Supreme Court Clarifies Limitation Period in Property Disputes Arising from Power of Attorney: V. Ravikumar vs. S. Kumar (2025)

Date of the Judgment: March 03, 2025
Citation: 2025 INSC 343
Judges: Justice Sudhanshu Dhulia and Justice K. Vinod Chandran

When does the clock start ticking for challenging property transactions made using a power of attorney? The Supreme Court recently addressed this crucial question in a property dispute case. The court clarified that the limitation period to file a suit challenging sale deeds executed under a power of attorney begins from the date the plaintiff becomes aware of the transactions, not from the date the power of attorney is cancelled. This judgment, delivered by a bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran, settles a significant point of law concerning limitation in property disputes.

Case Background:

The case revolves around a property dispute where the plaintiff sought to declare certain sale deeds as null and void. These sale deeds were executed by the first defendant, acting as a power of attorney holder for the plaintiff. The power of attorney was executed on October 15, 2004. Subsequently, sale deeds were executed between 2004 and 2009. The plaintiff claimed he only became aware of these sale deeds on September 21, 2015, and filed a suit on September 20, 2018, seeking a declaration that the sale deeds were invalid and an injunction to prevent the defendant from interfering with the property.

Timeline:

Course of Proceedings:

The first defendant filed an application under Order VII Rule 11 of the Civil Procedure Code (CPC), arguing that the suit was barred by limitation. The Trial Court, while acknowledging that a detailed examination of documents is usually reserved for trial, found that the suit was indeed barred by limitation based on the plaintiff’s own averments and the documents submitted. Specifically, the Trial Court noted that a patta obtained on January 10, 2015, indicated conveyances to the defendants, suggesting the plaintiff was aware of the transactions well before September 21, 2015. Consequently, the Trial Court rejected the plaint.

On appeal, the High Court reversed the Trial Court’s decision. The High Court reasoned that the limitation period should commence from the date the power of attorney was cancelled, which was September 22, 2015. Based on this, the High Court directed the Trial Court to restore the suit and proceed on its merits.

Legal Framework:

The case primarily involves the interpretation and application of:

• Order VII Rule 11 of the Civil Procedure Code (CPC): This provision allows the court to reject a plaint if it appears to be barred by any law, including the law of limitation.

Arguments:

Appellant’s (Defendant’s) Arguments:

• Ms. Haripriya Padmanabhan, the appellant’s counsel, argued that the limitation period should not commence from the date of cancellation of the power of attorney.
• She contended that conveyances were made based on the power of attorney, and these settled transactions should not be unsettled after a decade.

Respondent’s (Plaintiff’s) Arguments:

• The Senior Counsel for the respondent argued that the transactions were collusive.
• He alleged that the power holder transferred the properties to his own wife and then regained the conveyance in his name, constituting fraud against the plaintiff.
• He maintained that the High Court’s judgment should be upheld.

Issues Framed by the Supreme Court:

1. When does the limitation period commence for a suit challenging sale deeds executed under a power of attorney – from the date of knowledge of the transaction or from the date of cancellation of the power of attorney?

Treatment of the Issue by the Court:

Authorities:

The judgment does not explicitly mention any specific cases or legal provisions that were heavily relied upon or overruled. However, it implicitly considers the principles governing the law of limitation and the effect of a power of attorney on transactions conducted under it.

Judgment:

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The judgment did not explicitly cite or discuss specific authorities. The court relied on general principles of law regarding limitation and the validity of actions taken under a power of attorney.

What weighed in the mind of the Court?:

The Supreme Court’s decision was primarily influenced by the principle that the cancellation of a power of attorney does not retroactively invalidate actions taken under it while it was in effect. The Court emphasized that the cause of action arises from the knowledge of the transactions, not the cancellation of the power. The Court also considered the long delay in challenging the transactions, which had occurred between 2004 and 2009, while the suit was filed in 2018, years after the plaintiff allegedly gained knowledge of the sales in 2015.

Fact:Law

Key Takeaways:

• Limitation Period: The limitation period for challenging property conveyances made under a power of attorney starts from the date of knowledge of the transaction, not the cancellation of the power of attorney.
• Validity of Transactions: Cancellation of a power of attorney does not invalidate prior conveyances made under the valid power conferred.
• Importance of Timely Action: It is crucial to take timely legal action upon becoming aware of property transactions that may be prejudicial to one’s interests.

Conclusion:

The Supreme Court’s judgment in V. Ravikumar vs. S. Kumar clarifies that the limitation period for challenging property transactions executed under a power of attorney begins from the date of knowledge of the transaction, reinforcing the importance of timely legal action. The court set aside the High Court’s order and affirmed the Trial Court’s rejection of the plaint, providing clarity on a critical aspect of property law and limitation.