“Fraud Cannot Be Cloaked as Tenancy”: Himachal Pradesh HC Upholds Cancellation of Mutation, Slams ‘Collusive Conspiracy’ to Evade Stamp Duty
Sanchayita Lahkar
The Division Bench of the High Court of Himachal Pradesh at Shimla, comprising Chief Justice Gurmeet.Singh. Sandhawalia and Justice Ranjan Sharma, dismissed a Letters Patent Appeal challenging a judgment rendered by the Single Judge on July 30, 2019. The case pertained to a dispute over mutation of land located in an urban area of Shimla. The Division Bench upheld the dismissal of the writ petition, affirming that the mutation conferring proprietary rights was void ab initio due to lack of jurisdiction and allegations of collusion between the landowner and the alleged tenant.
The court dismissed the appeal in unequivocal terms: "In the absence of any irregularity and illegality in the impugned order and the fraudulent manner in which the mutation was sought to be attested, we do not find any tenable reason as such to interfere with the well-reasoned order passed by the learned Single Judge." The appeal was accordingly dismissed.
The appellants, legal heirs of one Surat Ram Mahantan, challenged the dismissal of their writ petition against the order of the Financial Commissioner (Appeals), Himachal Pradesh, dated April 26, 2011. The Financial Commissioner had affirmed the findings of the Commissioner (Revenue), who on November 6, 2000, rejected the validity of Mutation No. 1478 dated July 28, 1989. This mutation had conferred ownership rights to Surat Ram Mahantan over urban land situated in Station Ward, Chhota Shimla.
According to the court record, Surat Ram Mahantan was a retired Deputy Secretary (Revenue) and General Power of Attorney holder for the original landowner. The petitioners had relied on an inspection report dated December 24, 1987, and affidavits allegedly executed by the landowner to support their claim that Surat Ram Mahantan was a tenant under Section 104 of the H.P. Tenancy and Land Reforms Act, 1972.
The respondents, including legal representatives of the landowner, argued that the mutation was carried out by an incompetent authority—the Assistant Collector 2nd Grade (Settlement), who lacked jurisdiction to confer proprietary rights under the applicable legal framework. It was further contended that no documentary evidence existed to prove the tenancy, and that the land was located within Shimla’s urban area, where no girdawari entries were made.
The court scrutinized key statutory provisions, including Section 2(7), Section 93, and Section 104 of the H.P. Tenancy and Land Reforms Act, 1972, as well as Rules 27 to 29 of the H.P. Tenancy and Land Reforms Rules, 1975. The revenue record described the property as "Gair Mumkin Ahata" and "Kothi Do Manjila", indicating it was not agricultural land.
Respondents argued that the entire process—from the application dated August 18, 1987, to the mutation order dated July 28, 1989—was collusive and intended to bypass stamp duty and registration requirements. The matter was initially brought to the court’s attention by the landowner’s wife, who filed for review of the mutation, alleging fraudulent affidavits and concealment.
The Division Bench examined the judgment of the Single Judge and the record of revenue and judicial proceedings in detail. It concurred with the Single Judge’s conclusion that the land in question, situated within Shimla's urban area, could not be classified as agricultural land under Section 2(7) of the Act. The mutation based on affidavits and an uncorroborated inspection report lacked legal basis.
It was recorded: "The order of the Assistant Collector, (Settlement) 2nd Grade regarding attestation of mutation in favour of the tenant as such was without jurisdiction as per the Rules and there was collusive conspiracy between the landowner and the tenant by misusing the provisions of the Tenancy Act and to avoid the payment of stamp duty."
The Bench noted that "neither any agreement of tenancy nor any rent receipts nor any deed of tenancy was placed on record to prove the tenancy and the averment of the landlord in the earlier part of the affidavit is self-serving." The court found that the revenue entries had been altered improperly, bypassing the legal procedure and the jurisdictional mandate.
Further, referring to Supreme Court decisions, including S.P. Chengalvaraya Naidu v. Jagannath and Union of India v. Ramesh Gandhi, the court reiterated that fraud vitiates all proceedings: "It is settled position that fraud goes down to the root of the matter and if it is so, the Courts will not give a stamp of approval to it."
On the burden of proof, the Division Bench cited Pratap Singh v. Shiv Ram, stating: "The burden of proving the relationship was on the defendant. Such burden cannot be said to be rebutted only by oral evidence... The presumption of truth attached to the revenue record can be rebutted only on the basis of evidence of impeccable integrity and reliability."
The court upheld the findings and the dismissal of the writ petition by the Single Judge, who had upheld the rejection of the mutation by revenue authorities. The Division Bench concluded:
"The consistent findings returned by the Revenue Authorities which have been upheld by the learned Singh Judge, do not suffer from any infirmity and do not warrant any interference."
Accordingly, the Letters Patent Appeal was dismissed. Pending applications, if any, were disposed of.
Advocates Representing the Parties
For the Appellants: N.K. Sood, Senior Advocate with Hemant Kumar, Advocate.
For Respondents: Neeraj Gupta, Senior Advocate with Ajeet Pal Singh, Advocate, Bhim Raj, Advocate., Srishti Chauhan, Advocate, Priyanka Chauhan, Deputy Advocate General
Case Title: Dharam Singh & others vs Sheela (since deleted) & others
Case Number: LPA No. 70 of 2019
Neutral Citation: 2025: HHC:10277
Bench: Chief Justice Gurmeet.Singh. Sandhawalia, Justice Ranjan Sharma
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