The Supreme Court has dismissed an appeal filed by a woman challenging a series of property transactions executed through General Powers of Attorney (GPAs), holding that mere allegations of fraud and misuse of fiduciary position cannot succeed without reliable supporting evidence.
The appellant claimed that agricultural lands purchased by her in Coimbatore had been fraudulently transferred by the respondents using GPAs that were allegedly executed only as collateral security for loans. She contended that the respondents, who were money lenders, misused the GPAs to execute sale deeds in favour of their own relatives and family members.
The appellant argued that she had repaid the loans, and the GPAs were never intended to authorize outright sale of the properties. She also questioned the genuineness of receipts acknowledging sale consideration and alleged that blankly signed papers had been misused.
While the Trial Court had accepted her case and declared the sale deeds void, the First Appellate Court reversed the decree, and the Madras High Court later dismissed her second appeal. The matter eventually reached the Supreme Court.
A Bench comprising Justices Ujjal Bhuyan and Vipul M. Pancholi upheld the findings of the appellate courts and observed that the burden to establish that the transactions were merely loan-security arrangements rested squarely upon the appellant. The Court held:
“Mere allegations of fraud or misuse of fiduciary position are not sufficient unless supported by reliable and cogent evidence.”
The Court noted that the appellant neither entered the witness box to support allegations of forgery and misuse of signed blank papers nor examined attesting witnesses, who were her own relatives. Further, no expert evidence was produced to establish forgery or interpolation in the documents. Therefore, the plea of forgery could not be accepted.
The Court referred to Vidhyadhar v. Manikrao, (1999) 3 SCC 573, where it was observed that an adverse inference could legitimately be drawn when a party possessing special knowledge of facts abstains from testifying.
The Court further noted that the GPAs remained uncancelled for nearly a decade, mutation entries continued in the names of purchasers, and several subsequent registered transactions had taken place openly without challenge. The explanation that the appellant discovered the transactions only in 2008 was found unconvincing, especially since both the appellant and her husband were engaged in real estate business.
Rejecting the challenge based on Order XLI Rule 31 CPC, the Supreme Court held that substantial compliance by the First Appellate Court was sufficient and the appellate judgment could not be set aside merely on technical grounds.
The Court ultimately upheld the findings of the High Court that no substantial question of law arose for consideration and refused to interfere with the concurrent findings of the appellate courts dismissing the suit.
Appearances
For Appellant- Mr. B Ragunath, Adv. Mr. Sivagnanam Karthikeyan, Adv. Mrs. NC Kavitha, Adv. Mr. Vijay Kumar, AOR
For Respondents- Mr. V. Chitambaresh, Sr. Adv. Mr. Jayanth Muth Raj, Sr. Adv. Mrs. Malavika J, Adv. Mr. Sureshan P., AOR Ms. Nivedita, Adv.
