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Supreme Court: Void documents need not be challenged by claiming a declaration

The appellant Kewal Krishan executed a power of attorney in favour of Sudarshan Kumar on 28th March 1980. Acting on the basis of the said power of attorney, two sale deeds were executed by Sudarshan Kumar on 10th April 1981.

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The Supreme Court has allowed an appeal against a judgment of the Punjab and Haryana High Court while observing that a document that is void need not be challenged by claiming a declaration as the said plea can be set up and proved even in collateral proceedings. The bench said, “The appellant continues to have undivided half share in the suit properties, as no title was transferred under the said sale deeds.”

The division bench of Justice Ajay Rastogi and Justice Abhay S. Oka noted,

“There is no evidence adduced on record by Sudarshan Kumar that his minor sons had any source of income at the relevant time and that they paid him consideration as mentioned in the sale deed. Similarly, no evidence was adduced to show that Sudarshan Kumar’s wife had any source of income and that she paid consideration mentioned in the sale deed.”

The appellant Kewal Krishan and his elder brother (one of the respondents) Sudarshan Kumar acquired the properties which are the subject matter of the appeals  under the sale deeds dated August 12, 1976 and October 19, 1976.

According to the case of Sudarshan Kumar, the appellant was a benamidar. In short, the contention of Sudarshan Kumar is that he is the sole owner of the suit properties.

The Trial Court had dismissed the suits filed by the appellant and held that the suit lands were intended to be purchased only by Sudarshan Kumar and that is how the original sale deeds were in possession of Sudarshan Kumar. The Trial Court accepted the contention that he was the exclusive owner and the appellant was the benamidar. The Trial Court upheld the contention of Sudarshan Kumar regarding legality and validity of the power of attorney and both the sale deeds which were the subject matter of challenge.

“As no title was transferred under the said sale deeds, the appellant continues to have undivided half share in the suit properties. That is how the District Court passed the decree holding that the appellant is entitled to joint possession of the suit properties along with Sudarshan Kumar. Therefore, for the reasons recorded above, by setting aside the impugned Judgment and order of the High Court, the decree passed by the District Court deserves to be restored,”

-the bench observed.

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The Court while considering the appeal held that no evidence was adduced by Sudarshan Kumar about the payment of the price mentioned in the sale deeds as well as the earning capacity at the relevant time of his wife and minor sons. Hence, the sale deeds will have to be held as void being executed without consideration. Hence, the sale deeds did not affect in any manner one half share of the appellant in the suit properties. In fact, such a transaction made by Sudarshan Kumar of selling the suit properties on the basis of the power of attorney of the appellant to his own wife and minor sons is a sham transaction. “Thus, the sale deeds of 10th April 1981 will not confer any right, title and interest on Sudarshan Kumar’s wife and children as the sale deeds will have to be ignored being void.”

Being aggrieved by the judgment of the Trial Court, the appellant preferred two appeals before the District Court. The appeals were partly allowed. The District Court held that Sudarshan Kumar did not step into the witness box and except for the bald statement made by the attorney of Sudarshan Kumar in his evidence, nothing was placed on record to show that the entire sale consideration for acquiring suit properties was paid by him.

The District Court held that as the case of Sudarshan Kumar was that the money was transmitted from a foreign country to the appellant, it was easily possible for Sudarshan Kumar to adduce documentary evidence to show that money was transferred to the appellant as alleged in his written statement. Therefore, the District Court accepted that both the appellant and Sudarshan Kumar were the joint owners of the suit properties.

The respondents filed separate second appeals before the High Court which have been allowed by the impugned Judgment and order. The High Court upheld the finding of the District Court that Sudarshan Kumar failed to adduce evidence to prove that he remitted money from foreign country to the appellant. Therefore, the High Court held that the appellant and Sudarshan Kumar were the joint owners of the suit properties. The High Court held that the power of attorney was valid. The High Court further held that the suits for declaration of invalidity of the sale deeds were barred by limitation as the said prayers were belatedly incorporated on 23rd November 1985. The High Court held that the sale consideration mentioned in the sale deeds executed on 10th April 1981 of Rs.5,500/- and Rs.6,875/- respectively was not exorbitant and, therefore, the amounts were not out of reach of the sons of Sudarshan Kumar and wife of Sudarshan Kumar. As the High Court held the appellant to be the owner of half share in the suit properties and as the power of attorney was held to be valid, by the impugned Judgment and order, it directed Sudarshan Kumar to pay the share of the appellant in the consideration shown under the sale deeds dated 10th April 1981 with 12% interest from the date of execution of the sale deeds. The said Judgment and order has been impugned in these appeals.

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Before Apex Court , Neeraj Kumar Jain, the Senior Counsel appearing for the appellant submitted that even the High Court accepted that there was no evidence adduced to show that the purchasers under the sale deeds dated 10th April 1981 had paid consideration to Sudarshan Kumar. He submitted that the finding of the High Court that the consideration amounts were not out of reach of the purchasers is  without any basis as it was not the case of Sudarshan Kumar that his wife and minor sons had any source of income at the relevant time.

Surjeet Singh, the Senior Counsel representing the respondents invited the attention of the Court to the letter dated 5th April 1980 addressed by the appellant to Sudarshan Kumar. He pointed out that in the said letter, the appellant accepted that the suit lands were purchased out of the amounts remitted by Sudarshan Kumar and in fact, the appellant agreed to transfer the suit properties in the name of Sudarshan Kumar. He would, therefore, submit that the appellant has no right, title and interest in the suit properties.

“The High Court has not disturbed the finding recorded by the District Court regarding the failure of the respondents to adduce evidence regarding the payment of consideration under the sale deeds dated 10th April 1981. The High Court in paragraph 29 merely observed that the sale consideration of Rs.5,500/- and Rs.6,875/- was not exorbitant and was not out of reach of Sudarshan Kumar’s sons and wife. Perhaps, the High Court has ignored that it was considering a case of sale deeds of the year 1981 and that the purchasers under one of two sale deeds were minor sons of Sudarshan Kumar and it was not even pleaded that they had any source of income. The same is the case with the sale deed executed by Sudarshan Kumar in favour of his wife. Thus, the undisputed factual position is that the respondents failed to adduce any evidence to prove that the minor sons had any source of income and that they had paid the consideration payable under the sale deed. They did not adduce any evidence to show that Sudarshan Kumar’s wife was earning anything and that she had actually paid the consideration as mentioned in the sale deed”

-the Apex Court observed .

Relying on Section 54 of the Transfer of Property Act, 1882 the Apex Court said that a sale of an immovable property has to be for a price. The price may be payable in future. It may be partly paid and the remaining part can be made payable in future. The payment of price is an essential part of a sale covered by section 54 of the TP Act. If a sale deed in respect of an immovable property is executed without payment of price and if it does not provide for the payment of price at a future date, it is not a sale at all in the eyes of law. It is of no legal effect. Therefore, such a sale will be void. It will not affect the transfer of the immovable property.

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The appellant Kewal Krishan executed a power of attorney in favour of Sudarshan Kumar on 28th March 1980. Acting on the basis of the said power of attorney, two sale deeds were executed by Sudarshan Kumar on 10th April 1981. The first sale deed was executed by him by which he purported to sell a part of the suit properties to his minor sons. The sale consideration was shown as Rs.5,500/-. The other sale deed was executed by Sudarshan Kumar in favour of his wife in respect of remaining part of the suit properties. The consideration shown in the sale deed was of Rs.6,875/-. The respondents are Sudarshan Kumar, his wife and his sons.

Two separate suits were instituted by the appellant on 10th May 1983. One was against Sudarshan Kumar and his two sons and the other one was against Sudarshan Kumar and his wife. Both the suits, as originally filed, were for injunction restraining the defendants from interfering with the possession of the appellant and from alienating the share of the appellant in the suit properties. In the alternative, a prayer was made for passing a decree for possession. On 23rd November, 1985, the plaintiff in both the suits was amended by incorporating the relief of declaration that the power of attorney and sale deeds were null and void. A prayer was also incorporated for a money decree for the share of the appellant in the compensation awarded in respect of a tube well on the suit properties.

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