Supreme Court: The starting point of limitation to set aside or cancel an instrument, a contract or a decree on the ground of fraud is the date of knowledge of the alleged fraud

In Md. Noorul Hoda v. Bibi Raifunnisa and Ors.   MANU/SC/1414/1996 : (1996)7SCC767 , this Court held:

...There is no dispute that Article 59 would 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plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded.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.

{See also Sneh Gupta v. Devi Sarup and Ors.   MANU/SC/0238/2009 : (2009)6SCC194 }

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1573 of 2009.

Decided On: 06.03.2009

Abdul Rahim and Ors. Vs. SK. Abdul Zabar and Ors.

Hon'ble Judges/Coram:

S.B. Sinha, A.K. Ganguly and R.M. Lodha, JJ.

Author: S.B. Sinha, J.

Citation:  MANU/SC/0379/2009.AIR 2010 SC 211.

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Supreme Court: Power Of Attorney Impliedly Revoked When Principal Acts Independent Of Agency With Knowledge To Agent & Third Parties

 A con-joint reading of Sections 201 and 207 of the Contract Act and especially the illustrations appended to these Sections, I am of the view that the principal viz., Thelma Cecelia Pereira was well within her right and authority to deal with the suit property, dehors the Power of Attorney and during its subsistence and the moment the settlement deed was executed by the principal herself, it resulted in an automatic implied termination of the Power of Attorney given to the power agent.(Emphasis supplied) {Para 27}

21. In the absence of a particular mode suggested for revocation of the authority of an agent, the manner adopted by the principal to revoke the authority of the agent must be one which clearly and unequivocally communicates to the parties i.e., to be affected by such revocation, that the agent's authority has been withdrawn. In the framework of Sections 207 and 208 of the Act, the revocation/renunciation of authority may be made by express words or may be implied from the words and conduct of the principal, viz., which is inconsistent with the continuance of the agency. This is one facet of renunciation or revocation of authority of an agent; the other facet is governed by Section 208 of the Act. Section 208 provides for the effective time and date of termination of the agent's authority and third parties. From a plain reading, Section 208 infers and gives effect to revocation upon the twin conditions being satisfied, (i) communication to the agent and (ii) knowledge to a third party i.e., one who deals with or is likely to deal with the agent. Then, the revocation of authority becomes known to the agent and the said third parties. In other words, an idea in the mind of the principal to revoke cannot be construed as implied revocation or renunciation of agency. There ought to be an act or conduct of the principal which implies that the agency is revoked or withdrawn. If the revocation is expressed, such as by publication in newspapers, public notice or advertisement, communication to the agent etc., the parties who deal with the agent have a reasonable opportunity to know the revocation of agency by the principal. Two stages of revocation are, firstly, one dealing with the agent, and secondly, one which applies to the third parties. For attracting the consequence of revocation to either of the situations, the revocation of the agent's authority is made by the principal in a manner that clearly implies that the principal has withdrawn the authority to act on his or her behalf by the agent. Followed by knowledge to third parties, let us examine the circumstances of the case on whether implied revocation coupled with communication is established.

22. The Power of Attorney (Ex. A-4) was executed on 04.12.2003. The Appellant, on 30.11.2007, claims to have retired from service and settled in India. A power of attorney confers power for the execution of deeds in situations of necessity, including in the absence of the Appellant in the country. From the record, it can be noted that from 2007 onwards, the Appellant was not entirely absent from India or residing exclusively in the U.S.A. Therefore, the Appellant and Respondent No. 1 executed the sale deed dated 18.01.2008 (Ex. A-3). Respondent No. 2 is one of the witnesses to Ex. A-3. The execution of sale deed dated 16.04.2008 (Ex. A-5) is inconsistent with and contradictory to the power granted to Respondent No. 1 in Ex. A-4. This is an explicit conduct of the Appellant to act for herself on the share she holds in the property purchased in 1991. In Deb Ratan Biswas (supra), this Court held that the signing of a compromise by the Defendants themselves would amount to implied revocation of power of attorney. In a case where the principal chooses to act for himself, particularly to the agent's knowledge and a person to be affected, then it can be held that Section 207 of the Act is attracted. We have no doubt in holding that the Appellant, in terms of Section 207, impliedly revoked the authority of Respondent No. 1, and as required by Section 208, Respondent No. 2 had the knowledge of the independent dealing with the property by the Appellant. Therefore, the revocation takes effect on 18.01.2008. Ex. A-5 was executed on 16.04.2008. Thus, with the operation of implied revocation of authority, Respondent No. 1 cannot act as an agent of the Appellant and, hence, the sale deed insofar as the Appellant's share in the suit Schedule is held void ab initio.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6495 of 2023

Decided On: 09.07.2024

Thankamma George Vs. Lilly Thomas and Ors.

Hon'ble Judges/Coram:

C.T. Ravikumar and S.V. Bhatti, JJ.

Author: S.V. Bhatti, J.

Citation: MANU/SC/0582/2024,2024 INSC 494.

Read full Judgment here: Click here.

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Supreme Court: Under which circumstances limitation for setting aside sale deed will not commence inspite of its registration?

 We examine the plea of limitation raised by the Respondents. The Respondents' case is that the suit was filed on 11.05.2011, and in effect, the suit seeks to set aside the sale deed dated 16.04.2008 (Ex. A-5). The suit was filed beyond the limitation period and should have been dismissed. Limitation is a question of law and fact. The period of limitation and the time from which the period begins to run, depend on the Article in the Schedule appended to the Limitation Act of 1963. The case falls under "Part III - Suits Relating to Declarations". Article 58 reads thus:

{Para 15}

15.1. The words "when the right to sue first accrues" have been interpreted and held by this Court in Smt. Neelam Kumari and Anr. v. U.P. Financial Corporation MANU/UC/0123/2008 : AIR 2009 Utt 5. The starting point for the limitation in the case of setting aside sale deeds has two limbs: the date of execution and the date of knowledge. There is no difficulty in applying the period of limitation expiring three years from the date of execution, provided that the Appellant had knowledge of Ex. A-5 on the date of registration and the right to sue first accrued. The Respondents, in the circumstances of the case, failed to establish the Appellant's knowledge of the execution of Ex. A-5. In the final analysis, Ex. A-5 is held as without authority and void. The applicability of limitation has a different perspective. So, the starting point is when the right to sue first accrued to the Appellant. The admitted case of the Respondents is that the Appellant is a US citizen and she stayed abroad. Therefore, unless it is clearly established as a fact that the Appellant had knowledge of Ex. A-5, it cannot be inferred that the Appellant had contemporaneous knowledge of Ex. A-5 and the limitation started running from the date of execution of Ex. A-5. 

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6495 of 2023

Decided On: 09.07.2024

Thankamma George Vs. Lilly Thomas and Ors.

Hon'ble Judges/Coram:

C.T. Ravikumar and S.V. Bhatti, JJ.

Author: S.V. Bhatti, J.

Citation: MANU/SC/0582/2024,2024 INSC 494.

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Supreme Court: Coverage for the purpose of Motor accident claim petition under Insurance policy would begin from the day the money (i.e. premium) was received by the Insurance Company

Another aspect in need of consideration is as to whether the liability of the Insurance Company under the insurance certificate/policy granted by it would cover the incident. This is in reference to the question as to the date and time from when the concerned vehicle would be deemed to be covered by the policy. In the present case, the incident occurred on 11.04.2017 at 14:15 hrs, whereas the insurance policy discloses that insurance was obtained at 15:54 hrs on 11.04.2017. In this regard, on facts, the MACT has found that the premium was paid/given prior to the accident and it was the internal procedure, due to which the policy was issued the next day and, thus, coverage under the policy would begin from the day the money (i.e. premium) was received by the Insurance Company. {Para 11}

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 15016-15017 OF 2024

NATIONAL INSURANCE COMPANY LTD. Vs  MAYA DEVI AND OTHERS 

Author: AHSANUDDIN AMANULLAH, J.

Citation:  2024 INSC 1050.

Dated: SEPTEMBER 02, 2024.

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