Legal Review and Analysis of Hemalatha D by LRS vs Tukaram D by LRS & Ors 2026 INSC 82
Synopsis
The Supreme Court of India, in a civil appeal, reversed the High Court’s decision and restored the judgment of the First Appellate Court, holding that a registered sale deed dated 12 November 1971 was a genuine transaction and not a sham or mortgage by conditional sale. The Court emphasized the strong presumption of validity attached to registered documents and clarified the legal standards for challenging such instruments under the Indian Evidence Act, 1872, and the Transfer of Property Act, 1882.
1. Basic Information of the Judgment
Case Title: Hemalatha (D) by LRS v. Tukaram (D) by LRS & Ors.
Citation: 2026 INSC 82
Court: Supreme Court of India
Coram: Justices Rajesh Bindal and Manmohan
Bench: Division Bench (Two Judges)
Civil Appeal No.: 6640 of 2010
Date of Judgment: 22 January 2026
2. Legal Framework
The judgment engages with several key statutes and precedents governing the interpretation of registered documents, sham transactions, and mortgages:
Statutory Provisions:
Section 92 of the Indian Evidence Act, 1872: Bars oral evidence to contradict or vary the terms of a written contract, but permits evidence to show that the document was never intended to be acted upon (sham transaction).
Section 58(c) of the Transfer of Property Act, 1882: Defines “mortgage by conditional sale” and includes a proviso requiring the condition for reconveyance to be embodied in the same document that effects the sale.
Order VI Rule 4 of the Code of Civil Procedure, 1908: Requires material particulars to be pleaded in cases alleging fraud or sham transactions.
Key Precedents:
Gangabai v. Chhabubai (1982) 1 SCC 4: Held that oral evidence is admissible to prove a document is sham and not intended to be acted upon.
Prem Singh v. Birbal (2006) 5 SCC 353: Emphasized the presumption of validity of registered documents.
Ishwar Dass Jain v. Sohan Lal (2000) 1 SCC 434: Clarified the scope of Section 92 in sham transactions.
Sopan v. Syed Nabi (2019) 7 SCC 635: Interpreted the proviso to Section 58(c) of the Transfer of Property Act.
3. Relevant Facts of the Case
The respondent-plaintiff, Tukaram, mortgaged his house in 1966 to Sadanand Garje for ₹8,000.
In 1971, Tukaram executed a registered sale deed in favor of appellant-defendant No. 1, Hemalatha, for ₹10,000, with ₹8,000 used to redeem the mortgage and ₹2,000 paid in cash.
On the same date, a registered rental agreement was executed, leasing the property back to Tukaram for five months at ₹200 per month.
Tukaram defaulted on rent after January 1973. The appellants issued a legal notice in April 1974, to which Tukaram replied admitting the arrears and promising payment.
In 1975, the appellants initiated eviction proceedings. In 1977, Tukaram filed a suit seeking a declaration that the sale deed was sham and nominal.
The trial court decreed in favor of Tukaram, the first appellate court reversed it, the High Court restored the trial court’s decree, and the Supreme Court finally allowed the appellants’ appeal.
4. Issues Before the Supreme Court
What is the legal threshold for declaring a registered sale deed a “sham”?
Whether oral evidence is admissible under Section 92 of the Evidence Act to contradict the terms of a registered sale deed?
Whether the transaction dated 12 November 1971 constitutes a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act?
Whether the pleadings and evidence adduced by the respondent-plaintiff met the required standard to challenge a registered deed?
5. Ratio Decidendi of the Supreme Court
5.1 Presumption of Validity of Registered Documents
The Court held that a registered sale deed carries a strong presumption of validity and genuineness. This presumption can only be rebutted by cogent and convincing evidence.
The burden of proof lies heavily on the party alleging the document to be sham.
5.2 Admissibility of Oral Evidence Under Section 92, Evidence Act
While Section 92 bars oral evidence to contradict written terms, it permits evidence to show that a document was never intended to be acted upon (i.e., sham).
However, the Court clarified that mere vague pleadings or clever drafting without material particulars are insufficient to invoke this exception.
5.3 Transaction Not a Mortgage by Conditional Sale
The sale deed contained no clause for reconveyance or condition of repayment, which is mandatory under the proviso to Section 58(c) of the Transfer of Property Act.
Therefore, the transaction could not be construed as a mortgage by conditional sale.
5.4 Failure of Pleadings and Evidence
The respondent’s pleadings lacked material particulars as required under Order VI Rule 4 CPC.
Key admissions in the reply to the legal notice (1974) and conduct of the parties (payment of rent, delay in filing suit) contradicted the claim of a sham transaction.
6. Legal Framework Established by the Supreme Court
Rigorous Pleading Standard: A party alleging a registered deed to be sham must plead with clarity, particularity, and specificity akin to Order VI Rule 4 CPC.
High Evidentiary Burden: Strong and conclusive evidence is required to override the presumption of validity of registered documents.
Systemic Recommendations: The Court suggested digitization of land records using tamper-proof technologies like blockchain to prevent fraud and frivolous litigation.
7. Court’s Examination and Analysis
7.1 Analysis of Intent and Conduct
The Court examined the recitals in the sale deed, which were clear and unambiguous, indicating an outright sale.
The respondent’s conduct—including admission in the 1974 reply, payment of rent, and delay in filing suit—was inconsistent with the claim of a mortgage.
7.2 Scrutiny of Evidence
The Court found no documentary proof (e.g., contemporaneous sale records) to support the claim of inadequate consideration.
Testimony of the respondent’s own witness (PW-5) supported the appellants’ case that the sale was genuine.
7.3 Interpretation of Legal Provisions
The Court interpreted Section 58(c) and its proviso strictly, holding that absent a reconveyance clause in the same document, a transaction cannot be deemed a mortgage by conditional sale.
It distinguished Gangabai on facts, noting that in this case, the pleadings and evidence were insufficient.
8. Critical Analysis and Final Outcome
8.1 Strengths of the Judgment
Reinforces certainty and sanctity of registered titles, crucial for property market stability.
Clarifies the interplay between Section 92 of the Evidence Act and sham transaction claims.
Sets a high threshold for challenging registered deeds, discouraging frivolous litigation.
8.2 Potential Criticisms
May raise the bar excessively for genuine cases where documentary evidence is scarce.
Reliance on technicalities of pleading may overlook substantive inequities in certain transactions.
8.3 Final Outcome
The Supreme Court allowed the appeal, set aside the High Court’s judgment, and restored the first appellate court’s decree.
The respondent’s suit was dismissed with costs in favor of the appellants.
The registered sale deed was upheld as a genuine, intended-to-be-acted-upon transaction.
9. (MCQs)
1. Under which provision of the Transfer of Property Act is a “mortgage by conditional sale” defined?
a) Section 58(a)
b) Section 58(b)
c) Section 58(c)
d) Section 59
2. According to the Supreme Court, what is the presumption attached to a registered sale deed?
a) It is prima facie void
b) It carries a strong presumption of validity and genuineness
c) It is only valid if supported by oral evidence
d) It is always subject to municipal mutation
3. Which case did the Supreme Court cite to hold that oral evidence is admissible to prove a document is sham?
a) Prem Singh v. Birbal
b) Gangabai v. Chhabubai
c) Ishwar Dass Jain v. Sohan Lal
d) Sopan v. Syed Nabi
4. What must be embodied in the same document to treat a transaction as a mortgage by conditional sale under Section 58(c) proviso?
a) Payment receipt
b) Condition for reconveyance
c) Municipal tax record
d) Witness signatures