2026 Supreme(Online)(Mad) 49135

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B. Balaji, J
Mariappan – Appellant
Versus
Paulraj – Respondent
S.A(MD).No.183 of 2019|CMP.(MD).No.3979 of 2019

The burden of proving fraud concerning registered instruments rests upon the party alleging it. A principal who authorizes an agent to alienate property cannot invalidate the agent's actions without formally challenging the underlying power of attorney or the resulting deeds through appropriate legal proceedings.

Headnote:(A) Specific Relief Act, 1963 - Section 34 - Indian Evidence Act, 1872 - Sections 101 to 103 - Indian Contract Act, 1872 - Sections 188 and 203 - Code of Civil Procedure, 1908 - Order II Rule 2 - Declaration of title - Burden of proof for fraud - Registered documents. Where parties enter into registered documents of mortgage, sale, and power of attorney, the burden of proving fraud to invalidate such documents rests entirely on the party asserting it. Failure to challenge such documents or seek specific relief against an agent for breach of duty precludes a party from later asserting the instruments are sham, nominal, or without consideration. (Paras 3, 23, 31, 33)

(B) Appellate Jurisdiction - Scope and ambit - Appellate Courts are not permitted to overturn a trial court's findings based on conjectures, misinterpretation of documentary terms, or incorrect application of the burden of proof. A decision must be grounded in the evidence on record and the specific pleadings, and may not be interfered with in the absence of perversity or clear legal error. (Paras 25, 33, 40)

Facts of the case:
The appellants filed a suit for declaration of title and recovery of possession based on a series of registered documents, including a mortgage deed, a sale deed, and a power of attorney. The defendants contended that the plaintiffs were money lenders who exploited the defendants' illiteracy to procure the documents without consideration. The trial court decreed the suit, but the first appellate court reversed the decision, citing suspicion regarding the simultaneous execution of multiple documents and the lack of proof that the agent transferred the balance consideration to the principal.

Findings of Court:
The Court held that the first appellate court misconstrued the terms of the power of attorney, which explicitly authorized the sale of the property. The Court concluded that in the absence of a timely challenge to the sale deed or a counter-claim against the agent for breach of fiduciary duty, the defense of fraud and nominality was unsustainable. Furthermore, the plea of illiteracy failed because the defendants involved themselves in multiple prior legal proceedings demonstrating awareness of their rights.

Issues: Whether the appellate court erred in reversing the trial court's decree regarding the validity of registered sale deeds executed by a power of attorney and whether the defendants discharged the burden of proving the alleged fraud.

Ratio Decidendi: A principal who confers clear authority on an agent to alienate property cannot later repudiate that act as void without formally challenging the underlying authority or the deeds through legal channels. The burden of proving fraud regarding registered instruments remains on the party claiming it, and such claims cannot be sustained through mere assertions of illiteracy or lack of consideration without substantial evidence.

Result: Appeal allowed.