RAJEEV GUPTA & ORS. versus PRASHANT GARG & ORS.

Summary

A suit filed in 2003 to cancel two registered sale deeds of 1992, recover possession and restrain the purchasers was barred by Article 59 of the Limitation Act, 1963: cancellation was the primary relief, possession only ancillary, and the right to sue first accrued in June 1992 when the plaintiffs knew of the sales. The deeds were not void under Section 52 of the Transfer of Property Act since the pending suit was collusive, and the purchasers from a person mutated as owner since 1956 were protected under Section 41; the will founding the plaintiffs' title was not proved under Section 68 of the Evidence Act nor presumable under the Uttar Pradesh Section 90A; and the first appellate court could not decree possession without any declaration or cancellation. The trial court's dismissal of the suit was restored.

Issues

1. Whether the suit for cancellation of the sale deeds, recovery of possession and injunction was barred by limitation, and whether Article 59 (three years) or Article 65 (twelve years) of the Limitation Act governed it.
2. Whether the sale deeds executed during the pendency of an earlier suit and in the face of an interim injunction were void under Section 52 of the Transfer of Property Act, and whether the purchasers were protected as transferees from an ostensible owner under Section 41.
3. Whether the will on which the plaintiffs traced their title stood admitted in earlier compromised suits so as to dispense with proof under Section 68 of the Evidence Act, and whether a presumption under Section 90A (as amended in Uttar Pradesh) could be raised.
4. Whether the first appellate court could decree recovery of possession without any decree declaring the plaintiffs' title or cancelling the sale deeds.

Provisions considered

• Article 58, Limitation Act, 1963The word 'first' in 'when the right to sue first accrues', absent from Article 120 of the 1908 Act, was designedly inserted so that limitation for a declaratory suit runs from the first accrual of the right to sue; successive violations do not give fresh causes of action (Khatri Hotels; Rukhmabai; Shakti Bhog; West Coast Paper Mills). (¶¶ 17, 18, 19, 20, 30)
• Article 59, Limitation Act, 1963A suit to cancel an instrument as void or voidable must be brought within three years from when the facts entitling cancellation first became known; 'first' bears the same connotation as in Article 58. Cancellation of the registered sale deeds being the primary relief, the suit filed in 2003 on deeds known since June 1992 was barred. (¶¶ 9, 23, 31, 32, 35, 36)
• Article 65, Limitation Act, 1963The twelve-year period for possession based on title was held inapplicable: possession was only the ancillary relief, and limitation is judged by the substantive relief (Madhukar Vishwanath; L.C. Hanumanthappa; Rajpal Singh). The contrary note in the three-Judge decision in Sopanrao was observed to have been struck without considering these precedents. (¶¶ 12, 21, 22, 23, 25, 27, 28, 34)
• Section 3, Limitation Act, 1963A suit instituted after the prescribed period must be dismissed; the suit being hopelessly time-barred, its dismissal by the trial court was correct. (¶ 36)
• Section 52, Transfer of Property Act, 1882A transfer pendente lite is not void; it is merely subject to the result of the pending suit (G.T. Girish). Moreover the section does not apply to collusive suits, and the earlier suit, compromised between the plaintiffs' predecessor and the vendor after the vendor had already sold, was found collusive, so the sale deeds could not be declared void ab initio. (¶¶ 40, 41, 42)
• Section 41, Transfer of Property Act, 1882The vendor had been allowed to reside in the property, collect rent, and stand mutated in the revenue records since 1956, unchallenged until 1997; no vendee could have concluded that anyone else was the owner, so the appellants were bona fide purchasers for value entitled to the protection of Section 41. Paragraph 35 of the written statement was a sufficient pleading. (¶¶ 9, 40, 43, 44, 45)
• Section 68, Indian Evidence Act, 1872A will must be proved by calling at least one attesting witness even where the opposite party does not deny its execution (Ramesh Verma). The appellants had expressly denied the will in their written statement, so the plaintiffs bore the burden of proving it, which they did not discharge. (¶¶ 9, 46, 48, 49, 52, 64)
• Sections 90 and 90A (as amended in Uttar Pradesh), Indian Evidence Act, 1872Section 90A(1) allows a presumption of execution for a registered document or certified copy produced from proper custody, but Section 90A(2) excludes any document that is the basis of the suit or defence; the will being the basis of the plaintiffs' title, no presumption could be raised in their favour. (¶¶ 9, 50, 51)
• Section 58, Indian Evidence Act, 1872The plaintiffs' argument that the will's execution stood admitted (by non-contest in earlier suits) and so needed no proof was rejected: the plaint was vague about the will, the appellants were not parties to the earlier suits and never admitted the will, and in any event Section 68 proof remains necessary. (¶¶ 46, 47, 49, 57)
• Section 65(c), Indian Evidence Act, 1872A document on which title is based must be proved by primary evidence; secondary evidence such as a certified copy is admissible only after loss or non-availability of the original is pleaded and proved (Benga Behera; Jagmail Singh). No such foundation was laid for the certified copy of the will. (¶¶ 52, 53, 54, 55, 56)
• Section 96, Code of Civil Procedure, 1908In exercising first appellate jurisdiction the District Judge decreed recovery of possession without any decree declaring title or cancelling the deeds; with the cancellation prayer given up and the declaration amendment refused, the plaint before the appellate court was incurably defective and no relief could be granted. (¶¶ 60, 61, 65)
• Order VI Rule 17, Code of Civil Procedure, 1908The plaintiffs amended the plaint to assert that the suit was one for possession on title and that cancellation was sought only by way of abundant caution, and later sought at the appellate stage to add a prayer for declaration, which the High Court disallowed under Article 227. These manoeuvres were found to be after-thoughts aimed at overcoming the bar of limitation. (¶¶ 5, 6, 7, 10, 34, 35, 65)

Held

• Parliament's insertion of 'first' in Article 58 of the Limitation Act signifies that a declaratory suit must be filed within three years of when the right to sue first accrues; although causes of action may arise on varied occasions, limitation is computed from the first accrual and a suitor, though dominus litis, cannot pick and choose a time to approach the court. Likewise under Article 59 a suit to cancel an instrument as void or voidable must be filed within three years from when the suitor first knew of the instrument; 'first' has the same connotation in both Articles. (¶¶ 17, 18, 30, 31)
• Where the purchasers had been put in possession under registered sale deeds, a suit for declaration simpliciter would not have sufficed; the plaintiffs had to file, and did file, a composite suit for cancellation, recovery of possession and injunction. Cancellation was the primary relief and recovery of possession ancillary, so limitation is governed by the substantive relief of cancellation (Madhukar Vishwanath; L.C. Hanumanthappa; Rajpal Singh). The three-Judge decision in Sopanrao, which applied Article 65 to a suit for declaration and possession, did not consider these precedents and strikes a discordant note; the Court expressed its view in accord with the other precedents while also deciding the remaining questions. (¶¶ 21, 22, 23, 27, 28, 32, 33, 38)
• The plaintiffs had actual and constructive knowledge of the sale deeds during or soon after the earlier suit, and the purchasers moved in soon after execution; the right to sue first accrued in June 1992 when their rights were invaded. Their giving up of the cancellation prayer to project the suit as one for possession under Article 65, followed by an attempt to insert a declaration prayer at the appellate stage, was an after-thought to overcome limitation. The suit filed in 2003 was hopelessly barred and Section 3 of the Limitation Act required its dismissal. (¶¶ 34, 35, 36)
• Section 52 of the Transfer of Property Act does not ipso facto render a transfer pendente lite inoperative; it only subjects the transfer to the outcome of the pending proceedings (G.T. Girish). The earlier suit was compromised within months on terms never acted upon, the vendor compromised when he no longer had any right having already sold, the injunction order was never produced before the trial court, and there was no proof the purchasers knew of it; collusion being writ large, the case fell within the exception for collusive suits and the deeds could not be declared void ab initio. (¶¶ 41, 42)
• Even assuming the will gave the vendor no interest, he was allowed to reside in the property, collect rent from its shops and remain mutated in the revenue records from 1956 until 1997; it would have been well-nigh impossible for any vendee to conclude that anyone else owned the property. The purchasers were therefore bona fide purchasers for value entitled to the benefit of Section 41 of the Transfer of Property Act, and the plea in paragraph 35 of their written statement and ground (cc) of appeal was sufficient pleading despite no express reference to the section. (¶¶ 43, 44, 45)
• A will must be proved under Section 68 of the Evidence Act even if not disputed by the opposite party (Ramesh Verma). There was no deemed admission: the plaint gave no particulars of the will, the original was never filed, and the purchasers specifically denied its existence. The first appellate court erred in applying res judicata and admission since the purchasers were not parties to the earlier compromised suits and compromises among the family in their absence could not bind them. (¶¶ 46, 47, 48, 49, 52, 57, 64)
• No presumption under Section 90A of the Evidence Act as applicable in Uttar Pradesh could aid the plaintiffs because sub-section (2) excludes documents forming the basis of the suit, and the will was the basis of their title. A certified copy is secondary evidence admissible only on proof of loss or non-availability of the original under Section 65(c), and no such evidence was led. The plaintiffs' title therefore could not be traced to the will. (¶¶ 50, 51, 53, 54, 55, 56, 58)
• Where the plaintiff's title is under a cloud and he is not in possession, he must sue for declaration, possession and injunction (Anathula Sudhakar; Sopanrao). The first appellate court, in the face of strong opposition, acted illegally under Section 96 CPC in decreeing recovery of possession without any decree declaring the plaintiffs' rights or cancelling the registered deeds, the cancellation prayer having been given up and the declaration amendment refused with finality; the plaint before it was incurably defective. The High Court in second appeal did not apply its mind to the substantial questions of law. (¶¶ 61, 62, 63, 65, 66)

Result

Appeal allowed; the High Court's second appellate judgment and decree and the first appellate court's judgment and decree set aside; the trial court's judgment dismissing the suit restored, so that the subject suit stands dismissed; parties to bear their own costs.