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To Invoke Section 17 Limitation Act, Existence & Discovery Of Fraud Have To Be Pleaded & Proved : Supreme Court

LIVELAW NEWS NETWORK
22 Nov 2020 7:45 AM GMT
To Invoke Section 17 Limitation Act, Existence & Discovery Of Fraud Have To Be Pleaded & Proved : Supreme Court
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The Supreme Court has observed that to invoke Section 17 of the Limitation Act 1963, the plaintiff has to plead and prove two ingredients - the existence and discovery of fraud.

Section 17 of the Limitation Act deals with the effect of fraud on the limitation period for instituting a suit. It says that when the suit is based on the fraud of the defendant, the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud.

Commenting about this provision in a civil appeal, a bench comprising Justices A M Khanwilkar and Dinesh Maheshwari observed :

"For invoking Section 17 of the 1963 Act, two ingredients have to be pleaded and duly proved. One is existence of a fraud and the other is discovery of such fraud".

The Supreme Court was considering the case Rattan Singh and others vs Nirmal Singh and others and Inder Pal Sing and another vs Nirmal Gill and others, which were appeals against a judgment of the Punjab and Haryana High Court whereby the High Court reversed the concurrent findings of the trial Court and the first appellate Court as per which the suit was dismissed as time-barred.

The dispute between the parties pertains to a General Power of Attorney (GPA) purported to have been executed by the plaintiff on 28.06.1990 in favour of defendant No. 1 and consequently sale deeds executed by defendant No. 1 as an attorney of the plaintiff.

The plaintiff challenged the sale deeds as fraudulently got executed by the defendant.

While considering the appeals, the Supreme Court noted that the disputed documents were registered. Hence, the Court held that the onus is on the plaintiff to prove the defects in the documents, as a registered document is presumed to be genuine as settled by the precedent Prem Singh and Ors. v. Birbal and Ors(2006) 5 SCC 353.

The Court noted that the defendants had proved the documents by examining the attesting witnesses in terms of Sections 68, 69 and 71 of the Evidence Act.

The top court further observed that the mere existence of a fiduciary relationship was not sufficient to shift the burden of proof to the defendants.

"The requirement regarding shifting of burden onto the defendants had been succinctly discussed in Anil Rishi v. Gurbaksh Singh (2006) 5 SCC 558 , wherein this Court had held that for shifting the burden of proof, it would require more than merely pleading that the relationship is a fiduciary one and it must be proved by producing tangible evidence", the SC observed.

After elaborately discussing the facts of the case, the Court held that the plaintiff failed to establish both the existence and discovery of fraud. Therefore, the benefit of Section 17 was held to be not applicable.

Hence the suit was held to be time-barred.

Also from the same judgment : Registered Document Is Presumed To Be Genuine; Onus To Prove Otherwise Is On Person Who Challenges It, Reiterates Supreme Court


Case: Rattan Singh vs.Nirmal Gill [CIVIL APPEAL NOS. 3681­3682 OF 2020]

Coram: Justices AM Khanwilkar and Dinesh Maheshwari,

Counsel: Sr. Adv T.S. Doabia, Advocates Jagjit Singh Chhabra,Subhashish Bhowmik

Click here to read/download the judgment

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