The Delhi High Court dismissed a second regular appeal challenging the cancellation of a sale deed procured by fraud, affirming that the burden of proving good faith shifted to the daughter who stood in a position of active confidence over her illiterate, elderly father. The court held that the sale deed for ₹1 lakh, despite the property’s value exceeding ₹60 lakhs, was void for lack of consideration and consent, directing possession be restored to the legal heirs.
Background & Facts
The Dispute
The plaintiff, Ram Sarup, alleged that his daughter Rani obtained a sale deed dated 8 March 2006 for the suit property in Ganesh Nagar, New Delhi, by representing it as a will, although he intended to give an equal share to all five daughters. The plaintiff claimed he received no consideration and had no intention to transfer the property to Rani, and that the deed was executed without his free consent due to his illiteracy, weak eyesight and old-age ailments.
Key Facts
- The suit property bears No. A-128, Municipal No. WZ-2/50, ad-measuring about 60 square yards, situated in the revenue estate of Village Nangli Jalib, colony Ganesh Nagar, New Delhi.
- The plaintiff purchased the property from his own funds and raised construction thereon; it is assessed to property tax in his name.
- He had five daughters: Kusma, Sharda, Bimla, Rani and Sunita.
- On 8 March 2006, a sale deed was executed in favour of Rani showing a sale consideration of ₹1 lakh, while the plaintiff asserted the property’s value exceeded ₹60 lakhs in 2006.
- The plaintiff contended he had executed a will on 15 October 2013 disinheriting Rani from all movable and immovable properties.
- The plaintiff lodged a complaint with the SHO, PS Tilak Nagar, on 18 September 2013 and another through the DCP on 1 October 2013, alleging fraud.
- A legal notice dated 20 September 2013 was sent by the plaintiff calling upon Rani to treat the sale deed as illegal and void.
- The suit for cancellation of the sale deed and mandatory injunction was filed thereafter (issues framed on 22 January 2015).
- The learned civil judge, after appreciating evidence, held the sale deed was procured by fraud and declared it cancelled, directing Rani to hand over peaceful and vacant possession of the suit property to the plaintiff.
- Aggrieved, Rani filed a first appeal (RCA/DJ No. 65/2018) which was dismissed by the first appellate court upholding the judgment and decree dated 9 April 2018.
- The present second regular appeal (RFA 492/2026) was filed challenging that dismissal.
Procedural History
- 08.03.2006: Execution of the sale deed in favour of Rani.
- 15.10.2013: Execution of the will disinheriting Rani.
- 18.09.2013: Complaint lodged with SHO, PS Tilak Nagar.
- 01.10.2013: Complaint lodged through DCP.
- 20.09.2013: Legal notice sent by the plaintiff.
- 09.04.2018: Judgment and decree of the learned civil judge (canceling the sale deed and directing possession).
- 65/2018: First appeal filed by Rani (RCA/DJ No. 65/2018).
- 09.04.2018: Judgment of the first appellate court upholding the civil judge’s decision.
- 01.10.2026: Judgment of the Delhi High Court (present appeal) pronounced.
- 09.07.2026: Reserved judgment.
Relief Sought
The appellant (Rani) sought to set aside the judgment and decree dated 9 April 2018, to retain possession of the suit property and to dismiss the respondent’s claim for cancellation and mandatory injunction. The respondents (the four sisters) sought upholding of the civil judge’s order, cancellation of the sale deed and delivery of peaceful and vacant possession of the suit property to them as legal heirs of the deceased plaintiff.
The Legal Issue
The central question was whether, given the fiduciary relationship between the daughter and her illiterate father, the burden of proving the good faith of the sale deed lay on the daughter who stood in a position of active confidence, or whether the plaintiff was required to first establish fraud or undue influence. This turned on the application of Sections 101 and 111 of the Indian Evidence Act, 1872, and whether the inadequacy of consideration (₹1 lakh versus a property value exceeding ₹60 lakhs) raised a presumption of fraud that shifted the onus to the transferee.
Arguments Presented
For the Appellant (Rani)
The appellant contended that the plaintiff had appeared before the sub-registrar on 8 March 2006, understood the contents of the sale deed and acknowledged receipt of the entire consideration; as a registered document the sale deed enjoys a presumption of correctness and genuineness, and the sub-registrar recorded no deficiency regarding the plaintiff’s capacity to execute it. She emphasized that the plaintiff was aged about 84-85 years at the time of execution, had not lodged any complaint against her prior to September 2013, and that the testimony of PW-1 (Sunita) was hearsay because she was not present at the execution. Furthermore, she argued that no legal requirement existed for the purchaser to obtain a separate receipt evidencing payment of the consideration, and that the suit was barred by limitation as it was filed in October 2013 for a deed executed in March 2006. Finally, she asserted that having already received the sale consideration and transferred the property, the plaintiff could not later execute a testamentary document, so no cause of action existed.
For the Respondent (the sisters)
The respondents maintained that the plaintiff had discharged the initial burden under Section 101 of the Evidence Act by showing circumstances suggestive of fraud: the sale consideration of merely ₹1 lakh was grossly inadequate compared to the property’s value exceeding ₹60 lakhs; the plaintiff, being illiterate, of weak eyesight and suffering from old-age ailments, could not read or understand the English language deed, a fact corroborated by the attendance register (Ex. DW-1/9) showing he was not conversant with English. They highlighted that the plaintiff’s request for a copy of the deed was refused, forcing him to obtain a certified copy, and that the defendant failed to prove the source of the ₹1 lakh cash payment, her bank passbooks showing no more than ₹10,000 in 2006. The respondents further pointed to the plaintiff’s subsequent will disinheriting the defendant, the complaints lodged in September-October 2013, and the legal notice, all of which supported the inference of fraud and undue influence exerted by a daughter who, having resided with her father soon after marriage, was in a position to exercise influence over him.
The Court's Analysis
The Court examined the interplay of Sections 101 and 111 of the Indian Evidence Act, 1872. Section 101 places the initial burden of proof on the party asserting a fact; here, the plaintiff had to establish a prima facie case of fraud or undue influence, after which the onus shifts to the defendant under Section 111 when one party stands in a position of active confidence. The Court found that the plaintiff, despite his age and infirmities, had shown sufficient circumstances to raise a prima facie inference of fraud. The sale deed recited a consideration of ₹1 lakh while the property was valued at over ₹60 lakhs, a disparity that, standing alone, created doubt about the transaction’s genuineness. Moreover, the plaintiff’s illiteracy, weak eyesight and inability to comprehend the English language deed - proved by the attendance register maintained in Hindi - meant he could not have understood the nature of the instrument he was signing. His request for a copy was refused, compelling him to secure a certified copy, which revealed the fraud. The defendant, who had been residing with the plaintiff soon after her marriage and thus occupied a position of active confidence, failed to discharge the shifted burden: she could not produce any cogent evidence of having paid ₹1 lakh in cash, her income and bank records showing no such capacity, and she offered no explanation for the source of the funds. The Court relied on the principle that where a transaction is tainted by inadequacy of consideration and the transferee is in a position to influence the transferor, the presumption of correctness attached to a registered document is rebuttable. As noted in the judgment, “The Learned Civil Judge thus, rightly concluded that the Defendant had failed to discharge the onus placed upon her to establish that the Sale Deed had been executed by the deceased Plaintiff, with an understanding that it was a Sale Deed and not a Will.” (para 54). Consequently, the sale deed was declared void for fraud and lack of free consent, and the defendant was directed to hand over peaceful and vacant possession of the suit property to the plaintiffs. The first appellate court’s concurrent affirmation of these factual findings meant no interference was warranted in the second appeal.
The Verdict
The respondents (the four sisters) succeeded as the appeal was dismissed. The Court held that the burden of proving the good faith of the sale deed lay on the daughter who stood in a position of active confidence, and that she had failed to discharge it. The sale deed dated 8 March 2006 for a consideration of ₹1 lakh was declared cancelled on the ground of fraud and lack of consideration, given the property’s value exceeding ₹60 lakhs. The defendant was directed to deliver peaceful and vacant possession of the suit property to the legal heirs of the deceased plaintiff. No monetary compensation or interest was awarded; the relief was limited to restitution of possession.
What This Means For Similar Cases
Burden Shifts in Fiduciary Relationships
When a transferee occupies a position of active confidence over a transferor who is illiterate, aged or infirm, the onus to prove the transaction’s good faith shifts to the transferee under Section 111 of the Evidence Act. Practitioners must therefore be prepared to demonstrate the source of consideration and the transferor’s understanding of the instrument.
Adequacy of Consideration as a Red Flag
A stark disparity between the nominal consideration and the market value of the property raises a presumption of fraud that can rebut the presumption of correctness attached to a registered document. Courts will scrutinize such transactions closely, especially where the transferor lacks the means to verify the deed’s contents.
Presumption of Correctness Is Not Absolute
Although a registered document enjoys a presumption of genuineness, this presumption is rebuttable by evidence of fraud, undue influence or lack of free consent. Evidence such as the transferor’s refusal to provide a copy, the transferee’s inability to prove payment, and subsequent contradictory testamentary acts can be sufficient to set aside the deed.
