The Supreme Court of India has ruled that to claim an exemption under Section 17 of the Limitation Act, 1963, the plaintiff must prove that fraud actively prevented them from realizing their right to sue—it is not sufficient to merely allege that the transaction (like a sale deed) was fraudulent.

This clarification came in the case Basanti Devi vs. Ravindra Kumar where a dispute arose from a sale deed executed in 2008. The plaintiff filed a suit in 2012 seeking cancellation of the deed, claiming it was based on fraud. However, courts at all levels—the Trial Court, First Appellate Court, and the High Court—dismissed her suit as barred by limitation, stating it was filed beyond the three-year limit under Article 59 of the Limitation Act.

Read Also:-Supreme Court Modifies Bombay HC Order on Badlapur 'Fake' Encounter, Directs DGP to Form SIT

The plaintiff argued that she came to know about the fraud only in 2010, and thus, under Section 17, the limitation period should start from that date. She also stated that she should not be penalized for a delay caused by the fraudulent concealment of facts.

However, the Supreme Court, in a bench comprising Justices J.B. Pardiwala and R. Mahadevan, rejected this plea.

"Under Section 17 of the Limitation Act, the plaintiff should have been kept out of knowledge of his right to sue by means of fraud,” the Court held.

Read Also:-Supreme Court Orders New Forensic Report in Biren Singh Audio Clip Case

Justice Pardiwala, authoring the judgment, made it clear that mere fraud in the transaction itself is not enough. The plaintiff must show that fraud actively stopped them from knowing their legal right.

“We are of the opinion that the alleged fraud relating to the sale transaction itself has nothing to do with the question viz., that the plaintiff had been kept out of knowledge of his right to file a suit for cancellation of the sale deed because of fraud,” the Court observed.

The Supreme Court emphasized that the plaintiff was present during the execution of the sale deed in 2008 and, being a property dealer, was expected to understand the terms of the transaction.

Moreover, the Court found that the plaint lacked specific pleadings of fraud, which are mandatory under Order VII Rule 6 of the Code of Civil Procedure (CPC).

Read Also:-Supreme Court Dismisses Woman’s Claim Over Red Fort, Citing Lack of Merit

The Trial Court had also noted this, stating that it was not believable that the plaintiff, who attended the deed’s registration, would only discover fraud two years later.

"There is no plausible explanation as to how the fraud was discovered in 2010 if the plaintiff was personally present in 2008 and had access to the sale deed," the Court noted.

Accordingly, the Supreme Court dismissed the appeal, reinforcing the principle that Section 17 applies only when fraud conceals the right to sue—not just when the transaction is fraudulent.

Case Title: SANTOSH DEVI VERSUS SUNDER

Appearance:

For Petitioner(s) : Ms. Srishti Singla, Adv. Mr. Karan Kapoor, Adv. Mr. Manik Kapoor, Adv. Mr. Shrey Kapoor, AOR