A Legal Analysis with Supreme Court & High Court Jurisprudence

The Karnataka High Court’s recent ruling in Smt KG Laxmidevi v. Smt Hampamma and Ors [Neutral Citation: 2026:KHC-D:6231] (Justice Geetha K.B.) offers a timely and instructive occasion to revisit two foundational doctrines of Indian property law: the requirement of consideration for a valid sale under Section 54 of the Transfer of Property Act, 1882 (TPA), and the stringent conditions governing the acquisition of title by adverse possession.

The decision declares a registered sale deed unsupported by actual payment of consideration a sham and void instrument—functionally akin to a discharged mortgage—while simultaneously rejecting an adverse possession claim that lacked the indispensable ingredient of the claimant admitting the true owner’s title.

The ruling aligns with, and is fortified by, a consistent line of Supreme Court authority—most recently Shanti Devi (since deceased) Through LRs. Goran v. Jagan Devi & Ors. (2025 INSC 1105), decided on 12 September 2025—and earlier landmarks including Kewal Krishnan v. Rajesh Kumar (2022) 18 SCC 489, Dagadabai (dead) by L.Rs. v. Abbas @ Gulab Rustum Pinjari (2017) 13 SCC 705, and Yerraguntala Ramireddi v. Ratchepalli Atchamma (1953) 2 SCC 21.

This article undertakes a systematic analysis of both doctrines, with full citations and relevant excerpts from the governing authorities, and concludes with the key implications for property litigation.

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II. Sham Sale Deeds and the Requirement of Consideration

A. The Statutory Framework: Section 54 of the Transfer of Property Act, 1882

Section 54 of the TPA defines a ‘sale’ as the following:

“A sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.”

The provision makes unequivocally clear that price—whether paid presently, promised to be paid in the future, or a combination—is the definitional core of a sale. Where no price is paid and no binding promise to pay is recorded or proved, the transaction is not a ‘sale’ at all within the meaning of the section. Such a deed is void ab initio and incapable of passing any title to the purported purchaser.

B. Yerraguntala Ramireddi v. Ratchepalli Atchamma (1953) 2 SCC 21

This decision, one of the earliest Supreme Court pronouncements on nominal sale deeds, arose from a Madras High Court judgement that reversed a subordinate court’s decree. The vendor’s husband continued in cultivating possession of the land after the supposed sale. The Supreme Court affirmed the High Court’s finding that the deed was without consideration and was not acted upon.

The court relied upon evidence of the following:

• The vendor’s husband continuing to cultivate the land with hired bulls;
• The presence of agricultural implements and grain stocks in the house in his possession; and
• The purchaser’s failure to establish any actual payment.

The registrar’s endorsement was held rebutted by this conduct evidence: contentReference[oaicite:7]{index=7}.

Key Principle

A registered endorsement of consideration does not confer finality upon the question of payment. Evidence of the vendor’s continued possession and the purchaser’s inability to demonstrate actual payment or the means to make payment are sufficient to rebut the presumption of genuineness and render the deed a sham.

C. V.M. Salim v. Fathima Muhammed (2011) 15 SCC 756

The Supreme Court provided the definitive analytical framework for identifying a sham transaction in property law: [contentReference[oaicite:9]{index=9}]

A document will be ‘sham’ if it ostensibly creates rights/obligations, which are not intended to be acted upon by the parties to the deed, and is executed in pursuance of a secret arrangement, with the ulterior motive of securing an undisclosed advantage to the owner. It includes collusion between the parties to the document to achieve an illegal objective.”

V.M. Salim v. Fathima Muhammed, (2011) 15 SCC 756

The court further held that to establish a sham transaction, a party must plead and prove the following:

• A secret arrangement between vendor and purchaser;
• That the sale was nominal; and
• That no right, title, or interest passed or was intended to pass to the purchaser.

D. Kewal Krishnan v. Rajesh Kumar (2022) 18 SCC 489; 2021 INSC 765

This landmark ruling arose from sale deeds executed by an attorney in favour of his minor sons and wife—persons with no demonstrable income and thus no capacity to pay the stated consideration. The Supreme Court stated the governing principle in unequivocal terms:

“The sale of an immovable property would have to be for a price, and such a payment of price is essential, even if it is payable in the future. If a sale deed is executed without the payment of the price and if it does not provide for the payment of the price at a future date, it is not a sale at all in the eyes of the law, specifically under Section 54 of the Transfer of Property Act. Such a sale without consideration would be void and would not affect the transfer of the immovable property.”

Critically, the Court held that a void deed need not be specifically challenged by way of a separate declaration suit; its nullity can be asserted collaterally in any proceeding. Since no title passed, the original co-owner retained his undivided half-share and was entitled to joint possession.

E. Shanti Devi (Since Deceased) Through LRs. v. Goran & Ors — 2025 INSC 1105

Civil Appeal No. 11795 of 2025; Decided: 12 September 2025

This is the most recent and comprehensive Supreme Court exposition of the void sale deed doctrine. The case involved a sale deed dated 14 June 1973 for agricultural land in Gurgaon. The plaintiff, a co-owner, alleged that her thumb impression had been obtained by impersonation and that no consideration was received. The Supreme Court, after exhaustive analysis, declared the deed void ab initio on two independent grounds: non-execution and absence of consideration.

On the Question of Consideration

In para 34, reiterating Kewal Krishnan, the apex court observed:

“The sale of an immovable property would have to be for a price, and such a payment of price is essential, even if it is payable in the future. If a sale deed is executed without the payment of the price, it is not a sale at all in the eyes of the law, specifically under Section 54 of the Transfer of Property Act. Such a sale without consideration would be void and would not affect the transfer of the immovable property.”

The sub-registrar’s endorsement recited receipt of the balance consideration of Rs. 6,000 at the time of registration. However, the defendants produced no evidence—neither payment receipts, bank entries, nor credible witness testimony—to prove the payment of the stated consideration of Rs 15,000. The Court drew an adverse inference from this failure.

On Limitation: Article 65 vis-à-vis Article 59

Synthesising Prem Singh v. Birbal and State of Maharashtra v. Pravin Jethalal Kamdar, the court held the following:

“Where the impugned sale deed is void ab initio—either because the plaintiff did not execute it at all or because there was no consideration—Article 65 governs a suit for possession based on title. The plaintiff, particularly a non-executant, need not sue for cancellation under Article 59; even the inclusion of a declaratory prayer does not convert the governing limitation to Article 59.”

This proposition has decisive practical significance. A plaintiff who is not the executant of a void deed has 12 years from the date the defendant’s possession became adverse to institute a suit for possession based on title, without the obligation to first formally seek cancellation of the instrument. The three-year period under Article 59 applies only where an executant seeks cancellation of a voidable instrument.

On Burden of Proof

“Defendants bore the burden to prove that consideration was in fact paid. They failed to adduce any evidence to establish actual payment—neither the part-payment of Rs 9,000 alleged to have been made prior to execution, nor the balance of Rs 6,000 said to have been handed over before the Sub-Registrar.”

Key Legal Principles Emerging From the Judgments

Legal Principle	Position in Law
Requirement of Consideration	A sale without a price paid or promised is void under Section 54 TPA.
Registered Sale Deed	Registration alone does not prove valid consideration.
Burden of Proof	The purchaser must prove actual payment of consideration.
Void Sale Deed	A void deed can be challenged collaterally without a separate cancellation suit.
Limitation	Article 65 applies to possession suits based on title involving void deeds.
Sham Transactions	Courts examine intention, possession, conduct, and proof of payment.

Conclusion

The Karnataka High Court judgement in Smt. KG Laxmidevi v. Smt. Hampamma and Ors. reaffirms the settled jurisprudence that consideration is the indispensable foundation of a valid sale under Section 54 of the Transfer of Property Act, 1882. A registered instrument unsupported by actual payment or a legally enforceable promise to pay is void ab initio and incapable of transferring title.

The decision also strengthens the doctrinal clarity surrounding sham transactions and adverse possession claims. It underscores that courts will closely scrutinise the surrounding conduct of parties, possession patterns, financial capacity, and documentary evidence to determine whether a transaction was genuine or merely nominal.

For property litigants, conveyancing lawyers, and civil courts, the ruling serves as an important reminder that registration alone does not sanctify an otherwise void transaction. Proof of consideration remains central to the legality and enforceability of every sale deed.

III. The Karnataka High Court’s Application: Smt. KG Laxmidevi v. Smt. Hampamma (2026:KHC-D:6231)

A. Factual Matrix

The plaintiff sought a declaration of title and permanent injunction over the suit schedule property, contending that:

• (i) a sale deed dated 28 April 1941 executed by her grandfather was a nominal transaction to secure a loan—in substance a mortgage—and that the loan had been repaid, though no formal reconveyance was executed;
• (ii) a subsequent family partition by a registered deed of 1957 allotted the suit property to her father; and
• (iii) a later sale deed between the defendants was a fabricated document.

The defendants maintained that the third defendant was the absolute owner under the 1941 deed, with valid title passing to the second defendant under the subsequent sale.

B. Key Holdings of the High Court

Justice Geetha K.B., answering the two substantial questions of law in the regular second appeal under Section 100 CPC, held:

On the 1941 Sale Deed as a Sham

“On careful perusal of all the above facts and points of law, this Court is of the opinion that the First Appellate Court was right in reversing the judgement and decree of the Trial Court holding that Ex.P.2 registered sale deed dated 28.04.1941 was a nominal and sham one because no consideration passed under said document.”

The Court identified the plaintiff’s custody of the original 1941 deed as a key piece of evidence establishing the discharged-mortgage character of the transaction.

In a genuine sale, the original title document is delivered to the purchaser and does not remain with the vendor. Its retention by the plaintiff’s side was consistent only with the document being held as security for a loan that had since been repaid.

On Adverse Possession

“In all the aforesaid citations, it is clearly held that until and unless the ownership of the real owner is admitted by the person who is in possession of the property in question, he cannot say that his possession is adverse to the interest of the real owner. Hence, the plaintiff has not established the plea of adverse possession.”

The First Appellate Court had upheld both the sham deed finding and an adverse possession claim. The High Court corrected the error in the latter finding while affirming the former.

However, the ultimate relief in favour of the plaintiff was preserved on the basis of the unchallenged registered partition deed of 1957, which independently and conclusively established her title.

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IV. Adverse Possession: Essential Requirements And Supreme Court Jurisprudence

A. The Legal Framework

Under Article 65 of the Limitation Act, 1963, a suit for possession of immovable property must be filed within 12 years from when the defendant’s possession first becomes adverse to the plaintiff.

In the converse direction, if a defendant has been in adverse possession for 12 years, such possession extinguishes the plaintiff’s right to sue and, under settled law, perfects a possessory title in the defendant.

The Supreme Court has consistently held that adverse possession is a jealously guarded doctrine which requires the simultaneous coexistence of three classical requirements:

Requirement	Meaning
Nec vi	Adequate in continuity (continuous, uninterrupted possession for the requisite period)
Nec clam	Adequate in publicity (open and notorious possession, known to the true owner)
Nec precario	Adverse to the true owner (in denial of title, and to the owner’s knowledge)

Ravinder Kaur Grewal v. Manjit Kaur, AIR 2019 SC 3827: (2019) 8 SCC 729; P.T. Munichikkanna Reddy v. Revamma (2007) 6 SCC 59

B. T. Anjanappa v. Somalingappa (2006) 7 SCC 570

The Apex Court in the case of T. Anjanappa v. Somalingappa (2006) 7 SCC 570 observed thus:

“The High Court has erred in holding that even if the defendants claim adverse possession, they do not have to prove who the true owner is, and even if they had believed that the government was the true owner and not the plaintiff, still their possession may ripen into title by adverse possession. This view is clearly contrary to the settled law of adverse possession. If the defendants are not sure who the true owner is, there will be no question of possessing the property hostile to the true owner or in denial of the true owner’s title.”

T. Anjanappa v. Somalingappa, (2006) 7 SCC 570

C. Dagadabai (Dead) By L.Rs. v. Abbas @ Gulab Rustum Pinjari (2017) 13 SCC 705

Dagadabai (Dead) by L.Rs. v. Abbas @ Gulab Rustum Pinjari (2017) 13 SCC 705 | Civil Appeal No. 83 of 2008 | Decided: 18 April 2017

This decision is the most authoritative pronouncement on the requirement of title admission in adverse possession claims.

The defendant set up a plea of adverse possession as an alternative to his primary claim of heirship through adoption. The High Court admitted the second appeal on the adverse possession question and reversed the concurrent findings of the trial court and first appellate court. The Supreme Court set aside the High Court’s order.

The Supreme Court identified five fundamental errors in the High Court’s approach, the most critical being:

“The High Court erred fundamentally in observing in Para. 7 that ‘it was not necessary for him (defendant) to first admit the ownership of the plaintiff before raising such a plea’. In our considered opinion, these observations of the High Court are against the law of adverse possession. It is a settled principle of the law of adverse possession that the person who claims title over the property on the strength of adverse possession and thereby wants the court to divest the true owner of his ownership rights over such property is required to first admit the ownership of the true owner over the property.”

Dagadabai v. Abbas, (2017) 13 SCC 705, paras. 20–21 (Sapre, J.)

“It is equally well-settled that such a person must necessarily first admit the ownership of the true owner over the property to the knowledge of the true owner, and secondly, the true owner has to be made a party to the suit to enable the court to decide the plea of adverse possession between the two rival claimants.”

Dagadabai v. Abbas, (2017) 13 SCC 705 (Sapre, J.)

The Court further held that the question of adverse possession was purely factual in the circumstances and not a substantial question of law under Section 100 CPC.

The High Court had framed a question that raised no legal issue and had impermissibly reversed concurrent findings of fact, which were binding upon it in the second appeal.

D. Nand Ram v. Jagdish Prasad (2020) 9 SCC 393

“The question of adverse possession without admitting the title of the real owner is not tenable. Adverse possession cannot be decreed on a title which is not pleaded. Animus possidendi under hostile colour of title is required. Trespasser’s long possession is not synonymous with adverse possession.”

Nand Ram v. Jagdish Prasad, (2020) 9 SCC 393

E. Revenue Entries And Adverse Possession

A recurring issue in adverse possession disputes is the evidentiary weight of revenue mutation entries.

The settled position, confirmed across multiple Supreme Court decisions, is that revenue entries in favour of a claimant are not conclusive evidence of adverse possession and do not substitute for proof of actual physical possession that is open, hostile, and continuous.

In Dagadabai v. Abbas, the defendant relied upon mutation entries as the foundation of his adverse possession claim.

The Supreme Court held this entirely insufficient:

• Mutation entries are presumptive, not conclusive.
• They must be corroborated by evidence of actual, uninterrupted physical possession adverse to the true owner’s knowledge.
• Where the true owner has been in cultivating possession, or where there is no direct evidence establishing when possession turned hostile, the claim fails.

V. Comparative Analysis: Sham Deed vs. Adverse Possession

Aspect	Sham Deed	Adverse Possession
Legal Basis	Section 54, Transfer of Property Act, 1882	Articles 64–65, Limitation Act, 1963
Foundational Requirement	No consideration = void ab initio; title never passes	12 years’ hostile, open, continuous possession with animus possidendi
Burden of Proof	On the party’s challenging deed to rebut presumption of registration; on vendor’s side to show no intent to transfer	The claimant to plead and prove every ingredient with specificity and rigour
Title: Admission	Not applicable; deed itself is a nullity	The claimant must first admit true owner’s title; denial is fatal
Registration Effect	Raises presumption of genuineness but is rebuttable by evidence of no actual consideration or fictitious intent	Revenue entries in favour of claimant are not conclusive; physical possession evidence prevails
Limitation Period	Article 65 (12 years) governs suit for possession; Article 59 (3 years) applies only if cancellation is sought by the executant.	12 years of continuous adverse possession from date possession became adverse
Key Supreme Court Authority	Shanti Devi v. Jagan Devi (2025 INSC 1105); Kewal Krishnan v. Rajesh Kumar (2022) 18 SCC 489	Dagadabai v. Abbas (2017) 13 SCC 705; T. Anjanappa v. Somalingappa (2006) 7 SCC 570

VI. The Presumption Of Genuineness Of A Registered Deed And Its Rebuttal

The registration of a document under the Registration Act, 1908, raises a presumption of its genuineness. Courts have held that registration is not a mere procedural formality but a solemn act imparting sanctity to the document. The Supreme Court has held that a registered sale deed cannot be casually disregarded as nominal or a sham in the absence of cogent pleadings and convincing evidence.

However, this presumption is rebuttable. The following categories of evidence have been consistently recognised as sufficient to displace the presumption:

• Retention of the original title document by the vendor after the alleged sale (as in KG Laxmidevi), indicating the character of a pledge or mortgage rather than an outright sale.
• Evidence that the vendor continued cultivating or in physical possession of the property after execution of the deed (Yerraguntala Ramireddi).
• Evidence that the alleged purchaser had no financial means or income source capable of making the stated payment (Kewal Krishnan).
• Absence of any contemporaneous record of payment—bank entries, receipts, or credible witness evidence—despite the deed recording receipt of consideration (Shanti Devi v. Jagan Devi).
• Proof of a secret arrangement or fictitious endorsement designed to secure an undisclosed advantage (V.M. Salim v. Fathima Muhammed).

Practical Burden Of Proof

Once a prima facie case of non-payment is established by the challenger, the burden shifts to the party relying on the deed to demonstrate, by affirmative evidence, that consideration was actually paid. Failure to adduce such evidence—particularly in an era where banking transactions leave paper trails—invites an adverse inference.

VII. Implications For Litigation

A. Non-Executants Need Not Seek Cancellation

Following Shanti Devi v. Jagan Devi (2025 INSC 1105), a party who was not an executant of a void sale deed is not required to institute a suit for cancellation under Article 59 of the Limitation Act. A direct suit for possession on the basis of title, governed by the 12-year period under Article 65, is maintainable. This overrules any residual ambiguity created by some High Court decisions that had conflated the limitation periods.

B. Elect Between Deed-Based Title And Adverse Possession

A litigant must make a strategic election between claiming title through a deed and claiming title through adverse possession. These are mutually inconsistent pleas in their foundational logic: the deed-based title claimant asserts the instrument is valid; the adverse possession claimant acknowledges the true owner’s title and asserts that hostile possession has extinguished it. Courts will scrutinise inconsistent pleadings and may draw adverse inferences where a party seeks to blow hot and cold simultaneously.

C. The Binding Force Of Unchallenged Registered Partitions

A registered partition deed, once executed and registered, binds all parties and operates as public notice of the interests apportioned. In KG Laxmidevi, though the adverse possession reasoning was legally flawed, the ultimate decree in the plaintiff’s favour was preserved on the basis of the unchallenged 1957 registered partition deed. This underlines the critical importance of registered family settlements, which create binding interests that cannot be dislodged by subsequent revenue entries or disputed oral transactions.

D. Adverse Possession As A Defence Vs. Sword

While Ravinder Kaur Grewal v. Manjit Kaur (2019) 8 SCC 729 expanded the doctrine to permit a plaintiff to sue for adverse possession, the preconditions of hostile animus, title admission, and knowledge of the true owner remain equally applicable whether the plea is raised as a sword or shield. Claimants cannot skirt the admission requirement by framing the plea offensively.

E. Revenue Entries: Limited Evidentiary Value

Revenue mutation entries do not confer or evidence title. They are admissible as circumstantial evidence of possession but are decisively overridden by direct evidence of physical possession by the true owner, especially cultivating possession evidenced by Khasra-Girdawari entries, agricultural income, or witness testimony. Courts should be advised against treating revenue mutations in a claimant’s name as a substitute for the rigorous proof that adverse possession demands.

VIII. Conclusion

The Karnataka High Court‘s decision in Smt. KG Laxmidevi v. Smt. Hampamma represents a sound application of settled principles, even if the internal reasoning on adverse possession required correction at the second appellate stage.

Read together with the Supreme Court’s decisions in Shanti Devi v. Jagan Devi (2025), Kewal Krishnan v. Rajesh Kumar (2022), Dagadabai v. Abbas (2017), and the foundational pronouncement in Yerraguntala Ramireddi (1953), the following propositions stand as the governing law:

Governing Legal Principles

• A registered sale deed without actual consideration—whether paid, promised, or part-paid—is void ab initio under Section 54 TPA and transfers no title.
• The presumption of genuineness raised by registration is rebuttable, and continued possession by the vendor, absence of financial capacity in the purchaser, or absence of payment records can collectively displace it.
• A void deed need not be formally cancelled; its nullity may be asserted collaterally, and a suit for possession is governed by Article 65 (12 years), not Article 59 (3 years).
• Adverse possession requires the claimant to first admit the true owner’s title; hostile possession without such admission is legally impossible.
• The three classical requirements—nec vi, nec clam, nec precario—must co-exist. Revenue entries alone are insufficient; rigorous, direct evidence of open, continuous, hostile possession is required.
• Parties must elect between deed-based title and adverse possession; inconsistent pleadings are not maintainable.

Impact on Property Jurisprudence

These principles collectively fortify property rights against nominal documents and protect true owners against manufactured adverse possession claims.

They reinforce the imperative that courts approach registered instruments with respect for their solemnity while remaining vigilant against the weaponisation of the registration process to validate transactions that were never intended to transfer genuine title.

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Table of Authorities

A. Supreme Court Decisions

Case Name	Citation / Details
Shanti Devi (since deceased) Through LRs. Goran v. Jagan Devi & Ors.	2025 INSC 1105 | Civil Appeal No. 11795 of 2025 | 2025 LiveLaw (SC) 900 | Decided: 12.09.2025 | Pardiwala & Mahadevan, JJ.
Kewal Krishnan v. Rajesh Kumar & Ors.	(2022) 18 SCC 489 | 2021 INSC 765 | Civil Appeal Nos. 6989–6992 of 2021 | Decided: 22.11.2021 | Rastogi & Oka, JJ.
Dagadabai (Dead) by L.Rs. v. Abbas @ Gulab Rustum Pinjari	(2017) 13 SCC 705 | Civil Appeal No. 83 of 2008 | Decided: 18.04.2017 | Sapre, J.
Ravinder Kaur Grewal v. Manjit Kaur	AIR 2019 SC 3827 | (2019) 8 SCC 729
Nand Ram v. Jagdish Prasad	(2020) 9 SCC 393
P.T. Munichikkanna Reddy v. Revamma	AIR 2007 SC 1753 | (2007) 6 SCC 59
T. Anjanappa v. Somalingappa	(2006) 7 SCC 570
Karnataka Board of Wakf v. Government of India	(2004) 10 SCC 779
V.M. Salim v. Fathima Muhammed	(2011) 15 SCC 756
Yerraguntala Ramireddi v. Ratchepalli Atchamma	(1953) 2 SCC 21 | Decided: 15.05.1953 | Mahajan & Das, JJ.

B. High Court Decision

Case Name	Details
Smt KG Laxmidevi v. Smt Hampamma and Ors.	Neutral Citation: 2026:KHC-D:6231 — Karnataka High Court (Dharwad Bench) — Justice Geetha K.B. — Regular Second Appeal under Section 100 CPC

C. Statutory Provisions

Provision	Description
Section 54, Transfer of Property Act, 1882	Definition of ‘Sale’
Article 65, Schedule I, Limitation Act, 1963	Suit for possession of immovable property or any interest therein based on title
Article 59, Schedule I, Limitation Act, 1963	To cancel or set aside an instrument
Section 100, Code of Civil Procedure, 1908	Second Appeal