Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(AP) 1000

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
R Raghunandan Rao, J.
D. Sivakesava Reddy, S/O Late D. Siarami Reddy - Appellant
Versus
Smt Chennamma K Bharathi, W/O K. Prabhakar Reddy - Respondent
S.A.No.611 of 2006, W.P.No.19156 of 2017 and C.C.Nos.68 of 2016, 700 of 2020 & 1648 of 2022
Decided On : 08-04-2026

Advocates Appeared:
For the Appellant : Sita Ram Chaparla
For the Respondent: Pushpa Kumari.B, K Mohan Rami Reddy

The three-year limitation period to set aside a deed under Article 59 commences from the date of discovery of the underlying fraud or true nature of the transaction. In fiduciary relationships, the burden of proving the absence of undue influence rests upon the dominant party.

Headnote:(A) Limitation Act, 1963 - Article 59 - Suit to cancel or set aside an instrument - Period of limitation - Commencement - Limitation period of three years commences when the facts entitling the plaintiff to have the instrument cancelled or set aside first become known to the plaintiff. (Paras 24, 25, 30)

(B) Indian Contract Act, 1872 - Section 16 - Undue influence - Fiduciary relationship - Father and daughter - Where a relationship is one of active confidence and dominance, the burden of proving that a transaction was not induced by undue influence lies upon the person in the position of dominance. (Paras 21, 22)

(C) Evidence - Adverse inference - Failure of a party to enter the witness box to rebut allegations of undue influence or fraud allows for drawing an adverse inference against said party. (Paras 7, 27)

Facts of the case:
The plaintiff sought cancellation of a gift deed executed in favor of her father, alleging it was obtained through undue influence and fraudulent pretext during a period where she reposed complete faith in him. The trial court decreed the suit, finding the transaction voidable due to the fiduciary relationship and dominance exercised by the father. The appellate court affirmed the decision, holding that the suit was within limitation as the cause of action accrued upon the plaintiff's discovery of the fraud and the father's change in conduct, rather than the date of document execution.

Findings of Court:
The Court held that the burden of proving the absence of undue influence rests on the dominant party, especially in fiduciary relationships. It further determined that limitation for challenging a deed under Article 59 of the Limitation Act runs from the date the plaintiff acquires knowledge of the true nature of the transaction or the fraud involved, rejecting the contention that the date of execution is the sole point of commencement.

Issues: 1. Whether the limitation period for challenging a gift deed commences from the date of execution or the date of discovery of the fraud. 2. Whether the burden of proving the absence of undue influence shifts to the beneficiary in a fiduciary relationship.

Ratio Decidendi: The Court established that under Article 59 of the Limitation Act, 1963, the limitation period of three years commences only when the plaintiff discovers the facts entitling them to relief. Additionally, in scenarios involving a fiduciary relationship where one party holds a position of dominance, the burden of proving the good faith of the transaction and absence of undue influence rests solely upon the dominant party. Failure to testify in such circumstances permits an adverse inference.

Result: Second Appeal and Writ Petition dismissed.

JUDGMENT :

R Raghunandan Rao, J.

As all these cases arise out of the same dispute and between the same parties, they are being disposed of, by way of this common order.

2. Heard Sri Sita Ram Chaparla the learned counsel appearing for the appellants in S.A.No.611 of 2006 and Sri Patanjali Pamidighantam, learned counsel appearing for the contesting respondents.

3. The parties are being referred to as they are arrayed in O.S.No.359 of 1997. The deceased 1^st defendant had married Smt. Thulasamma. Four daughters were born to this couple, namely Smt. Sarojamma, Smt. Lakshmikanthamma, Smt. Chennamma alias K. Bharathi and Smt. Girijamma. Smt. Thulasamma, the wife of the 1^st defendant and the mother of the plaintiff had passed away even before the marriages of any of the daughters had been performed. On account of the demise of Smt. Thulasamma, the property belonging to her had devolved upon the four daughters and the deceased 1^st defendant herein. The marriages of three daughters were performed in 1974. These three daughters namely Smt. Sarojamma, Smt. Lakshmikanthamma and Smt. Girijamma, before their marriage, along with the 1^st defendant herein, had gifted their shares in the property of Smt. Thulasamma to the plaintiff that is Smt. Chennamma alias K. Bharathi. These gifts were by way of registered deeds of gifts, dated 07.05.1974 & 09.08.1974. These documents were marked as Exhibits A.1 to A.3, in the suit.

4. The marriage alliance of the plaintiff was fixed in December, 1974 and the marriage was performed in the month of February, 1975. At that stage, the plaintiff had executed a registered deed of gift, dated 19.12.1974, transferring all the property, which had been gifted to her, by her three sisters and the deceased first defendant, apart from her share which had devolved upon her, on account of the demise of her mother, to the deceased first defendant. It is the contention, of the plaintiff, that the property was transferred to the 1^st defendant only for the purposes of his livelihood and with a clear understanding that the property would revert back to the plaintiff after the demise of the 1^st defendant. After the execution of Exhibit B-1 and after the marriage of the plaintiff had been performed, the 1^st defendant had contracted a 2^nd marriage. At that stage, the plaintiff is said to have confronted the 1^st defendant, on the ground that the property had been given to the 1^st defendant solely for his livelihood with the understanding that the property would be revert back to the plaintiff, while the second marriage was in violation of the said undertaking. The 1^st defendant is said to have convinced the plaintiff that her interest would not be harmed in any manner, by the second marriage, and that he would continue to safeguard the property, in her favour.

5. The defendant No.1 had continued to cultivate the suit schedule property, during his lifetime. In the course of time, children were also born to the 1^st defendant, out of his second marriage. In the year 1995, the 1^st defendant is said to have stopped paying any part of usufruct to the plaintiff. At that stage, the plaintiff, having realized that the 1^st defendant had all around misused his relationship with her to transfer the property, to his children, born from second marriage, had issued a legal notice. The 1^st defendant is said to have replied to the legal notice with false allegations. On account of these facts, the plaintiff filed O.S.No.359 of 1997 before the Principal Junior Civil Judge, Kadiri, seeking cancellation of the deed of gift, dated 19.12.1974; the delivery of suit schedule property to the plaintiff; mesne profits as well as costs of the suit. The suit was decreed by the trial court on 20.02.2004. Aggrieved by this judgment/decree, the 1^st defendant filed AS.No.21 of 2004 before the Senior Civil Judge, Kadiri. This appeal came to be dismissed on 21.11.2005. Aggrieved by the said order of dismissal, the 1^st defendant filed S.A.No.611 of 2006. During the pende

Click Here to Read the rest of this document

2026 Supreme(AP) 1000

The three-year limitation period to set aside a deed under Article 59 commences from the date of discovery of the underlying fraud or true nature of the transaction. In fiduciary relationships, the burden of proving the absence of undue influence rests upon the dominant party.

Cases Referred (2)