In Suit For Cancellation Of Deed & Recovery Of Possession, Limitation Of 3 Years Applies As Cancellation Is Main Relief : Supreme Court

The Supreme Court has reiterated that where a composite suit had been filed for cancellation of the sale deed and of possession, the limitation period would have to be adjudged from the primary relief of cancellation which is 3 (three) years, and not the ancillary relief of possession which is 12 (twelve) years.

Reference was made to Rajpal Singh v. Saroj (2022) 15 SCC 260, which observed : "When a composite suit is filed for cancellation of the sale deed as well as for recovery of the possession, the limitation period is required to be considered with respect to the substantive relief of cancellation of the sale deed, which would be three years from the date of the knowledge of the sale deed sought to be cancelled. "

The Court also held that the contrary view held in Sopanrao v. Syed Mehmood (2019) 7 SCC 76 was taken without considering earlier precedents. In Soapnrao, it was held that merely because one of the reliefs sought is of declaration that will not mean that the outer limitation of 12 years is lost.

The Court also reiterated that the limitation period for seeking a declaration under Article 58 or seeking a cancellation of the deed under Article 59 of the Limitation Act, 1963 beings from the date on which the right to sue first accrues to the plaintiff.

“In simpler terms, if cause of action to sue means accrual of the right for an actionable claim, it is the moment from which such right first accrues that the clock of limitation would start ticking. Thus, even though cause of action for instituting a suit might arise on varied occasions and/or at different times, what is material and assumes relevance for computing the period of limitation under Article 58 is the date when the right to sue first accrues to the aggrieved suitor…The period of limitation in terms of Article 58 being 3 (three) years, the prescribed period has to be counted from that date of the right to sue first accruing and the suit, if not instituted within 3 (three) years therefrom, would become barred by time.”, the court observed.

Similarly, any suit seeking cancellation of the particular instrument as void or voidable needs to be filed within three years from the date the suitor first derived knowledge of the fact of such an instrument (which, according to him, is void or voidable) coming into existence.

“Any suit seeking cancellation of a particular instrument as void or voidable would be governed by Article 59 and, therefore, has to be instituted within 3 (three) years from date the suitor could be said to have first derived knowledge of the fact of such an instrument (which, according to him, is void or voidable) coming into existence. The word “first” in Article 59 would ordinarily have the same connotation as in Article 58.”, the court said.

The bench comprising Justices Dipankar Datta and Prashant Kumar Mishra was hearing the case where the Respondent/Plaintiff had instituted a suit seeking cancellation of the sale deed in 2003, which was executed in 1992, against the Appellant/Defendant.

The trial Court held the suit was barred under Article 59 of the Limitation Act, and it was filed beyond three years for the cancellation of documents. However, the First Appellate Court & High Court decreed the suit, noting that the suit was within limitation as it was filed within 12 years of limitation, a prescribed period of limitation for possession based on title.

Following this, an appeal was presented before the Supreme Court by the Defendants/Appellants.

Before the Supreme Court, the Respondent supported the impugned findings, arguing that the suit was not barred by limitation, asserting that it was filed within the prescribed time. They contended that they were also seeking recovery of possession, which had become adverse to them, and since Article 65 of the Limitation Act provides a 12-year limitation period for such claims, the suit filed in 2003 was therefore within time and not barred by limitation.

Rejecting the Respondent's argument, the judgment authored by Justice Datta observed that since the core relief was cancellation of sale deeds (governed by Article 59, 3-year limit), thus the right to sue first accrued in 1992 (when the sale deeds were executed and possession taken) making the Respondent's suit seeking cancellation of the sale deed to be time barred.

Interestingly, in the recent case of Mallavva v. Kalsammanavara Kalamma, 2024 LiveLaw (SC) 1031, the Supreme Court took a different approach to the application of limitation periods. The Court held that although, as a general rule, the limitation period is determined by the main relief sought in a suit, this principle does not apply where the primary relief is a declaration of title. Since there is no prescribed limitation period for seeking a declaration of ownership, the limitation must instead be determined by the nature of the consequential relief namely, recovery of possession which, under Article 65 of the Limitation Act, is subject to a twelve-year period.

In the present case, from facts, the Court noted that cancellation was the main relief, with recovery of possession being the ancillary relief.

Case Title: RAJEEV GUPTA & ORS. VERSUS PRASHANT GARG & ORS. 

Citation : 2025 LiveLaw (SC) 471

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Appearance:

For Appellant(s) : Mr. Kavin Gulati, Sr. Adv. Mr. Rohit Amit Sthalekar, Adv. Mr. Pramod Dayal, AOR Mr. Nikunj Dayal, Adv. Mr. Rakesh Kumar, Adv.

For Respondent(s) :Ms. Dharitry Phookan, AOR