The Madhya Pradesh High Court has clarified that the limitation period for challenging a sale deed on grounds of fraud begins only when the fraud is discovered, not when the deed was executed. This ruling reinforces the procedural rigor required under Order VII Rule 11 CPC and sets a critical precedent for plaintiffs alleging fraudulent conveyances.
Background & Facts
The Dispute
The plaintiffs filed a suit in 2024 seeking to set aside two sale deeds executed in 2013 and 2024, alleging that the 2013 deed was procured through fraud. The defendants moved for rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, arguing that the suit was barred by limitation under Article 59 of the Limitation Act, 1963.
Procedural History
- 16 May 2013: Plaintiffs executed the first sale deed.
- 28 August 2024: Plaintiffs filed the suit seeking cancellation of both deeds.
- 8 April 2025: Trial Court dismissed the defendant’s application under Order VII Rule 11 CPC.
- 28 January 2026: Civil Revision filed before the Madhya Pradesh High Court.
Relief Sought
The petitioner sought dismissal of the suit on the ground that the plaint disclosed on its face that the cause of action was barred by limitation, and no averment was made regarding when the plaintiffs became aware of the alleged fraud.
The Legal Issue
The central question was whether Article 59 of the Limitation Act, 1963 begins to run from the date of execution of a sale deed, or only from the date the plaintiff discovered or ought to have discovered the fraud.
Arguments Presented
For the Appellant/Petitioner
The petitioner relied on Dahiben v. Arvind Bhai Kalyanji Bhanusali to argue that Article 59 mandates that limitation commences only when the facts entitling the plaintiff to seek cancellation of the instrument first become known to him. Since the plaint contained no averment regarding when the fraud was discovered, the suit was inherently defective and liable to be rejected under Order VII Rule 11 CPC.
For the Respondent/State
The respondents contended that fraud is inherently concealed and its discovery is a question of fact requiring evidence. They argued that the trial court was correct in refusing to reject the plaint at the threshold, as limitation is a mixed question of fact and law.
The Court's Analysis
The Court examined the plaint and found that while fraud was alleged, there was no disclosure of when the plaintiffs became aware of it. The Court emphasized that Article 59 explicitly ties the limitation period to the date when the facts entitling the plaintiff to seek cancellation first became known. The mere execution of the deed in 2013 could not be the starting point.
"Nothing has been mentioned in the plaint that when they came into the knowledge of the aforesaid alleged fraud."
The Court rejected the argument that limitation is always a mixed question of fact and law. It held that where the plaint itself reveals the cause of action arose more than three years prior and contains no factual basis for delay, the court is empowered to reject it under Order VII Rule 11 CPC. The plaintiffs, having executed the deed themselves, could not claim ignorance of its terms or circumstances. The absence of any plea regarding discovery of fraud rendered the suit time-barred on the face of the pleading.
The Verdict
The petitioner succeeded. The Court held that Article 59 of the Limitation Act, 1963 requires the plaintiff to plead when the fraud was discovered, and failure to do so renders the suit liable to rejection. The impugned order was set aside and the suit was dismissed.
What This Means For Similar Cases
Plaint Must Plead Discovery of Fraud
- Practitioners must ensure plaints alleging fraud under Article 59 explicitly state the date or approximate time when the fraud was discovered.
- Failure to plead this element invites rejection under Order VII Rule 11 CPC, even if the fraud is later proven.
Order VII Rule 11 Applies Even in Fraud Cases
- Courts may reject plaints at threshold if the cause of action is clearly time-barred on the face of the document.
- Allegations of fraud do not automatically shield a suit from limitation-based rejection.
Execution Date ≠ Limitation Start Date
- The date of execution of a deed is irrelevant for limitation under Article 59 if fraud is alleged.
- The burden is on the plaintiff to plead and prove when knowledge of fraud arose.
