police station in the presence of the independent witnesses so as to lend credence that a particular statement was made by the accused expressing his willingness on his own free will and volition to point out the place where the weapon of offence or any other article used in the commission of the offence had been hidden. Once the first part of the panchnama is completed thereafter the police party along with the accused and the two independent witnesses (panch witnesses) would proceed to the particular place as may be led by the accused. If from that particular place anything like the weapon of offence or blood stained clothes or any other article is discovered then that part of the entire process would form the second part of the panchnama. This is how the law expects the investigating officer to draw the discovery panchnama as contemplated under Section 27 of the Evidence Act. If we read the entire oral evidence of the investigating officer then it is clear that the same is deficient in all the aforesaid relevant aspects of the matter.” (It is quoted and followed by the Apex Court in Boby v. State of Kerala, 2023-1 Ker LT 543).
- Note: In Praveen Kumar v. State of Karnataka, (2003) 12 SCC 199, our Apex Court held that Section 27 does not lay down that the statement made to a Police Officer should always be in the presence of independent witnesses.

In any case, the observation in Subramanya v. State of Karnataka, AIR 2022 SC 5110 – ‘when the accused while in custody makes such statement before the two independent witnesses (panch-witnesses)’, is only obiter; in view of the earlier observation in the judgment, which reads as under:

“The first and the basic infirmity in the evidence of all the aforesaid prosecution witnesses is that none of them have deposed the exact statement said to have been made by the appellant herein which ultimately led to the discovery of a fact relevant under Section 27 of the Evidence Act.”

Sec. 27 is a Most Misused Provision

Sec. 27 is an effective instrumentality to prove the truth in criminal cases before the courts, though it is inappropriately said by some persons that it is the most misused provision. No doubt, the critics are undeniably wrong; for, it is not a great Indian hypocrisy in criminal-investigation. All who handle matters in Court and Police know the truth.

Law Commission of India

But, the Law Commission of India has qualified it as a ‘malady’ and recommended in its 152^nd Report (Report On Custodial Crimes), dated 26-8-1994, as under:

“If information spoken of in section 27 is not forthcoming voluntarily, the police may have recourse to procuring the same by other means. This is not to say that in every case the information is compelled to be given. But it cannot be gainsaid that the very existence of the section (in the form in which it appears at present in the Act) creates an impression or an urge to resort to means not desirable or legitimate so that the section is pressed into service in situations never intended by the legislature. We are convinced that the section needs an amendment, if not repeal, in order to completely ward off the tendency mentioned above.
In order to meet the malady two courses are open. Section 27 may be repealed in toto and that is our first reference. But if that course is not acceptable, the minimum that can be done is to revise the section so as to confine it to make admissible the fact discovered but not the information. Therefore, if the milder alternative of merely amending Section 27 (and not its total repeal) is to be adopted, we would recommend that Section-27 may be replaced by the following Section-
- ’27. Discovery of facts at the instance of the accused– When any relevant fact is deposed to as discovered in consequence of information received from a person accused of any offence, whether or not such person is in the custody of a police officer, the fact discovered may be proved, but not the information, whether it amounts to a confession or not’.”

Supreme Court of India

In Geejaganda Somaiah v. State of Karnataka, AIR 2007 SC 1355, our Supreme Court said as follows:

“As the section is alleged to be frequently misused by the police, the courts are required to be vigilant about its application. The court must ensure the credibility of evidence by police because this provision is vulnerable to abuse.”
It is quoted in-
- Jafarudheen v. State of Kerala, AIR 2022 SC 3627;
- Mukesh v. State of Delhi, (Nirbhaya Case) 2017-6 SCC 1;
- Kusal Toppo v. State of Jharkhand, (2019) 13 SCC 676.)

Conclusion

Law must be specific and accurate. Otherwise, those who enforce it may be free to handle it according to their understanding, if not speculation.

It is really disgraceful to continue Section 27 of the Evidence Act, in its present tough-and-rough form, without change, in spite of the observation of the Privy Council, in Pulukuri Kotayya v. King Emperor as early as in 1947, that it was not artistically worded; and after the resounding recommendation of the Law Commission of India that Section-27 should be repealed in toto.

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