Supreme Court: The starting point of limitation to set aside or cancel an instrument, a contract or a decree on the ground of fraud is the date of knowledge of the alleged fraud

In Md. Noorul Hoda v. Bibi Raifunnisa and Ors.   MANU/SC/1414/1996 : (1996)7SCC767 , this Court held:

...There is no dispute that Article 59 would apply to set aside the instrument, decree or contract between the inter se parties. The question is whether in case of person claiming title through the party to the decree or instrument or having knowledge of the instrument or decree or contract and seeking to avoid the decree by a specific declaration, whether Article 59 gets attracted? As stated earlier, Article 59 is a general provision. In a suit to set aside or cancel an instrument, a contract or a decree on the ground of fraud, Article 59 is attracted. The starting point of limitation is the date of knowledge of the alleged fraud. When the plaintiff seeks to establish his title to the property which cannot be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded. Section 31 of the Specific Relief Act, 1963 regulates suits for cancellation of an instrument which lays down that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled. It would thus be clear that the word `person' in Section 31 of the Specific Relief Act is wide enough to encompass a person seeking derivative title from his seller. It would, therefore, be clear that if he seeks avoidance of the instrument, decree or contract and seeks a declaration to have the decrees set aside or cancelled he is necessarily bound to lay the suit within three years from the date when the facts entitling the plaintiff to have the decree set aside, first became known to him.

{See also Sneh Gupta v. Devi Sarup and Ors.   MANU/SC/0238/2009 : (2009)6SCC194 }

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1573 of 2009.

Decided On: 06.03.2009

Abdul Rahim and Ors. Vs. SK. Abdul Zabar and Ors.

Hon'ble Judges/Coram:

S.B. Sinha, A.K. Ganguly and R.M. Lodha, JJ.

Author: S.B. Sinha, J.

Citation:  MANU/SC/0379/2009.AIR 2010 SC 211.

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Supreme Court: Under which circumstances limitation for setting aside sale deed will not commence inspite of its registration?

 We examine the plea of limitation raised by the Respondents. The Respondents' case is that the suit was filed on 11.05.2011, and in effect, the suit seeks to set aside the sale deed dated 16.04.2008 (Ex. A-5). The suit was filed beyond the limitation period and should have been dismissed. Limitation is a question of law and fact. The period of limitation and the time from which the period begins to run, depend on the Article in the Schedule appended to the Limitation Act of 1963. The case falls under "Part III - Suits Relating to Declarations". Article 58 reads thus:

{Para 15}

15.1. The words "when the right to sue first accrues" have been interpreted and held by this Court in Smt. Neelam Kumari and Anr. v. U.P. Financial Corporation MANU/UC/0123/2008 : AIR 2009 Utt 5. The starting point for the limitation in the case of setting aside sale deeds has two limbs: the date of execution and the date of knowledge. There is no difficulty in applying the period of limitation expiring three years from the date of execution, provided that the Appellant had knowledge of Ex. A-5 on the date of registration and the right to sue first accrued. The Respondents, in the circumstances of the case, failed to establish the Appellant's knowledge of the execution of Ex. A-5. In the final analysis, Ex. A-5 is held as without authority and void. The applicability of limitation has a different perspective. So, the starting point is when the right to sue first accrued to the Appellant. The admitted case of the Respondents is that the Appellant is a US citizen and she stayed abroad. Therefore, unless it is clearly established as a fact that the Appellant had knowledge of Ex. A-5, it cannot be inferred that the Appellant had contemporaneous knowledge of Ex. A-5 and the limitation started running from the date of execution of Ex. A-5. 

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6495 of 2023

Decided On: 09.07.2024

Thankamma George Vs. Lilly Thomas and Ors.

Hon'ble Judges/Coram:

C.T. Ravikumar and S.V. Bhatti, JJ.

Author: S.V. Bhatti, J.

Citation: MANU/SC/0582/2024,2024 INSC 494.

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