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PETITIONER: NINGAWWA

       Vs.

RESPONDENT: BYRAPPA & 3 ORS.

DATE OF JUDGMENT: 17/01/1968

BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. SHAH, J.C.

CITATION:  1968 AIR  956            1968 SCR  (2) 797  CITATOR INFO :  F          1990 SC 540  (6)  F          1990 SC1173  (4,6,7)

ACT: 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 Iimitation.

HEADNOTE: 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

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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. 224. applied.

JUDGMENT: 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 appellant. 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,  1938. 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 usufructually 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

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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 plots nos. 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

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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 duced by fraud does not make the contract void or prevent the property from passing, but merely gives the party defrauded a thoght 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 for ever.  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

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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  cormmitted 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.

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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

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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 be 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  defendantrespondents  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. Appeal allowed. 805