Summary
A landowner agreed on 04.04.1993 to sell agricultural land to the appellant for Rs. 1,15,000; meanwhile his wife obtained an uncontested decree on 01.02.1995 declaring the land hers under an unproduced family settlement, never registered or mutated. He then executed a registered sale deed to the appellant on 19.04.1996 for the full price; the appellant was mutated in May 1996 and has cultivated the land since. The wife sued in 2001 to cancel the deed and for possession; the trial court decreed the suit, the first appellate court dismissed it on merits and limitation, and the High Court in second appeal restored the decree. The Supreme Court allowed the purchaser's appeal: the substantive relief was cancellation, governed by three years from knowledge, which the consequential prayer for possession could not extend; the decree was collusive and the appellant a bona fide purchaser.
Issues
- Whether a composite suit for cancellation of a registered sale deed and for recovery of possession is governed by the three-year limitation applicable to the substantive relief of cancellation or by the twelve-year period for possession.
- Whether a collusive declaratory decree obtained by the vendor's wife, never registered or mutated, could defeat a bona fide purchaser under a prior agreement to sell who paid the full consideration and was put in possession, and whether the High Court could interfere in second appeal with the first appellate court's findings.
Provisions considered
- Article 59 (cancellation of instrument — three years from knowledge) as against Article 65 (possession — twelve years), Limitation Act, 1963Where a composite suit seeks cancellation of a sale deed and possession, limitation is reckoned on the substantive relief of cancellation, three years from knowledge of the deed; possession is a consequential prayer. The purchaser was mutated in 1996 and in admitted possession since, so the suit filed in 2001 was barred. (¶ 6)
- Section 100 (second appeal), Code of Civil Procedure, 1908The High Court, in its limited second-appellate jurisdiction, erred in setting aside the first appellate court's detailed and reasoned judgment without considering limitation, the collusive nature of the earlier decree or the appellant's status as a bona fide purchaser. (¶¶ 3.3, 6, 7)
Held
- In a composite suit for cancellation of a sale deed and recovery of possession, the limitation period is determined by the substantive relief of cancellation — three years from the date of knowledge of the deed — and not by the consequential relief of possession; the plaintiff, whose husband's vendee was mutated in the revenue records in 1996 and in open possession and cultivation thereafter, had to sue within three years of 1996, so the suit of 2001 was clearly barred and the trial court ought to have dismissed it. (¶ 6)
- The declaratory decree of 01.02.1995 was collusive: it was obtained by the wife against her husband on an alleged family settlement never produced, admitted by him without contest after he had already agreed to sell the land and extended time for the sale deed, and was neither registered nor mutated; he then executed the registered sale deed and pocketed the full consideration without disclosing it, and did not contest the present suit, the heirs of both spouses being represented by the same counsel. The appellant was a bona fide purchaser who had paid Rs. 40,000 earnest money and the balance, and the High Court failed to consider any of these aspects which the first appellate court had. (¶¶ 6, 7)
Result
Appeal allowed; the Punjab and Haryana High Court's judgment of 29.09.2016 in R.S.A. No. 4594 of 2009 quashed; the first appellate court's judgment of 31.07.2009 restored and the plaintiff's suit (Civil Suit No. 419/2007) for cancellation of the sale deed dated 19.04.1996 and possession dismissed. No order as to costs.