Mr. Chitambaresh, the appellant claims that the GPAs were executed only as security for loans. The respondents were professional money lenders. Is it not common for money lenders to take documents as security? Why should her version be disbelieved?

My Lord, even if the respondents were money lenders, the burden was on the appellant to prove the existence of the loan, the terms of the loan, the payment of interest, and the repayment. She produced no documentary evidence — no loan agreement, no promissory note, no bank statements showing payment of interest, no receipts for repayment. The Trial Court itself found that she failed to prove repayment. She did not challenge that finding. Without foundational evidence, her allegation remains a mere assertion. The Court cannot assume the existence of a loan merely because the respondents were money lenders. The law requires evidence.

The receipts (Ex. B7 and Ex. B9) do not mention the amount paid. The attesting witnesses were not examined. Are these not serious defects?

My Lord, the receipts may not be ideal, but they are not the only evidence. The registered sale deeds themselves recite the consideration. The appellant admitted her signatures on the receipts. She did not examine any handwriting expert to prove forgery. The attesting witnesses were her own relatives; she could have examined them but chose not to. The First Appellate Court correctly held that the receipts cannot be rejected in isolation. The surrounding circumstances — execution of registered GPAs, registered sale deeds, mutation entries, subsequent transfers, and the appellant's failure to enter the witness box — must be considered together. When viewed in totality, the evidence supports the respondents.

The appellant argues that the First Appellate Court violated Order XLI Rule 31. Is that not a substantial question of law?

My Lord, the First Appellate Court framed three points for determination. It discussed the evidence in detail. The points may not be perfectly worded, but this Court has repeatedly held that substantial compliance is sufficient. The substance of the judgment — the detailed reappreciation of evidence — is what matters. The High Court examined this and held that no substantial question of law arose. This Court should not interfere on a technical ground when the appellate court has in substance complied with the rule.

The appellant did not enter the witness box. Her husband deposed. Is that not sufficient? Why draw an adverse inference?

My Lord, the appellant was the one who executed the GPAs. She was the one who allegedly received the loans. She was the one who allegedly repaid the loans. She had special knowledge of these facts. Her husband (PW-1) admitted that he was not present when the GPAs were executed. He was not present when the sale deeds were executed. He was not present when the alleged loans were repaid. He cannot depose about facts within the appellant's special knowledge. Under Vidhyadhar v. Manikrao, the adverse inference is fully justified. The appellant made serious allegations of fraud and forgery against the respondents, yet she did not have the courage to face cross-examination. That speaks volumes.

For RespondentCivil

Appellant Failed to Prove GPA Was Only Loan Security — (2026) INSC 529

Mallika v. R. Nallathambi — (2026) INSC 529

Core Argument

The appellant executed registered GPAs and registered sale deeds. She failed to produce any evidence of the alleged loan transactions, failed to prove repayment, failed to enter the witness box, and instituted the suit nearly ten years after the transactions. The First Appellate Court correctly reversed the Trial Court, and the High Court rightly dismissed the second appeal.

Key Precedents

Vidhyadhar v. Manikrao (1999) 3 SCC 573 — Held that where a party possessing special knowledge of facts fails to enter the witness box, an adverse inference may legitimately be drawn.
H. Siddiqui (dead) by LRs v. A. Ramalingam (2011) 4 SCC 240 — Relied upon for the proposition that compliance with Order XLI Rule 31 is mandatory, but the First Appellate Court has substantially complied.
Subhra Mukerjee v. Bharat Coking Coal Ltd. (2000) 3 SCC 312 — Distinguished: the burden shifts only after foundational facts are established; the appellant failed to establish foundational facts.

Full Argument

The respondents — R. Nallathambi and others — submit that the impugned judgment of the High Court dated 3 January 2017 dismissing the appellant's second appeal under Section 100 of the Code of Civil Procedure, 1908 (CPC) is correct and does not require any interference. The First Appellate Court, being the final court on facts, undertook a thorough reappreciation of the oral and documentary evidence and reversed the Trial Court with reasoned findings. The High Court, upon independent examination, concluded that no substantial question of law arose. The Supreme Court should not interfere.

The legal foundation for the respondents' case is that the initial burden of proof rests on the party alleging fraud or misuse. The appellant alleged that the registered General Powers of Attorney (GPAs) were executed only as security for loans. However, she failed to produce any documentary evidence of the loan transactions — no loan agreement, no promissory note, no proof of payment of interest, no proof of repayment. Even the Trial Court recorded a categorical finding that the appellant failed to prove repayment of the alleged loans. This finding was not challenged before the appellate courts.

The respondents rely on the well-settled principle that registered documents are valid unless proved otherwise. The appellant executed registered GPAs in 1997 and 1998. Registered sale deeds were executed pursuant thereto in 1998. The appellant did not cancel the GPAs for nearly ten years. She did not object to the mutation entries that stood in the names of purchasers for years. She did not challenge the subsequent transfers. This conduct is inconsistent with a person alleging fraud.

The respondents also rely on Vidhyadhar v. Manikrao (1999) 3 SCC 573, where this Court held that where a party possessing special knowledge of facts fails to enter the witness box, an adverse inference may legitimately be drawn. The appellant did not enter the witness box. She examined her husband (PW-1) instead. PW-1 admitted that both the appellant and he were engaged in real estate business. The appellant was not an illiterate person. Her failure to enter the witness box, despite making serious allegations of fraud and forgery, is fatal. The First Appellate Court and the High Court rightly drew an adverse inference.

The respondents further submit that the receipts (Ex. B7 and Ex. B9) acknowledging consideration are valid documents. The appellant admitted her signatures on those receipts. She did not examine any handwriting expert to prove forgery. The attesting witnesses were her own relatives; she could have examined them but chose not to. The receipts cannot be rejected merely because they do not mention the exact amount — the consideration is evident from the registered sale deeds themselves.

The respondents also rely on the unexplained delay of nearly ten years in instituting the suit. The impugned transactions took place in 1998. The suit was filed in 2008. The explanation that the appellant discovered the transactions only in 2008 after inspecting Sub-Registrar records is not credible. The appellant and her husband were engaged in real estate business. They would have been aware of the mutation entries. They did not cancel the GPAs. They did not object. The suit is barred by limitation and the appellant slept over her rights.

The respondents further submit that the First Appellate Court substantially complied with Order XLI Rule 31 of the CPC. The court framed points for determination, discussed the evidence in detail, and gave reasons for reversing the Trial Court. The requirement is one of substantial compliance, not technical perfection. The High Court correctly held that no substantial question of law arose.

The respondents therefore pray that this Court dismiss the appeal and affirm the impugned judgment.

Tactical Note — When & How to Deploy

Deploy this argument when defending a transaction where the other party alleges that a registered GPA was only security for a loan. Emphasise that the burden is on the party alleging fraud to prove foundational facts. Highlight the failure to produce loan documents, failure to prove repayment, and failure to enter the witness box. Rely on Vidhyadhar v. Manikrao for adverse inference. Argue that unexplained delay and registered documents weigh heavily against the plaintiff.

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