Mallika v. R. Nallathambi & Ors., 2026

The dispute related to more than two acres of agricultural land in Coimbatore purchased by the appellant in 1996.

The appellant claimed that in 1997 and 1998 she borrowed:

• Rs. 2 lakh

• Rs. 5 lakh
  from two brothers.

According to the appellant, she executed registered General Powers of Attorney (GPAs) in favour of the lenders only as collateral security for the loans.

She also handed over original title documents as part of the alleged security arrangement.

The appellant alleged that the respondents later misused the GPAs and executed sale deeds in favour of their relatives to unlawfully deprive her of ownership rights.

The respondents denied the allegations and contended that:

• The transactions were genuine sale transactions.

• Full sale consideration had been paid.

• Possession had been handed over.

The Trial Court accepted the appellant’s version and declared the sale deeds void.

However, the First Appellate Court reversed the decree after holding that:

• Repayment of loans was not proved.

• The GPAs were not proved to be security documents.

The Madras High Court refused to interfere in second appeal.

The appellant thereafter approached the Supreme Court.

The Supreme Court upheld the judgments of the First Appellate Court and the Madras High Court.

The Court held that the burden of proving that GPA transactions were merely loan security arrangements rested upon the appellant.

It observed that mere allegations of fraud or fiduciary misuse are insufficient unless supported by reliable and cogent evidence.

The Bench clarified that before the burden shifts to the respondents, the appellant must first establish foundational facts constituting fraud or fiduciary misuse.

The Court found that the appellant failed to produce documentary evidence regarding:

• Loan transactions

• Interest payments

• Repayment of principal amounts

The Court also noted that the appellant failed to personally enter the witness box despite making serious allegations of fraud and forgery.

It endorsed the adverse inference drawn by the lower courts on this aspect.

The Supreme Court further considered the appellant’s delay of nearly ten years in challenging the sale deeds as conduct inconsistent with allegations of fraudulent alienation.

The Court observed that while mutation entries do not confer title by themselves, long-standing unchallenged revenue records are relevant in assessing possession and conduct.

The Court also rejected the procedural challenge under Order XLI Rule 31 CPC and held that substantial compliance with the provision was sufficient.

Finding no perversity or substantial question of law, the Supreme Court dismissed the appeal.

The judgment reinforces the principle that allegations of fraud must be supported by concrete evidence and cannot rest on mere assertions.

The Court correctly emphasized that burden of proof initially lies on the party alleging that an apparently valid transaction is sham or collateral in nature.

The ruling is significant in disputes involving GPA transactions, especially where parties later seek to characterize registered transactions as loan security arrangements.

The decision clarifies that fiduciary principles do not automatically reverse the burden of proof without foundational evidence.

The Court’s reliance on conduct, delay, and documentary silence reflects a practical evidentiary approach in civil disputes.

The judgment also highlights the importance of entering the witness box when serious allegations such as fraud and forgery are raised.

The ruling strengthens certainty in property transactions by protecting long-standing registered conveyances from unsupported challenges.

The Court’s interpretation of Order XLI Rule 31 CPC reflects a substance-over-form approach in appellate adjudication.