1. Suit for possession and declaration of title — dispute over validity of prior sale deed alleged to be a sham transaction without consideration. (Para 1 , 2 )
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1991 Supreme(SC) 112
SUPREME COURT OF INDIA
B.C.Ray : M.Fathima Beevi
Lakhan Sao
Versus
Dharamu Chaudhary
Case No. : 1440 of 1986
Date of Decision : 2/20/91
Advocates Appeared: Bardiyar A.N. : Dwivedi Ranjan : Goburdhan D. : Goburdhan D.N. : Sharma R.S.
Advocates:
A.N.Bardiyar, D.GOVERDHAN CHARY, D.N.GOVARDHAN, R.S.Sharma, Ranjan Dwivedi
A.N.Bardiyar, D.GOVERDHAN CHARY, D.N.GOVARDHAN, R.S.Sharma, Ranjan Dwivedi
In suits challenging a prior deed as a sham, the initial burden of proof lies with the plaintiff. However, once both parties lead evidence, the court must evaluate all available materials to reach a decision, regardless of the initial onus of proof.
Headnote:(A) Civil Procedure Code, 1908 - Section 100 - Burden of proof in suits for title - When a plaintiff assails a prior deed executed by their vendor as a sham transaction or 'farzi kebala' unsupported by consideration, the initial burden lies on the plaintiff to establish such facts. (Para 4)
(B) Evidence - Appreciation of evidence - Once both parties have tendered evidence on a particular issue, the court is entitled to consider the entire evidence on record to arrive at a finding. The question of the initial burden of proof becomes less critical at the final stage of the case, as the court must decide based on all available materials. A party who leads evidence cannot subsequently request the court to ignore that evidence simply because the initial onus was on the opposing party. (Paras 5, 6)
Facts of the case:
A suit for possession and declaration of title was instituted based on a sale deed. The plaintiff challenged a prior sale deed executed by the vendor in favor of a relative, alleging it was a sham transaction without consideration, intended to shield the property from creditors. The prior deed was allegedly cancelled before the property was transferred to the plaintiff. The trial court and the first appellate court decreed the suit in favor of the plaintiff. After a remand by the High Court to address the burden of proof, the lower appellate court upheld the plaintiff's title, finding the prior deed to be a sham. A second appeal was dismissed in limine by the High Court.
Findings of Court:
The court found that the prior deed was a sham based on several factors: the vendor remained in possession after execution, the vendor purchased the stamp paper, the vendee did not participate in the document's preparation, and there was no satisfactory evidence of payment of consideration. The motive to protect the property from creditors was also established.
Issues: Whether the lower appellate court erred in its approach to the burden of proof by considering the defendant's evidence to determine if the prior deed was a sham, and whether the High Court failed to exercise jurisdiction under Section 100 of the Civil Procedure Code by dismissing the second appeal in limine.
Ratio Decidendi: While the initial onus to prove a deed is a sham lies with the plaintiff, the court is justified in examining all evidence provided by both parties to determine the truth. Once the defendant leads evidence to counter the claim, that evidence becomes part of the record and must be appreciated by the court. The findings of fact based on a comprehensive analysis of all evidence are not vitiated by the initial allocation of the burden of proof.
Result: Appeal dismissed.
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2. Whether the burden of proof to establish a sale deed as a sham transaction remained solely on the plaintiff or shifted upon the defendant's evidence. (Para 3 )
3. The court found the prior deed was a sham based on custody of the document, lack of consideration, motive to shield property, and continued possession by vendor. (Para 4 , 5 )
4. When both parties tender evidence, the court must consider all materials to reach a decision, regardless of the initial burden of proof. (Para 6 )
5. Appeal dismissed; findings of the lower court upholding the plaintiff's title are affirmed. (Para 7 )
6. Who bears the initial burden of proof to establish that a sale deed is a sham or farzi kebala?
In a suit based on title, the burden is on the plaintiff to prove their title. If the plaintiff assails a prior deed executed by their vendor, they must establish that the deed was a sham transaction unsupported by consideration. (Para 4 )
7. How does the court treat the burden of proof after both parties have tendered evidence?
Once both parties have tendered evidence, the court must consider all materials on record to reach a decision. The defendant cannot lead evidence and subsequently argue that the court should not act upon it. (Para 5 , 6 )
8. What evidentiary factors are relevant in determining whether a sale deed is a sham transaction?
Relevant factors include the relationship between the parties, custody of the document, evidence regarding the passing of consideration, the motive for execution, and the actual possession of the property. (Para 4 )
JUDGMENT
M.S.FATHIMA BEEVI, J.
(1) THE plaintiff-respondent instituted the suit for possession of the land in Khata No. 19 in village Gauripur in 1968 claiming title under Ex. 2 sale deed dated 10/02/1964 executed in his favour by Mst. Tetri, the widow of Chhathu Sah, the original owner. Mst. Tetri had earlier executed Ex. 2-A sale deed on 14/02/1959 in favour of her brothers son Lakhan Sao for a consideration of Rs. 600.00. She cancelled this deed on 31/07/1962 before transferring the property in favour of the respondent. By proceeding dated July 11, 1963 she obtained mutation in her name and paid rent on 18/07/1963. The dispute, however, arose over possession of the land between the respondent and Lakhan Sao that led to proceedings under S. 145, Criminal Procedure Code. By the order dated 4/03/1966, Lakhan Sao and his brother Gulab Sao the appellants herein were put in possession. The present suit was thereafter instituted by the respondent for declaration of his title and possession.
(2) THE respondent alleged that the deed of 1959 in favour of Lakhan Sao was a farzi kebala executed without consideration and was not operative and the respondent had acquired valid title under the transfer in his favour. The suit was resisted denying plaintiffs title and asserting that the title and possession passed under the deed of 1959. The trial court decreed the suit and the decree was confirmed in appeal. The High court set aside the decree and remanded the case to the first appellate court pointing out that the burden to prove that the document of 1959 9 was farzi in character and remained inoperative clearly lay on the plaintiff and the finding of the first appellate court was vitiated by erroneous conception of law. After the remand, the appeal was disposed of by the Additional District Judge by judgement dated 31/01/1983 upholding the plaintiffs title and confirming the decree of the trial court. The second appeal filed against that judgment was dismissed in limine by the High court on 30/11/1985. This appeal by special leave is directed against that judgment of the High court.
(3) SHRI Ranjan Dwivedi, learned counsel for the appellants, maintained that the first appellate court committed the same error as was pointed out by the High court earlier in disposing of the appeal and the error thus committed has given rise to a substantial question of law and the High court failed to exercise the jurisdiction under S. 100, Civil Procedure Code, in dismissing the appeal in limine. The original defendant died and his legal representatives are the appellants before this court. It was submitted that the Additional District Judge had approached the question as to whether the impugned deed of 1959 is a sham and inoperative transaction by casting the burden on the defendant, in spite of the specific direction in the order of remand. No fresh evidence had been tendered by the plaintiff to discharge the burden of proving that no consideration passed under the document and that the document was inoperative. The court proceeded to examine the evidence tendered by the defendant to arrive at the conclusion and has found fault with the defendant for not proving that consideration passed and the transaction has come into operation. This approach, according to the learned counsel, has vitiated the finding and resulted in miscarriage of justice. The submission is that the lower appellate court has discussed the evidence tendered by the defendant and rejected the same. The respondents learned counsel pointed out that the lower appellate court had properly appreciated the evidence applying the correct law as to the burden of proof. The findings recorded are on the appreciation of the facts and evidence of the case and no question of law did arise and therefore the second appeal has been rightly dismissed.
(4) IN the suit based on title the burden was undoubtedly on the , plaintiff to prove such title. When the plaintif
