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Varnasi Venkatasastrulu And Another . v. Kalluri Veerabhadrudu .
Concise Analytical Summary of the Opinion (S.A. 241 & 242 of 1930)
Factual and Procedural Background
This opinion deals with two second appeals (S.A. 241 and S.A. 242 of 1930) arising from suits attacking historical property transactions. In S.A. 241 the principal transaction is a sale executed by a widow, Gangammal, on 12 April 1892, which included a small house-site of 64 square yards that the plaintiff alleged did not belong to Gangammal but belonged to the 1st defendant (her brother). Lower Courts (a District Munsif and a Subordinate Judge) found that fraud had been made out against the sale (fraud on the registration law). The plaintiff sued in 1925; the alleged reversioner (the plaintiff's father) had not impeached the sale in his lifetime (died 1922). The High Court (or appellate bench hearing the second appeal) reviews the evidentiary record including Ex. I (sale deed of 1892), Ex. C (a formal gift deed of November 1893 conveying 280 sq. yards including the 64 sq. yards), and witness testimony (notably P.W.1 — the plaintiff himself — and P.W.2).
In S.A. 242 the impugned instrument is Ex. XII, a sale purporting to be from 1880 transferring about 89 cents for Rs. 30. The plaintiff later suggested this deed was a forgery (allegedly forged circa 1892 to effect mutation). The trial judge found the deed to be forged on grounds the appellate bench criticizes as speculative. Both appeals culminate in the present judgment, which sets aside the lower appellate court's findings and allows the second appeals.
Legal Issues Presented
- Whether the inclusion of a small item of property in a registered instrument, which the plaintiff alleges did not belong to the vendor, amounts to a fraud on the registration law sufficient to invalidate the transaction absent clear and cogent evidence of collusion or fraud.
- What standard and quantum of evidence are required to establish "fraud on the registration law" (i.e., whether mere failure to make out title is distinct from and insufficient to establish the statutory fraud contemplated by the Privy Council decisions cited).
- Whether the trial and appellate courts were justified in finding that an ancient sale deed (Ex. XII, dated 1880) was a forgery based on the discrepancies, dates, and the timing of subsequent mutations, given the available evidence and the long delay before impeachment.
Arguments of the Parties
Plaintiff's Arguments
- The sale containing the 64 sq. yard house-site included an item that did not belong to the widow Gangammal and therefore the parties committed a fraud on the registration law.
- In the second appeal, the plaintiff suggested that Ex. XII (dated 1880) was a forged document, probably forged shortly before the mutation in 1892, and thus the sale was invalid.
Defendant's (1st defendant / Defence) Arguments
- The 1st defendant asserted that Gangammal had acquired the site from her father by an oral gift around 1890–1891 and that the later formal gift deed (Ex. C of 1893) included the site within a larger 280 sq. yard conveyance; the defence evidence (including the 1st defendant's deposition and P.W.2's testimony) supported ownership by Gangammal.
- Regarding the alleged forgery (Ex. XII), the defence pointed to the age of the stamp paper (1880), the absence of direct proof of forgery, difficulties in examining elderly attesting witnesses, and the long lapse of time before impeachment as reasons why the forgery finding was unsupported.
Other Noted Submissions Recorded in the Opinion
- Mr. Lakshmanna (counsel) argued that the execution of Ex. C (the later formal gift) showed the oral gift could not be true; the court explicitly rejected this line of reasoning and explained why.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Harendra Lal Roy Chowdhuri v. Haridasi Debi | The Privy Council's rule as to "fraud on the registration law" — that the defence of fraud must be established by clear and cogent evidence; a finding of "no evidence" is a decision of law. | The court criticises lower Courts for misapplying this rule and relies on the principle that mere failure to make out title is distinct from the fraud contemplated; it treats a finding of "no evidence" as a legal error and hence overturns the lower appellate decision. |
| Biswanath Prasad v. Chandra Narayan Chowdhury | The Judicial Committee's observation distinguishing mere failure to make good title from the specific fraud contemplated by the registration decisions. | The opinion invokes this distinction to say that invalidating a transaction solely because a party has not adduced satisfactory title evidence misunderstands the law; the court applies this to reject the lower Courts' approach. |
| Ramanathan Chetti v. Delhi Batcha Tevar | Authority stressing that there must be "the strongest evidence" of collusion between mortgagors and mortgagees before depriving mortgagees of the mortgage amount due to invalid registration arising from inclusion of a small non-owned item. | The court quotes this passage to reinforce its requirement that strong, cogent evidence is necessary and concludes the lower Courts lacked such evidence to find fraud. |
| Marina Ammayi v. Sundayya | Principle that the crucial question is whether it was intended that the document should take effect in regard to the particular item of property in dispute; the existence of the item versus a fictitious item affects the inference of fraud. | The court cites this to focus analysis on intention and on whether the item existed — applying it to show that when the item exists and evidence of title is disputed, that alone does not prove fraud on the registration law. |
| Harendra Lal Boy Chowdhuri v. Haridasi Debt | Support for the proposition that "a decision that there is no evidence to support a finding is a decision of law." | The court relies on this statement to treat the lower court's finding (that there was evidence of fraud) as legally unsustainable because, on the appellate record, there was effectively no evidence to support that finding. |
Court's Reasoning and Analysis
The court's reasoning proceeds on a few interlocking legal and evidentiary points, applied step-by-step to the record of each appeal:
- Standard of proof for "fraud on the registration law": The court reiterates controlling authorities to the effect that allegations of fraud (including fraud by collusion to defeat registration safeguards) demand clear and cogent proof — often described as "the strongest evidence" — and that mere failure to prove title is not the same as the statutory fraud contemplated by the authorities.
- Critique of the lower courts' approach: The court finds that both lower Courts approached the evidence improperly — treating the case as one where the defence had to negative fraud rather than the plaintiff having to prove the fraud allegation. The District Munsif's judgment is singled out for failing even to weigh the plaintiff's evidence and for focusing on whether the defence had affirmatively shown title.
- Evaluation of the facts in S.A. 241: On the specific point of the 64 sq. yard site, the court carefully reviews the testimony and documentary record: the 1st defendant's categorical account of an oral gift from the father (about 1890–1891), the later formal gift deed Ex. C of 1893 that encompassed the site, and P.W.2's testimony which the court views as corroborative rather than contradictory. The plaintiff's own testimony is described as hearsay; the District Munsif's reliance on a prior statement of P.W.2 (from another suit) is held to be a misapplication because that prior statement does not displace the present testimony and cannot be used as substantive evidence to establish fraud. On this assessment, the court concludes there was no evidentiary foundation for finding fraud.
- Rejection of a registeration-formality argument: The District Munsif's reasoning that an oral gift could not be valid because an absence of registered deed made it invalid is criticized as a misdirection; the court explains that the legal issue is the existence of fraud, not simply lack of formal registration.
- Specific rebuttal of counsel's contention: The court addresses Mr. Lakshmanna's contention that the later formal deed (Ex. C) disproves the oral gift and finds the contention unsound on the evidence as the father and son were joint and undivided and the witness P.W.2 at times conflated the father and the son in describing the transactions; the court deems the defence evidence uncontradicted.
- Analysis in S.A. 242 (the alleged forgery): The court criticizes the Subordinate Judge's finding of forgery as speculative. The judge relied on discrepancies in dates and conjecture that a forged deed must have been fabricated around the time of mutation in 1892; the appellate court finds no positive evidence to support that. The court notes the long passage of time before impeachment (trial in 1928 of a transaction of 1880), the death of intervening parties, the advanced infirmity of attesting witnesses, and the absence of concrete proof of forgery. The judge's reliance on suspicion and speculation is held to be inadequate.
- Overarching approach to ancient transactions: The court cautions against a tendency to lightly invalidate ancient transactions on inadequate or meagre grounds, stressing the need for solid proof before condemning old instruments as forgeries or invalid.
- Conclusion drawn from the evidence: On both appeals the court determines there is either no evidence or only speculation to support the adverse findings in the lower Courts; where the finding is that "no evidence" supports a conclusion, the court treats that as a legal error warranting reversal.
Holding and Implications
APPEALS ALLOWED WITH COSTS THROUGHOUT.
Direct effect on the parties:
- In S.A. 241: The lower appellate Court's judgment finding fraud on the registration law is set aside and the second appeal is allowed; the court found no evidence to support the fraud finding and accepted the defence evidence (oral gift and later formal gift deed) as not being effectively contradicted.
- In S.A. 242: The finding that Ex. XII (dated 1880) was a forged document is set aside; the second appeal is allowed because the finding of forgery rested on conjecture and insufficient evidence, especially given the long delay and the absence of positive proof.
Broader implications: The opinion reiterates and applies established principles (from Privy Council and Judicial Committee authorities) regarding the high standard of evidence required to impeach registered instruments on grounds of fraud. The judgment cautions lower courts against substituting suspicion and conjecture for cogent proof when dealing with ancient transactions. The opinion does not purport to lay down a new precedent beyond reaffirming these established rules and their correct application to the facts before the court.
N. R. R. Appeals allowed.
This case (S. A. 241) illustrates forcibly the way in which the Subordinate Judiciary, I find, often misapplies the rule as to the fraud on the registration law, laid down by the Privy Council in Harendra Lal Roy Chowdhuri v. Haridasi Debi , and Biswanath Prasad v. Chandra Narayan Chowdhury (2). It is forgotten that, as in the case of every other kind of fraud, the party, who sets up this defence, is bound to make it out by clear and cogent evidence. As has been pointed out by Beasley, C. J. and Curgenven, J. in their Judgment in Ramanathan Chetti v. Delhi Batcha Tevar (3),
“There should be the strongest evidence of the fact that there was collusion between the mortgagors and the mortgagees before the mortgagees can be deprived of the mortgage amount owing under the mortgage deed by reason of its registration being invalid, because of the inclusion of a small item of property not belonging to the mortgagors.”
Again, it is important to bear in mind that a mere failure to make a good title to the property dealt with by the instrument, is something totally different from the fraud contemplated by the decisions: (see the observations of the Judicial Committee in Biswanath Prasad v. Chandra Narayan Chowdhury . The crucial question in each case, as I observed in my judgment in Marina Ammayi v. Sundayya , is, was it intended or not that the document should take effect in regard to the particular item of property in dispute? The fact, that it is a fictitious item, may often furnish clear evidence of fraud, but when the item does exist, to invalidate a transaction on the ground that the party has not adduced satisfactory evidence as to his title, is to misunderstand and misapply the law ®n the subject.
If there were some legal evidence on which the lower Courts could have properly acted, however much I might regret their finding, I should not, this being a second appeal, interfere with it; but this is not a case of insufficient or meagre evidence but of no evidence at all and “a decision that there is no evidence to support a finding is a decision of law” Harendra Lal Boy Chowdhuri v. Haridasi Debt .
This is, strictly speaking, not a suit by a reversioner, because on the death of the widow Gangammal in 1913, the person, that succeeded to the property as the reversioner, was not the plaintiff but his father, who lived for about 9 years thereafter, never impeached the sale and died in 1922. The plaintiff brings this suit in 1925 just as the period of limitation was about to expire. The sale was of lands of the extent of about 7 acres and both the lower Courts have found that plaintiff's case that it was not for legal necessity, is thoroughly false; but then it is said that the sale deed comprises an item of small house site measuring 64 sq. yards which did not belong to the widow Gangammal and that therefore the parties committed a fraud on the registration law. The relationship of the parties has a material bearing on this issue. The vendor was Gangammal and the vendee was the 1st defendant, her brother. The plaintiff alleged in his plaint that plot did not belong to Gangammal but to the 1st defendant himself. The District Munsif, who has found that fraud has been made out, has not chosen to give a finding as to whom this property belonged. When the attack is that the vendor was not the owner of the property, one would expect that this attack is made good by showing that somebody else was the owner. The learned Subordinate Judge seems to think, although he has also not given a definite finding, that the property belonged to Gangammal's father. The position then is this: the defence maintains that Gangammal was the real owner; the plaintiff came to the Court with the allegation that it belonged to her brother and while the trial Court gives no finding, the appellate Court seems to think that it belonged to the father. This house site appears to have formed a portion of a bigger waste plot, on which there were encroachments made both by Gangammal and her father; that is what the Subordinate Judge says. Naturally, no kind of title deed could be produced; the acquisition, if at all, was by some kind of trespass. The learned judge also seems to think that on a part of this waste plot adjacent to the site in question, Gangammal had built a granary. Incidentally I may mention that in arriving at this conclusion, he acted upon a statement made by P. W. 2 in a previous suit, which of course is not evidence. Both the Courts appear to have approached the evidence from the standpoint, that it is for the defence to make out that there was no fraud. Indeed, in the judgment of the District Munsif, there is not even an attempt to weigh or estimate the evidence adduced by the plaintiff; in fact there is no reference made to it at all; the whole of his judgment is directed to showing that the 1st defendant has not affirmatively made out that Gangammal had title. The case of the defence was that on the death of Reddy Sastry, Gangammal's husband, in 1885, she came over to her father's village Moygeru where this plot is situate and that her father about the year 1890 made to her a gift of this site, on which she then built a thatched hut, in which she began to reside. As already observed, Gangammal executed the sale deed in question on 12th April, 1892, which comprises inter alia this item. Later on, i.e, in November, 1893, the father both of Gagammal and the 1st defendant executed a formal gift deed (Ex. C) giving her a plot of the extent of 280 sq. yards, which included the suit site measuring, as stated above, 64 sq. yards. This is what the 1st defendant categorically deposes. This evidence, in my opinion, remains uncontradicted. The plaintiff examined himself as P. W. land though he professed in his examination-in-chief to have some knowledge of the extent of Gangammal's property, he was obliged to admit, when cross-examined, that his evidence was hearsay. The only other witness examined on the point was P. W, 2, He deposed:
“She (Gangammal) got some land from her father 8 or 9 years after her marriage.”
Her marriage, according to the Subordinate Judge, was in 1879 though the witness gives the year as 1882. This, for the present purpose, is immaterial, for, granting that the marriage was in 1882, Gangammal, according to this witness's evidence, got the land in 1890 or 1891. This is precisely what the 1st defendant himself stated. No doubt, P. W. 2 adds that it was under a gift deed that Gangammal got the site from her father, and this is said to negative the idea of a prior oral gift. I cannot agree, for, the witness, when pressed, had to admit that of the gift deed, he had no personal knowledge. Then again, he deposed:
“The site on which Gangammal built the house is a portion of what is called “Pemmaraju vari chintala peradu,” Gangammal built the house nearly 38 or 39 years ago.”
The witness gave his evidence in 1928 and the building of the house, would, according to him, be therefore about 1890. That again is a corroboration, pure and simple, of the 1st defendant's evidence. What is worse, he was confronted with a previous statement made in a former deposition and that was:
“The site on which Gangammal built the house is called ‘Pemmarajuvari padu chintala peradu.’ Each encroached thereon and built their houses for themselves. She raised a granary in the Pemmarajuvari site. She acquired rights in the site by encroachment before her father gave her site.”
This shows, if at all, that she owned some site in this waste land even before the date of the formal gift, and at any rate what I wish to point out, is this: the object of confronting the witness with this statement was to show that he previously admitted that Gangammal had acquired some portion of the land by trespass prior to the gift deed. This witness's present evidence, I have shown, literally taken, far from being opposed to the defence version, actually supports it. The learned Judge therefore is at pains to fall back upon the witness's previous deposition and read into it some kind of statement, that the house was built not previous to but subsequent to the gift in writing. Surely, this is not the way in which evidence is to be weighed or considered for the purpose of arriving at a finding of fraud. The whole of the evidence consists of what I have referred to now and it is impossible to hold that there is a scrap of evidence in support of fraud. The District Munsif has had therefore to content himself with commenting on the evidence adduced by the defence; the learned Subordinate Judge tries to explain away the evidence of P. W. 2 by referring to his previous deposition which he uses very wrongly as substantive evidence. Granting that his former statement can be treated as evidence, even that does not show that the defence version is untrue. In a case of this kind, it is astounding that the lower Courts should have held that fraud has been made out. As I have said, the case is not one of meagre evidence but of no evidence and I cannot possibly accept the finding. The fallacy underlying the District Munsif's judgment is obvious; he observes that, even if the oral gift was true, that would not be valid by reason of the absence of a registered deed. He has completely misdirected himself, as alrealy observed, in approaching the question from this point of view.
Mr. Lakshmanna argues that the very fact that the father executed Ex. C, shows that the oral gift cannot be true. I cannot assent to this. The reasoning is somewhat thus: By Ex. I, it was the son that became the owner; how then could the father make a gift of the same property? The answer is perfectly simple. Even P. W. 2 identifies the father with the son in this transaction. He says more than once, quite as a matter of course, that Gangammal sold her land to the father, forgetting that the vendee under Ex. I is the son. He admits also that the father and the son were joint and undivided.
In the result, the lower appellate Court's judgment is set aside and the Second Appeal is allowed with costs throughout.
Coming to the second of these two appeals 242 of 1930, this case again presents a very curious method of treatment by the learned Subordinate Judge. The transaction impeached by the plaintiff is that evidenced by Ex. XII of the year 1880. It purports to be a sale by the last male-holder himself, i. e., Reddy Sastry, of a paltry extent of 89 cents for Rs. 30. The sale was made in favour of his father-in-law, who having died, the suit was instituted against the son, the 1st defendant. In the plaint not a single allegation was made about this sale; it was not referred to, much less attacked. But at the trial it transpired that so far back as 1892, the land was transferred to the name of the 1st defendant. The plaintiff, suggesting that the sale deed had been forged, hazarded the guess that the forgery must have taken place just prior to the mutation of names in 1892. What apparently was put forward was, that the deed was first forged and on the strength of it the transfer was effected in 1892. The learned Judge's reversing judgment on this point is based on a series of surmises, for not one of which, there is the slightest foundation. The stamp paper was admittedly of the year 1880, but on account of some discrepancy in the dates, the judge condemns it as suspicious. Then again, by Ex. I, as has been pointed out in my judgment in the previous appeal, the 1st defendant purchased some properties from the widow on 12th April, 1892. Ex. I conveys inter alia some land in Bhimole. The plot in question is also in the same village. If the intention of Gangammal was to transfer this plot to her brother in 1892, she could well have included it in Ex. I, which admittedly came into existence in that year. The Subordinate Judge conjectures that the parties made a mistake in not including this small plot in Ex. I and therefore brought into existence a forged deed in the same year soon after. It is extraordinary that by a line of reasoning of this sort, based on speculation and conjecture, the Subordinate Judge has held that the document is a forged one. I have been taken through the evidence and there is not a word to be found in it in support of this finding. In this connection, I must remark that no Court should be too ready to lightly pronounce against a transaction impeached long after its date; the tendency to set aside or invalidate ancient transactions on inadequate or meagre grounds must be strongly deprecated. Now let us turn to the dates. The sale purports to be of the year 1880; the last male-holder died in 1885. According to the plaintiff, the deed must have been forged in 1892. The widow died in 1913. What prevented the reversioner, i. e., the plaintiff's father, who lived for 9 years thereafter, from impeaching the transaction, at any rate after her death? The plaintiff comes to Court in 1925 just on the eve of his claim becoming barred. The trial took place in 1928, about half a century after the transaction. What has happened to the writer of the deed, the 1st defendant is unable to say and that is quite natural. As regards one of the attestors, he was at the trial 80 years old, blind and deaf and was of feeble mind. Is the party to be blamed for not examining such a man? D.W 2 was examined to identify the signature of another attestor. His evidence is disbelieved on the ground that he merely saw the attesting witness sign his name “over two decades previously.” It seems to me that on no evidence and on flimsy grounds this deed has been condemned as a forgery.
In the result, the second appeal is allowed with costs throughout.
N. R. R.Appeals allowed.
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