For Invoking Section 17 of Limitation Act, Two Ingredients have to be Pleaded and Duly Proved – Existence and Discovery Fraud: SC

For invoking Section 17 of Limitation Act, two ingredients has to be pleaded and duly proved- existence and discovery fraud: SC

The Apex Court has ruled that the plaintiff has to plead and establish two ingredients i.e. the one is the existence of fraud and the other is a discovery of such fraud to invoke Section 17 of the Limitation Act 1963.

Section 17 of the Limitation Act

Section 17 of the Limitation Act talks about “Effect of fraud or mistake”

It states 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 or the mistake or could, with reasonable diligence, has discovered it, or in the case of a concealed document until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production.

Brief Facts of the Case

  • The Supreme Court was hearing an appeal against a common judgment of the Punjab and Haryana High Court, wherein the High Court reversed the concurrent findings of the trial Court and the first appellate Court according to which the suit was dismissed as time-barred.
  • The dispute between the parties was related to a General Power of Attorney supposed to have been executed by the plaintiff on 28.06.1990 in favour of defendant No. 1 and subsequently 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.

Observation made by the Court

“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 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 Apex Court noted.

“The requirement regarding shifting of the

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”, it added.

  • It is settled that the standard of proof required in a civil dispute is a preponderance of probabilities and not beyond a reasonable doubt. In the present cases, though the discrepancies in the 1990 GPA are bound to create some doubt, however, in absence of any tangible evidence produced by the plaintiff to support the plea of fraud, it does not take the matter further. Rather, in this case, the testimony of the attesting witness, scribe and other independent witnesses plainly support the case of the defendants. That evidence dispels the doubt if any, and tilt the balance in favour of the defendants, concluded the Court.
  • The Count held that since the plaintiff could not establish the existence of fraud, it must follow that the suits are ex­facie barred by limitation.
  • In view of the foregoing discussion, the Court held that the trial Court and the first appellate Court had appreciated the evidence properly and that view being a possible view, the High Court ought not to have disturbed the same in the second appeal and that too on surmises and conjectures.

Thus the suit was held to be time-barred.

Case Name: Rattan Singh vs. Nirmal Gill

Citation: CIVIL APPEAL NOS. 3681­3682 OF 2020

Case Name: Inder Pal Singh & Anr. Vs.  Nirmal Gill & Ors. 

Citation: CIVIL APPEAL NOS. 3683­3684 OF 2020

Coram: Justices AM Khanwilkar and Dinesh Maheshwari

[For invoking Section 17 of Limitation Act, two ingredients has to be pleaded and duly proved- existence and discovery fraud: SC]

Also Read: A Person Cannot File An Anticipatory Bail Application Apprehending Arrest Following The Cancellation Of His Regular Bail: SC

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