A document vitiated by fraud is voidable, not void, and the party defrauded has the right to elect whether to treat the contract as binding or disaffirm it.

M. Madhavan Nair, J.

1. Plaintiff is the owner of the suit properties. During her minority she was under the care and protection of her uncle the 1st defendant. After she had attained majority she assigned, per Ext. III, dated 18-8-1122 M.E., 30 cents out of the 150 cents of suit item No. 1 in favour of defendants 2 to 6 who are the wife and children of the 1st defendant. Her case is that she was made to execute Ext. III on the misrepresentation that it was an acknowledgment of surrender of all her properties to her by the 1st defendant; and that she did not know of its being a deed of sale. The suit is therefore laid to set aside Ext. III, as also Ext. IV that followed the same being a deed of sale dated 29-11-1950 by defendants 2 to 6 in favour of the 7th defendant. The courts below found her allegation of having executed Ext. III as an acknowledgment of surrender of her properties by the 1st defendant true, and therefore the document vitiated by fraud. On these findings, they held Ext. III void and set aside the same as also Ext. IV. Hence this second appeal by the 7th defendant.

2. The reasoning in the judgments of the courts is not clear. If the plaintiff was made to execute Ext. III on the misrepresentation that it evidenced a surrender of her properties to her by the 1st defendant, while it really was a document of sale of her property to defendants 2 to 6, the document must necessarily be void. It would then be a case of 'mistake as to the transaction' and not a case of fraud that would make the transaction voidable only. The courts below held the document vitiated by fraud and yet void. A transaction vitiated by fraud cannot be said to be void, but only voidable at the option of the party defrauded. The plaintiff says that in spite of the professed surrender, she was not given possession of any of the properties for about three years after date of Ext. III. If she executed and registered an acknowledgment of surrender of the properties to her, she must have expected possession of the properties with her thereafter and if that did not come to be and she had no complaint for years, it can only show that her averment as to the execution of Ext. III is false. It is stated that two months before the institution of the suit the plaintiff had left her uncle, the 1st defendant, and been thereafter with her father. If she had not been given possession of her properties as was made to be acknowledged by her three years ago, she would certainly have taken steps to enforce her rights in regard thereto. She did nothing of that sort. Her case of mistake in the nature of the transaction that she entered into on 18-8-1122 cannot therefore be true.

3. Counsel for the plaintiff respondent tried to support the decree of the courts below on the ground that the impugned transaction was vitiated by undue influence. There is no averment in the plaint of any undue influence, not any reference of such a case in the judgments of the courts below. It is then evident that a case of undue influence has neither been pleaded, nor been put forth at the trial of the case in the two courts below. A case of undue influence being a question of fact, cannot be raised for the first time in second appeal, in surprise of the opposite party.

4. The concurrent finding of the courts below is that the impugned alienation under Ext. III is vitiated by fraud; but it lacks in basic facts and cannot therefore be upheld. Even if it be accepted, under S.19 of the Contract Act a document vitiated by fraud is only voidable and not void. It must then be valid till it is avoided, so that third parties who acquired rights under it without notice of the fraud cannot be prejudiced.

"The fact that the contract has been induced by fraud does not make the contract void or prevent the property passing, but merely gives the party defrauded a right, on discovering the fraud, to elect whether he shall continue to treat the contract as binding or disaffirm the contract and resum