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2025 Supreme(Online)(KAR) 4855

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
MR. JUSTICE HEMANT CHANDANGOUDAR, J
Smt. S. Anasuyamma – Appellant
Versus
Sri. S.v.babu Reddy – Respondent
CIVIL REVISION PETITION NO. 489 OF 2022 (IO)



Advocates:
Advocate Appeared:
For the Appellant :SRI. DILIP KUMAR I.S., ADVOCATE
For the Respondent: SRI. SHIVARUDRAPPA SHETKAR, ADV. FOR R1 TO R6

Limitation for filing a suit based on fraud begins from the date of knowledge of the fraud, not from the date of registration of the fraudulent document.

Headnote:(A) Limitation Act, 1963 - Article 65 - Code of Civil Procedure, 1908 - Order 7 Rule 11 - Rejection of plaint - The defendants sought rejection of the plaint filed 16 years post-execution of a sale deed, claiming it was barred by limitation. The plaintiffs alleged fraud and claimed they filed promptly upon discovering the execution. The Trial Court found no admission of knowledge by plaintiffs regarding the sale deed, thus dismissing the application for rejection. (Paras 1, 12, 14)

(B) Deemed Knowledge - The court ruled that knowledge of a registered document does not equate to knowledge of fraud unless proven. The issue of limitation is a mixed question of law and fact, requiring trial. (Paras 10, 26)

(C) Fraud - The court emphasized that limitation begins from the date of knowledge of fraud, not from the date of registration of the fraudulent document. (Paras 16, 26)

Facts of the case:
The plaintiffs claimed ownership of property inherited from their mother and alleged fraudulent conveyance by a deceased relative. They filed suit after discovering the fraudulent actions in 2018.

Findings of Court:
The Trial Court's dismissal of the rejection application was upheld, as the plaintiffs had not admitted knowledge of the sale deed execution.

Issues: Whether the plaint was ex facie barred by limitation due to deemed knowledge of the sale deed.

Ratio Decidendi: The court held that limitation begins from the date of knowledge of fraud, and the issue of limitation is a matter for trial.

Result: Civil revision petition dismissed.

ORAL ORDER

The petitioner-defendants challenge in civil revision the order dated 28.09.2022 passed by the Trial Court in O.S No. 8435/2018 wherein, their application seeking rejection of plaint filed under Order 7 Rule 11 (a) and (d) r/w Section 151 of CPC came to be rejected.

1.1. In short, the defendant-revision petitioners herein seek the rejection of a plaint instituted after lapse of 16 years from the date of execution of a registered sale deed on the grounds that the same is ex facie barred by limitation under Article 65 of the Limitation Act, 1963 , and that the plaintiffs had deemed knowledge of the same via registration of the impugned deed of sale on 30.08.2003. Conversely, the plaintiffs allege fraud and that the plaint had been promptly instituted upon the fact of execution and registration of the impugned instruments having come to their knowledge. The allegedly fraudulent execution of the impugned instruments however, have been followed by a change in the Khata of the scheduled property in favour of the defendants, respectively, as and when such impugned conveyances were executed.

2. The Respondents/ plaintiffs have filed a suit for declaration of title, and recovery of possession, and more specifically seeking to declare the following:

I. The unregistered GPA dated 10.6.1999 purportedly executed by the plaintiff no.2 in favour of one deceased Sundarram Reddy is void, non-est and to be not binding on the plaintiffs;

II. The sale deed dated 30.08.2003, registered as document no. 3103/03-04 executed by the deceased Sundarram Reddy in favour of the defendants No.1 is void, non-est and to be not binding on the plaintiffs, and also further to cancel the said sale deed.

III. The Gift deed dated. 30.10.2016 executed by Defendant no.1 in favour of Defendant no.2, registered as document no. JGN-1- 03625/16-17 is void, non-est and to be not binding on the plaintiffs, and also further to cancel the said Gift deed.

3. The Plaintiffs claim to be the owner of the suit schedule property having inherited the same upon the demise of their mother Lingamma on 16.03.1993 and claim to be in joint possession of the same ever since. The deceased propositus acquired the schedule property vide Gift Deed dated 28.01.1974, registered as Document No. 3978/1973-74, conveyed by her husband and original owner, Late Abbaiah Reddy. Thereafter, upon becoming an absolute owner, the deceased propositus had further gifted two portions within the larger gifted property, to her sisters vide two separate registered Gift Deeds dated 01.04.1974. The remainder thereof is the scheduled property herein.

4. The plaint further reveals that the plaintiffs had agreed to partition the suit schedule property at a later date amongst the plaintiffs, and further, include one Shri Sundarram Reddy as a sharer in the schedule property. Shri Sundarram Reddy is described as a cousin of the Plaintiffs No. 2, 6, and 7 and is alleged to have been in permissive possession of the scheduled property, as another property in the exclusive ownership of Shri Sundarram Reddy, was in joint possession of the plaintiffs and Shri Sundarram Reddy as one whole property. Hence, the plaintiffs contend that the plaintiffs and Shri Sundarram Reddy (d. 18.12.2015) have been in joint possession of the scheduled property ever since.

5. Thereafter, upon long passage of time, the plaintiffs contend that upon approaching the defendant No. 1 (wife of late Shri Sundarram Reddy) and requesting the latter to handover the possession of the scheduled property to the plaintiffs, the defendant No. 1 refused the same and per contra, alleged that she had been in possession of the same as a rightful and absolute owner, as a purchaser of the scheduled property vide sale deed dated 30.08.2003, registered as document No.3103/03-04, in the office of the jurisdictional Sub-Registrar, Basavangudi. The plaint further reveals that the said sale deed had been executed by the now deceased Shri Sundarram Reddy, in his purport

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