Untwisting Justice - Need of the hour

Exploring gaps and possibilities in our justice system

Equity aids the vigilant, not those who slumber on their rights. This principle of law has been a life jacket to many land grabbers and the like, who would’ve otherwise been subject to eviction.

The legal maxim, “ignorance of law is no excuse”, dictates all be deemed aware of various enactments, in the thousands, especially the statute of limitation, which prescribes time limits for instituting suits, as also countless judgments.

Article 56 of the Limitation Act, 1963, stipulates three years limitation for instituting suits to declare forgery of an instrument issued or registered, which period begins to run from when the issue or registration becomes known to the plaintiff. Article 58 of the Limitation Act, 1963, stipulates three years limitation for instituting suits to obtain any declaration, which period begins to run from when the right to sue first accrues. As per Article 59 of the Limitation Act, 1963, in the case of suits to cancel or set aside an instrument or decree or for the rescission of a contract, the limitation is also three years, which period begins to run when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first becomes known to him.

Section 17 of the Registration Act, 1908 sets out documents required to be registered which among others includes instruments of gift of immovable property and non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property. Section 49 of the Registration Act, 1908, deals with the effect of non-registration of documents required to be registered, and provides that no document required to be registered shall— (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless registered.

In the case of Smt. Dilboo (Dead) by Lrs. & Ors. vs. Smt. Dhanraji (Dead) & Ors. (“Dilboo”), the Supreme Court emphasized the ratio: “Whenever a document is registered the date of registration becomes the date of deemed knowledge.” The suit was for redemption of mortgage of land created by the plaintiffs’ predecessors, in which the mortgagee created interest in excess of rights vested in him by sale deed. The suit was filed without challenging the sale deed. The Supreme Court set aside the judgment of the Appellate Court and upheld the judgment of the Trial Court dismissing the suit as barred by limitation, with the observations: “Thus a Suit for redemption of mortgage could be filed within 60 years. But if the mortgagee had created an interest in excess of the right enjoyed by him then to recover possession against the third party the Suit had to be filed within 12 years of the transfer becoming known to the plaintiff. The rational in cutting down the period of 60 years to 12 years is clear. The 60 years period is granted as a mortgagee always remains a mortgagee and thus the rights remain the same. However when an interest in excess of the interest of the mortgagee is created then the third party is not claiming under the mortgagee. The position of such a person could not be worse than that of a rank trespasser who was in open and hostile possession. As the title of the rank trespasser would get perfected by adverse possession on expiry of 12 years so also the title of such transferee would get perfected after 12 years. The period of 12 years has to run from the date of knowledge by the plaintiff of such transfer. It is always for the party who files the Suit to show that the Suit is within time. Thus in cases where the suit is filed beyond the period of 12 years, the plaintiff would have to aver and then prove that the Suit is within 12 years of his/her knowledge. In the absence of any averment or proof, to show that the suit is within time, it is the plaintiff who would fall. Whenever a document is registered the date of registration becomes the date of deemed knowledge. In other cases where a fact could be discovered by due diligence then deemed knowledge would be attributed to the plaintiff because a party cannot be allowed to extend period of limitation by merely claiming that he had no knowledge.”

Deemed knowledge of registration, is certainly reasonable when extended to or expected of parties signatory to an instrument, or even their heirs or associates. This legal principle is espoused in section 3 of the Transfer of Property Act, 1882, which is an interpretation clause explaining different terms used in the said Act, where the expression “a person is said to have notice” is explained as under.

“A person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it.

Explanation I− Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub−district, or where the registered instrument has been registered under sub−section (2) of section 30 of the Indian Registration Act, 1908, from the earliest date on which any memorandum of such registered instrument has been filed by any Sub−Registrar within whose sub−district any part of the property which is being

acquired, or of the property wherein a share or interest is being acquired, is situated:

Provided that − (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908, and the rules made thereunder. (2) the instrument [or memorandum] has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act.

Explanation II− Any person acquiring any immoveable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.

Explanation III− A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.” (emphasis supplied)"

There ought not to be two interpretations of an interpretation clause, written in clear terms.

Once the legal presumption of deemed knowledge, is attached perfunctorily to strangers or parties not privy to a registered instrument, an otherwise salutary principle appears nebulous, opening avenues to misapplication, misinterpretation and misuse.

In the case of Becharbhai Zaverbhai Patel & Anr. vs. Jashbhai Shivabhai Patel & Ors. (“Becharbhai”), the Gujarat High Court, in Civil Revision Application set aside an order passed by the Additional Senior Civil Judge, Vadodara dismissing application in Regular Civil Suit preferred by defendants, for rejection of plaint under Order VII Rule 11(d) of the Civil Procedure Code, 1908 on the ground that the suit was ex facie barred by limitation. The suit instituted by the plaintiffs in 2010 sought declaration that sale deed registered in 1975 was null and void and ancillary reliefs. The plaintiffs claimed that the subject land which stood in their fathers’ name, which was illegally mutated in the revenue record to the name of the father of the first and second defendants while he was Sarpanch, which upon his death was mutated in the name of the first defendant. The first defendant sold the subject land by registered sale deed to the third and fourth defendants in 1975. The defendants application for rejection of plaint under Order VII Rule 11(d) of the Civil Procedure Code, 1908, was founded upon the judgment in the case of Dilboo (supra) and the proposition that since the sale deed was registered on 1975 and mutation entries made in the revenue record on the basis thereof, the plaintiffs were deemed to have knowledge about the transaction and the suit was clearly barred by limitation. The Gujarat High Court upended and quashed the order passed by the Additional Senior Civil Judge, Vadodara misreading the judgment in the case of Dilboo (supra) and held: “Thus when the sale deed dated 25.8.1975 was registered in the year 1975 itself and even the mutation entry was made in favour of defendant nos.3 and 4 on the basis of the registered sale deed immediately thereafter the plaintiff is deemed to have the knowledge of the said transaction and by making such vague averments in the plaint that earlier he had no knowledge and he came to know about the transaction only in the 2010, by such clever drafting the plaintiff cannot be permitted to bring the suit within the period of limitation, which otherwise is barred by law of limitation as the suit challenging the registered sale deed dated 25.8.1975 has been filed after a period of 35 years.”, ordered the plaint to be rejected as barred by law of limitation.”

In the case of Raman Mahindra & Ors. vs. Adarsh Bala Sud @ Adarsh Kumari & Ors., before the Delhi High Court, an application was preferred by defendants under Order VII Rule 11 of the Code of Civil Procedure, 1908 for rejection of the plaint on ground of limitation in a suit instituted in 2013 for partition and declaration that a Will of 2001 was not binding. The defendants sought to extend the principle of deemed knowledge in respect of registered Sale Deeds set out in the case of Dilboo (supra) to registered Wills. The Delhi High Court dismissed the application, holding the judgment in the case of Dilboo inapplicable, as deemed knowledge which flows from mandatorily registerable documents cannot be attributed to cases of registered Wills. The Delhi High Court while observing that a Will is not mandatorily registerable and not a public document open for public inspection, held: “…in cases of challenge to the existence of the Wills, the actual date of knowledge of existence of Will or date of receipt of such Will, would be the starting point of limitation. Also at this stage, the question of limitation has to be read in the context of facts pleaded in the plaint with respect to knowledge of the Will in dispute.”

The Supreme Court in the case of Chhotanben & Anr. vs. Kiritbhai Jalkrushnabhai Thakkar & Ors. (“Chhotanben”), was seized of an Appeal against judgment of the Gujarat High Court, which reversed an order of the Trial Court rejecting application by the defendant no.5 under Order VII Rule 11(d) of the Code of Civil Procedure, 1908. The suit was filed for declaration and permanent injunction, on the assertion that the plaintiffs and original defendant nos.1 and 2 were in joint ownership and possession of ancestral property inherited from their father, with their names recorded in the record of rights, and that the defendant nos.1 and 2 surreptitiously transferred/ sold the subject land including the plaintiffs half share to defendant nos.4 to 6 forging their signatures on the registered sale deed in 1996. The plaintiffs learnt of the fraudulent sale from community members in 2012, and upon making enquiries with concerned authorities. The application filed by the defendant no.5 under Order VII Rule 11(d) for rejection of plaint on ground that the suit filed 17 limitation, was rejected by the Trial Court holding that since the factum of suit being barred by limitation was a triable issue and the pleadings in the plaint do not bear out the same. The defendant no.5 carried the matter before the High Court by way of Civil Revision Application which allowed the application and reversed the decision of the Trial Court on the finding that the suit was barred by limitation. The Supreme Court while reversing the view of the High Court and restoring the order of the Trial Court rejecting the application under Order VII Rule 11, held thus: “After having cogitated over the averments in the plaint and the reasons recorded by the Trial Court as well as the High Court, we have no manner of doubt that the High Court committed manifest error in reversing the view taken by the Trial Court that the factum of suit being barred by limitation, was a triable issue in the fact situation of the present case. We say so because the appellants (plaintiffs) have asserted that until 2013 they had no knowledge whatsoever about the execution of the registered sale deed concerning their ancestral property. Further, they have denied the thumb impressions on the registered sale deed as belonging to them and have alleged forgery and impersonation. In the context of totality of averments in the plaint and the reliefs claimed, which of the Articles from amongst Articles 56, 58, 59, 65 or 110 or any other Article of the Limitation Act will apply to the facts of the present case, may have to be considered at the appropriate stage…

…In the present case, we find that the appellants (plaintiffs) have asserted that the suit was filed immediately after getting knowledge about the fraudulent sale deed executed by original defendant Nos.1 & 2 by keeping them in the dark about such execution and within two days from the refusal by the original defendant Nos.1 & 2 to refrain from obstructing the peaceful enjoyment of use and possession of the ancestral property of the appellants. We affirm the view taken by the Trial Court that the issue regarding the suit being barred by limitation in the facts of the present case, is a triable issue and for which reason the plaint cannot be rejected at the threshold in exercise of the power under Order VII Rule 11(d).”

Yet another instance of misapplication of the ratio in the case of Dilboo (supra) is in the case of Arvindbhai Sakarchand Prajapati & Ors. vs. Amarsang Nathaji & Ors., before the Gujarat High Court wherein order of the Additional Civil Judge, Sanand in a regular civil suit dismissing an application for rejection of plaint on ground of limitation was under challenge. The case filed by the plaintiffs pertained to their land to which they succeeded upon the death of the father of plaintiff no.1 and appropriate entry was made in revenue records. In 1984, a revenue entry was made in favor of the defendant no.1, which was subsequently cancelled. The plaintiffs claimed the subject land which was given to the defendant nos.2 and 3 for baking bricks, was surreptitiously sold by defendant no.1 to defendant no.2 by sale deed registered in 1984 and revenue entry made subsequently. The cause of action in filing the suit, seeking setting aside of sale deed registered in 1984, arose in the year 2013, when defendant no.2 sought to take over possession of the subject land. The defendant nos.2 and 3 filed application for rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 on principal ground that sale deed being registered about 30 years ago, suit for cancellation of the same was clearly time barred and beyond limitation. The application for rejection of the plaint was rejected by the Trial Judge who observed that the defendant nos.2 and 3 had not produced anything on record to contend that the plaintiffs had any knowledge of execution of the sale deed in 1984 and that when the revenue records was first made known to the plaintiffs only in 2013, it can be said that the cause of action arose thereupon. The Gujarat High Court in Civil Revision Application, accepted the submission of the appellants (original defendant nos.2 and 3) relying on judgments in the cases of Dilboo (supra) and Becharbhai (supra), that that the sale deed was registered was deemed knowledge of such event of sale, and it cannot be said that the period of limitation was extended only because the date of knowledge shown by the plaintiffs, and set aside and quashed the order of the Additional Civil Judge, Sanand and dismissed the suit as barred by law of limitation.

Advantage of the twisted interpretation of the ratio of deemed knowledge of registration, was sought to be made in the case of Hirjibhai Jivanbhai vs. Sadhu Magniramji Kashiramji & Ors. before the Gujarat High Court in Court presided by Justice J. B. Pardiwala. The matter was a First Appeal against order of the Principal Senior Civil Judge, Surendranagar, rejecting the plaint under Order VII Rule 11(d) of the Civil Procedure Code, 1908 on ground that the suit preferred by the plaintiffs was time barred. Briefly, the plaintiffs’ case was that they were the lawful owners of an agricultural land, which they were cultivating and deriving income from, got mutated in favor of the government also arrayed as a defendant. On or about 1985, the plaintiffs’ father, an illiterate, had handed over the original title deeds to the subject land to the father of the first defendant for correcting/ updating revenue records, who by fraudulent, false and bogus sale deed registered in 1985, purchased the subject land from the plaintiffs’ father, forging his signature. Subsequently, in 2000, the subject land was sold by the first defendants’ father by registered sale deed to the second defendant, who in turn transferred the subject land to third and fourth defendants by registered sale deed in 2010. The plaintiffs claimed that they obtained knowledge of the forgery and fraudulent sale of the subject land only a few months before institution of the suit in 2011, when they were threatened by the defendants with interference and sale of the subject land. The plaintiffs sought cancellation of the various registered sale deeds. The ground of challenge taken up by the first defendant in application for rejection of plaint under Order VII Rule 11(d) of the Civil Procedure Code, 1908, was principally that the first sale deed was a registered document, and thus it is deemed to be public knowledge. Ergo, the period of limitation for institution of the suit by the plaintiffs as per Article 58 of the Limitation Act, 1963 would start from 1985. Reliance was placed by the plaintiffs on judgments in the cases of Becharbhai (supra) and Dilboo (supra). The Hon’ble Judge applying the view laid down by the Supreme Court in the case of Chhotanben (supra), held that the plaint could not have rejected on the ground that the suit is barred by the law of limitation and quashed and set aside the judgment of the Principal Senior Civil Judge, Surendranagar, simultaneously reminding the learned Civil Judge of the decision of the Supreme Court in the case of Surjit Kaur Gill vs. Adarsh Kaur Gill, which while dealing with the issue of rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 observed that the issue of limitation is always a mixed question of fact and law. The Hon’ble Judge of Gujarat High Court, appropriately and succinctly distinguished the judgment in the case of Dilboo (supra) in the following words:

“It is true that in the said case, the Supreme Court did apply the principle of deemed knowledge on a plaintiff, who claimed to be having pre−existing right when the suit land was subsequently sold. However, such observations should not be read in isolation and cannot be seen as the Court laying down a ratio that in case of every registered instrument of transfer of immovable property, the world at large would be deemed to have notice of such transaction and the period of limitation to question the legality thereof would commence from the date of registration of the instrument. In fact the Supreme Court adopted the analogy and applied the principles flowing from section 3 of the Transfer of Property Act in the facts of the case where the plaintiffs could and ought to have discovered with due diligence regarding the subsequent sale transaction. It was in this context the Supreme Court held that in the absence of any averment or proof to show that the suit is within time, the plaintiff would fail. It was further observed that when a document is registered the date of registration becomes the date of deemed knowledge and in other cases where a fact could be discovered by due diligence then deemed knowledge would be attributed to the plaintiff because a party cannot be allowed to extend the period of limitation by merely claiming that he had no knowledge. Thus, even in a case of a registered document, to any situations which are not covered under section 3 of the Transfer of Property Act, it is always open for the plaintiff to point out as to the manner and source of knowledge of the transaction and to establish that such fact could not have been discovered by due diligence and that therefore, the plaintiff cannot be attributed deemed knowledge of the offending transaction.”

The judgment in the case of Dilboo (supra) appears to be widely cited and the erroneous interpretation thereof, often canvassed before all courts in Gujarat, giving rise to a raft of conflicting judgments, adding to the fuddle. It’s given, that all judges exhibit if not possess, clarity of thought, legal knowledge and common sense, sufficient to repel confusion, misinterpretation and misapplication of settled legal principles.

Numerous instances of misapplication or misinterpretation of the settled principle of deemed knowledge of registration, and consequent miscarriage of justice, exemplify the glaring systemic failure in uniform justice dispensation. “Injustice anywhere is a threat to justice everywhere...”

With ready access to judgments of all courts—discrepant and faulty judgments, misapplication of law and settled legal principles, are easily discernible and intensify the failings of the Judicial system. The need for systemic change, adaptation to a system reliant on computer programs incorporating functional tools enhanced through Artificial Intelligence (AI), preventing or uprooting at the onset, discordant views and misapplication of the law by Judges, Judicial officers, law officers and Advocates, is more pronounced than ever.

Till then, to those asleep while robbed of their property, Justice shall continue indolently resting on slender shoulders of a few good men, hope and Lady Luck.

Jacob Kadantot

Advocate