Supreme Court dismisses appeal challenging sale deeds executed through General Powers of Attorney, holds appellant failed to prove alleged loan-security arrangement or fraud in land transactions.
The Supreme Court of India has dismissed an appeal filed by Mallika against a Madras High Court judgment in a dispute involving agricultural lands in Coimbatore.
The Court held that the appellant failed to prove that the General Powers of Attorney (GPAs) executed in favour of the respondents served only as security for loan transactions.
A Bench of Ujjal Bhuyan and Vipul M. Pancholi delivered the judgment on May 22, 2026, in Mallika v. R. Nallathambi & Ors.
The Bench upheld the Madras High Court judgment dated January 3, 2017 passed in Second Appeal No. 714 of 2016.
Dispute Related To Agricultural Lands
The dispute involved two agricultural properties situated at Kalapatty Village in Coimbatore Taluk.
The appellant purchased the lands in 1996 through registered sale deeds.
According to the appellant, she later executed two registered GPAs in 1997 and 1998 in favour of Respondent Nos. 1 and 2 only as collateral security for loans of Rs. 2 lakh and Rs. 5 lakh carrying 18% interest.
She claimed that the respondents misused the GPAs and executed sale deeds in favour of their close relatives and family members.
The appellant further alleged that the respondents obtained signatures on blank papers and later prepared receipts without mentioning the amount allegedly paid.
Appellant Claimed Loans Were Repaid
The appellant argued that she had repaid the loans through monthly interest payments and yearly instalments towards the principal amount.
However, according to her, the respondents neither cancelled the GPAs nor returned the title deeds.
She claimed that she discovered the disputed transactions only in 2008 after inspecting records at the Sub-Registrar’s office.
Respondents Claimed Transactions Were Genuine
The respondents denied allegations of fraud and maintained that the transactions were genuine sale arrangements.
They argued that the appellant voluntarily executed the GPAs and handed over possession of the properties.
The respondents further contended that they paid valid sale consideration and that subsequent purchasers acquired lawful title.
Trial Court Ruled In Appellant’s Favour
In 2008, the appellant filed a civil suit before the Principal Subordinate Court, Coimbatore.
She sought a declaration that the sale deeds executed through the GPAs were null and void. She also sought permanent injunction against interference with possession and further alienation.
The Trial Court decreed the suit on March 22, 2012 and accepted the appellant’s case that the GPAs had been executed only as security for loans.
Appellate Courts Reversed Trial Court Decree
The IVth Additional District Judge, Coimbatore, later reversed the Trial Court decree on March 8, 2016 in Appeal Suit No. 52 of 2012.
The appellate court held that the appellant failed to prove repayment of the loans or continued possession over the properties.
The Madras High Court subsequently dismissed the second appeal under Section 100 of the Code of Civil Procedure, 1908, holding that no substantial question of law arose.
Supreme Court Examined Compliance With CPC
Before the Supreme Court, the appellant argued that the First Appellate Court had failed to comply with Order XLI Rule 31 CPC because it did not frame proper points for determination.
The appellant also alleged that the respondents acted as professional money lenders and routinely obtained registered documents and blank signed papers as security.
The respondents argued that the dispute involved pure questions of fact and did not raise any substantial question of law.
Supreme Court Finds No Evidence Of Loan Repayment
The Supreme Court observed that the burden to prove that the transactions were merely security arrangements rested upon the appellant.
The Bench held that mere allegations of fraud and misuse could not succeed without reliable evidence.
The Court noted that the appellant failed to produce documentary proof regarding repayment of the alleged loans, payment of interest, or return of principal amounts.
Court Draws Adverse Inference Against Appellant
The Bench also noted that the appellant did not enter the witness box despite making serious allegations of fraud, forgery, and misuse of signed blank papers.
Relying on Vidhyadhar v. Manikrao, the Court held that the adverse inference drawn against the appellant was justified.
The Court further observed that although mutation entries alone do not create title, long-standing revenue records supported by registered sale transactions remained relevant circumstances.
Delay In Filing Suit Also Considered
The Supreme Court also considered the nearly ten-year delay in filing the suit.
The Bench noted that the appellant neither challenged the mutation entries nor sought cancellation of the GPAs during that period.
According to the Court, such conduct weakened the allegations of fraudulent transfer of immovable property.
Supreme Court Dismisses Appeal
The Court held that the Madras High Court correctly concluded that no substantial question of law arose under Section 100 CPC.
Finding no perversity, patent illegality, or jurisdictional error in the judgments of the appellate courts, the Supreme Court dismissed the appeal.
Justice Vipul M. Pancholi authored the judgment.
