Possession Can Be Claimed Without Cancelling a Fraudulent Sale Deed If It Is Void Ab Initio – Supreme Court Explains Why Article 65, Not Article 59, Applies to Void Transactions

“A Plaintiff Not Party to a Fraudulent Sale Deed Is Not Obligated to Cancel It — Can Ignore It and Sue for Possession”: In a detailed and legally rich judgment Supreme Court of India addressed a long-standing doctrinal confusion under the Limitation Act, 1963, regarding the proper article applicable when a plaintiff seeks possession of immovable property by disputing the validity of a prior fraudulent sale deed.

The Court ruled that Article 65, which provides a 12-year limitation period for suits based on title, applies when the impugned sale deed is void ab initio, and not Article 59, which provides a 3-year limitation for setting aside voidable instruments. The bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan decisively held:

"Where a sale deed is a nullity — forged, without consideration, or not executed by the rightful owner — there is no need for the plaintiff to seek its cancellation. Such a document can be ignored and a suit for possession can be maintained under Article 65."

Court Holds That Sale Without Consideration or Valid Execution is Void and Confers No Title

The litigation originated from a suit filed by Rasali, claiming her 1/3rd share in ancestral agricultural land in Gurgaon that had allegedly been sold through a fraudulent registered sale deed dated 14.06.1973 by her brother Ram Saran and allegedly by her. She sought a declaration that the deed was void and joint possession of the land.

According to her, she never executed the sale deed, never received any consideration, and only learned of the fraudulent deed in February 1984. The trial court dismissed the suit as time-barred under Article 59, but the First Appellate Court reversed the decision, holding that the sale deed was void and the suit, being filed within 12 years, was well within limitation under Article 65. The High Court, while affirming the decree, wrongly applied Article 59 but still held the suit to be within time from the date of knowledge.

However, the Supreme Court decisively clarified the correct legal position:

“A void document need not be cancelled. It is non est in the eyes of law. The plaintiff can simply ignore it and sue for possession based on title. The limitation would begin from the date possession becomes adverse, and Article 65 would apply.”

"Fraud As to Character Renders a Document Void – Article 65 Governs Limitation": SC Clarifies Core Distinction Between Void and Voidable Instruments

In a crucial doctrinal exposition, the Supreme Court reiterated that Article 59 applies only when the plaintiff is a party to the document and the challenge is based on fraud or misrepresentation as to contents, making the instrument voidable, not void.

The Court observed: “Fraud as to the character of a document, such as impersonation or forgery, renders the transaction void ab initio. Where the plaintiff never executed the sale deed or received any consideration, the deed is a nullity and Article 65 alone will apply.”

The Court drew a critical distinction from its own precedents including Prem Singh v. Birbal (2006), State of Maharashtra v. Pravin Jethalal Kamdar (2000), and Hussain Ahmed Choudhury v. Habibur Rahman (2025), clarifying that:

"A party not bound by a document need not cancel it. He may sue for possession based on title and set up the plea of invalidity in the course of the suit."

Referring to the evidence, the Court found that Rasali never executed the sale deed, her thumb impressions were forged, and no consideration was proved to have been paid. The defendant's husband, who allegedly paid the balance of ₹6,000, never appeared in court. The original sale deed was never produced, and the attesting witnesses were either partial or unavailable. Based on this, the sale deed was declared “void for want of execution and consideration.”

"Consideration is an Essential Element of Sale Under Section 54 of the Transfer of Property Act — Its Absence Renders the Sale Void"

The Court invoked Section 54 of the Transfer of Property Act, 1882, which defines “sale” as a transfer of ownership in exchange for a price. The bench held: “If a sale deed is executed without payment of consideration, and if it does not provide for any future payment, it is not a sale in the eyes of law. Such a document is a sham and void.”

The Court found that the sale consideration of ₹15,000 was never proved to have been paid. There was no receipt of ₹9,000 prior to execution, nor any witness to the alleged ₹6,000 paid at the time of registration.

Reaffirming the ruling in Kewal Krishnan v. Rajesh Kumar (2022), the Court emphasized: “A document that is void need not be challenged. It may be ignored even in collateral proceedings. The sale deed here did not transfer any title — the plaintiff continued to remain a co-owner in law.”

Suit Filed After 11 Years Was Within Limitation — Adverse Possession Begins Only From Date of Knowledge or Execution

Even on limitation, the Court held that the plaintiff had filed the suit within 12 years of the 1973 sale deed, and was therefore well within the permissible period under Article 65.

“Even if possession became adverse from 14.06.1973, the suit filed on 28.02.1984 is within 12 years. The plea of limitation raised by the defendant has no merit.”

The Court also rejected the argument that the plaintiff needed to first cancel the sale deed or seek a declaration that it was void.

“When a document is void, no relief of cancellation is necessary. The plaintiff may seek joint possession directly, based on title.”

Supreme Court Corrects High Court’s Error But Upholds Final Decree — Suit for Joint Possession Maintainable Without Cancelling Void Document

While the Supreme Court found fault with the High Court’s reliance on Article 59, it held that this error did not affect the outcome because the suit was in any case within the 12-year period under Article 65.

The judgment clarified: “We find the High Court erred in applying Article 59 to a suit based on title where the instrument was void. Nevertheless, the suit was rightly held to be maintainable. The final relief was just and requires no interference.”

Void Sale Deeds Need Not Be Cancelled — Possession Can Be Claimed Under Article 65 Based on Title

The Supreme Court’s ruling in Shanti Devi through LRs. v. Jagan Devi & Others offers authoritative guidance on several core legal issues:

• A void sale deed can be ignored — there is no legal obligation to seek its cancellation.

• A plaintiff not party to a void instrument may sue for possession directly under Article 65.

• Fraud as to character, impersonation, or absence of consideration renders a document void, not voidable.

• Limitation begins from the date possession becomes adverse, not from the date of the document.

• Section 54 of the Transfer of Property Act mandates consideration as essential to a valid sale.

With this decision, the Supreme Court has removed ambiguity surrounding the intersection of property law, fraudulent transactions, and limitation periods, thereby strengthening the rights of property holders seeking to reclaim possession from impostors or beneficiaries of forged conveyances.

Date of Decision: 12th September, 2025