Supreme Court of India

KRISHNAMURTHY S. SETLUR DEAD BY LRS.versusO.V. NARASIMHA SETTY & ORS.

Citation: 2007 INSC 192
Decided: 23 February 2007
Disposal: Appeal(s) allowed
Bench: ARIJIT PASAYAT

Holding

The Supreme Court held that the High Court judgment was legally flawed and therefore set it aside, remitting the appeal to the High Court for a fresh determination.

Summary

The case arose from a long‑running dispute over ownership of certain lands originally sold by Kalyana Sundram Iyer. K.S. Setlur claimed title by adverse possession, asserting that tenant Shyamala Raju had attorned to him in 1946 and that he had been in possession for more than twelve years, a claim upheld by the Karnataka High Court in 1981. The original plaintiff’s heirs (Iyengar’s legal representatives) never filed a suit on title despite being given liberty to do so, and the trial court later decreed in favour of Setlur, which the High Court reversed on appeal. The Supreme Court held that the High Court judgment was riddled with contradictions, failed to address key questions of adverse possession, the applicability of Section 27 of the Limitation Act, and whether the earlier High Court decision was binding on the respondents. Consequently, the Supreme Court set aside the High Court’s order and remitted the matter to the High Court for a fresh determination in accordance with law.

Issues considered

The applicability of Section 27 of the Limitation Act, 1963 to extinguish the right of the original plaintiff’s heirs who did not sue for possession.
Whether the tenant's possession can be treated as the owner's possession for the purpose of computing the twelve‑year period under Section 64 of the Limitation Act.
Whether the Karnataka High Court judgment in RSA No. 545/73 is binding on the respondents in the present suit.
The correct approach to adjudicating a claim of adverse possession and the necessity to plead and prove actual possession.
Whether the trial court erred in treating the suit as based on adverse possession without addressing the legal questions.

Legislation cited

Code of Civil Procedure, 1908s. Section 96
Constitution of Indias. Article 136
Limitation Act, 1963s. Section 27, s. Section 64

Subjects

adverse possessionlimitationSection 27Section 64civil appealdeclaration of titlepermanent injunctiontenancybenami transactionArticle 136

Judgment

)

KRISHNAMURTHY S. SETLUR DEAD BY LRS. A
~-
\~

O.V. NARASIMHA SETTY & ORS.

'·
• FEBRUARY 23, 2007

[DR. ARIJIT PASA YAT AND S.H. KAPADIA, JJ.] B

.. Constitution of India; Article 136-Civil Procedure Code, 1908; Section
· 96-Suit for declaration of title on adverse possession and for permanent
injunction decreed in favour of Plaintiff-High Court, in appeal, reversed the
judgment of the trial court-Correctness of-Held, High Court has committed
c
serious errors in the impugned judgment and has not dealt with the plea of

·- adverse possession as required to be done by an appellate court-Hence,
molter remitted back to the High Court to decide the appeal in accordance
with law-Limitation Act, 1963; Sections 27 & 64.
D
Respondent-Original Plaintiff, who claimed to have purchased suit
properties, filed a suit for permanent injunction for restraining the defendants
- cultivating tenant and appellant - from interfering with his possession before
trial court. The trial court dismissed the suit holding that the plaintiff had
not proved his actual possession of the Suit properties; and that the tenant
had attorned in favour of the appellant. The trial court, however, gave liberty E
to the plaintiff to file a suit on title and for possession of the suit properties.
Neither the original plaintiff not his legalheirs tiled a suit on title.

Thereafter, the appellant filed a suit for declaration of title and for
permanent injunction against the defendant-tenant before trial court which
~
was dismissed. The respondent - original plaintiff was not made a party to
F
the suit. The High Court, however, allowed the appeal of the appellant holding
that he had possessory title over the suit properties.

The appellants intituted a suit for declaration of ownership of the suit
properties against the respondents - legal heirs of the original plaintiff and
G
successors-in-title-and for permanent injunction. The trial court decreed the
suit in favour of the appellants in view of the judgment of the High Court in
earlier proceedings holding that the appellant had possessory title. The appeal
filed by the respondents was allowed by the High Court.

1097 H
1098 SUPREME COURT REPORTS (2007] 2 S.C.R.

A In appeal to this Court, the appellate contended that niether the original
plaintiff nor his legal heirs instituted a suit for declaration of title despite ·/
liberty givm by the trial court and hence they lost their right to rcover
possession; that the possessory title held in favour of them cannot he allowed
to be reopened in the present proceedings; and that the impugned judgment
B of the High Court is full of contradictions and inconsistent findings and hence
the matter needs to be remitted back to decide afresh.

The respondents, supporting the impugned judgment, contended that
they were not parties to the proceedings in which the High Court had
possessory title in favour of the appellants.
c Allowing the appeal and remitting the case back to High court, the court

HELD: I.I. Section 27 of the Limitation Act, 1963 operates to extinguish
the right to property of a person who does not sue for its possession within
the time allowed by law. The right extinguished is the right which the lawful
D owner has and against whom a claim for adverse possession is made, therefore,
the plaintilTwho makes a claim for adverse possession has to plead and prove
the date on and from which he claims to be in exclusive, continous and
undisturb1:d possession. The question whether possession is adverse or not
is often one of simple fact but it may also be a conclusion of law or a mixed
question oflaw and fact. The facts found must be accepted, but the conclusion
E drawn from them, namely, ouster or adverse possession is a question of law
and has to be considered by the court. (Para 131[1107-G-H; 1108-A)

1.2. The impugned judgment of the High Court is a bundle of confusion.
It quotes depositions of witnesses as findings. It quotes findings of the courts
below which have been set aside by the High Court in the earlier round. It
F criticizes the findings given by the coordinate Bench of the High Court in ...
the earlier round of litigation. It does not answer the question of law which
arises for determination in this case. In the matter of adverse possession, the
courts have to find out the plea taken by the plaintiffin the plaint. In the plaint;
the plaintiff who claims to be owner by adverse possession has to plead actual
G possession. None of the aspects have been considered by the High Court in
its impugned judgment. Adverse possession or ouster is an inference to be
drawn from the facts proved which is the work of the first appellate court.
(Para 141 (1108-C; G-H; 1109-A)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5079 of2000.
H
)
KRISHNAMURTHY S. SETLUR DEAD BY LRS. 1-. 0. V. NARASIMHA SETfY (KAPADIA, J.) j 099

From the Judgment and final Order dated 22.3.1999 of the High Court A
'r of Karnataka at Bangalore in R.F.A. No. 672 of 1996.

D.A. Dave, R.S. Hedge, Chandra Prakash, Rahul Tyagi and P.P. Singh
for the Appellants.

V.A. Mohta, Shanti Bhushan, Jaideep Gupta, D. Bharat Kumar, Anand, B
Indrani, Abhijit Sengupta, Azim H. Laskar, N.K. Nayak and Indra Makwana
for the Respondents.

The Judgment of the Court was delivered by

KAPADIA, J. I. This civil appeal arises out of judgment and decree C
rendered by Kamataka High Court on 22.3.1999 filed under section 96 CPC
against judgment and decree dated I I .J0.1996 passed in O.S. No. 3656/81 on
the file of City Civil Judge, Bangalore, decreeing the suit for declaration. By
the impugned judgment, the High Court has set aside the judgment and
decree dated J 1.10.1996. Hence this civil appeal has been filed by the LRs. D
of deceased Krishnamurthy S. Setlur (original plaintiff).

2. The facts giving rise to this civil appeal are as follows.

3. One Kalyana Sundram Iyer was the owner of the suit properties. H.R.
Narayana Iyengar (represented by his LRs.) claimed to have purchased the
suit properties from Iyer under sale deed dated 10.7.1942. At the relevant time, E
one Shyamala Raju was the cultivating tenant. Iyengar (since deceased)
claimed that he had terminated the tenancy in 1948. On termination of the
tenancy disputes arose between Iyengar and Shyamala Raju. Consequently,
Suit No. 79/49 came to be instituted by Iyengar in the court of Second
Munsiff, Bangalore. The suit was instituted by Iyengar against K.S. Setlur F
and Shyamala Raju stating that they had unauthorisedly disturbed his
possession. Suit No. 79/49 was for permanent injunction restraining the
defendants from interfering with the possession of Iyengar (plaintiff). In his
defence Raju stated that he was in possession for eight years; that he
continued to be in possession; that Iyengar was collecting rents arising from
the suit properties as a constituted attorney of K.S. Setlur; that on termination G
of the Power of Attorney, he paid rent to K.S. Setlur and, therefore, he was
in possession of the suit lands as a tenant under K.S. Setlur and not under
Iyengar (plaintiff). He (Raju) in his written statement stated that he continued
to remain in possession till 28.8.1950 (see p. 78 of the SLP Paper Book).
According to Iyengar, defendant No. 2 (Shyamal'I Raju) was his tenant who H
1100 SUPREME COURT REPORTS [2007] 2 S.C.R.

A turned hostile when he terminated the tenancy. According to Iyengar, there
was collusion between Shyamala Raju and K.S. Setlur to defeat his rights. In I
the said suit, K.S. Setlur contended that he was the real owner who had
appointed Iyengar as his constituted attorney to collect rent and profits. It
was contended that the sale deed executed by Kalyana Sundram Iyer was a
benami transaction. He further alleged that in 1946 he had cancelled the Power
B of Attorney in favour of Iyengar. He further alleged that after 1946, Shyamala
Raju had considered him as the landlord. Rent was paid to him by Shyamala
Raju. Raju had attorned in favour of K.S. Setlur. Lease deeds were executed
by Shyamala Raju in favour of K.S. Setlur. By judgment dated 28.2.1951, .•
delivered by the Munsiff Court in Suit No. 79/49, it was held that the factum
c of Shyamala Raju being in possession of the suit lands till 28.8.1950 stood
proved, therefore, it was held that Raju was in possession of the suit lands
from 1946 onwards. it was further observed by the trial court that the disputed
suit lands were not in de facto possession of Iyengar. The trial court relied
upon the revenue records of 1947-48 showing cultivation of the lands by
Shyamala Raju (see p. 91 of the SLP Paper Book). The trial court did not
D believe the plaintiff (Iyengar) to say that he had entered into possession in
1947. However, the trial court also observed that the plaintiff had a conveyance
~
in his favour from Kalyana Sundram Iyer but the suit was for permanent
injun~tion and since the plaintiff was not in actual possession it was not
possible to grant injunction restraining Shyamala Raju from entering the
E lands. The trial court further held that Shyamala Raju as a tenant had attorned
in favour of K.S. Setlur. The trial court, however, held that it was not in a
position to give a clear-cut finding as to whether Shyamala Raju was the
tenant of Iyengar or of K.S. Setlur. In this connection we find on page 95 of
the SLP Paper Book the conclusion of !he trial court which states that, "the
only inference that can be drawn is that the second defendant (Shyamala
F Raju) is in possession and cultivation of the suit disputed lands; whether he ~

was tenant under the plaintiff (Iyengar) or the first defendant (K.S. Setlur) is
not established." In the said judgment, the trial court further observed that
since the plaintiff had instituted a suit for permanent injunction it was not
necessary for the court to go into the question of the benami nature of the
G sale deed executed by Kalyana Sundram Iyer in favour of the plaintiff as well
as the real ownership of the suit lands. According to the trial court, it was
not necessary to go into the question of ownership except to the limited
extent, namely, attornment of the tenancy by Shyamala Raju in favour ofK.S.
Setlur and not in favour of Iyenger (plaintiff). According to the trial court,
since Shyamala Raju (defendant no. 2) had continued to remain in possession
H till he was prevented by an order of interim injunction which stood subsequently
~·
KRISHNAMURTHY S. SElLURDEADBYLRS. 1·. O.V. NARASIMHASETTY[KAPADIA, J.] 11 QI

vacated and since the plaintiff had failed to prove his actual possession, the A
plaintiff was not entitled to an order of injunction.The question of title was
not gone into by the trial court. The question of title deed being benami was
not gone into by the trial court. In conclusion, the trial court observed that
it was open to the plaintiff to file suit on title and for possession. The trial
court observed that grant of injunction is a matter of discretion. The court B
was, therefore, not inclined to grant permanent injunction in favour of the
plaintiff. At this stage, we may point out that the litigation has a chequered
history. We need not go into the various stages of this litigation except to
state that ultimately by judgment dated 14.12.1961 delivered by Additional
Civil Judge, Bangalore vide Regular Appeal No. 70/51 the suit filed by Iyengar
(plaintiff-appellant) ultimately stood dismissed. The judgment of the trial court C
dated 28.2.1951 stood affirmed. The termination of tenancy of Shyamala Raju
.was proved but there was no evidence that the plaintiff had obtained actual
· · possession from the ex-tenant on termination of tenancy. In the result, the
appeal stood dismissed on the ground that the appellant (Iyengar) was not
in possession of the suit lands on the date of filing of Suit No. 79/49 (see
p. 118 of the SLP Paper Book). The appeal of Iyengar stood dismissed on D
14.12.1%1.

4. Coming to the second round of litigation, it may be stated that after
Shyamala Raju attomed in favour of K. S. Setlur, differences arose which I.ed
to litigation between K.S. Setlur on one hand and Shyamala Raju on the other . E
hand. In the said litigation, Iyengar was not a party. In the said litigation LRs.
of Iyengar were not made party-defendants. Iyenger died on 6.12.1959. As
stated above, disputes arose between K.S. Setlur and Shyamala Raju around
1962. K.S. Setlur instituted Suit No. 89/63 for declaration of his title and for
permanent injunction. In the said suit K.S. Setlur contended, that Iyengar was
+ his constituted attorney; that Iyengar had purchased the suit lands from F
Kalyana Sundram Iyer in 1942; that he had terminated the Power of Attorney
in favour of Iyengar in 1946; that Shyamala Raju had attorned the tenancy
in his favour in 1946 and that on 23.4.1962 Shyamala Raju had surrendered
the suit lands to K.S. Setlur. In the said suit, K.S. Setlur alleged, that Shyamala
Raju was his ex-tenant; that Raju had surrendered his possession on 23 .4.1962, G
and after surrender he has been interfering with his possession. It appears
that Shyamala Raju had purported to sell a portion of the suit lands which
led Setlur to file Suit No. 89/63 saying that Shyamala Raju had no right to
convey the suit lands or any portion thereof. In the said suit, originally one
of the issues framed by the trial court was whether K.S. Setlur was the owner
of the suit lands and whether he was in possession of the suit lands. Later H
1102 SUPREME COURT REPORTS [2007] 2 S.C.R.

A on in appeal, the question framed was whether K.S. Setlur had proved his
possessory title to the suit lands. Th is question was answered in favour of
K.S. Setlur in the affirmative in RSA No. 545/73, which appeal stood disposed
of by the High Court vide judgment dated 14.8.1981 arising from Suit No. 89/
63 filed by K.S. Setlur. It is this judgment dated 14.8.1981 of the High Court
B which constitutes the basis of the judgment of the trial court in the present
proceedings. Be that as it may, the High Court in its judgment in RSA No.
545173 held that since Shyamala Raju had surrendered the suit lands in favour
of K.S. Setlur in 1962 it was obvious that K.S. Setlur was put in possession
through, the intervention of the Tahsildar (seep. 126 of the SLP Paper Book). :.
According to the High Court, the tenancy of Shyamala Raju stood terminated
C in 1946, that Setlur has been in possession since 1946, that Suit No. 89/63 was
filed by Setlur against Shyamala Raju in February, 1963 and, therefore, when
Setlur had been in possession for more than 12 years since 1946 he had the
possessory title vested in him and his possession had to be protected against
the whole world except the true owner and, therefore, according to the High
Court, the trial court should not have dismissed the suit of Setlur against
D Shyamala Raju bearing No. 89/63 but should have given a declaration that
Setlur had the possessory title for more than 12 years and the trial court
should have given declaration to that effect. Accordingly, the High Court vide
its judgment dated 14.8.1981 overruled the decision of the trial court dismissing
the suit filed by Setlur for declaration of his title. Accordingly in the second
E round of litigation Setlur succeeded in obtaining a declaration to the effect
that he had possessory title in him. At this stage, it may be noted that Iyengar
(since deceased) never instituted a suit for declaration of title.

5. Before coming to the present suit, it may be pointed out that during
the intervening period between the above two proceedings, K.S. Setlur had
F instituted Suit No. 94156 against Iyengar for accounts and reconveyance
based on the sale deed of 1942 executed by Kalyan Sundram Iyer in favour
of Iyengar. In Suit No. 94/56, the question of possession or prescriptive title
was neither raised nor decided. Issue No. 12 in that suit related to the plea
of reconveyance. The said suit was dismissed on 10.11.1961 by the Additional
G Civil Judge, Bangalore. In that suit, Setlur had claimed that he was the real
purchaser of the suit lands from Kalyan Sundram Iyer in 1941-42; that Iyengar
was his agent and was only a benamidar and, therefore, the purchase by
Iyengar was only for the benefit of K.S. Setlur and, therefore, Iyengar or his
LRs. were liable to reconvey the suit lands to the plaintiff (K.S. Setlur). This
story was not believed by the trial court. By the said judgment dated
H 10.11.1961, it was held that the case ofSetlur was a fairy tale and that Setlur
KRISHNAMURTHYS.SETLURDEADBYLRS. 1•. O.V.NARAS!MHASETTY[KAPADIA,J.] 1J03

had failed to prove that the suit lands were purchased from his funds or from A
the funds of his joint family. In the circumstances, it was held by the trial court
that Setlur was not entitled to reconveyance and that he had failed to prove
that Iyengar was only a benamidar in the transaction of 1941-42 with Kalyan
Sundram Iyer. Accordingly, Suit No. 94/56 filed by Setllir against Iyengar
stood dismissed. In the said suit, Setlur had also sought a pennanent injunction B
restraining Iyengar/ his LRs. from interfering with his peaceful possession
and also for restraining Iyengar/ his LRs. from claiming possession. According
to the appellants herein, the prayer for injunction was not pressed in view of
the judgment in the earlier Suit No. 79/49 on the question of possession
between Iyengar and Setlur. However, according to the LRs. oflyengar, Setlur
did not press for injunction in the said suit for reconveyance as Setlur was C
dispossessed in 1953.

6. To complete the chronology of events, K.S. Setlur (plaintiff) in the
present proceedings instituted, before the Additional City Civil Court,
Bangalore, Suit No. 3656/81. This suit was instituted on 11.12.1981. The said
suit was for a declaration that Setlur was the owner of the suit lands and that D
the LRs. of Iyengar or their alienees got no title from two sale deeds dated
21.5.1970 and 7.9.1970 executed by LRs. of Iyengar in favour of Narasimha
Setty and others (defendants). In the said suit, Setlur once again alleged that
the suit lands originally belongs to Kalyana Sundram Iyer, they were cultivated
by Shyamala Raju, in 1942 he had purchased the suit lands through his E
constituted attorney (Iyengar), that the said deed of 1942 was nominally in
favour of Iyengar as his agent and that Shyamala Raju had attorned in his
favour in 1946. The above avennent regarding the benami nature of transaction
was made by K.S. Setlur in the present suit despite the dismissal of his Suit
No. 94/56 against Iyengar. It was further submitted by K.S. Setlur that vide
+ judgment dated 14.8.1981, delivered by the High Court in RSA No. 545/73, he F
has been declared to have acquired possessory title to the suit lands as being
in possession thereof between 1946 and 1963 and, therefore, the LRs. of
Iyengar had no right, title or interest to convey the suit lands on 21.5.1970
and 7.9.1970 to Narasimha Setty and others. In the said suit Setlur sought a
declaration that he may be declared as an owner. He has also prayed for G
possession of a portion of the properties allegedly occupied by Setty and
others and for pennanent injunction (see p. 134 of the SLP Paper Book). In
the said suit, the LRs. oflyengar as well as their successors-in-title (defendants)
denied that the suit property was purchased by Iyengar for K.S. Setlur as his
Power of Attorney holder. They also denied the allegation that K.S. Setlur had
obtained possession at the time of attornment of tenancy in 1946. The H
1104 SUPREME COURT REPORTS (2007] 2 S.C.R.

A defendants' contended that neither K.S. Setlur nor Shyamala Raju were in
possession in 1946 and that documents of allotment were fictitious and never
acted upon. They contended that they were in exclusive, continuous and
undisturbed physical possession and enjoying the suit lands. The defendants
asserted that Iyengar had purchased the suit lands from Kalyana Sundram
B Iyer and they were in lawful and exclusive possession of the suit lands. The
defendants further stated that they were unaware of the proceedings between
K.S. Setlur and Shyamala Raju culminating in the judgment and decree dated
14.8.1981 in RSA No. 545/73 and, in the circumstances, the said judgment of
the High Court in RSA No. 545/73 was not binding on them. They denied of
having taken possession without authority of law in September/ November,
C 1970 as alleged by K.S. Setlur (plaintiff). They also relied upon the revenue
records from 1967 to show that they were in possession of the suit lands. (see
p. 140 of the SLP Paper Book)

7. In the present suit, issues were framed by the trial court. One-0f the
main issues was whether the plaintiff (K.S. Setlur) has proved that the
D defendants wrongly came into possession of the suit lands in 1970 and
whether the plaintiff was entitled to get back the possession from the defendants
herein. Th(' said issue was answered in favour of the plaintiff by the trial
court. In the reasoning, the case of the plaintiff has been set out to say that
Suit No. 3656/81 (present suit) was tiled for a different cause of action than
E the earlier suit filed by the plaintiff (K.S. Setlur) for reconveyance bearing Suit
No. 94156. That the present suit was filed by the plaintiff in view of his
dispossession in 1970. (see p. 153 of the SLP Paper Book). According to the
plaintiff, Iyenger had lost his suit for permanent injunction. The appeal
therefrom was ultimately disposed ofon 14.12.1961. Therefore, according to
the plaintiff, up to 14.12.1961 Iyengar was not in possession since in that suit_
F the court came to the conclusion that Iyengar was not in possession of the
suit lands. That suit filed by Iyengar was Suit No. 79/49 which came to be
ultimately dismissed vide judgment dated 14.12.1961 delivered by Additional
Civil Judge, Bangalore· in RA No. 70/51. In the present suit, the plaintiff
contended that he had entered into settlement with Shyamala Raju in 1962-
G 63; that on 23.4.1962 Shyamala Raju had surrendered his possession and K.S.
Setlur (plaintiff) was put in possession, therefore, according to the plaintiff,
he was in possession till 1962. (see p. 154 of the SLP Paper Book).

8. In the present suit, on the above pleadings and evidence, the trial
court came to the conclusion that it is around 1970 that the plaintiff stood
H dispossessed when the LRs. of Iyengar executed two sale deeds on 21.5.1970
KRISHNAMURIBY S. SETI.UR DEAD BY LRS. 1•. 0.V. NARASIMHA SETIY [KAPADIA,J.] 1105

and 7.9.1970 in favour of defendant No. 1 and others and since the present A
Suit No. 3656/81 stood instituted on 11.12.1981 it was within time of twelve
years. According to the trial court, in view of the judgment of the trial court
in the suit instituted by Iyengar bearing No. 79149, K.S. Setlur was in possession
of the suit property till December, 1961 and that the defendants had wrongly
entered into possession in April/ September, 1970. On the merits, the trial B
court held that since the High Court had declared vide its judgment dated
14.8.1981 in RSA No. 545173 that Setlur was in possession from 1946 to 1963
he had become owner by adverse possession and since Setlur was
dispossessed in 1970 the present Suit No. 3656/81 was well within limitation.
According to the trial court, in view of the judgment of the High Court dated
14.8.1981 in RSA No. 545/73, defendant No. I, Narsimha Setty, did not get a C
valid title in respect of the suit lands. According to the trial court, in view
of the said judgment of the High Court dated 14.8.1981 in RSA No. 545/73
there was no merit in the contention advanced on behalf of the defendants
that the said judgment of the High Court dated 14.8.1981 was not binding on
them since the High Court had declared that K.S. Setlur had possessory title
over the suit lands and in view of the said findings the defendants Narasimha D
Setty and others had failed to prove that they had derived valid title to the
said suit lands under the above two sale deeds dated 21.5.1970 and 7.9.1970
from the LRs. of Iyengar. The trial court further observed that K.S. Setlur had
instituted the said suit for declaration and permanent injunction in 1981. That
Suit was amended by K.S. Setlur as plaintiff alleged that he was in possession E
in 1970 and that subsequently the defendants had unlawfully entered into the
suit lands. The plaintiff accordingly amended the plaint. He sought possession.
While seeking possession, the plaintiff in his evidence stated that he was
dispossessed in 1970. According to the trial court, therefore, between 1946
and 1962-63, K.S. Setlur was in possession. He had possessory title. He was
in possession till 1970 when he was unlawfully dispossessed and in view of F
the judgment of the High Court dated 14.8.1981 possessory title in the suit
lands had vested in K.S. Setlur (plaintiff). In the circumstances, the trial court
decreed the suit in favour of the plaintiff. The trial court declared that Narsimha
Setty did not derive title from the LRs. of Iyengar under the above two sale
deeds dated 21.5.1970 and 7.9.1970. G
9. Aggrieved by the said decision of the trial court dated 11.10 .1996, the
matter was carried in appeal by the LRs. of Iyengar and their alienees to the
High Court under section 96 CPC vide RFA No. 672/96. By the impugned
judgment dated 22.3 .1999, the appeal filed by the defendants stood allowed
and the impugned judgment of the trial court was set aside. Hence this civil H
•
1106 SUPREME COURT REPORTS [2007] 2 S.C.R.

A appeal.
I0. As stated at the outset, the present civil appeal is filed by the LRs.
of the deceased K.S. Setlur, the original plaintiff. This civil appeal arises out
of the judgment of the High Court dated 22.3.1999 in RFA No. 672/96 filed
under section 96 CPC.
B
11. It is urged on behalf of the appellants-plaintiff that the suit is based
on adverse possession. According to the appellants, Shyamala Raju was the
tenant of K.S. Setlur since deceased. According to the appeilants, Shyamala
Raju had attorned the tenancy in 1946 in favour of K.S. Setlur. According to
the appellants, Shyamala Raju had surrendered possession to K.S. Setlur on
C 23.4.1962. According to the appellant, the High Court had categorically declared
vide judgment dated 14.8.1981 in RSA No. 545173 that the possessory title
stood vested in K.S. Setlur. It is urged on behalf of the appellants that Iyengar
had also instituted a :mit for permanent injunction being Suit No. 79/49 in
which it has been held that Iyengar was not in possession of the suit lands
D but he was certainly entitled to file a separate suit for declaration of his title.
It was urged on behalf of the appellants that despite liberty being given to
Iyengar to institute a separate suit for declaration on title, neither Iyengar nor
his LRs. ,ever instituted a suit on title and, therefore, the possessory title
found by the High Court vide judgment dated 14.8.1981 in favour of K.S.
Setlur cannot be allowed to be reopened in the present proceedings. It was
E urged on behalf of the appellants that the trial court was right in coming to
the conclusion that the possessory title stood vested in K.S. Setlur. In this
connection, reliance was placed on judgment dated 14.8.1981 in RSA No. 545/
73. According to the appellants the LRs. of Iyengar, in the above
circumstances, had lost their right to recover possession. In this connection,
F the appellants placed reliance on Section 27 of the Limitation Act, 1963. It was -r
urged on behalf of the appellants that the impugned judgment is full of
contradictions and inconsistent findings. It was urged on behalf of the
appellants that the matter needs to be remitted back since there are fundamental
errors in the impugned judgment.

G 12. On the other hand, it is urged on behalfof the respondents-defendants
that the trial court has failed to appreciate that the judgment of the High Court
dated 14.8.198 I in RSA No. 545173 arose from proceedings/ Suit No. 89/63
filed by K.S. Setlur against his alleged tenant, Shyamala Raju. In that suit, the
LRs. of K.S. Setlur were not made party defendants. According to the
H responde~ts, the present Suit No. 3656/81 filed by K.S. Setlur was a title suit
KRISHNAMURTHY S. SETLUR DEAD BY LRS. '" O.V. NARASIMHA SETTY (KAPADIA, J.] 1107

for a declaration that the LRs. of Iyengar had no right, title or interest in the A
suit lands and that they had no right to transfer/ alienate the suit lands in
favour of Narsimha Setty and others. According to the respondents, the trial
_court has erred in treating the present suit as a suit based on adverse
possession. According to the respondents, the suit was based on title, it was
s4bsequently amended falsely alleging that the plaintiffs were forcibly B
dispossessed. According to the respondents, K.S. Setlur was in fact
dispossessed in 1953. According to the respondents, the trial court had erred
in holding that K.S. Setlur was dispossessed in 1969-70. According to the
respondents, the trial court had erred in holding that the tenant's possession
during 1946 to 1963 was the plaintiffs possession, which, according to the
respondents, was a fundamental error in the judgment of the trial court. C
According to the respondents, the judgment of the High Court dated 14.8.1981
was between K.S. Setlur and Shyamala Raju. In that proceedings, LRs. of
Iyengar were not party defendants and, therefore, the judgment of the High
Court dated 14.8.1981 was not binding on the respondents. According to the
respondents, the trial court had proceeded on the basis of judgment dated
14.8.1981 which was not binding on the respondents and even ifit is assumed D
that the said judgment was binding on the respondents even then the trial
}
court had erred in holding that possession of Shyamala Raju was the
possession of Setlur in reckoning the period of twelve years under Article ·64
of the Limitation Act, 1963. It is urged on behalf of the respondents that even
in the suit for permanent injunction instituted by Iyengar being Suit No. 79/ E
49 the trial court has held that, even though Shyamala Raju is found to be
in possession, whether Shyamala Raju was a tenant of Iyengar or K.S. Setlur
was not fairly established and, therefore, in none of the earlier proceedings
it had been established that Shyamala Raju was cultivating as a tenant of K.S.
Setlur or as a tenant of Iyengar. This question has never been conclusively
decided and even if one is to proceed on the basis that Shyamala Raju was F
a tenant of K.S. Setlur, will the tenant's possession be taken into account in
calculating the period of twelve years under Article 64 of the Limitation Act,
1963? These questions, according to the respondents, have not been answered
by the trial court.

13. Section 27 of the Limitation Act, 1963 operates to extinguish the
G
right to property of a person who does not sue for its possession within the
time allowed by law. The right exiinguished is the right which the lawful owner
has and against whom a claim for adverse possession is made, therefore, the
plaintiff who makes a claim for adverse possession has to plead and prove
the date on and from which he claims to be in exclusive, continuous and H
1108 SUPREME COURT REPORTS (2007] 2 S.C.R.

A undisturbed possession. The question whether possession is adverse or not
is often one of simple fact but it may also be a conclusion of law or a mixed ,1

question oflaw and fact. The facts found must be accepted, but the conclusion
drawn from them, namely, ouster or adverse possession is a question of law
and has to be considered by the court.
'
B 14. As' stated, this civil appeal arises from the judgment of the High
Court in Rf A No. 672/96 filed by the original defendants under section 96
CPC. The impugned judgment, to say the least, is a bundle of confusion. It
quotes depositions of witnesses as findings. It quotes findings of the courts
below which have been set aside by the High Court in the earlier round. It • !

c criticizes the findings given by the coordinate Bench of the High Court in the
earlier rol!nd of litigation. It does not answer the question of law which arises
for determination in this case. To quote an example, one of the main questions
which arises for determination in this case is whether the tenant's possession
could be treated as possession of the owner in computation of the period of
twelve ye~rs under Article 64 of the Limitation Act, 1963. Similarly, as an
D example, the impugned judgment does not answer the question as to whether
the decision of the High Court dated 14.8.1981 in RSA No. 545/73 was at all
binding on, the LRs. oflyengar/ their alienees. Similarly, the impugned judgment
does not consider the effect of the judgment dated I0.11.1961 rendered by the
trial court in Suit No. 94/56 filed by K.S. Setlur against Iyengar inter alia for
reconveyance in which the court below did not accept the contention of K.S.
E Setlur that .the conveyance executed by Kalyana Sundram Iyer in favour of
Iyengar was a benami transaction. Similarly, the impugned judgment has failed
to consider "'
the effect of the observations made by the civil court in the suit,'
filed by Iyengar for permanent injunction bearing Suit No. 79149 to the effect.
that though Shyamala Raju was in possession and cultivation, whether he
F was a tena1it under Iyengar or under K.S. Setlur was not conclusively proved.
Similarly, the impugned judgment has not at all considered the effect of the
Iyengar or his L'Rs. not filing a suit on title despite being liberty given to them
in the earlier Suit No. 79149. In the matter of adverse possession, the courts
have to find out the plea taken by the plaintiff in the plaint. In the plaint, the
plaintiff who claims to be owner by adverse possession has to plead actual
G possession. He has to plead the period and the date from which he claims
to be in possession. The plaintiff has to plead and prove that his possession -
~

was continuous, exclusive and undisturbed to the knowledge of the real y

owner of the land. He has to show a hostile title. He has to communicate his
hostility to the real owner. None of these aspects have been considered by
H the High Court in its impugned judgment. As stated above, the impugned
KRISHNAMURTHY S. SElLURDEAD BYLRS. 1•. O.V. NARASIMHASETTY [KAPADIA,J.] ) ) 09

judgment is under section 96 CPC, it is not a judgment under section 100 CPC. A
As stated above, adverse possession or ouster is an inference to be drawn
from the facts proved that work is of the first appellate court.

15. It is true that the litigation is pending for the last several years,
however, we are in agreement with the contention advanced on behalf of the
appellants that there are serious errors in the impugned judgment which B
warrants interference under Article 136 of the Constitution of India. We do
not wish to express any opinion on the merits of the matter. Reasoning, if any,
given hereinabove, should not be read as our conclusion on merits.

16. For the reasons indicated above, without expressing any opinion on C
the merits of the case, we allow this civil appeal, set aside the impugned
judgment of the High Court dated 22.3.1999 in RF A No. 672/96 and we remit
the case back to the High Court to decide the said RF A No. 672/96 de nova
in accordance with law.

17. Since the above proceedings are pending from 1981 we request the D
High Court to expeditiously hear and dispose of the appeal bearing No. RFA
} 672/96, preferably within three months from the receipt of this judgment.
Office is directed to send back records and proceedings to the High Court
expeditiously.

B.S. Appeal allowed. E

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