Rajpal Singh vs Saroj (Deceased) Through LRs and Anr.
Background
A landowner agreed in 1993 to sell agricultural land to Rajpal Singh, extending the sale-deed deadline twice at his own request. Before executing the sale, the landowner's wife filed a suit against her husband claiming the land under an alleged (and never produced) family settlement; the husband did not contest it, and a collusive decree was passed in her favour, but it was never registered or recorded in revenue records. The husband then went ahead and executed a registered sale deed in Rajpal Singh's favour in 1996, who took possession, cultivated the land, and got it mutated in his name. Five years later, in 2001/2007, the wife sued to cancel that sale deed and recover possession, relying on her earlier collusive decree; the Trial Court dismissed her suit but the High Court, in second appeal, reinstated it.
Decision Breakdown
The Supreme Court held that the wife's suit for cancellation of the 1996 sale deed was barred by limitation, since such a suit must be filed within three years of acquiring knowledge of the sale deed, and here it was filed roughly five years after mutation and open possession by the purchaser: the additional prayer for possession being merely consequential does not extend the limitation period governing the substantive relief of cancellation. The Court also found the purchaser to be a bona fide buyer who paid full consideration without knowledge of the secret, unregistered, uncontested collusive decree obtained behind his back by husband and wife acting in concert. It held the High Court erred in second appeal by ignoring both the limitation bar and the collusive nature of the earlier decree, and restored the First Appellate Court's dismissal of the suit.
Lesson Learnt
A secret, unregistered decree obtained through a collusive suit between family members cannot defeat the rights of a bona fide purchaser who later buys the same property for value without notice of it; and a suit to cancel a registered sale deed must be filed within three years of learning of that sale deed, regardless of an added prayer for possession.