Suit for cancellation of sale deed filed after five years is barred by limitation under Article 58.

The appellant (original plaintiff) executed a registered sale deed on 22.02.2019 in favor of the respondent for a suit property in Kheda for a total consideration of Rs. 96,55,000/-.

The plaintiff later issued a notice on 12.04.2024—more than five years after the execution—claiming that a cheque for Rs. 40,00,000/- mentioned in the deed was actually intended for N.A. (Non-Agricultural) conversion premiums rather than the sale price, and thus remained unpaid.

The defendant contended the premium was paid separately via Demand Draft and the sale consideration was fully discharged and credited in 2018.

The Trial Court dismissed the suit under Order 7 Rule 11(a) and (d) of the CPC, holding the suit was barred by limitation.

1. Whether the learned Trial Court committed an error in dismissing the suit under Order 7 Rule 11 of the CPC on the ground of limitation.

The Court applied Order 7 Rule 11(d) of the Code of Civil Procedure, 1908, which mandates the rejection of a plaint where the suit appears from the statement in the plaint to be barred by any law.

It further relied on Articles 58 and 59 of the Limitation Act, 1963, which prescribe a three-year limitation period for obtaining a declaration or canceling an instrument, commencing from when the right to sue first accrues or when the facts entitling the plaintiff to cancellation first become known.

The Court also addressed Section 54 of the Transfer of Property Act regarding the payment of price as an essential element of sale.

The Court distinguished the Supreme Court precedent in Shanti Devi v. Jagan Devi regarding the applicability of Section 17 of the Limitation Act in cases of fraud.

The Court observed that the registered sale deed was executed in February 2019, and the disputed cheque was credited to the plaintiff's account as early as 19.11.2018.

While the appellant argued that the discovery of "fraud" only occurred in 2024, the Court found that since the plaintiff was the executor of the deed and the funds were indisputably credited to his account at the time of the transaction, the cause of action accrued in 2019.

The Court distinguished the present case from Shanti Devi, noting that in that precedent, the vendor's signature was forged by impersonation (void ab initio), whereas here, the plaintiff admitted to executing the deed and receiving the funds but merely disputed the purpose of the payment five years later.

Consequently, the suit was filed well beyond the three-year limit prescribed by Articles 58 and 59.

The Court held that the suit was clearly barred by limitation as the right to sue accrued upon the execution of the sale deed in 2019, and the subsequent notice in 2024 could not restart the limitation period.

Civil Application for stay was also disposed of accordingly.