P Murugan vs H Nagaraj on 13 March, 2026

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    Karnataka High Court

    P Murugan vs H Nagaraj on 13 March, 2026

                                         NC: 2026:KHC:15156-DB
                                           RFA No. 501 of 2016
                                      C/W RFA No. 1229 of 2018
    
     HC-KAR
    
    
    
    
         IN THE HIGH COURT OF KARNATAKA AT BENGALURU
    
            DATED THIS THE 13TH DAY OF MARCH, 2026
    
                            PRESENT
                THE HON'BLE MR. JUSTICE D K SINGH
                              AND
          THE HON'BLE MS. JUSTICE TARA VITASTA GANJU
         REGULAR FIRST APPEAL NO. 501 OF 2016 (DEC/INJ)
                              C/W
              REGULAR FIRST APPEAL NO. 1229 OF 2018
    
    IN RFA No. 501/2016
    BETWEEN:
    
    1.     SRI. P. MURUGAN
           S/O LATE SRI. PONNU SWAMY MUDALIAR,
           SINCE DECEASED BY HIS LR'S,
    
    1(a) SMT. GANGAMMA
         W/O LATE SRI. P.MURUGAN,
         AGED ABOUT 78 YEARS,
         R/AT OLD NOU-22, NEW NO.12,
         5TH CROSS, OLD OKALI PURAM,
         BANGALORE-21.
    
    2.     M.RAGHUNATHAN
           S/O MURUGAN,
           AGED ABOUT 54 YEARS,
    
    3.     SRI. P.UMAPATHY
           AGED ABOUT 24 YEARS,
           S/O LATE SRI. PONNU SWAMY MUDALIAR,
    
    4.     SRI. P.SANTHI,
           W/O SRI. P.UMAPATHY,
           AGED ABOUT 50 YEARS,
    
    
    
    
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           APPELLANTS 1(a), 2, 3 AND 4 ARE
           R/AT OLD NO.U-22, NEW NO.12,
           5TH CROSS, OLD OKALIPURAM,
           BENGALURU-560 021.
                                                    ...APPELLANTS
    (BY SMT. R.V.NAIK., ADVOCATE)
    
    
    AND:
    
    1.   SRI. H.NAGARAJ
         S/O LATE SRI. HANUMAIAH,
         AGED ABOUT 67 YEARS,
         PRESENTLY R/AT NO.3, 6TH CROSS,
         40 FEET ROAD, MANJUNATHNAGAR,
         2ND PHASE, BANGALORE-560 010.
    
    2.   SMT. KUPPAMMA.G.
         W/O LATE SRI. GOVINDARAJ.P.,
         D/O LATE SRI. PONNU SWAMY MUDALIAR,
         SINCE DECEASED BY HER LR'S,
    
    a)   SRI. GOVINDARAJ.P.,
         S/O LATE SRI. MUNISWAMY,
         AGED ABOUT 68 YEARS,
    
    b)   SRI. KUMAR
         S/O LATE SRI. GOVINDARAJ.P.,
         AGED ABOUT 40 YEARS,
    
         RESPONDENTS 2(a) AND 2(b) ARE
         R/O NO.30/13, VIJAYARANGAN STREET,
         SAIDHAPETTAI, ARANI POST,
         ARNI, TIRUVANNAMALAI,
         TAMIL NADU-632 301.
    
                                                  ...RESPONDENTS
    (BY SRI. M.ASHWATHANARAYANA REDDY., ADVOCATE FOR
    C/R1;
    V/O/DTD: 15.11.2023, APPELLANT NO.1 IS TREATED AS LR OF
    R2;
    
    
    
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    V/O/DTD:18.07.2023, R2(A & B) ARE HELD SUFFICIENT)
    
    
    THIS RFA IS FILED UNDER ORDER 41 RULE 1 R/W SEC.96 OF
    
    CPC., AGAINST THE JUDGMENT AND DECREE DATED 16.02.2016
    
    PASSED IN O.S NO.7372/2010 ON THE FILE OF THE XII ADDL.
    
    CITY CIVIL & SESSIONS JUDGE, BENGALURU, DECREEING THE
    
    SUIT FOR DECLARATION AND PERMANENT INJUNCTION.
    
    
    IN RFA NO. 1229/2018
    BETWEEN:
    
    1.   SRI. P.MURUGAN
         S/O LATE SRI.PONNUSWAMY MUDALIAR,
         SINCE DEAD BY LR'S,
    
    1a) SMT. GANGAMMA
        W/O LATE SRI.P.MURUGAN,
        AGED ABOUT 79 YEARS,
        R/AT NO.22, NEW NO.12,
        15TH CROSS, OLD OKALIPURAM,
        BENGALURU-560 021.
    
    2.   SRI. M.RAGHUNATHAN,
         S/O SRI. P.MURUGAN,
         AGED ABOUT 56 YEARS,
    
    3.   SRI. P.UMAPATHY
         S/O LATE SRI.PONNUSWAMY MUDALIAR,
         AGED ABOUT 69 YEARS,
    
    4.   SMT. SANTHI
         W/O SRI. UMAPATHY.
         AGED ABOUT 56 YEARS,
    
    
    
    
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        ALL ARE R/O OLD NO.V.22,
        NEW NO.12, 5TH CROSS,
        OLD OKALIPURAM,
        BENGALURU-560 021.
                                                 ...APPELLANTS
    (BY SRI. R.V.NAIK, ADVOCATE )
    
    AND:
    SRI. H.NAGARAJ
    S/O LATE SRI.B.N.HANUMAIAH,
    AGED ABOUT 60 YEARS,
    R/A NO.3, 6TH CROSS, 40 FT. ROAD,
    MAJUNATHANAGARA, 2ND PHASE,
    BENGALURU-560 010.
                                                ...RESPONDENT
    
    (BY SRI. M.ASHWATHANARAYANA REDDY, ADVOCATE
    (V/O/DTD: 07.08.2024)
    
    
    THIS RFA IS FILED UNDER SECTION 96 OF CPC., AGAINST THE
    
    JUDGMENT AND DECREE DATED: 16.2.2016 PASSED IN OS
    
    NO.7371/2011 ON THE FILE OF THE XII ADDL. CITY CIVIL AND
    
    SESSIONS JUDGE (CCH NO.27), BANGALORE, DISMISSING
    
    THE SUIT FOR DECLARATION AND INJUNCTION.
    
    
    THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR
    
    JUDGMENT ON 27.11.2025, THIS DAY, COMING ON FOR
    
    PRONOUNCEMENT OF JUDGMENT, THIS DAY, THE JUDGMENT
    
    WAS DELIVERED THEREIN AS UNDER:
    
    
    
    
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    CORAM:         HON'BLE MR. JUSTICE D K SINGH
                            &
                   HON'BLE MS. JUSTICE TARA VITASTA GANJU
    
    
                                 CAV JUDGMENT
    

    (PER: HON’BLE MS. JUSTICE TARA VITASTA GANJU)

    TABLE OF CONTENTS

    SPONSORED

    I. Preface: ……………………………………………………… 5
    II. Brief Facts: …………………………………………………. 6
    III. Impugned Judgment: …………………………………… 14
    IV. Contentions of the Appellants/Defendants: …………. 15
    V. Contentions of Respondent No.1/Plaintiff: ………….. 20
    VI. Issues for Consideration: ………………………………. 22
    VII. Analysis and Findings: ………………………………….. 23
    VIII.Conclusion: ……………………………………………….. 44

    I. Preface:

    1. These appeals are directed against the common

    Judgment and Decree dated 16-02-2016 passed by the XII

    Additional City Civil and Sessions Judge, Bengaluru, in

    O.S.No.7372/2010 and O.S.No.7371/2011, whereby the

    suit filed by the respondent No.1/plaintiff in

    O.S.No.7372/2010 for declaration of title, possession and

    cancellation of Gift Deeds was decreed against the

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    appellants/defendants and the suit filed by the appellants in

    O.S.No.7371/2010 seeking declaration of title by adverse

    possession against the respondent No.1/plaintiff was

    dismissed.

    2. For the sake of convenience, the parties are referred

    to as they were arrayed before the learned Trial Court in

    O.S.No.7372/2010.

    II. Brief Facts:

    3. The brief facts are that the respondent

    No.1, as plaintiff in O.S.No.7372/2010 and as

    defendant in O.S.No.7371/2011, contended that late

    Sri. B.N.Hanumaiah was the absolute owner of the suit

    schedule property, bearing Old No.U-22, New No.12,

    5th Cross, Old Okalipuram, Bengaluru, [hereinafter referred

    to as the “suit schedule property”] having purchased it from

    Mrs. B. Peacock under a registered Sale Deed dated

    13.12.1958. The respondent No.1/plaintiff asserted that

    late Sri. B.N.Hanumaiah had been in continuous possession

    of the suit schedule property and had effected khata in his

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    name and regularly paid all property taxes and statutory

    dues in respect thereof.

    4. The respondent No.1/plaintiff referred to earlier

    litigations between the parties contending that in execution

    proceedings arising out of O.S.No.486/1973, the suit

    property was attached. However, thereafter, O.S.

    No.1019/1973 was filed by Smt. Muttamma, the

    appellants/defendants’ mother asserting ownership of the

    suit schedule property and specific performance of an

    Agreement to Sell dated 21.01.1973 which was dismissed,

    and the attachment of the suit property was upheld.

    Thereafter, O.S.No.7123/1980 filed by her for declaration

    of title and injunction in respect of the suit property was

    dismissed. A subsequent suit being O.S.No.1010/1993

    seeking declaration of title by adverse possession was also

    dismissed. It is contended that, in all earlier proceedings,

    the claims of ownership and adverse possession set up by

    the appellants/defendants’ family were consistently

    rejected.

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    4.1. The respondent No.1/plaintiff further submitted that,

    after the death of late Sri. B.N.Hanumaiah, the other legal

    heirs executed a registered Release Deed dated 17.04.2010

    in his favour, thereby vesting the title of the suit schedule

    property with him.

    5. The appellants/defendants, on the other hand, other

    than admitting that the suit schedule property originally

    belonged to Sri. C.B. Oakley have denied that the

    respondent No.1/plaintiff had any right, title or interest

    therein. It was contended that the father of the

    appellants/defendants, Sri. Ponnuswamy Mudaliar and one

    Narayanappa entered into an Agreement to Sell

    dated 23.11.1949 [Ex.D1] with Sri. C.B.Oakley and

    part consideration was paid. Pursuant thereto,

    Sri. Ponnuswamy Mudaliar was put in possession of the suit

    property. He thereafter got the khata recorded in his name

    and started paying taxes and after his death in the year

    1965, the mother of the appellants/defendants Smt.

    Muttamma got the khata endorsement in her name on

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    22.08.1975 [Ex.D-2] and paid property taxes thereafter.

    It is further stated that although Sri. C.B.Oakley died in

    December 1949 naming his brother Howard Oakley as the

    executor of his Will and the said Howard Oakley executed

    the Sale Deed in favour of Sri. B. H. Peacock on 23.07.1951,

    the possession of the suit property remained with Sri.

    Ponnuswamy Mudaliar. It is further averred that on

    13.12.1958 when Mrs. B.Peacock, wife of Sri. B.H.Peacock

    sold the suit property in favour of Sri. B.N Hanumaiah, the

    father of the respondent No.1/plaintiff, the possession of

    the suit property continued to remain with Sri. Ponnuswamy

    Mudaliar. It is thus contended that Smt. Muttamma has

    been in possession and enjoyment of the suit property for

    over 40 years continuously and without any interruption

    from any of the appellants/defendants. The possession of

    the suit scheduled property has been adverse for more than

    40 years and thus the second defendant’s claim is time

    barred. It is further stated that the cause of action to file

    the suit arose on 07.12.1976 when the

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    appellants/defendants’ suit for declaration, injunction and

    setting aside of the order was dismissed.

    5.1. It is thus averred that the appellants/defendants and

    their predecessors in title are in possession and enjoyment

    of the suit property since 1949 when the Sale Agreement

    between Sri. C.B.Oakley and Sri. Ponnuswamy Mudaliar was

    executed and part payment of the consideration in the sum

    of Rs.700/- was paid. The appellants/defendants had

    thereafter perfected the title by adverse possession and

    transfer of rights was complete.

    6. In the year 2010, the appellants/defendants

    attempted to carry out construction on the suit schedule

    property, relying upon Gift Deed dated 22.10.2007

    executed by Smt. Muttamma in their favour, which led to

    the filing of O.S.No.7372/2010. It was asserted therein that

    Smt. Muttamma had no title to the suit property and

    therefore she had no right to execute the said Gift Deed.

    7. As stated above, two suits were filed being

    O.S.No.7372/2010 and O.S.No.7371/2011 by the

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    appellants and the respondent No.1 respectively. It is

    apposite to set out the reliefs sought in these two suits

    which is reproduced below:

    “Relief sought by Appellants/defendants in
    O.S.No.7371/2011

    (a) to declare that the plaintiffs are the absolute owners
    of the suit schedule property;

    (b) for declaring that the plaintiffs have perfected their
    title by way of adverse possession;

    (c) for consequential injunction restraining the defendant
    and his men from disturbing the peaceful enjoyment of the
    property by the plaintiffs;

    (d) and for such other costs and reliefs the Hon’ble Court
    may deem fit to grant in the circumstances of the case.”

    Relief sought by Respondent No.1/plaintiff in
    O.S.No.7372/2010:

    “(a) to declare that the plaintiff is the absolute owner of
    the suit schedule property;

    (b) to direct the defendants to deliver the possession of
    the schedule property;

    (c) to direct the registered Gift Deeds vide Reg.

    Nos.2526/2007-08 dated 22.10.2007 and 2527/2007
    dated 22.10.2007 registered in the office of the Sub-
    Registrar, Srirampura, Bangalore by defendant Nos. 1 to
    3 in favour of defendant Nos. 2 and 4 are illegal and null;

    (d) for permanent injunction restraining the defendants or
    their agents, men etc. or anybody claiming under them or
    through them from alienating or creating a charge in any
    manner over the Suit Schedule Property;

    (e) for mesne profits; and

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    (f) to grant such other relief or reliefs as this Hon’ble Court
    may deem fit to grant to the Plaintiff under the
    circumstances of the case including the costs of the above
    proceedings in rendering justice, equity and good
    conscience.”

    8. The learned Trial Court after examining the

    pleadings between parties, framed the following two

    separate sets of Issues in the suits:

    “Issues in O.S.No.7372/2010

    1. Whether the plaintiff proves his title over the suit
    property?

    2. Whether the plaintiff proves that the defendants are
    tenants?

    3.Whether the plaintiff proves that the gift deeds executed
    defendant nos. 1 and 3 in favour of defendant Nos. 2 and
    4 on 22.10.2007 are illegal null and void?

    4. Whether the plaintiff is entitled for possession?

    5.Whether the defendant Nos.2 to 4 prove that
    Ponnuswamy Modaliar is the absolute owner of the suit
    schedule property on the strength of an agreement of sale
    dated 23.11.1949 executed by Mr. C.B. Oakley as pleaded
    in paras 20 and 21 of the written statement?

    6. Whether the defendants prove that they have perfected
    their title over the suit property by means of adverse
    possession?

    7. What order or decree?”

    Issues in O.S.No.7371/2011

    1. Whether the plaintiff proves his title over the suit
    property?

    2. Whether the plaintiff proves that the defendants are
    tenants?

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    3. Whether the plaintiff proves that the gift deeds
    executed defendant nos. 1 and 3 in favour of defendant
    Nos. 2 and 4 on 22.10.2007 are illegal null and void?

    4. Whether the plaintiff is entitled for possession?

    5.Whether the defendant Nos.2 to 4 prove that
    Ponnuswamy Modaliar is the absolute owner of the suit
    schedule property on the strength of an agreement of sale
    dated 23.11.1949 executed by Mr. C.B. Oakley as pleaded
    in paras 20 and 21 of the written statement?

    6. Whether the suit is in time?

    7. Whether the court fee paid is sufficient?

    8. What order or decree?”

    8.1. The plaintiff in O.S.No.7372/2010, Sri. H. Nagaraj was

    examined as PW-1 while plaintiff No.2 in O.S.No.7371/2011

    – Sri. M.Raghunathan was examined as DW-1. In addition,

    one Perumal, his neighbour was examined as DW-2 to prove

    two documents, Exs.D-34 and D-35 which are Election Card

    and Marriage Card of Perumal, respectively.

    9. The appellants, as defendants in O.S.No.7372/2010

    and as plaintiffs in O.S.No.7371/2011, contended that the

    suit property originally belonged to Sri. C.B.Oakley, who

    executed an Agreement of Sale dated 23.11.1949 in favour

    of their father, late Sri. Ponnuswamy Mudaliar and put him

    in possession. They asserted that their father constructed a

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    residence and a shop premises on the suit property and that

    the family remained in continuous and exclusive possession

    for several decades. After the death of late Sri.

    Ponnuswamy Mudaliar, their mother Smt. Muttamma was

    recorded as the khathedar, and that the taxes and statutory

    dues were paid. They contended that late Sri.

    B.N.Hanumaiah did not ever have possession over the suit

    schedule property.

    9.1. The respondent No.1/plaintiff on the other

    hand contended that he had a valid and legal title to the

    property through Sri. B.N.Hanumaiah and that neither

    Smt. Muthamma nor Sri. Ponnuswamy Mudaliar had any

    title to the suit property.

    III. Impugned Judgment:

    10. By the Impugned Judgment, the learned Trial Court

    held that the respondent No.1/plaintiff had proved his title

    through the registered Sale Deed and the Release Deed.

    The pleas of tenancy and adverse possession were rejected

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    and the Gift Deed dated 22.10.2007 was declared void.

    Thus, the respondent No.1/plaintiff’s suit was decreed, and

    the appellants/defendants’ suit was dismissed.

    11. This led to the filing of these two appeals before this

    Court by the appellants/defendants, one challenging the

    decree passed in the suit filed by the respondent

    No.1/plaintiff and the second challenging the dismissal of

    the suit filed by the appellants/defendants.

    11.1. This Court by its order dated 07.06.2016, admitted

    R.F.A.No.501/2016 and passed an interim order staying the

    impugned Judgment and Decree. The said order has

    continued since.

    IV. Contentions of the Appellants/Defendants:

    12. Learned counsel for the appellants/defendants has

    contended that their possession commenced pursuant to

    the execution of the Agreement of Sale dated 23.11.1949

    and continued openly and uninterruptedly. It was argued

    that even if the initial possession was permissive, it became

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    hostile when a suit asserting absolute ownership was filed

    in the year 1979, and the limitation under Article 65 of the

    Limitation Act, 1963 commenced from that date, rendering

    the respondent No.1/plaintiff’s suit barred by time.

    13. The learned counsel for the appellants/defendants

    has contended that it is pursuant to the order passed in RFA

    No.681/1999 dated 07.07.2006 that the appellants/

    defendants filed O.S.No.7371/2011 claiming title by

    adverse possession. It is contended that the starting point

    of limitation as set out in Article 65 of the Limitation Act

    arose when the pleadings are filed in Misc. Case

    No.358/1975 and O.S.No.7123/1980 claiming hostile title.

    Since the suit for possession as per Article 65 of the

    Limitation Act is required to be filed within twelve years

    from the date when the possession became adverse, it

    should have been filed within twelve years from 1975/1979.

    Thus, the suit filed by the respondent No.1/plaintiff

    (O.S.No.7372/2010) in the year 2010 was barred by

    limitation.

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    14. The second contention raised by the appellants/

    defendants is that the right to sue in terms of Article 58 of

    the Limitation Act first accrued when the sale deed was

    executed on 13.12.1958 and despite the execution, the

    respondents/plaintiffs were not put in possession of the suit

    schedule property. Thus, it is contended that the suit for

    declaration of title and possession is barred by the

    provisions of Article 58 of the Limitation Act as well. In

    support of the said contention, learned counsel for the

    appellants/defendants has also placed reliance on the

    judgments of the Supreme Court in Rajeev Gupta v.

    Prashant Garg1 and Khatri Hotels (P) Ltd. v. Union of

    India2 to contend that under Article 58 of the Limitation

    Act, the period of limitation commences when the right to

    sue first accrues, and that successive or continuing causes

    do not give rise to a fresh period of limitation. Reliance was

    also placed on the judgment of the Supreme Court in

    1
    2025 SCC OnLine SC 889
    2
    (2011) 9 SCC 126

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    Rajpal Singh v. Saroj3 to submit that where the principal

    relief is one of declaration, the limitation applicable is three

    years, and the prayer for possession being consequential

    cannot extend the period of limitation. It is therefore

    contended that once the right to sue had accrued in the year

    1958 upon execution of the registered sale deed, the failure

    to institute the suit within the prescribed period renders the

    present suit barred by limitation. The relevant extract of the

    Rajeev Gupta‘s case relied upon is below:

    “17. A coordinate Bench of this Court, in its decision of
    Khatri Hotels (P) Ltd. v. Union of India, examined the
    position Under Article 120 of the Limitation Act, 1908 vis-
    a-vis Article 58 of the Limitation Act to observe that the
    right to sue would accrue when there was a clear and
    unequivocal threat of infringement of the Plaintiff’s right.
    However, while the former provision simply stated that the
    period of limitation commenced when the right to sue
    accrues, in a marked linguistic departure, the latter
    provision stated that the limitation would commence when
    the right to sue “first” accrued. Having observed so, this
    Court held that:

    30. While enacting Article 58 of the 1963 Act,
    the legislature has designedly made a
    departure from the language of Article 120 of
    the 1908 Act. The word ‘first’ has been used
    between the words ‘sue’ and ‘accrued’. This
    would mean that if a suit is based on
    multiple causes of action, the period of
    limitation will begin to run from the date
    when the right to sue first accrues. To put

    3
    (2022) 15 SCC 260

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    it differently, successive violation of the
    right will not give rise to fresh cause and
    the suit will be liable to be dismissed if it
    is beyond the period of limitation counted
    from the day when the right to sue first
    accrued.”

    [Emphasis Supplied]

    xxx xxx xxx

    23. Further, in Rajpal Singh v. Saroj, this Court held that
    where a composite suit had been filed for cancellation of
    the sale deed and of possession, the limitation period
    would have to be adjudged from the primary relief of
    cancellation which is 3 (three) years, and not the ancillary
    relief of possession which is 12 (twelve) years. In holding
    so, this Court held that:

    14. The submission on behalf of the original
    Plaintiff (now represented through her heirs)
    that the prayer in the suit was also for recovery
    of the possession and therefore the said suit
    was filed within the period of twelve years and
    therefore the suit has been filed within the
    period of limitation, cannot be accepted. Relief
    for possession is a consequential prayer and
    the substantive prayer was of cancellation of
    the sale deed dated 19-4-1996 and therefore,
    the limitation period is required to be
    considered with respect to the substantive
    relief claimed and not the consequential relief.

    When a composite suit is filed for
    cancellation of the sale deed as well as for
    recovery of the possession, the limitation
    period is required to be considered with
    respect to the substantive relief of
    cancellation of the sale deed, which would
    be three years from the date of the
    knowledge of the sale deed sought to be
    cancelled. Therefore, the suit, which was filed
    by the original Plaintiff for cancellation of the
    sale deed, can be said to be substantive
    therefore the same was clearly barred by
    limitation. Hence, the learned Trial Court ought

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    to have dismissed the suit on the ground that
    the suit was barred by limitation….”

    [Emphasis Supplied]

    V. Contentions of Respondent No.1/Plaintiff:

    15. Learned counsel for the respondent No.1/plaintiff

    supported the Impugned Judgment and submitted that

    absolute title flowed from the registered Sale Deed dated

    13-12-1958 and the subsequent Release Deed executed by

    the legal heirs of late Sri. B.N.Hanumaiah. It was submitted

    that possession of the appellants/defendants originated

    under an Agreement of Sale and was permissive in nature,

    that there was no pleading or proof of hostile repudiation of

    title. It was averred that the cause of action arose only in

    2010 when the appellants/defendants asserted hostile title

    by executing Gift Deed and attempting construction.

    16. Learned counsel for the respondent No.1/plaintiff has

    further contended that despite claiming title through an

    Agreement to Sell dated 23.11.1949, no suit for specific

    performance was filed by the appellants/defendants

    claiming ownership of the property. In addition, it has been

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    contended that after the decree was passed in RFA

    No.681/1999 and attachment order qua suit schedule

    property was set aside, Sri. Murugan (appellant No.1)

    executed a registered Gift Deed in favour of his son of the

    southern portion of the suit schedule property on

    09.10.2004 (Ex.P6) and also on the same day, Sri. P.

    Umapathi (appellant No.3) executed a Gift Deed in favour

    of his wife Smt. Shanthi on the remaining northern portion

    of the suit schedule property (Ex.P7). The respondent

    No.1/plaintiff has contended that in the suit in

    O.S.No.7372/2010 for declaration of title and delivery of

    possession, the respondent No1/plaintiff has specifically

    pleaded that cause of action has arisen on 02.03.2010 when

    the respondent No.1/plaintiff had knowledge of the

    fraudulent Gift Deeds and when the FIR against these Gift

    Deeds was registered on 07.08.2010. It is thus contended

    that the suit is filed within time and is not barred by

    limitation.

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    17. Learned counsel for the respondent No.1/plaintiff has

    also sought to rely upon the judgment of the Supreme Court

    in Achal Reddy v. Ramakrishna Reddiar4, to submit that

    the party who obtains possession under an Agreement to

    Sell, cannot claim adverse possession and that if the

    possession is legal and proper referable to a contract, it

    cannot be adverse. Thus, it is contended that the

    appellants/defendants cannot claim title by adverse

    possession.

    VI. Issues for Consideration:

    18. The questions that arise for consideration before this

    Court are:

    (i) Whether the suit as filed by the
    respondents was barred by limitation, and

    (ii) Whether the appellants had perfected the
    title of the suit scheduled property by adverse
    possession?

    4
    (1990) 4 SCC 706

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    VII. Analysis and Findings:

    19. At this stage, it is apposite to set out the provisions of

    the Limitation Act, which would be relevant:

    Description of suit Period of Time from which the
    Limitation period begins to run

    58. To obtain any other 3 years When the right to sue
    declaration. first accrues.

                 XXX               XXX                XXX
      65. For possession of 12 years        When the possession of
      immovable property or                 the defendant becomes
      any interest therein                  adverse to the plaintiff.
      based on title.
    
    
    
    
    

    19.1. A plain reading of these provisions shows that Section

    58 of the Limitation Act provides for a limitation of three

    years to obtain a decree of declaration. Section 65 of the

    Limitation Act provides a period of limitation for a

    possession of immovable property as 12 years from when

    the possession continues adverse to a plaintiff.

    20. In order to better appreciate the contentions of the

    appellants/defendants, it is apposite to set out the

    transaction in relation to the suit property through the flow

    chart prepared.

    
    
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                              FLOW CHART
    
                                           Havard Oakley
              C. B. Oakley                   (Brother)
             (died in 1950)               (Executor of will)
    
    
    
    
         ATS 1949, Ponnuswamy
                                           B. H. Peacock
           part consideration
                                       Registered Sale Deed:
              paid Rs.700/-
                                            23.07.1951
    
    
    
    
                Gift Deed
             dt.22.10.2007                 B.N. Hanumaiah
             by Muttamma                 Registered Sale Deed:
              in favour of                    13.12.1959
               appellants
               (Murugan)
                                         Mortgaged property
                                             12.08.1959
                                          Nagarathnamma
    
      Murugan is descendent of
      Ponnuswamy/Muttamma
                                         Agreement to Sell -
                                           21.01.1973 by
                                         Muttamma with B.N.
                                        Hanumaiah-Mortgagee
    
      Property was mortgaged
       embroiled in litigation
    
    
                                         Release Deed by B.N.
                                          Hanumaiah's heirs
                                          dt.17.04.2010 -in
                                           favour of Nagaraj
    
    
    
                                           Nagaraj claims title
                                                through
                                         B.N.Hanumaiah(father)
    
    
    
    
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    20.1.     As   can   be    seen     from    the   above,    the
    
    

    appellants/defendants’ predecessor-in-interest do not have

    a registered title. The appellants/defendants claim rights by

    virtue of the Agreement to Sell. On the other hand, the title

    with the respondent No.1/plaintiff is based on a registered

    instrument and is continuous. Learned counsel for the

    appellants/defendants has laid emphasis on a judgment and

    decree dated 08.02.1979 passed by the 18th Additional City

    Civil Judge, CCH-10, Bangalore City, in O.S.No.7123/1980

    to contend that this case was filed by Muttamma, mother of

    the appellants/defendants and the suit was filed for

    declaration of title and injunction and originally was

    numbered as O.S.No.415/1979 (re-numbered as

    O.S.No.7123/1980). It is contended that in this suit, the

    said Muttamma had stated that she has been in possession

    and enjoyment of the suit schedule property continuously

    and without any interruption for over 40 years and that

    B.N.Hanumaiah or his persons claiming through him do not

    have any right, title or interest in the suit schedule property.

    It is further contended by the appellants/defendants that in

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    this suit, the Court restrained the respondents herein from

    any kind of interference with the suit schedule property till

    the plaintiff (Muttamma) is evicted in due course of law.

    20.2. This judgment was challenged by the

    appellants/defendants by filing RFA No.681/1999 and by a

    judgment and decree dated 07.07.2006 the High Court

    modified the decree of the Trial Court and held that the title

    could not be declared of the appellant Muttamma in the

    appeal since the suit was not filed for declaration of title and

    if a suit is subsequently filed claiming title by adverse

    possession, the parties are at liberty to place their

    appropriate contentions. The High Court also set aside the

    order of attachment passed in O.S.No.486/1973 which

    attached the property in a suit for recovery filed against said

    B.N.Hanumaiah. The relevant extract of the order dated

    07.07.2006 is below:

    “9. As regards the claim of the appellant for a declaration
    of title, the basis for such declaration is only the
    possession of the property for a considerable number of
    years. This is not a suit for a declaration of title against
    the owner of the property. Though the respondent No.2
    claimed title to the property, no documents having
    been produced in evidence and the plaintiff’s claim

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    itself being that he is not the owner of the property,
    the question of adverse possession against him does
    not arise. It is submitted by Sri. Vidyadhar, learned
    counsel for the respondent No.2(b), (d) and (e) that
    certain documents had been produced by the
    defendant No.2 in the Trial Court, but they have not
    been exhibited and they have not been kept in the Lower
    Court records. In the absence of admission of those
    documents in evidence, the Court is not in a position to
    determine the claim of the defendant No.2 that he was the
    owner of the property. Therefore there being no
    evidence to show the ownership of the property by
    the defendant No.2, the question of granting a
    declaration of title in favour of the plaintiff against
    the defendant No.2 in this case does not arise. In
    case subsequently there is any suit, the parties are
    at liberty to place their contentions and the present
    plaintiff is not precluded from showing that by
    adverse possession, she had become the owner.
    However, it is clear that she was in possession of
    the suit property since long and she was in
    possession on the date of the suit.”

    [Emphasis Supplied]

    21. It is also the case of the respondent No.1/plaintiff that

    the appellants and late Smt.Mutamma are only tenants in

    respect of the suit schedule property and they are in illegal

    occupation of the suit schedule property and liable to pay

    damages. The respondent No.1/plaintiff has also challenged

    the execution of the fraudulent Gift Deeds that the Gift Deed

    executed by late Smt. Muttamma in favour of Defendant

    Nos.1 and 2, which was produced and marked in evidence

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    on behalf of the defendants, was fraudulent, void and not

    binding on him.

    21.1. Thus, the cause of action as set out in the plaint,

    arose on 2/3 March 2010. It is apposite to set out cause of

    action as reproduced in the plaint in O.S.No.7372/2010

    which is below:

    “24. That the cause of action for the above suit arose on
    2/3.3.2010 when the plaintiff had the knowledge of the
    fraudulent Gift Deeds and on 7.8.2010 when the plaintiff
    lodged police complaint against the defendants for the
    offences punishable under Section 465, 467, 468, and 471
    of IPC and subsequently, within the jurisdiction of this
    Hon’ble Court.”

    22. Indisputably, the appellants/defendants’ possession,

    originated under an Agreement of Sale dated 23.11.1949.

    23. The Supreme Court in Achal Reddy‘s case has held

    that an Agreement of Sale does not by itself create any

    right, title or interest in immovable property and that where

    the parties contemplate execution of a registered sale deed,

    title passes only on such execution and registration; till

    then, the possession of the transferee cannot be considered

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    as adverse and remains permissive and on behalf of the true

    owner. The relevant extract is set out below:

    “8. The Division Bench noticed that all that the plaintiff
    has to prove is that he or his predecessor-in-title was in
    possession at any time between February 11, 1947 and
    February 11, 1959. If between February 11, 1947 and July
    17, 1947 the possession of Varada Reddi was possession
    held on behalf of Dasu Reddi then it could be held that the
    plaintiff’s predecessor-in-title had been in possession
    within 12 years prior to the suit. The Division Bench held
    that the transaction of July 10, 1946 was in fact and in law
    only on oral agreement for sale and that on the
    assumption that it was an oral sale the learned Single
    Judge failed to apply the legal position as enunciated in
    Annamali v. Muthiah5. They observed that possession
    as held by Varada Reddi subsequent to July 10, 1946
    and before he instituted the suit in 1949 for specific
    performance was in the consciousness that it was
    only possession on behalf of the real owner. Even if
    the execution of an infructuous sale deed on July 17,
    1947 by Dasu Reddi in favour of Varada Reddi is
    assumed to have altered the complexion of events
    in any manner, the possession by Varada Reddi from
    July 1, 1946 up to July 17, 1947 at least was clearly
    possession held on behalf of Dasu Reddi, the
    predecessor-in-title of the plaintiff. If the plaintiff’s
    predecessor had been in possession of the suit property
    on July 17, 1947, that is to say within 12 years prior to
    the institution of the present suit on February 11, 1959,
    there can be little doubt that the plaintiff must succeed on
    the question of possession as well. In this view the
    judgment of the learned Single Judge was reversed.

    9. There is no controversy that the plaintiff has to
    establish subsisting title by proving possession
    within 12 years prior to the suit when the plaintiff
    alleged dispossession while in possession of the suit
    property. The first appellate court as well as the second
    appellate court proceeded on the basis that the plaintiff is
    not entitled to succeed as such possession has not been
    proved. The concurrent findings that the plaintiff had

    5
    ILR (1965) 1 Mad 254

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    title in spite of the decree for specific performance
    obtained against him, when that decree had not
    been executed are not assailed by the appellant in
    the High Court. The appellant cannot, therefore, urge
    before us on the basis of the findings in the earlier suit to
    which he was not a party that Ex. A-1 sale deed is one
    without consideration and does not confer valid title on the
    plaintiff. The sole question that has been considered
    by the High Court is that of subsisting title. We have
    to consider whether the question of law as to the character
    of the possession Varada Reddi had between July 10, 1946
    and July 17, 1947 is adverse or only permissive. In the
    case of an agreement of sale the party who obtains
    possession, acknowledges title of the vendor even
    though the agreement of sale may be invalid. It is
    an acknowledgement and recognition of the title of
    the vendor which excludes the theory of adverse
    possession. The well settled rule of law is that if a
    person is in actual possession and has a right to
    possession under a title involving a due recognition
    of the owner’s title his possession will not be
    regarded as adverse in law, even though he claims
    under another title having regard to the well
    recognised policy of law that possession is never
    considered adverse if it is referable to a lawful title.
    The purchaser who got into possession under an
    executory contract of sale in a permissible character
    cannot be heard to contend that his possession was
    adverse. In the conception of adverse possession
    there is an essential and basic difference between a
    case in which the other party is put in possession of
    property by an outright transfer, both parties
    stipulating for a total divestiture of all the rights of
    the transferor in the property, and in a case in which
    there is a mere executory agreement of transfer
    both parties contemplating a deed of transfer to be
    executed at a later point of time. In the latter case the
    principle of estoppel applies estopping the transferee from
    contending that his possession, while the contract
    remained executory in stage, was in his own right and
    adversely against the transferor. Adverse possession
    implies that it commenced in wrong and is maintained
    against right. When the commencement and continuance
    of possession is legal and proper, referable to a contract,
    it cannot be adverse.”

    [Emphasis Supplied]

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    23.1. It was further held in the Achal Reddy‘s case that

    in the case of a contract of sale or Agreement to Sell, where

    the transferee is put in possession of the property and the

    parties contemplate the execution of a registered sale deed,

    the vendor has to execute a registered sale deed. However,

    where in the pursuance of an oral transfer or unregistered

    transfer deed, the transferee is put in possession, the

    transferor retains no right or title to the property. In such a

    case, the transferee is in possession as the owner. It is

    apposite to set out relevant extract below:

    “10. In the case of an executory contract of sale where the
    transferee is put in possession of the property in
    pursuance of the agreement of sale and where the
    parties contemplate the execution of a regular
    registered sale deed the animus of the purchaser
    throughout is that he is in possession of the
    property belonging to the vendor and that the
    former’s title has to be perfected by a duly executed
    registered deed of sale under which the vendor has to
    pass on and convey his title. The purchaser’s possession
    in such cases is of a derivative character and in clear
    recognition of and in acknowledgement of the title of the
    vendor. The position is different in the case where in
    pursuance of an oral transfer or a deed of transfer
    not registered the owner of a property transfers the
    property and puts the transferee in possession with
    the clear animus and on the distinct understanding
    that from that time onwards he shall have no right
    of title to the property. In such a case the owner of
    the property does not retain any vestige of right in
    regard to the property and his mental attitude

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    towards the property is that it has ceased to belong
    to him altogether. The transferee after getting into
    possession retains the same with the clean animus
    that he has become the absolute owner of the
    property and in complete negation of any right or
    title of the transferor, his enjoyment is solely as
    owner in his right and not derivatively or in recognition
    of the title of any person. So far as the vendor is concerned
    both in mind and actual conduct, there is a total divestiture
    of all his right, title and interest in the property. This
    applies only in a case where there is a clear
    manifestation of the intention of the owner to divest
    himself of the right over the property. On the other
    hand in the case of an executory contract the
    possession of the transferee until the date of
    registration of the conveyance is permissive or
    derivative and in law is deemed to be on behalf of
    the owner himself. The correctness of the decision
    in Annamali v. Muthiah cannot, therefore, be doubted.”

    [Emphasis Supplied]

    24. In the present case, it is not disputed that the original

    agreement that was entered into by the predecessor in

    interest of the appellants is an Agreement to Sell dated

    23.11.1949 (Ex.D1) between the said Sri. C.B.Oakley and

    Sri. Ponnusawamy Modaliar and Sri. Narayanaswamy for a

    sale consideration in a sum of Rs.1,000/- and only a sum of

    Rs.700/- was paid. Even at the time of putting the

    predecessor in interest in possession of the suit schedule

    property, the sale deed was not executed nor was any

    agreement to perfect the title executed to enable a transfer

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    of rights. However, on the other hand, after the demise of

    said Sri. C.B.Okaley, Sri. Havard Oakley, his brother and

    executor of the Will executed a registered sale deed in

    favour of B.H.Peacock who himself executed a registered

    sale deed in favour of B.H.Hanumaiah on 13.12.1958, was

    the father of the respondent No.1/plaintiff. The title and

    possession of the respondent No.6 was perfected by the

    execution of the registered Gift Deed.

    25. As stated above, the other question that has been

    raised by the appellant / defendant is on limitation. The

    issues which are reproduced in paragraph No.8 above

    reflect that no ground of limitation was raised by the

    respondent No.1/plaintiff in his suit. The issues framed

    essentially relate to title of the respondent/plaintiff.

    25.1. It is the contention of the appellants/defendants that

    the title was adverse to the respondents since the period

    when the suit was filed being O.S.No.7123/1980 (filed in

    the year 1979 and renumbered). Thus, it is contended that

    suit should have been filed within twelve years i.e. by 1982

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    and since it was filed in the year 2010, the suit is barred by

    limitation.

    26. The respondent No.1/plaintiff has on the other hand,

    contended that the cause of action had arisen when they

    found out about the fraudulent Gift Deed and when the

    respondent No.1/plaintiff filed a police complaint with

    respect to these fraudulent Gift Deeds on 2/3 March 2010.

    27. Thus, it is a case of the respondent No.1/plaintiff that

    all along the appellants/defendants did not have any title to

    the property and could not have perfected the title by way

    of adverse possession.

    28. Insofar as the issue relating to limitation in respect of

    the alleged fraudulent Gift Deeds is concerned, reliance is

    placed on the judgment of the Hon’ble Supreme Court in

    Mohd. Noorul Hoda v. Bibi Raifunnisa6. The Supreme

    Court, while interpreting Article 59 of the Limitation Act, has

    held that a suit for cancellation or setting aside of an

    6
    (1996) 7 SCC 767

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    instrument on the ground of fraud must be instituted within

    three years from the date when the facts entitling the

    plaintiff to have the instrument cancelled first become

    known to him. The Court further clarified that the

    expression “person” under Section 31 of the Specific Relief

    Act is of wide import and includes even a person claiming

    derivative title, and that such person cannot ignore a

    subsisting instrument which stands as an obstacle to his

    title. It was held that where the plaintiff seeks to avoid an

    instrument on the ground of fraud, limitation necessarily

    begins from the date of knowledge of such fraud. It is

    apposite to set out relevant extract of the Mohd. Noorul’s

    case in this regard below:

    6. The question, therefore, is as to whether Article 59
    or Article 113 of the Schedule to the Act is applicable
    to the facts in this case. Article 59 of the Schedule to
    the Limitation Act, 1908 had provided inter alia for suits
    to set aside decree obtained by fraud. There was no
    specific article to set aside a decree on any other ground.

    In such a case, the residuary Article 120 in Schedule III
    was attracted. The present Article 59 of the Schedule
    to the Act
    will govern any suit to set aside a decree
    either on fraud or any other ground. Therefore,
    Article 59 would be applicable to any suit to set
    aside a decree either on fraud or any other ground.
    It is true that Article 59 would be applicable if a person
    affected is a party to a decree or an instrument or a
    contract. There is no dispute that Article 59 would

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    apply to set aside the instrument, decree or contract
    between the inter se parties. The question is whether
    in case of person claiming title through the party to the
    decree or instrument or having knowledge of the
    instrument or decree or contract and seeking to avoid the
    decree by a specific declaration, whether Article 59 gets
    attracted? As stated earlier, Article 59 is a general
    provision. In a suit to set aside or cancel an instrument, a
    contract or a decree on the ground of fraud, Article 59 is
    attracted. The starting point of limitation is the date
    of knowledge of the alleged fraud. When the plaintiff
    seeks to establish his title to the property which
    cannot be established without avoiding the decree
    or an instrument that stands as an insurmountable
    obstacle in his way which otherwise binds him,
    though not a party, the plaintiff necessarily has to
    seek a declaration and have that decree, instrument
    or contract cancelled or set aside or rescinded.
    Section 31 of the Specific Relief Act, 1963 regulates suits
    for cancellation of an instrument which lays down that any
    person against whom a written instrument is void or
    voidable and who has a reasonable apprehension that
    such instrument, if left outstanding, may cause him
    serious injury, can sue to have it adjudged void or voidable
    and the court may in its discretion so adjudge it and order
    it to be delivered or cancelled. It would thus be clear
    that the word ‘person’ in Section 31 of the Specific
    Relief Act is wide enough to encompass a person
    seeking derivative title from his seller. It would,
    therefore, be clear that if he seeks avoidance of the
    instrument, decree or contract and seeks a declaration to
    have the decrees set aside or cancelled he is necessarily
    bound to lay the suit within three years from the date
    when the facts entitling the plaintiff to have the decree set
    aside, first became known to him.

    [Emphasis Supplied]

    28.1. Thus, applying the said ratio, the respondent

    No.1/plaintiff’s contention that the cause of action arose

    when the fraudulent Gift Deeds came to his knowledge, as

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    evidenced by the filing of a police complaint, is in

    consonance with Article 59 of the Limitation Act.

    29. This Court has also examined the deposition including

    examination in chief and additional affidavit of P.W.1 in

    support of his contention qua limitation. P.W.1 sets out that

    the appellants/defendants had started putting up illegal

    construction on the vacant portion of the suit property in

    the month of March 2010 and at that time, a police

    complaint was lodged with the Bruhath Bengaluru

    Mahanagara Palike (BBMP) with respect to the illegal and

    unauthorised construction. The appellants/defendants

    appeared before Srirampuram Police Station and produced

    the Gift Deed dated 22.10.2007 and thereafter, the

    respondent No.1/plaintiff obtained copies of the Gift Deeds

    from the jurisdictional Sub-Registrar. The relevant extract

    of deposition of P.W.1 is set out below:

    “14. I submit that being aggrieved by the said order of
    dismissal the LRS of late Muthamma filed
    R.F.A.No.681/1999 on the file of the Hon’ble High Court of
    Karnataka, Bangalore. The Hon’ble High Court of
    Karnataka, has passed an order on 7-7-2006 in the said
    R.F.A by partly allowing the said R.F.A., thereby the order

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    of attachment passed on 20-2-1973 in O.S.No.486/1973
    attaching the suit schedule property was thereby raised.
    In the said R.F.A the Hon’ble High Court has made an
    observation that in case subsequently, there is any suit;
    the parties therein are at liberty to place their contentions.
    The order passed by the Hon’ble High Court of Karnataka
    in the aforesaid R.F.A. raising the Attachment order
    attaching the suit schedule property is advantageous to
    the LRS of my father late B.N.Hanumaiah. The said order
    is not at all beneficial to the LRS of late Smt. Muthamma.
    That being the position, the defendants started putting up
    illegal structures in the vacant portion of the suit schedule
    property in the month of March 2010. Then immediately,
    I had questioned about their illegal construction but
    they did not give any reply and therefore, I lodged a
    police complaint with respect to their illegal
    construction and also complaint to the BBMP with
    respect the unauthorized illegal construction. The
    jurisdictional police had sent a word to the
    defendants and they appeared before the
    Sriramapuram Police Station and produced
    fabricated alleged Gift Deeds dated 22-10-2007
    which were said to have registered in the office of
    the Sub-Registrar, Srirampuram, Bangalore and
    therefore immediately, I rushed to the office of the
    Jurisdictional Sub-Registrar, and found that
    defendants 1 and 3 had executed the Gift Deeds in
    respect of the suit schedule property in favour of his
    son and wife respectively that is defendants 2 and 4
    herein.”

    [Emphasis Supplied]

    29.1. No cross-examination on this aspect was conducted

    by the appellants/defendants except for the following:

    “29. Smt.Puttalingamma is the first wife of my father.
    Nanjundappa is the son of Smt.Puttalingamma. We had
    not produced Death extracts of both the persons in earlier

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    proceedings. We obtained certified copies of Death
    Certificates immediately after effecting entries in the
    concerned register. As per charge sheet and Ex.P62, I
    was the complainant in that criminal case. We did
    not receive any notice from Sub-registrar office
    before lodging complaint. An enquiry was made in
    the office of Sub-registrar. There is a record to show
    such enquiry held and the charge sheet is filed in
    that regard. I am not having copy of record showing the
    said enquiry. I have not produced such record in the suit.
    It is not true to suggest that no such enquiry was held in
    Sub-registrar office. It is not true to suggest that I am
    deposing falsely.

    [Emphasis Supplied]

    29.2. Thus, this contention of the respondent No.1/plaintiff

    remained unimpeached.

    30. The principles laid down in Rajeev Gupta‘s case

    further fortify the respondent No.1/plaintiff’s case both on

    limitation and on the legal effect of possession traced to

    impugned instruments. The Supreme Court has

    emphatically held that the word “first” occurring in Articles

    58 and 59 is of determinative significance, and that once

    the right to sue first accrues, limitation cannot be postponed

    by relying upon subsequent events or continuing

    consequences. It was held that where a registered

    instrument invades or jeopardises the rights of a party, the

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    right to sue crystallises from the date of knowledge of such

    instrument, and later acts such as continued possession,

    police complaints, or repeated assertions do not furnish a

    fresh cause of action. The Court further observed that

    possession referable to a registered document is traceable

    to such document and, when disputed, cannot be treated as

    inherently hostile from its inception. The relevant extract of

    Rajeev Gupta‘s case is set out below:

    “30. Insertion by the Parliament of the word “first” under
    the column ‘Time from which period begins to run’ in
    Article 58 is not without a purpose. Such word, which was
    not there in the Limitation Act, 1908, has been designedly
    used in Article 58 to signify that a suit to obtain declaration
    (other than those referred to in Articles 56 and 57) has to
    be instituted within three years of ‘when the right to sue
    first accrues’. In simpler terms, if cause of action to sue
    means accrual of the right for an actionable claim, it is the
    moment from which such right first accrues that the clock
    of limitation would start ticking. Thus, even though cause
    of action for instituting a suit might arise on varied
    occasions and/or at different times, what is material and
    assumes relevance for computing the period of limitation
    under Article 58 is the date when the right to sue first
    accrues to the aggrieved suitor. Though dominus litus, a
    suitor cannot pick and choose a time for approaching
    court. The period of limitation in terms of Article 58 being
    3 (three) years, the prescribed period has to be counted
    from that date of the right to sue first accruing and the
    suit, if not instituted within 3 (three) years therefrom,
    would become barred by time.

    31. Similarly, under the column ‘Time from which period
    begins to run’ in Article 59 providing for a three-year
    limitation period for cancellation of an instrument, the
    ordainment is that the period will run ‘when the facts

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    entitling the plaintiff to have the instrument … cancelled
    or set aside … first become known to him’. Any suit
    seeking cancellation of a particular instrument as
    void or voidable would be governed by Article 59
    and, therefore, has to be instituted within 3 (three)
    years from date the suitor could be said to
    have first derived knowledge of the fact of such an
    instrument (which, according to him, is void or
    voidable) coming into existence. The word “first” in
    Article 59 would ordinarily have the same connotation as
    in Article 58.

    XXX XXX XXX

    35. It is not in dispute that the plaintiffs did have
    knowledge – constructive as well as actual – during the
    pendency of the second suit or soon thereafter of transfer
    of the suit property in favour of the appellants effected by
    Ramesh Chand by way of execution of the sale deeds
    which were subsequently registered as required by Section
    54
    of the TP Act. Once the appellants started residing
    in the suit property, what crystallised was the
    invasion of the plaintiffs’ rights. Their right to the
    suit property, if any, was put to clear jeopardy. With
    the execution of the sale deeds, subsequently
    registered, this was the moment when the right to
    sue first accrued to the plaintiffs. In fact, according to
    the plaintiffs, Ramesh Chand was proposing to dispose of
    the suit property in favour of third parties and such
    apprehension of an intended transfer was precisely the
    cause of action that was pleaded for institution of the
    second suit. In any event, whatever be the relevant date,
    i.e., execution of the sale deeds by which Ramesh Chand
    conveyed the suit property to the appellants or the date
    of taking actual possession of the suit property by the
    appellants from Ramesh Chand a few days after execution
    of such deeds, it is from such date of knowledge in June,
    1992 that the said transfer effectively did invade or
    jeopardize the plaintiffs’ interest in respect of the suit
    property. Contention of Mr. Gulati, therefore, has
    sufficient force that the suit had to be instituted within 3
    (three) years, since the title in respect of the suit property
    had passed on to the appellants. He is also right in
    submitting that the conduct of the plaintiffs does throw
    light on how they juggled to overcome the bar of limitation
    by seeking a decree for cancellation of the sale deeds,

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    which they sought to abandon midway by applying for
    amendment; thereafter, again they made an attempt for
    insertion of the prayer for declaration, also by way of an
    amendment at the appellate stage, which did not
    ultimately fructify.”

    [Emphasis Supplied]

    30.1. Consequently, where the appellants’ possession is

    founded upon impugned Gift Deeds and has been

    continuously questioned, the same lacks the necessary

    hostile animus to ripen into adverse possession, the

    respondent No.1/plaintiff’s contention that no title could

    have been perfected by adverse possession gains

    significance.

    31. A similar view has been taken by the Supreme Court in

    Mohan Lal v. Mirza Abdul Gaffar,7 wherein it has been

    held that possession which originates under an agreement

    of sale or other permissive or derivative arrangement

    cannot mature into adverse possession unless there is a

    clear, unequivocal and hostile repudiation of the true

    owner’s title to his knowledge. The Court held that mere

    7
    (1996) 1 SCC 639

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    long or continuous possession, without animus possidendi

    and without denial of the true owner’s title, does not satisfy

    the legal requirements of adverse possession, and such

    possession cannot be construed as hostile in law. The

    relevant paragraphs are extracted below:

    “4. As regards the first plea, it is inconsistent with the
    second plea. Having come into possession under the
    agreement, he must disclaim his right thereunder
    and plead and prove assertion of his independent
    hostile adverse possession to the knowledge of the
    transferor or his successor in title or interest and that
    the latter had acquiesced to his illegal possession during
    the entire period of 12 years, i.e., up to completing the
    period of his title by prescription nec vi, nec clam, nec
    precario. Since the appellant’s claim is founded on Section
    53-A, it goes without saying that he admits by implication
    that he came into possession of the land lawfully under
    the agreement and continued to remain in possession till
    date of the suit. Thereby the plea of adverse
    possession is not available to the appellant.

    5. The question then is whether he is entitled to retain
    possession under Section 53-A. It is an admitted fact that
    suit for specific performance had been dismissed and
    became final. Then the question is whether he is entitled
    to retain possession under the agreement. Once he lost
    his right under the agreement by dismissal of the
    suit, it would be inconsistent and incompatible with
    his right to remain in possession under the
    agreement.Even otherwise, a transferee can avail of
    Section 53-A only as a shield but not as a sword. It
    contemplates that where any person contracts to transfer
    for consideration any immovable property by writing,
    signed by him or on his behalf, from which the terms
    necessary to constitute the transfer can be ascertained
    with reasonable certainty and the transferee has
    performed or is willing to perform his part of the contract,
    he would be entitled to retain possession and to continue
    in possession which he has already received from the

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    transferor so long as he is willing to perform his part of
    the contract. Agreement does not create title or
    interest in the property. Since the agreement had met
    with dismissal of the suit his willingness to perform his part
    of the contract does not arise.

    6. Even otherwise, in a suit for possession filed by the
    respondent, successor-in-interest of the transferor as a
    subsequent purchaser, the earlier transferee must plead
    and prove that he is ready and willing to perform his part
    of the contract so as to enable him to retain his possession
    of the immovable property held under the agreement. The
    High Court has pointed out that he has not expressly
    pleaded this in the written statement. We have gone
    through the written statement. The High Court is right in
    its conclusion. Except vaguely denying that he is not ready
    and willing to perform his part, he did not specifically plead
    it. Under Section 16(c) of Specific Relief Act, 1963, the
    plaintiff must plead in the plaint, his readiness and
    willingness from the date of the contract till date of the
    decree. The plaintiff who seeks enforcement of the
    agreement is enjoined to establish the same. Equally,
    when the transferee seeks to avail of Section 53-A
    to retain possession of the property which he had
    under the contract, it would also be incumbent upon
    the transferee to plead and prove his readiness and
    willingness to perform his part of the contract. He
    who comes to equity must do equity. The doctrine of
    readiness and willingness is an emphatic way of
    expression to establish that the transferee always abides
    by the terms of the agreement and is willing to perform
    his part of the contract. Part performance, as statutory
    right, is conditioned upon the transferee’s
    continuous willingness to perform his part of the
    contract in terms covenanted thereunder.”

    [Emphasis Supplied]

    VIII. Conclusion:

    32. The appellants/defendants have failed to establish any

    such hostile assertion. Earlier litigations instituted by their

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    predecessor only sought for protection of possession and

    thus negate the plea of adverse possession. The decrees in

    those proceedings merely protected possession until

    eviction in accordance with law and did not recognise title

    in favour of the appellants/defendants or their predecessor.

    33. Undisputably, the possession obtained by appellants/

    defendants pursuant to an Agreement to Sell, thus the

    possession cannot be termed as adverse in terms of the

    settled law discussed above.

    34. In the absence of proof of adverse possession,

    limitation under Article 65 of the Limitation Act cannot be

    invoked by the appellants/defendants as has been

    discussed above. The cause of action for the respondent

    No.1/plaintiff arose only in the year 2010, when hostile acts

    were asserted by execution of Gift Deed and attempted

    construction. The suit was therefore within limitation.

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    35. In view of the aforesaid discussions, the Appeals are

    dismissed. Pending applications, if any, stand closed.

    Sd/-

    (D K SINGH)
    JUDGE

    Sd/-

    (TARA VITASTA GANJU)
    JUDGE
    YN
    List No.: 1 Sl No.: 1

    46



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