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by Admin
23 January 2026 3:42 PM
"Sanctity of Registered Documents Cannot Be Undermined By Clever Drafting or Post Hoc Allegations" – On 22nd January 2026, the Supreme Court of India delivered a significant judgment in the case of Hemalatha (Dead) by LRs. v. Tukaram (Dead) by LRs. & Ors. [Civil Appeal No. 6640 of 2010], emphatically reinforcing the evidentiary threshold required to challenge a registered Sale Deed as being a sham or nominal. The Court held that registered conveyances enjoy a strong presumption of validity and cannot be lightly or casually invalidated, absent clear, cogent, and specific pleadings and evidence in accordance with the standards prescribed under Order VI Rule 4 CPC and Sections 91 and 92 of the Indian Evidence Act, 1872.
The Bench comprising Justice Rajesh Bindal and Justice Manmohan allowed the appeal filed by the legal representatives of the original purchaser and set aside the judgment of the Karnataka High Court dated 04.02.2010. The Court restored the first appellate court’s decision dated 13.12.1999, which had dismissed the suit filed by the original owner Tukaram, who had sought to declare the registered Sale Deed and Rental Agreement dated 12.11.1971 as sham and not to be acted upon.
“Courts Should Not Casually Declare Registered Documents As Sham”—Presumption of Validity Reaffirmed
The judgment reiterates that “registration is a solemn act that imparts high degree of sanctity to the document” and hence, courts must not casually declare a registered instrument as a sham. Referring to the settled position of law, the Bench observed:
“A registered Sale Deed carries with it a formidable presumption of validity and genuineness. Courts must not lightly or casually declare a registered instrument as a sham. The burden of proof to displace this presumption rests heavily upon the challenger.” [Para 31]
Citing Prem Singh v. Birbal, Jamila Begum v. Shami Mohd., and Rattan Singh v. Nirmal Gill, the Court held that challenges to such documents can only succeed if the party provides material particulars and credible evidence to demonstrate that the document was never intended to operate as a bona fide transfer.
A Registered Sale Followed by Tenancy – Later Challenged as Sham
The dispute arose from a registered Sale Deed executed on 12.11.1971, whereby the original owner Tukaram sold his house in Bidar to Smt. Hemalatha (represented by her legal heirs in this case) for ₹10,000. The deed included full recitals of sale, redemption of prior mortgage, symbolic delivery of possession, and was followed by a registered Rental Agreement for 5 months wherein Tukaram and his family became tenants in the same house.
However, in 1977, after the purchaser initiated eviction proceedings for default in rent, the seller filed a suit (O.S. No. 39/1977) alleging that the sale and lease were sham, intended only to secure a loan. The Trial Court decreed in his favour, relying on oral evidence and suspicious circumstances. The First Appellate Court reversed this, holding that such oral evidence was inadmissible and that the transaction was a genuine sale. The High Court allowed second appeal by relying on Gangabai v. Chhabubai, accepting the view that the transaction was a sham and oral evidence was admissible to prove it.
Scope of Oral Evidence, Presumption of Registered Documents & Conditional Sale
The Supreme Court framed the central legal question as:
“What is the threshold for declaring that a registered Sale Deed is a sham?”
The Court held that under Sections 91 and 92 of the Indian Evidence Act, oral evidence is barred where the written document is clear and unambiguous. An exception exists only when it is alleged that the document was never intended to be acted upon. However, such an exception must meet the high pleading standards under Order VI Rule 4 CPC, especially when the document is registered.
“The person alleging that a registered deed is a sham must satisfy a rigorous standard of pleading by making clear, cogent, convincing averments and provide material particulars in his pleadings and evidence.” [Para 34]
The Court strongly deprecated the practice of using clever drafting to create the illusion of a cause of action, warning that this leads to frivolous litigation and erodes faith in the sanctity of registered property transactions.
Sale or Mortgage by Conditional Sale? Court Finds No Legal Basis to Treat It as Mortgage
One of the key planks of the plaintiff’s case was that the sale was in fact a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882. The Supreme Court categorically rejected this argument:
“There is no clause in the impugned Sale Deed which effects or purports to effect the sale as a mortgage. The condition for reconveyance was not embodied in the sale deed, which is a statutory requirement under Section 58(c).” [Para 44]
Relying on Shri Bhaskar Waman Joshi, Tulsi v. Chandrika Prasad, Sopan v. Syed Nabi, and Leela Agrawal v. Sarkar, the Court clarified that without an explicit clause of reconveyance in the same document, the transaction cannot be construed as a mortgage by conditional sale.
“The deeming fiction was added in the negative: that a transaction shall not be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale.” [Para 49]
Reply to Legal Notice Admitting Tenancy and Rent Default Held as Crucial Admission
The Court laid emphasis on the reply issued by the seller to the legal notice in 1974, wherein he admitted the tenancy and defaulted rent, and undertook to clear arrears by Diwali:
“In the said reply, the Respondent-Plaintiff categorically admitted his liability to pay arrears of rent and undertook to clear the arrears. The said reply, admittedly, bears the signature of the Respondent-Plaintiff.” [Para 73]
The Court further observed that no plea was taken in the suit that the reply was written without understanding or under coercion. Consequently, this reply was held to be a strong admission, and the Trial Court’s rejection of it was found to be beyond pleadings and unjustified.
Delay in Challenging the Sale and Contradictions in Pleadings Proved Fatal
The Supreme Court observed that no effort was made to seek reconveyance after alleged part-payment of ₹8,426 in 1974. The seller approached the Court only in 1977, after eviction proceedings were initiated.
“If the plea of the Respondent-Plaintiff was genuine, he would have approached the Appellant-Defendant No.1 immediately in January 1974 for reconveyance.” [Para 52]
Moreover, the Court noted the contradictions in the plaint, lack of clarity about alleged debts, absence of pleading regarding the lease reply, and internal inconsistencies. These led the Court to term the suit as a “cleverly drafted illusion of cause of action”, which ought to have been rejected at the threshold.
Systemic Recommendations: Court Suggests Blockchain for Land Record Transparency
In a noteworthy conclusion, the Bench called for systemic reforms and recommended digitisation of land records using tamper-proof technologies like Blockchain:
“Many experts believe that Blockchain... would ensure that once a transaction of a sale or mortgage or like nature is recorded, it becomes immutable and cryptographically secured.” [Para 76]
The Court stressed that certainty and sanctity of titles are fundamental to Rule of Law and economic development.
Holding that the Sale Deed dated 12.11.1971 and the contemporaneous Rental Agreement were genuine, valid, and intended to be acted upon, the Court allowed the appeal and restored the judgment of the First Appellate Court. The suit filed by the original owner to declare the registered deed as sham was dismissed with costs.
The judgment stands as a strong precedent against frivolous challenges to registered documents, and a resounding reaffirmation of the principle that oral evidence cannot be used to undo solemn, registered transactions, except in rare and narrowly defined circumstances.
Date of Decision: 22 January 2026
Case Title: Hemalatha (Dead) by LRs. Versus Tukaram (Dead) by LRs. & Ors.
