Supreme Court Clarifies Jurisdiction in Cases of Fraudulent Sale Deeds Under U.P. Consolidation Act (10 September 2024)

Introduction

Date of the Judgment: 10 September 2024
Citation: 2024 INSC 764
Judges: Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah
Can a civil court hear a case about a sale deed that was allegedly obtained through fraud, or does the U.P. Consolidation of Holdings Act, 1954, take precedence? The Supreme Court of India recently addressed this question, clarifying the jurisdiction of civil courts in cases involving fraudulent sale deeds of agricultural land when consolidation proceedings are underway. The core issue revolves around whether a suit seeking cancellation of a sale deed, allegedly executed through fraud and impersonation, is barred by the U.P. Consolidation of Holdings Act, 1954. The judgment was delivered by a two-judge bench comprising Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah.

Case Background

The dispute concerns agricultural land in village Basedi Khaadar, District Haridwar. The original owner, Illahibaksh, had three sons: Shafi, Gafoor, and Shaqoor (the respondent). Upon Illahibaksh’s death, the land was divided equally among his sons. Shafi had three daughters, one of whom is Haneefa (mother of Petitioner No. 1). Gafoor had no children, and his share went to his wife, Vakila. Vakila’s name was recorded in the revenue records. Later, Vakila married Shaqoor (the respondent). In 2003, the land was brought under consolidation proceedings.

After Vakila’s death in 2009, Haneefa allegedly impersonated Gafoor’s daughter and fraudulently got her name recorded as a co-tenant on 03.08.2016. Subsequently, on 09.08.2016, Haneefa executed a sale deed in favor of Petitioner No. 2, selling the property to which she had no legal right. The respondent, Shaqoor, then filed a civil suit to cancel the sale deed.

Timeline

Course of Proceedings

The Civil Court initially ordered the abatement of the suit based on Section 5(2)(a) of the Consolidation Act, stating that the dispute was under the purview of the consolidation authorities. The Additional District Judge upheld this decision in appeal. The High Court of Uttarakhand, however, overturned these orders in a writ petition, relying on the distinction between ‘void’ and ‘voidable’ documents, stating that a suit for cancellation of a voidable sale deed would not abate under Section 5(2)(a) of the Consolidation Act. The High Court relied on the judgment of the Supreme Court in Gorakh Nath Dube v. Hari Narain Singh (1973) 2 SCC 535 to come to the conclusion that as the allegation is that the sale deed was executed by playing fraud and by impersonation, it would be a “voidable” document.

Legal Framework

The core of the legal framework is based on Section 5(2)(a) of the U.P. Consolidation of Holdings Act, 1954, which states:

“(2) Upon the said publication of the notification under sub-section (2) of Section 4, the following further consequences shall ensue in the area to which the notification relates, namely-
(a) every proceeding for the correction of records and every suit and proceeding in respect of declaration of rights or interest in any land lying in the area, or for declaration or adjudication of any other right in regard to which proceeding can or ought to be taken under this Act, pending before any court or authority whether of the first instance or of appeal, reference or revision, shall, on an order being passed in that behalf by the court or authority before whom such suit or proceedings is pending, stand abated:”

This section essentially bars civil courts from hearing cases related to land rights once consolidation proceedings begin. However, the crucial aspect is the interpretation of “void” versus “voidable” documents. The Supreme Court relied on its previous judgments, including Ningawwa v. Byrappa (1968) 2 SCR 797, which established that a contract induced by fraud is voidable, not void. Further, the court also relied on Dularia Devi v. Janardan Singh & Ors. AIR 1990 SC 1173 and Ram Sakal Singh v. Mosamat Monako Devi (1997) 5 SCC 192, which held that consolidation authorities do not have the jurisdiction to cancel voidable documents, and such documents remain valid until cancelled by a competent civil court.

Arguments

Petitioners’ Arguments:

• The petitioners argued that the civil suit should be abated under Section 5(2)(a) of the Consolidation Act, as the land was under consolidation proceedings. The main contention was that the dispute regarding the sale deed falls within the jurisdiction of the consolidation authorities.
• They contended that once a notification under Section 4 of the Consolidation Act is published, all suits related to land rights must be addressed by the consolidation authorities, not the civil courts.

Respondent’s Arguments:

• The respondent argued that the sale deed was obtained through fraud and impersonation, making it a voidable document. The respondent contended that the consolidation authorities do not have the power to cancel a voidable document and that only a civil court can do so.
• The respondent relied on the Supreme Court’s judgments in Ningawwa v. Byrappa (1968) 2 SCR 797, Dularia Devi v. Janardan Singh & Ors. AIR 1990 SC 1173, and Ram Sakal Singh v. Mosamat Monako Devi (1997) 5 SCC 192 to emphasize that a voidable document remains valid until cancelled by a civil court.
• The respondent argued that since the sale deed was voidable and not void, the civil court has the jurisdiction to try the suit seeking its cancellation and it will not abate under Section 5(2)(a) of the Consolidation Act.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for determination:

1. Whether, by virtue of Section 5 (2) (a), upon publication of the Notification under Section 4 of the Consolidation Act, any pending civil suit for cancellation of a sale deed executed by fraud and impersonation, stands abated and the jurisdiction of the Civil Court to try such a suit is ousted in terms of Section 49 of the Consolidation Act?

Treatment of the Issue by the Court

Authorities

Void vs. Voidable Documents:

• Ningawwa v. Byrappa (1968) 2 SCR 797 (Supreme Court of India): This case established the distinction between fraudulent misrepresentation as to the character of a document (making it void) and fraudulent misrepresentation as to the contents of a document (making it voidable). The court held that a contract or transaction tainted by fraud is voidable at the option of the defrauded party.

Jurisdiction of Civil Courts and Consolidation Authorities:

• Gorakh Nath Dube v. Hari Narain Singh (1973) 2 SCC 535 (Supreme Court of India): This case was relied upon by the High Court to conclude that a sale deed executed by fraud and impersonation is voidable.
• Dularia Devi v. Janardan Singh & Ors. AIR 1990 SC 1173 (Supreme Court of India): This case held that a voidable document continues to be in force until it is set aside by a competent civil court and is binding upon consolidation authorities until then.
• Ram Sakal Singh v. Mosamat Monako Devi (1997) 5 SCC 192 (Supreme Court of India): The Supreme Court held that consolidation authorities do not have the jurisdiction to cancel a voidable document, and it will remain valid until cancelled by a competent civil court. The court also held that if the document is void, the consolidation authorities can disregard it.

Authorities Considered by the Court

Judgment

How each authority was viewed by the Court?

The Court relied on the following authorities:

• Ningawwa v. Byrappa (1968) 2 SCR 797*: The Court used this case to establish the distinction between void and voidable documents, stating that fraudulent misrepresentation as to the character of a document makes it void, while fraudulent misrepresentation as to the contents makes it voidable.
• Gorakh Nath Dube v. Hari Narain Singh (1973) 2 SCC 535*: The Court relied on this case to support the conclusion that a sale deed executed by fraud and impersonation is voidable, not void.
• Dularia Devi v. Janardan Singh & Ors. AIR 1990 SC 1173*: The Court used this case to support the view that a voidable document remains in force until it is set aside by a competent civil court.
• Ram Sakal Singh v. Mosamat Monako Devi (1997) 5 SCC 192*: The Court used this case to reiterate that consolidation authorities do not have the jurisdiction to cancel a voidable document, and it remains valid until cancelled by a civil court.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the distinction between ‘void’ and ‘voidable’ documents and the jurisdictional limitations of consolidation authorities. The court emphasized that a document obtained through fraud and impersonation is voidable and not void. This distinction is crucial because a voidable document remains valid until it is set aside by a competent court, which in this case, is a civil court. The court also considered that consolidation authorities do not have the power to cancel a voidable document, reinforcing the jurisdiction of civil courts in such matters. The reasoning was heavily based on previous judgments of the Supreme Court, ensuring consistency and adherence to established legal principles.

Fact:Law Ratio:

Logical Reasoning

Judgment

The Supreme Court dismissed the Special Leave Petition, upholding the High Court’s decision. The Court reasoned that since the sale deed was obtained through fraud and impersonation, it is a voidable document. The Court stated that “The allegation here is that the fraudulent misrepresentation was by petitioner No. 1’s mother, who executed the sale deed dated 09.08.2016 by impersonation, it would make the sale deed voidable, but not void.” The court further emphasized that “…the Sale Deed dated 09.08.2016 will be binding on the Consolidation Authorities unless it is set aside by a competent Civil Court and there would be no bar on jurisdiction of the Civil Court to try a suit for cancellation of such a sale deed.”

The Court also reiterated that “…consolidation authorities do not have the jurisdiction and power to cancel a document, which is required to be set aside or cancelled and the document will continue to be valid till it is cancelled by a Competent Court i.e. a Civil Court.” The Court concluded that the High Court was correct in restoring the civil suit to the file of the Civil Judge, and there was no reason to interfere with the High Court’s order.

Key Takeaways

• Civil courts retain jurisdiction in cases involving cancellation of voidable sale deeds, even when consolidation proceedings are underway.
• Sale deeds obtained through fraud and impersonation are considered voidable, not void, requiring a civil court to cancel them.
• Consolidation authorities do not have the power to cancel voidable documents.
• This judgment reinforces the distinction between void and voidable documents in the context of land disputes and consolidation proceedings.

Directions

No specific directions were given by the Supreme Court in this judgment.

Specific Amendments Analysis

There was no specific amendment discussed in the judgment.

Development of Law

The ratio decidendi of this case is that a sale deed obtained through fraud and impersonation is voidable, not void, and thus, a civil court retains jurisdiction to cancel such a deed even during consolidation proceedings. This judgment reinforces the existing legal position regarding the distinction between void and voidable documents and clarifies the jurisdictional limits of consolidation authorities, ensuring that the civil courts retain their power to adjudicate matters relating to cancellation of voidable documents.

Conclusion

The Supreme Court’s judgment in Khursheed & Anr. vs. Shaqoor clarifies that civil courts have the jurisdiction to hear cases for the cancellation of sale deeds obtained by fraud and impersonation, even when consolidation proceedings are in progress. The Court emphasized that such sale deeds are voidable, not void, and can only be cancelled by a civil court. This ruling reinforces the distinction between void and voidable documents and ensures that consolidation authorities do not overstep their jurisdiction.