How to cancel sale deeds

By Team Legal Helpline India, January 23, 2018

Cancellation of a sale deed or a written instrument is a very important and crucial aspect of the civil laws in India. Such situations often arise due to misrepresentation of facts, suppression of facts and other related factors. The cancellation of any sale deed or any other document related to the property requires specific grounds about which a discussion is being given here by our experts. The legal provisions related to the cancellation of the deed are being described in brief for giving a broad idea about the same.

Section 31 to 33 of the Specific Relief Act, 1963 provides for the cancellation of instruments which reads as under:
When cancellation may be ordered:

(1) Any person against whom a written instrument is voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, atits discretion, so adjudge it and order it to be delivered up and cancelled.
(2) If the instrument has been registered under the Indian Registration Act, 1908 the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.

What instruments may be partially cancelled: Where an instrument is evidence of different rights or different obligations, the court may, I a proper case, cancel it is part and allow it to stand for the residue.

Power to require benefit to be restored or compensation to be made when instrument is cancelled or is successfully resisted as being void or voidable(1) On adjudging the cancellation of an instrument, the court may require the party to whom such relief is granted, to restore, so far as may be, any benefit which he may have received from the other party and to made any compensation to him which justice may require.

(2) Where a defendant successfully resists any suit on the ground–
(a) that the instrument sought to be enforced against him in the suit is voidable, the court may, if the defendant has received any benefit under the instrument from the other party, require him to restore, so far as may be, such benefit to that party or to make compensation for it;
(b) that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under Section 11 of the Indian Contract Act, 1872, the court may, if the defendant has received any benefit under the agreement from the other part, require him to restore, so far as may be, such benefit to that party, to the extent to which he or his estate has benefited thereby.

The relief provided in Section 33 of the Specific Relief Act is based on the principle of protective or preventive justice. This section applies to instruments executed by the plaintiff as well as to other instruments which he seeks to have adjudged void or voidable. It is not necessary that the plaintiff must be a party to a contract; he can maintain the suit under this section if the instrument is against his interest.
The conditions precedent to the applicability of this section are
(a) the instrument should be void or voidable against the plaintiff;
(b) there is a reasonable apprehension of a serious injury;
(c) that the case is fit for the exercise of the courts discretion to grant the prayer.

Void: An agreement not enforceable by law is said to be void [Section 2(8) of Indian Contract Act]. A contract is void
(i) where the consideration or object or an agreement is forbidden by law, or
(ii) is of such a nature that, it permitted, it would defeat the provisions of any law, or
(iii) is fraudulent, or
(iv) involves or implies injury to the person or property of another, or,
(v) the court regards it as immoral or opposed to public policy (Section 23, Indian Contract Act).

It will also be noted that an agreement in restraint of marriage any person other than a minor, or by which anyone is restrained from exercising a lawful profession, trade or business or legal proceedings, or agreements of unmeaning or of wagering nature and an agreement without consideration as a general rule are void. A contract by a minor is void.
Voidable: An agreement which is enforceable by law, at the option of one or more parties thereto, but not at the option of the other or others, is a voidable contract.
When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement it a contract voidable at the option of the party, whose consent was so caused.
A contract induced by undue influence is voidable at the option of the party whose consent was so caused.
Reasonable apprehension relief provided under Section 31 of the Specific Relief Act is based upon protective justice and upon the idea of quia time(for fear) and, therefore, where there is no apprehension of injury to the plaintiff, no suit can be instituted. Reasonable apprehension is to be determined with reference to the circumstances of each case which the court has to deal.
Limitations(1) The relief under Section 31 of Specific Relief Act cannot be claimed as a matter of right; the court will act upon the principle of the exercise of sound discretion, having due regard to the conduct of the parties.
(2) Where the parties are in pari delicto and fraud is alleged as the ground for cancellation, the court may refuse the relief to the plaintiff, as he is equally to blame with the defendant.
(3) No relief can be granted under Section 31 of the Specific Relief Act where there is a question of mere inadequacy of consideration.
(4) No suit for the cancellation of a will can be instituted during testators lifetime.

Partial cancellation section 32 of the Specific Relief Act will be applicable only when rights and obligations under an instrument are distinct and separable.
Compensation The plea of compensation must be taken in the first court.

Limitation: Article 59 of the Indian Limitation Act, 1953 prescribes a period of 3 years for a suit for cancellation of an instrument computable from the date when the fact entitling the plaintiff where the instrument cancelled first becomes known to him.

The provisions have been frequently used by the courts in rescuing minors from the burden of contracts made by them. One of the outstanding cases is the decision of the decision of the Privy Council in Mohoribibi v. Dharmodas Ghose. A minor, declaring himself to be of full age, mortgaged his two houses as against a loan, a part of which was paid to him in cash. He then applied to the court for cancellation of the mortgage. The money-lender pleaded for the refund of his money. The provisions do authorize the courts to require the minor to restore the benefits obtained or make compensation, but only to the extent o which justice so requires. In the resent case their Lordships said that justice did not require any relief in favour of the lender because he was reckless in his dealings with the minor.

The provisions quite clearly contemplated that the court could ask only that person to make compensation who was seeking the relief of cancellation. In a case before the Lahore High Court relief was sought by a person against a minor who had taken the price in advance of the land which he purported to sell but refused to complete the sale. It was powerfully contended that the provisions would permit relief only against a person who himself seeks cancellation and not against one who came to the court as a defendant. But the court ordered the minor, to refund the money. As against it, the Allahabad High Court refused to ask the minor, who was a defendant in the court, to refund the mortgage money. When the Specific Relief Act was re-enacted in 1963 in terms of the proposals of the Law Commission, Section 33 which provided for the relief of restitution on the cancellation of a contract contained provisions to cover both situations, namely, whether the person seeking relief is the plaintiff or the defendant. The provision can be presented in terms of the following propositions:
(1) Where a void or voidable contract has been cancelled at the instance of a party thereto, the court may require him to restore such benefits as he has received under the contract and to make any compensation to the other party which justice may require.
(2) Where a defendant successfully resists any suit on the ground that the contract, by reason of his being incompetent, is void against him, he may be required to restore the benefits, if any obtained by him under the contract, but only to the extent to which he or his estate has benefited thereby.

Such situations are very often visible in various deals of properties or business and need a specialized opinion by a legal expert to ascertain the applicability of the right law and the violation of the laws. It is always advisable to avail the services of a highly qualified and expert civil lawyer for such matters as the same has the effect of giving a good foundation of a case which will carry its weight till the last.

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