Madras HC Revives Trial Court Verdict, Declares Suit Time-Barred

A bench of Justice P.B. Balaji heard a second appeal filed under Section 100 of the Code of Civil Procedure, 1908 that challenged the first appellate court's allowance of the plaintiffs' appeal in A.S. No.92 of 2019 and raised substantial questions concerning limitation, the admissibility of unregistered sale documents and the character of possession.

The Court allowed the second appeal, set aside the judgment and decree in A.S. No.92 of 2019 and restored the decree in O.S. No.3 of 2010, holding that the plaintiffs' claim was time-barred and that unregistered documents could be considered for collateral purposes to ascertain the character of possession. The Court, in its reasoning, observed: "The first appellate Court has lost sight of the provisions available under Section 49 of the Registration Act, which permit even an unregistered sale deed to be received in evidence, provided it is for collateral purpose. I have already held that character of possession of the first defendant is clearly a collateral purpose, which falls within the ambit of Section 49 of the Registration Act and therefore, the first appellate Court fell in error in holding that since the sale deed does not qualify to be a valid transfer of property under Section 54 of the Transfer of Property Act, it cannot be received in evidence at all." The judgment further recorded that "the suit is held to be clearly barred by limitation" and therefore the relief of declaration and possession could not be granted to the plaintiffs.

Background

The dispute arose from rival claims to an extent of land originally comprising 62 cents. The plaintiffs pleaded title by family inheritance and alleged that they had placed the property with the first defendant to manage cultivation; when the first defendant purportedly mutated the revenue records and obtained patta, the plaintiffs issued a notice and filed suit for declaration and recovery of possession. The defendants relied on an agreement of sale dated 13.08.1977 and an unregistered sale deed dated 15.10.1978 (marked as Ex.B2 and Ex.B3) and produced extensive documents of mutation, mortgages and settlement deeds, asserting long and open possession and payment of taxes in their favour.

At trial the suit was dismissed, but the first appellate Court allowed the plaintiffs' appeal. The present Court examined whether the first appellate Court was right to reject Ex.B2 and Ex.B3 and whether the suit was barred by limitation under Articles 58, 59 and 65 of the Limitation Act, 1963. The Court held that although Section 54 of the Transfer Of Property Act, 1882 prescribes registration for transfers of immovable property, Section 49 of the Registration Act, 1908 permitted the reception of an unregistered sale deed in evidence for collateral purposes, and that the character of possession was such a collateral purpose. The Court analysed Section 53-A of the Transfer Of Property Act, 1882 and concluded that the plaintiffs, being witnesses to the unregistered sale deed and having been aware of the agreement and the sale, were barred from asserting rights inconsistent with that arrangement. The Court therefore found that the defendants had adduced sufficient material to show adverse acts from 1978 onwards and that the plaintiffs had not demonstrated permissive possession or exercised ownership acts to interrupt limitation.

In reaching its conclusion the Court engaged with precedents: it relied on Bondar Singh and others v. Nihal Singh and others ( "2003-4-SCC-141": 2003 CaseBase(SC) 231) to support the proposition that an unregistered sale deed may be examined for collateral purposes to determine the nature of possession; it relied on Oswal Fats and Oil Limited v. Additional Commissioner (Administration) Bareilly Division to emphasize that concealment of material facts disentitles a party from equitable relief where relevant facts were suppressed; and it relied on D.Balachandran, Prop. Of Balu Tex v. T.C.Shanmugam for the proposition that an admitted but unstamped document could be considered for collateral purposes. The Court therefore answered the substantial questions of law in favour of the appellants and allowed the second appeal, restoring the trial Court decree and directing that there shall be no order as to costs.

Case Details: Case No.: SA(MD). No.467 of 2020 Case Title: T.Tharmaraj Pandian (Died), 1.T.Lakshmi, 2. A. Sudhanthirathileepan, 3. C. Selvaraj, 4. P. Sakthivel, 5. T. Athibagavan Vs. 1. R.Ayyammal, 2. V. Lakshmi Appearances: For the Petitioner(s): Ms.T.Shiva Shree for Mr.B.Ramanathan For the Respondent(s): Mr.V.N.Arjun; Mr.N.Vallinayagam

Source: 2026 CaseBase(MAD) 250