Supreme Court Upholds Civil Court Jurisdiction in Property Deed Cancellation Cases: Narendra Kumar Mittal & Ors. vs. M/S Nupur Housing Development Pvt. Ltd. (2019) INSC 712 (31 July 2019)

Introduction

Date of the Judgment: 31 July 2019

Citation: (2019) INSC 712

Judges: N.V. Ramana, J. and S. Abdul Nazeer, J.

Can a civil court hear a case about canceling a property sale deed, or does it have to go to a revenue court? This was the central question before the Supreme Court of India in this case. The Court had to decide if a suit filed in a civil court for the cancellation of a sale deed of agricultural land was valid, especially when the person filing the suit already had their name in the land records. The Supreme Court, in this judgment, clarifies the jurisdiction of civil courts in such matters. The judgment was delivered by a two-judge bench comprising Justice N.V. Ramana and Justice S. Abdul Nazeer, with the opinion authored by Justice S. Abdul Nazeer.

Case Background

M/S Nupur Housing Development Pvt. Ltd. (the plaintiff), a private limited company, purchased certain properties in Village Yakootpur, District Gautam Budh Nagar, through five sale deeds dated 17.10.1998 from the first defendant. After the purchase, the plaintiff applied to the Tehsildar to have their name entered in the land records. While this process was ongoing, the plaintiff discovered that the first defendant had illegally sold the same property through four registered sale deeds, all dated 15.06.2006, to defendants 2 to 5.

Aggrieved by this, the plaintiff filed Original Suit No. 55 of 2008 in the court of the Civil Judge (Sr. Division), Gautam Budh Nagar, seeking cancellation of the sale deeds dated 15.06.2006. They also sought an injunction to prevent the first and second defendants from interfering with their possession and use of the property. The second defendant challenged the maintainability of the suit, citing Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, which deals with jurisdiction over land matters.

Timeline

Course of Proceedings

The second defendant challenged the maintainability of the suit in the Civil Court, arguing that the matter should be heard by a revenue court, based on Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950. However, the Civil Court, vide order dated 22.05.2014, held that the suit was maintainable. The second defendant then challenged this order before the Allahabad High Court. The High Court dismissed the revision petition on 17.11.2014, upholding the Civil Court’s decision. The second defendant then appealed to the Supreme Court against the High Court’s order.

Legal Framework

The primary legal provision at the heart of this case is Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (the Act). This section deals with the jurisdiction of courts in cases related to land. The second defendant argued that this section bars civil courts from hearing cases related to agricultural land, which is the type of property in dispute.

The Supreme Court, however, referred to its previous judgment in Smt. Bismillah v. Janeshwar Prasad and Ors., where it was held that provisions that exclude the jurisdiction of civil courts must be strictly interpreted. The Court also noted that a distinction has to be made between cases where a deed has to be cancelled through adjudication and cases where the transaction is void, where there is nothing to cancel.

The relevant part of Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, is not quoted in the judgment.

Arguments

The second defendant argued that since the disputed property is agricultural land, the suit is barred under Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, and only the revenue court has jurisdiction to hear the matter.

The plaintiff argued that the suit was only for the cancellation of the sale deed and for an injunction. They contended that the bar under Section 331 of the Act does not apply in this case, as the plaintiff was not seeking a declaration of their own title but merely the cancellation of a fraudulent sale deed.

The Court noted that the plaintiff had purchased the property through five sale deeds dated 17.10.1998 and the suit was filed for cancellation of the sale deed dated 15.06.2006 on the grounds of fraud and misrepresentation. The plaintiff did not seek any relief regarding their own title or status as a tenure holder.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

✓ Whether the suit filed by the first respondent-plaintiff for cancellation of the sale deed dated 15.06.2006 against the appellant-second defendant and second respondent-first defendant, and for injunction restraining them from interfering with its possession of the property was maintainable?

Treatment of the Issue by the Court

Authorities

The Court relied on the following authorities:

Judgment

The Supreme Court dismissed the appeal, upholding the decision of the Allahabad High Court. The Court held that the suit filed by the plaintiff for cancellation of the sale deed was maintainable in the civil court.

The Court’s view on the authorities:

✓ Smt. Bismillah v. Janeshwar Prasad and Ors. [1990] 1 SCC 207*: The Court followed this authority to emphasize that provisions ousting the jurisdiction of civil courts must be strictly construed.

✓ Ram Padarath & Ors. v. Second ADDL D.J., Sultanpur & Ors. [1989] RD 21 (All)(FB): The Court relied on this Full Bench decision of the Allahabad High Court, which held that a suit for cancellation of a void document will generally lie in the civil court.

✓ Shri Ram & Anr. v. Ist Addl. Distt. Judge & Ors. [2001] 3 SCC 247: The Court followed this authority, which held that a recorded tenure holder in possession, filing a suit for cancellation of a sale deed obtained on the ground of fraud, cannot be directed to file a suit for declaration in the Revenue Court.

✓ Kamla Prasad & Ors. v. Kishna Kant Pathak & Ors. [2007] 4 SCC 213: The Court distinguished this case, stating that the plaintiff was a co-owner and not a recorded tenure holder, unlike the present case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the plaintiff was a recorded tenure holder seeking cancellation of a sale deed on the grounds of fraud and misrepresentation. The Court emphasized that the Revenue Court does not have the jurisdiction to grant relief of cancellation of a deed on such grounds. The Court also highlighted that the plaintiff was not seeking a declaration of their own title, which would have necessitated approaching the Revenue Court.

The Court’s reasoning was based on a careful consideration of both the facts and the law. The Court emphasized that the plaintiff was a recorded tenure holder, which was a key factual element that influenced its decision. The Court also considered the legal principles regarding the jurisdiction of civil and revenue courts, particularly the interpretation of Section 331 of the U.P. Zamindari Abolition and Land Reforms Act, 1950. The Court’s reasoning also emphasized that the Revenue Court does not have jurisdiction to grant relief of cancellation of a deed on the ground of fraud and misrepresentation.

Logical Reasoning

Key Takeaways

✓ A civil court has the jurisdiction to hear a suit for cancellation of a sale deed, especially when the plaintiff is a recorded tenure holder and the suit is based on grounds of fraud or misrepresentation.

✓ If a person is a recorded tenure holder and seeks cancellation of a sale deed, they do not need to approach the Revenue Court for a declaration of their title.

✓ The Revenue Court does not have the power to grant relief for cancellation of a deed on grounds of fraud and misrepresentation.

✓ This judgment clarifies the jurisdiction of civil courts in cases involving the cancellation of sale deeds for agricultural land, providing relief to recorded tenure holders who have been victims of fraudulent transactions.

Directions

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

Specific Amendments Analysis

There are no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that a civil court has jurisdiction to hear a suit for cancellation of a sale deed of agricultural land when the plaintiff is a recorded tenure holder and the suit is based on grounds of fraud or misrepresentation. This judgment reinforces the principle that civil courts have the jurisdiction to address cases of fraud and misrepresentation, especially when the Revenue Court lacks the power to grant such relief. This judgment does not change the previous position of law, but clarifies the existing position.

Conclusion

The Supreme Court’s decision in this case reaffirms the jurisdiction of civil courts to hear suits for cancellation of sale deeds, particularly when the plaintiff is a recorded tenure holder and the suit is based on grounds of fraud and misrepresentation. The Court clarified that the Revenue Court does not have jurisdiction to grant relief of cancellation of a deed on such grounds. This judgment provides clarity on the division of jurisdiction between civil and revenue courts in cases involving agricultural land and fraudulent transactions.