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Indian Limitation Act (9 of 1908), Arts. 91 and 95-Suit to set aside gift deed on grounds of undue influence and fraud- Period of limitation and starting point for Iimitation. =In 1938, the appellant executed a gift deed of four plots of land-two in village T and two in village L in favour of her husband. At that time the appellant was young and illiterate and her husband was in a position to dominate her will, and she believed that the document related only to the plots in village T which were originally the property of the husband. The properties in village L were inherited by the appellant from her father. They were very valuable and fertile and there was no reason whatever for her to gift them away to her husband. In 1941, the husband married a second wife but the appellant continued to live with him amicably till he died in 1949. Thereafter the conduct of the relatives of the second wife made her suspicious, and on enquiry, she found that the plots in village L were also included in the gift deed. She therefore filed a suit for setting aside the gift deed and for possession of all the four items of property, against the second wife and her children. The High Court, in appeal, dismissed the suit. In appeal to this Court, HELD : (1) The appellant’s husband included the two plots of land in village L in the gift deed by fraud and without the appellant’s knowledge. Since the fraudulent misrepresentation was with respect to the contents and not the character of the document the transaction was not void but only voidable. Therefore, the suit for setting aside the gift deed would be governed by Art. 95 of the Limitation Act, 1908. Since the Article prescribes a period of limitation of 3 years from the time when the fraud became known to the party wronged, and the suit in the present case was filed within a few days after the appellant came to know of the fraud, the suit with respect to the items in village L was within time and should be decreed. [800 G; 802 A-C, E] Clough v. L. & N. W. Railway, (1871) L.R. 7 Ex. 26; Foster v. Mackinon (1869) 4 C.P. 704, Sanni Bibi v. Siddik Hossain, A.I.R. 1919 Cal. 728 and Brindaban v. Dhurba Charan, A.I.R. 1929 Cal. 606, referred to. (2) As regards the plots in village T, in view of s. 16(3) of the Indian Contract Act, and s. II 1 of the Evidence Act the gift deed must be presumed to have been obtained by the appellant’s husband by undue influence. The suit with respect to these properties would therefore be governed by Art. 91. The period of limitation prescribed by the Article is three years and time begins to run from the date when the plaintiff discovered the facts entitling the plaintiff to have the instrument cancelled or set aside and not from the date when the plaintiff escaped from the undue influence. Since the appellant in the present case knew at the very time of the execution of the gift deed that her husband prevailed upon her to convey the plots in village T to him by undue. influence, her suit was barred by limitation so far as he plots in village T are concerned. [803 A-B, D, E- G] L3 Sup. Cl/68-7 798 Someshwar Dutt v. Tirbhawan Dutt, 61 I.A. 224. applied.

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PETITIONER:
NINGAWWA

 Vs.

RESPONDENT:
BYRAPPA & 3 ORS.

DATE OF JUDGMENT:
17/01/1968

BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
SHAH, J.C.

CITATION:
 1968 AIR 956 1968 SCR (2) 797
 CITATOR INFO :
 F 1990 SC 540 (6)
 F 1990 SC1173 (4,6,7)

ACT:
Indian Limitation Act (9 of 1908), Arts. 91 and 95-Suit to
set aside gift deed on grounds of undue influence and fraud-
Period of limitation and starting point for Iimitation.

HEADNOTE:
In 1938, the appellant executed a gift deed of four plots of
land-two in village T and two in village L in favour of her
husband. At that time the appellant was young and
illiterate and her husband was in a position to dominate her
will, and she believed that the document related only to the
plots in village T which were originally the property of the
husband. The properties in village L were inherited by the
appellant from her father. They were very valuable and
fertile and there was no reason whatever for her to gift
them away to her husband. In 1941, the husband married a
second wife but the appellant continued to live with him
amicably till he died in 1949. Thereafter the conduct of
the relatives of the second wife made her suspicious, and on
enquiry, she found that the plots in village L were also
included in the gift deed. She therefore filed a suit for
setting aside the gift deed and for possession of all the
four items of property, against the second wife and her
children. The High Court, in appeal, dismissed the suit.
In appeal to this Court,
HELD : (1) The appellant's husband included the two plots of
land in village L in the gift deed by fraud and without the
appellant's knowledge. Since the fraudulent
misrepresentation was with respect to the contents and not
the character of the document the transaction was not void
but only voidable. Therefore, the suit for setting aside
the gift deed would be governed by Art. 95 of the Limitation
Act, 1908. Since the Article prescribes a period of
limitation of 3 years from the time when the fraud became
known to the party wronged, and the suit in the present case
was filed within a few days after the appellant came to know
of the fraud, the suit with respect to the items in village
L was within time and should be decreed. [800 G; 802 A-C, E]
 Clough v. L. & N. W. Railway, (1871) L.R. 7 Ex. 26; Foster
v. Mackinon (1869) 4 C.P. 704, Sanni Bibi v. Siddik Hossain,
A.I.R. 1919 Cal. 728 and Brindaban v. Dhurba Charan, A.I.R.
1929 Cal. 606, referred to.
(2) As regards the plots in village T, in view of s. 16(3)
of the Indian Contract Act, and s. II 1 of the Evidence Act
the gift deed must be presumed to have been obtained by the
appellant's husband by undue influence. The suit with
respect to these properties would therefore be governed by
Art. 91. The period of limitation prescribed by the Article
is three years and time begins to run from the date when the
plaintiff discovered the facts entitling the plaintiff to
have the instrument cancelled or set aside and not from the
date when the plaintiff escaped from the undue influence.
Since the appellant in the present case knew at the very
time of the execution of the gift deed that her husband
prevailed upon her to convey the plots in village T to him
by undue. influence, her suit was barred by limitation so
far as he plots in village T are concerned. [803 A-B, D, E-
G]
L3 Sup. Cl/68-7
798
Someshwar Dutt v. Tirbhawan Dutt, 61 I.A. 224. applied.JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 586 of
1965.
Appeal from the judgment and decree dated July 29, 1960 of
the Mysore High Court in Regular Appeal No. (B) 71 of 1956.
K. R. Chaudhuri, for the appellant.
Naunit Lal, for the respondent.
The Judgment of the Court was delivered by
Ramaswami, J. This appeal is brought, by certificate, from
the judgment of the Mysore High Court dated July 29, 1960 in
R.A. (B) 71 of 1956, whereby the High Court allowed the
appeal of the respondents and dismissed the suit of the
appellant.
In the suit which is the subject-matter of this appeal the
appellant asked for a decree for possession of the
properties mentioned in the schedule to the plaint on the
ground that she was the owner of the properties in spite of
the gift deed, Ex. 45 executed by her on January 16, 1938.
According to the case of the appellant, plot nos. 91 and 92
of Lingadahalli village were inherited by her from her
father and plot nos. 407/1 and 409/1 of Tadavalga village
were originally the properties of her husband Shiddappa.
These plots had been usufructually mortgaged but they were
redeemed from the funds supplied by the appellant and a
reconveyance of the two plots was taken in the name of the
appellant. At about the time Ex. 45 was executed it is
alleged by the appellant that her husband Shiddappa was
dominating her will and persuaded her to execute the gift
deed in respect of plots 407/1 and 409/1 of Tadavalga
village. The appellant was taken to Bijapur by her husband
on January 16, 1938 and there Ex. 45 was written and she was
made to sign it. The document was registered on January 18,
1938 at Indi. The appellant believed that the document, Ex.
45 related to only plots nos. 407/1 and 409/1 of Tadavalga
village. She was never told by her husband that the
document related either to plot no. 91 or plot no. 92 of
Lingadahalli village. Shiddappa died in about the end of
December, 1949 and till then she was amicably living with
him and consequently she had no occasion to know about the
true character of Ex. 45 or about its contents. Shiddappa
had taken a second wife in the year 1941 and after the death
of Shiddappa in 1949 the relations of the second wife,
respondent no. 4, began to assert their rights in respect of
the properties of the appellant. Growing suspicious of the
conduct of the respondents, the appellant made enquiries
from the Karnam of the village and found that in Ex. 45 she
was purported to have made a gift of properties
799
included in plots 91 and 92 of Lingadahalli village to her
husband Shiddappa. Consequently the appellant brought the
present suit for possession of properties. Respondent no. 4
is the second wife of Shiddappa and respondents 1 to 3 are
the children of Shiddappa through respondent no.. 4. They
resisted the appellant's suit and contended that the gift
deed in favour of Shiddappa, Ex. 45 was valid and that the
same was executed voluntarily by the appellant and
consequently it was not liable to be set aside. The trial
court came to the conclusion that Shiddappa obtained Ex. 45
by the exercise of undue influence over the appellant, that
he had represented to her that it related only to plots nos.
407/1 and 409/1 of Tadavalga village and he had fraudulently
included in the document plots nos. 91 and 92 of
Lingadahalli village. The trial court, however, dismissed
the appellant's suit in respect of plots nos. 407/1 and
409/1 on the ground that the suit was barred under Article
91 of the Limitation Act. With regard to plots 91 and 92 of
Lingadahalli village the trial court gave a decree in favour
of the appellant. The respondents took the matter in appeal
to the Mysore High Court. The appellant filed cross-
objections against the decree of the trial court. By its
judgment dated July 29, 1960, the High Court allowed the
appeal and dismissed the cross-objections, thereby
dismissing the suit of the appellant in its entirety. The
High Court confirmed the finding of the trial court so far
as plots nos. 407/1 and 409/1 of Tadavalga village were
concerned and held that the suit was barred by limitation as
it was not filed within three years of _the execution of the
deed. As regards plots nos. 91 and 92 of Lingadahalli
village the High Court held that the alleged fraud had not
been established by ,he appellant.
On behalf of the appellant learned Counsel contended, in the
first place, that the High Court was not justified in
interfering with the finding of the trial court that plots
nos. 91 and 92 of Lingadahalli village were included in the
gift deed by the fraud of the husband without knowledge of
the appellant. It was pointed out that the finding of the
High Court is vitiated because it has not taken into account
certain important circumstances upon which the trial court
relied for reaching its finding. In our opinion, the
argument put forward on behalf of the appellant is well-
founded and must be accepted as correct. At the time of the
gift deed, The appellant was a young woman of about 24 years
of age. She was illiterate and ignorant and all her affairs
were being managed by her husband who stood in a position of
active confidence towards her. The trial court found that
the appellant's husband was in a position to dominate her
will. The document of gift also appears to be grossly
undervalued at Rs. 1,500 while actually the value of the
property was about Rs. 40,000 at the relevant
800
date. The trial court has found that plots nos. 91 and 92
of Lingadahalli village were the most valuable and fertile
lands owned by the appellant before the execution of the
gift deed. It is the admitted position that not only the
appellant and her husband but her husband's two brothers and
their families lived on -he income of the two plots. There
appears to be no reason whatever for the appellant to agree
to transfer the valuable lands of plots nos. 91 and 92 of
Lingadahalli village inherited by her from her father to her
husband. It was suggested on behalf of the respondents that
it was the desire of the appellant that her husband should
marry a second wife and he could no,, find a bride to marry
unless he possessed sufficient properties and therefore the
appellant executed the gift deed in favour of her husband
with a view to enable him to find a bride. But it is an
undisputed fact that the appellant's husband married the 4th
respondent about three years after the execution of the gift
deed and it is not Possible to accept the case of the
respondents that there was any connection between the gift
deed and the second marriage of Shiddappa. The High Court
has referred to the evidence of the attesting witness,
Bhimarao who said that the document was read over to the
appellant before she put her thumb impression thereon. On
the basis of this evidence the High Court came to the
conclusion that the plea of fraud could not be accepted as
Shiddappa would not have allowed the document to be read
over to the appellant if he intended to perpetrate a fraud
on her. But Bhimarao was not a disinterested witness
because it is admitted that he had been approached by the
respondents before they filed the Written Statement in the
suit. For this reason the trial court disbelieved the
evidence of Bhimarao and no reason ha-, been given by the
High Court for taking a different view of the evidence of
this witness. The other attesting witness, Venkappa does
not say that the gift deed was read over to the appellant
before her thumb impression was taken on it or that she knew
of its contents. In our opinion the Civil Judge was right
in taking the view that the appellant never agreed to convey
the lands in plots nos. 91 and 92 of Lingadahalli village
and that they were included in the gift deed by the fraud of
Shiddappa without the knowledge of the appellant.
On behalf of the respondents Mr. Naunit Lal, however,
stressed the argument that the trial court was wrong in
holding that the gift deed was void on account of the
perpetration of fraud. It was submitted that it was only a
voidable transaction and the suit for setting aside the gift
deed would be governed by Article 95 of the Indian
Limitation Act. In our opinion, the proposition contented
for by Mr. Naunit Lal must be accepted as correct. It is
well-established that a contract or other transaction
induced or
801
ainted by fraud is not void, but only voidable at the option
of the arty defrauded. Until it is avoided, the transaction
is valid, so at third parties without notice of the fraud
may in the meantime aquire rights and interests in the
matter which they may enforce against the party defrauded.
"The fact that the contract has been duced by fraud does not
make the contract void or prevent the property from passing,
but merely gives the party defrauded a thoght on discovering
the fraud to elect whether he shall continue to treat the
contract as binding or disaffirm the contract and resume the
property, If it can be shown that the party defrauded has at
any time after knowledge of the fraud either by express
words or by unequivocal acts affirmed the contract, his
election determined for ever. The party defrauded may keep
the question open so long as he does nothing to affirm the
contact. Clough v. L. & N. W. Ry.) (1). ,
The legal position will be different if there is a
fraudulent misrepresentation not merely as to the contents
of the document out as to its character. The authorities
make a clear distinction between fraudulent
misrepresentation as to the character of the document and
fraudulent misrepresentation as to the contents Thereof.
With reference to the former, it has been held that the
Transaction is void,.while in the case of the latter, it is
merely voidable. In Foster v. Mackinon(2) the action was by
the endorsee of a bill of exchange. The defendant pleaded
that he endorsed the bill on a fraudulent representation by
the acceptor that he was signing a guarantee. In holding
that such a plea was admissible, the Court observed :
 "It (signature) is invalid not merely on the
 ground of fraud, where fraud exists, but on
 the ground that the mind of the signer did not
 accompany the signature; in other words, that
 he never intended to sign, and therefore in
 contemplation of law never did sign, the
 contract to which his name is appended ....
 The defendant never intended to sign that
 contract or any such contract. He never
 intended to put his name to any instrument
 that then was or thereafter might become
 negotiable. He was deceived, not merely as to
 the legal effect, but as to the ,actual
 contents' of the instrument."
This decision has been followed by the Indian courts-Sanni
Bibi v. Siddik Hossain(3), and Brindaban v. Dhurba
Charan(4). It is not the contention of the appellant in the
present case that there was any fraudulent misrepresentation
as to the character of the gift deed but Shiddappa
fraudulently included in the gift deed
(1) (1871) L.R. 7 Ex. 26, 34.
(3) A.I.R. 1919 Cal. 728.
(2) [18691 4 C.P. 704.
(4) A.I.R. 1929 Cal. 606.
802
plots 91 and 92 of Lingadahalli village without her
knowledge. We are accordingly of the opinion that the
transaction of gift was voidable and not void and the suit
must be brought within the time prescribed under Article 95
of the Limitation Act.
It was contended on behalf of the respondents that the
terminus a quo for the limitation was the date of the
execution of the gift deed and claim of the appellant was
therefore barred a,, the suit was filed more than three
years after that, date. We are unable to accept this
argument as correct. Article 95 prescribe., a period of
limitation of three years from the time when the fraud
becomes known to the party wronged. In the present case,
the appellant stated that she did not come to know of the
fraud cormmitted by her husband in respect of plots 91 and
92 of Lingadahalli village till his death. The trial court
has discussed the evidence on this point and reached the
conclusion that the case of the appellant is true. The
appellant lived with her husband on affectionate terms till
the time of his death. Till then she had no reason to
suspect that any fraud had been committed on her in respect
of the two plots in Lingadahalli village. It is only after
his death when his brothers and respondent no. 4's brothers
removed grain from the house against her wishes that the
appellant came to know that the lands at Lingadahalli
village were included in the gift deed by fraud. The suit
was instituted by the appellant within a few days after she
came to know of the fraud. We are therefore of the opinion
that the suit was brought within time prescribed under Art.
95 of the Indian Limitation Act so far a.plots 91 and 92 of
Lingadahalli village are concerned.
As regards plots nos. 407/1 and 409/1 of Tadavalga village
the trial court has found that the husband of the appellant
was in a position of active confidence towards her at the
time of the gift deed and that he was in a position to
dominate her will and the transaction of gift was on the
face of it unconscionable. Section 16(3) of the Indian
Contract Act says that where a person who is in a position
to dominate the will of another enters into a transaction
with him which appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that
such transaction was not induced by undue influence, shall
lie upon the person in a position to dominate the will of
another. Section I 1 1 of the Indian Evidence Act also
states :
 "Where there is a question as to the good
 faith of a transaction between parties, one of
 whom stands to the other in a position of
 active confidence, the burden of proving the
 good faith of the transaction is, on the party
 who is in a position of active confidence."
 803
The trial court found that the respondents had not adduced
sufficient evidence to rebut the presumption under these
statutory provisions and reached the finding that the gift
deed was obtained by the appellant's husband by undue
influence as alleged by her. The finding of the trial court
has been affirmed by the High Court. But both the trial
court and the High Court refused to grant relief to the
appellant on the ground that the suit was barred under Art.
91 of the Limitation Act so far as plots nos. 407/1 and
409/1 were concerned. On behalf of the appellant it was
contended that the lower courts were wrong in taking this
view. We are, however, unable to accept this argument as
correct. Article 91 of the 'Indian Limitation Act provides
that a sun to set aside an instrument not otherwise provided
for (and no other provision of the Act applies to the
circumstances of the case) shall be subject to a three
year's limitation which begins to run when the facts
entitling the plaintiff to have the instrument cancelled or
set aside ,ire Known to him. In the present case, the trial
court has found, upon examination of the evidence, that at
the very time of the execution of the gift deed, Ex. 45 the
appellant knew that her husband prevailed upon her to convey
survey plots nos. 407/1 and 409/1 of Tadavalga village to
him by undue influence. The finding of the trial court is
based upon the admission of the a appellant herself in the
course of her evidence. In view of this finding of the
trial court it is manifest that the suit of the appellant is
barred under Art. 91 of the Limitation Act. so far as plots
nos. 407/1 and 409/1 of Tadavalga village are concerned. On
behalf of the appellant Mr. K. R. Chaudhuri presented ,be
argument that the appellant continued to be under the undue
influence of her husband till the date of his death and the
three year's period under Art. 91 should therefore be taken
to run not when the appellant had knowledge of the true
nature of the gift deed but from the date when she escaped
the influence of her husband by whose will she was
dominated. It is not possible, to accept this argument in
view of the express language of Art. 91 of the Limitation
Act which provides that the three years' period runs from
the date when the plaintiff came to know the facts entitling
her to have the instrument cancelled or set aside. This
view is borne out by the decision of the Judicial Committee
in Someshwar Dutt v. Tirbhawan Dutt(1) in which it was held
that the limitation of a suit to set aside a deed of gift on
the ground that it was obtained by undue influence was
governed by Art. 91 of the Indian Limitation Act, and the
three years period runs from the date when the plaintiff
discovered the true nature of the deed, and not from the
date when he escaped from the influence by which be alleged
that be was dominated.
(1) 61 I.A. 224.
804
For the reasons expressed we hold that this appeal must be
allowed and the appellant must be granted a decree that the,
gift deed, Ex. 45 is not binding on her so far as plots 9".
and 92 of Lingdahalli village are concerned and she is
further entitled to recover possession of the said two plots
from the defendantrespondents with mesne profits. We
accordingly set aside the decree of the High Court, restore
the decree of the Civil Judge, Senior Division, Bijapur
dated January 29, 1953 and allow this appeal with costs.
V. P. S.
Appeal allowed.
805

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