Ningawwa Vs. Byrappa & Ors 
INSC 9 (17 January 1968)
17/01/1968 RAMASWAMI, V.
CITATION: 1968 AIR 956 1968 SCR (2) 797
CITATOR INFO :
F 1990 SC 540 (6) F 1990 SC1173 (4,6,7)
Indian Limitation Act (9 of 1908), Arts. 91
and 95-Suit to set aside gift deed on grounds of undue influence and fraud-
Period of limitation and starting point for Imitation.
In 1938, the appellant executed a gift deed
of four plots of land-two in village T and two in village L in favour of her
husband. At that time the appellant was young and illiterate and her husband
was in a position to dominate her will, and she believed that the document
related only to the plots in village T which were originally the property of
the husband. The properties in village L were inherited by the appellant from
her father. They were very valuable and fertile and there was no reason
whatever for her to gift them away to her husband. In 1941, the husband married
a second wife but the appellant continued to live with him amicably till he
died in 1949. Thereafter the conduct of the relatives of the second wife made
her suspicious, and on enquiry, she found that the plots in village L were also
included in the gift deed. She therefore filed a suit for setting aside the
gift deed and for possession of all the four items of property, against the
second wife and her children. The High Court, in appeal, dismissed the suit.
In appeal to this Court,
HELD : (1) The appellant's husband included
the two plots of land in village L in the gift deed by fraud and without the
appellant's knowledge. Since the fraudulent misrepresentation was with respect
to the contents and not the character of the document the transaction was not
void but only voidable. Therefore, the suit for setting aside the gift deed
would be governed by Art. 95 of the Limitation Act, 1908. Since the Article
prescribes a period of limitation of 3 years from the time when the fraud
became known to the party wronged, and the suit in the present case was filed
within a few days after the appellant came to know of the fraud, the suit with
respect to the items in village L was within time and should be decreed. [800
G; 802 A-C, E] Clough v. L. & N. W. Railway, (1871) L.R. 7 Ex. 26; Foster
v. Mackinon (1869) 4 C.P. 704, Sanni Bibi v. Siddik Hossain, A.I.R. 1919 Cal.
728 and Brindaban v. Dhurba Charan, A.I.R.
1929 Cal. 606, referred to.
(2) As regards the plots in village T, in
view of s. 16(3) of the Indian Contract Act, and s. II 1 of the Evidence Act
the gift deed must be presumed to have been obtained by the appellant's husband
by undue influence. The suit with respect to these properties would therefore
be governed by Art. 91. The period of limitation prescribed by the Article is
three years and time begins to run from the date when the plaintiff discovered
the facts entitling the plaintiff to have the instrument cancelled or set aside
and not from the date when the plaintiff escaped from the undue influence.
Since the appellant in the present case knew
at the very time of the execution of the gift deed that her husband prevailed
upon her to convey the plots in village T to him by undue. influence, her suit
was barred by limitation so far as he plots in village T are concerned. [803
A-B, D, E- G] L3 Sup. Cl/68-7 798 Someshwar Dutt v. Tirbhawan Dutt, 61 I.A.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 586 of 1965.
Appeal from the judgment and decree dated
July 29, 1960 of the Mysore High Court in Regular Appeal No. (B) 71 of 1956.
K. R. Chaudhuri, for the appellant.
Naunit Lal, for the respondent.
The Judgment of the Court was delivered by
Ramaswami, J. This appeal is brought, by certificate, from the judgment of the
Mysore High Court dated July 29, 1960 in R.A. (B) 71 of 1956, whereby the High
Court allowed the appeal of the respondents and dismissed the suit of the
In the suit which is the subject-matter of
this appeal the appellant asked for a decree for possession of the properties
mentioned in the schedule to the plaint on the ground that she was the owner of
the properties in spite of the gift deed, Ex. 45 executed by her on January 16,
According to the case of the appellant, plot
nos. 91 and 92 of Lingadahalli village were inherited by her from her father
and plot nos. 407/1 and 409/1 of Tadavalga village were originally the
properties of her husband Shiddappa.
These plots had been usufruct ally mortgaged
but they were redeemed from the funds supplied by the appellant and a
reconveyance of the two plots was taken in the name of the appellant. At about
the time Ex. 45 was executed it is alleged by the appellant that her husband
Shiddappa was dominating her will and persuaded her to execute the gift deed in
respect of plots 407/1 and 409/1 of Tadavalga village. The appellant was taken
to Bijapur by her husband on January 16, 1938 and there Ex. 45 was written and
she was made to sign it. The document was registered on January 18, 1938 at
Indi. The appellant believed that the document, Ex. 45 related to only plots nos.
407/1 and 409/1 of Tadavalga village. She was never told by her husband that
the document related either to plot no. 91 or plot no. 92 of Lingadahalli
village. Shiddappa died in about the end of December, 1949 and till then she
was amicably living with him and consequently she had no occasion to know about
the true character of Ex. 45 or about its contents. Shiddappa had taken a
second wife in the year 1941 and after the death of Shiddappa in 1949 the
relations of the second wife, respondent no. 4, began to assert their rights in
respect of the properties of the appellant. Growing suspicious of the conduct
of the respondents, the appellant made enquiries from the Karnam of the village
and found that in Ex. 45 she was purported to have made a gift of properties
799 included in plots 91 and 92 of Lingadahalli village to her husband
Shiddappa. Consequently the appellant brought the present suit for possession
of properties. Respondent no. 4 is the second wife of Shiddappa and respondents
1 to 3 are the children of Shiddappa through respondent no.. 4. They resisted
the appellant's suit and contended that the gift deed in favour of Shiddappa,
Ex. 45 was valid and that the same was executed voluntarily by the appellant
and consequently it was not liable to be set aside. The trial court came to the
conclusion that Shiddappa obtained Ex. 45 by the exercise of undue influence
over the appellant, that he had represented to her that it related only to
407/1 and 409/1 of Tadavalga village and he
had fraudulently included in the document plots nos. 91 and 92 of Lingadahalli
village. The trial court, however, dismissed the appellant's suit in respect of
plots nos. 407/1 and 409/1 on the ground that the suit was barred under Article
91 of the Limitation Act. With regard to plots 91 and 92 of Lingadahalli
village the trial court gave a decree in favour of the appellant. The
respondents took the matter in appeal to the Mysore High Court. The appellant
filed cross- objections against the decree of the trial court. By its judgment
dated July 29, 1960, the High Court allowed the appeal and dismissed the
cross-objections, thereby dismissing the suit of the appellant in its entirety.
The High Court confirmed the finding of the trial court so far as plots nos.
407/1 and 409/1 of Tadavalga village were concerned and held that the suit was
barred by limitation as it was not filed within three years of _the execution
of the deed. As regards plots nos. 91 and 92 of Lingadahalli village the High
Court held that the alleged fraud had not been established by ,he appellant.
On behalf of the appellant learned Counsel
contended, in the first place, that the High Court was not justified in
interfering with the finding of the trial court that plots nos. 91 and 92 of
Lingadahalli village were included in the gift deed by the fraud of the husband
without knowledge of the appellant. It was pointed out that the finding of the
High Court is vitiated because it has not taken into account certain important
circumstances upon which the trial court relied for reaching its finding. In
our opinion, the argument put forward on behalf of the appellant is well-
founded and must be accepted as correct. At the time of the gift deed, The
appellant was a young woman of about 24 years of age. She was illiterate and
ignorant and all her affairs were being managed by her husband who stood in a
position of active confidence towards her. The trial court found that the
appellant's husband was in a position to dominate her will. The document of
gift also appears to be grossly undervalued at Rs. 1,500 while actually the
value of the property was about Rs. 40,000 at the relevant 800 date. The trial
court has found that plots nos. 91 and 92 of Lingadahalli village were the most
valuable and fertile lands owned by the appellant before the execution of the
gift deed. It is the admitted position that not only the appellant and her
husband but her husband's two brothers and their families lived on -he income
of the two plots. There appears to be no reason whatever for the appellant to
agree to transfer the valuable lands of plots nos. 91 and 92 of Lingadahalli
village inherited by her from her father to her husband. It was suggested on
behalf of the respondents that it was the desire of the appellant that her
husband should marry a second wife and he could no,, find a bride to marry
unless he possessed sufficient properties and therefore the appellant executed
the gift deed in favour of her husband with a view to enable him to find a
bride. But it is an undisputed fact that the appellant's husband married the
4th respondent about three years after the execution of the gift deed and it is
not Possible to accept the case of the respondents that there was any
connection between the gift deed and the second marriage of Shiddappa. The High
Court has referred to the evidence of the attesting witness, Bhimarao who said
that the document was read over to the appellant before she put her thumb
impression thereon. On the basis of this evidence the High Court came to the
conclusion that the plea of fraud could not be accepted as Shiddappa would not
have allowed the document to be read over to the appellant if he intended to
perpetrate a fraud on her. But Bhimarao was not a disinterested witness because
it is admitted that he had been approached by the respondents before they filed
the Written Statement in the suit. For this reason the trial court disbelieved
the evidence of Bhimarao and no reason ha-, been given by the High Court for
taking a different view of the evidence of this witness. The other attesting
witness, Venkappa does not say that the gift deed was read over to the
appellant before her thumb impression was taken on it or that she knew of its
contents. In our opinion the Civil Judge was right in taking the view that the
appellant never agreed to convey the lands in plots nos. 91 and 92 of
Lingadahalli village and that they were included in the gift deed by the fraud
of Shiddappa without the knowledge of the appellant.
On behalf of the respondents Mr. Naunit Lal,
however, stressed the argument that the trial court was wrong in holding that
the gift deed was void on account of the perpetration of fraud. It was
submitted that it was only a voidable transaction and the suit for setting
aside the gift deed would be governed by Article 95 of the Indian Limitation
Act. In our opinion, the proposition contented for by Mr. Naunit Lal must be
accepted as correct. It is well-established that a contract or other
transaction induced or 801 ainted by fraud is not void, but only voidable at the
option of the arty defrauded. Until it is avoided, the transaction is valid, so
at third parties without notice of the fraud may in the meantime aquire rights
and interests in the matter which they may enforce against the party defrauded.
"The fact that the contract has been diced
by fraud does not make the contract void or prevent the property from passing,
but merely gives the party defrauded a thought on discovering the fraud to
elect whether he shall continue to treat the contract as binding or disaffirm
the contract and resume the property, If it can be shown that the party
defrauded has at any time after knowledge of the fraud either by express words
or by unequivocal acts affirmed the contract, his election determined forever.
The party defrauded may keep the question open so long as he does nothing to
affirm the contact. Clough v. L. & N. W. Ry.) (1). , The legal position
will be different if there is a fraudulent misrepresentation not merely as to
the contents of the document out as to its character. The authorities make a
clear distinction between fraudulent misrepresentation as to the character of
the document and fraudulent misrepresentation as to the contents Thereof.
With reference to the former, it has been
held that the Transaction is void,.while in the case of the latter, it is
merely voidable. In Foster v. Mackinon(2) the action was by the endorsee of a
bill of exchange. The defendant pleaded that he endorsed the bill on a
fraudulent representation by the acceptor that he was signing a guarantee. In
holding that such a plea was admissible, the Court observed :
"It (signature) is invalid not merely on
the ground of fraud, where fraud exists, but on the ground that the mind of the
signer did not accompany the signature; in other words, that he never intended
to sign, and therefore in contemplation of law never did sign, the contract to
which his name is appended ....
The defendant never intended to sign that
contract or any such contract. He never intended to put his name to any
instrument that then was or thereafter might become negotiable. He was
deceived, not merely as to the legal effect, but as to the ,actual contents' of
the instrument." This decision has been followed by the Indian
courts-Sanni Bibi v. Siddik Hossain(3), and Brindaban v. Dhurba Charan(4). It
is not the contention of the appellant in the present case that there was any
fraudulent misrepresentation as to the character of the gift deed but Shiddappa
fraudulently included in the gift deed (1) (1871) L.R. 7 Ex. 26, 34.
(3) A.I.R. 1919 Cal. 728.
(2) [18691 4 C.P. 704.
(4) A.I.R. 1929 Cal. 606.
802 plots 91 and 92 of Lingadahalli village
without her knowledge. We are accordingly of the opinion that the transaction
of gift was voidable and not void and the suit must be brought within the time
prescribed under Article 95 of the Limitation Act.
It was contended on behalf of the respondents
that the terminus a quo for the limitation was the date of the execution of the
gift deed and claim of the appellant was therefore barred a,, the suit was
filed more than three years after that, date. We are unable to accept this
argument as correct. Article 95 prescribe., a period of limitation of three
years from the time when the fraud becomes known to the party wronged. In the
present case, the appellant stated that she did not come to know of the fraud
committed by her husband in respect of plots 91 and 92 of Lingadahalli village
till his death. The trial court has discussed the evidence on this point and
reached the conclusion that the case of the appellant is true. The appellant
lived with her husband on affectionate terms till the time of his death. Till
then she had no reason to suspect that any fraud had been committed on her in
respect of the two plots in Lingadahalli village. It is only after his death
when his brothers and respondent no. 4's brothers removed grain from the house
against her wishes that the appellant came to know that the lands at
Lingadahalli village were included in the gift deed by fraud. The suit was
instituted by the appellant within a few days after she came to know of the
fraud. We are therefore of the opinion that the suit was brought within time
prescribed under Art.
95 of the Indian Limitation Act so far a plots
91 and 92 of Lingadahalli village are concerned.
As regards plots nos. 407/1 and 409/1 of
Tadavalga village the trial court has found that the husband of the appellant
was in a position of active confidence towards her at the time of the gift deed
and that he was in a position to dominate her will and the transaction of gift
was on the face of it unconscionable. Section 16(3) of the Indian Contract Act
says that where a person who is in a position to dominate the will of another
enters into a transaction with him which appears, on the face of it or on the
evidence adduced, to be unconscionable, the burden of proving that such
transaction was not induced by undue influence, shall lie upon the person in a
position to dominate the will of another. Section I 1 1 of the Indian Evidence
Act also states :
"Where there is a question as to the
good faith of a transaction between parties, one of whom stands to the other in
a position of active confidence, the burden of proving the good faith of the
transaction is, on the party who is in a position of active confidence."
803 The trial court found that the respondents had not adduced sufficient
evidence to rebut the presumption under these statutory provisions and reached
the finding that the gift deed was obtained by the appellant's husband by undue
influence as alleged by her. The finding of the trial court has been affirmed
by the High Court. But both the trial court and the High Court refused to grant
relief to the appellant on the ground that the suit was barred under Art.
91 of the Limitation Act so far as plots nos.
407/1 and 409/1 were concerned. On behalf of the appellant it was contended
that the lower courts were wrong in taking this view. We are, however, unable
to accept this argument as correct. Article 91 of the 'Indian Limitation Act
provides that a sun to set aside an instrument not otherwise provided for (and
no other provision of the Act applies to the circumstances of the case) shall
be subject to a three year's limitation which begins to run when the facts
entitling the plaintiff to have the instrument cancelled or set aside ,ire
Known to him. In the present case, the trial court has found, upon examination
of the evidence, that at the very time of the execution of the gift deed, Ex.
45 the appellant knew that her husband prevailed upon her to convey survey
plots nos. 407/1 and 409/1 of Tadavalga village to him by undue influence. The
finding of the trial court is based upon the admission of the a appellant
herself in the course of her evidence. In view of this finding of the trial
court it is manifest that the suit of the appellant is barred under Art. 91 of
the Limitation Act. so far as plots nos. 407/1 and 409/1 of Tadavalga village
are concerned. On behalf of the appellant Mr. K. R. Chaudhuri presented ,be
argument that the appellant continued to be under the undue influence of her
husband till the date of his death and the three year's period under Art. 91
should therefore be taken to run not when the appellant had knowledge of the
true nature of the gift deed but from the date when she escaped the influence
of her husband by whose will she was dominated. It is not possible, to accept
this argument in view of the express language of Art. 91 of the Limitation Act
which provides that the three years' period runs from the date when the plaintiff
came to know the facts entitling her to have the instrument cancelled or set
aside. This view is borne out by the decision of the Judicial Committee in
Someshwar Dutt v. Tirbhawan Dutt(1) in which it was held that the limitation of
a suit to set aside a deed of gift on the ground that it was obtained by undue
influence was governed by Art. 91 of the Indian Limitation Act, and the three
years period runs from the date when the plaintiff discovered the true nature
of the deed, and not from the date when he escaped from the influence by which
be alleged that he was dominated.
(1) 61 I.A. 224.
804 For the reasons expressed we hold that
this appeal must be allowed and the appellant must be granted a decree that
the, gift deed, Ex. 45 is not binding on her so far as plots 9".
and 92 of Lingdahalli village are concerned
and she is further entitled to recover possession of the said two plots from
the defendant respondents with mesne profits. We accordingly set aside the
decree of the High Court, restore the decree of the Civil Judge, Senior
Division, Bijapur dated January 29, 1953 and allow this appeal with costs.
V. P. S.