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        Companies Law

        2022 (7) TMI 1462 - HC - Companies Law

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        Limitation for challenging conveyance deeds on alleged fraud turns on Article 59, not possession claims, where cancellation is required. A suit challenging conveyance deeds on alleged fraud and seeking possession was treated as barred by limitation because the plaint and annexed documents ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Limitation for challenging conveyance deeds on alleged fraud turns on Article 59, not possession claims, where cancellation is required.

                          A suit challenging conveyance deeds on alleged fraud and seeking possession was treated as barred by limitation because the plaint and annexed documents showed execution of the deeds, acceptance of consideration, and knowledge of the transactions by 2016, or at the latest 2017. The pleaded fraud was treated as fraud as to contents, not as to the character of the documents, so the deeds were voidable and required cancellation. Relief of possession was consequential to setting aside the deeds, so Article 65 of the Limitation Act did not apply; the applicable period was three years under Article 59. As the suit was filed in December 2021, the plaint was rejected under Order VII Rule 11(d).




                          Issues: Whether the plaint was liable to rejection under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 on the ground that the suit, which challenged conveyance deeds on the basis of alleged fraud and sought possession, was barred by limitation.

                          Analysis: The plaint and the documents annexed to it showed that the plaintiff had executed the conveyance deeds, had accepted consideration, and had knowledge of the nature and effect of the transactions at least by the notice and reply exchanged in 2016 and, at the latest, by the affidavit filed in 2017. The allegations disclosed, at best, fraud as to the contents of the documents and not fraud as to their character. A transaction of that nature is voidable and must be avoided by seeking cancellation of the instrument. Since the relief of possession was consequential to setting aside the conveyance deeds, Article 65 of the Limitation Act, 1963 did not assist the plaintiff. The applicable limitation was three years under Article 59 of the Limitation Act, 1963, and the suit filed in December 2021 was beyond time. The plea that the deeds were void ab initio or executed in breach of injunction was rejected on the facts and in light of the governing legal principles.

                          Conclusion: The plaint was correctly rejected as barred by limitation and the defendants succeeded in obtaining rejection of the suit under Order VII Rule 11(d).


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