Can Sale Deeds be Cancelled According to the Indian Law?

Last Updated at: August 11, 2020
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Can Sale Deeds be Cancelled According to the Indian Law?
The Haryana State Government has banned “registration of deeds for the transfer of land” across the state till 17th August, 2020. This is because a “series of malpractices” has come to the Government’s notice in the past few weeks during the COVID-19 lockdown period.

 

When is a sale deed cancellable? What is the compensation provided? Is there a relief provided? Is the sale deed partially cancellable? These are the questions answered in this article to help buyer or sellers who are stuck in bad sales deed and give them more clarity on the topic.

Cancellation of a sale deed can be a tricky and critical aspect of the civil laws in India. The suppression and misrepresentation of facts, lead to situations wherein cancellation becomes the only plausible way out of a bad deal. But such cancellation requires specific grounds and reasons as in general such cancellation is not allowed by the law. The legal provisions regarding the dissolution of a deed have been described below.

Listed below are some of the legal services provided at Vakilsearch. If you find them useful, feel free to contact us.

Cancellation

Sections 31 to 33 of the Specific Relief Act, 1963 gives information regarding when a deed can be cancelled. According to this Act, cancellation is possible when and if:

    1. An individual feels that the deed is voidable or has a doubt that such a deed will cause him injury if left outstanding.
    2. If the deed was registered according to the laws prescribed in the Indian Registration Act, 1908.
    3. The cancellation may be executed by mutual consent of all parties.

Get the property documents verified

For partial cancellation

  • When the deed has clear signs of partiality or when it is evident that different people mentioned in the document have different rights or obligations, the court may partially cancel it and agree to let it stand for the residue.

Compensation

  • On cancellation, if the court sees it fit, it may ask the other party to offer compensation or return the benefits enjoyed by the former due to the unfair nature of the deed and pay the offended all the dues owed to them.
  • If a defendant resists a suit because the deed against him or her is voidable, or because the defendant has received several benefits due to it, the court may order the defendant to make compensation for it.
  • If the deed has not been drawn up according to the laws stated in Section 11 of the Indian Contract Act, 1872, the court may choose to let him restore any benefit to that party, that he or she enjoyed, courtesy of the deed.

Relief

The relief provided works on the principle of protective or preventive justice and hence applies to documents executed by the plaintiff. This does not mean that the plaintiff has to be a party to the contract, but instead, he or she may file a suit if the deed is against the best of their interest.

Required conditions

  1. The deed must be void or voidable against them
  2. A reasonable apprehension regarding severe injury for the plaintiff
  3. The case is fit for the court to make a verdict

Void and Voidable Deeds

An agreement or document that is not enforceable by law is said to be void under Section 2(8) of the Indian Contract Act. A contract is said to be void if and when:

  1. its consideration is forbidden by law
  2. If permitted would go against any law
  3. Is fraudulent
  4. Involves or implies injury to anyone or anything
  5. Is immoral or against the best interests of the public

It is to be noted that a contract by a minor is void.

An agreement or document which is enforceable by law, by the consensus of one or more parties but not so by the interest of several other parties is said to be a voidable contract. A deed is said to be voidable if and when:

  1. The agreement is brought about by coercion, fraud or misrepresentation
  2. Induced by undue influence

Reasonable Apprehension

Reasonable apprehension section comes under Section 31 of the Specific Relief Act and is based on the concept of protective justice and quia time(for fear).  Reasonable apprehension varies from case to case as per the conditions and circumstances of the query or suit in particular.

Limitations

  • Is not a right and hence requires a lot of discretion
  • If parties are in pari delicto( in equal fault) and fraud is then alleged, the court may dismiss the claim as the defendant is equally responsible
  • If there is only mere inadequacy of consideration
  • Cannot be filed during testator’s lifetime

Partial cancellation is possible only when rights listed under a deed are distinct, and in such cases, the plea for compensation must be filed early on in the case.

 Limitation

  • A gap of 3 years for the cancellation of a deed

As these cases tend to get drawn out and complicated, it is always best to employ a competent lawyer to go through your situation and find the most amicable solution for both parties. There have been several cases of such nature that have gone on for considerable periods becoming a burden for even the ones carrying on the fight at the courts and hence, these cases have become notorious of late. Make sure you have a good understanding of your situation and also make it clear to your lawyer to prevent any miscommunication later on in the proceedings.

To put it pithily, Sections 31 to 33 of the Specific Relief Act, 1963 defines when a sales deed can be cancelled and under what conditions. They range from clear signs of partiality to deeds that are void. If you are stuck in a sales deed case, consult a lawyer as the terms of the law is complicated.

 

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Can Sale Deeds be Cancelled According to the Indian Law?

27188
The Haryana State Government has banned “registration of deeds for the transfer of land” across the state till 17th August, 2020. This is because a “series of malpractices” has come to the Government’s notice in the past few weeks during the COVID-19 lockdown period.

 

When is a sale deed cancellable? What is the compensation provided? Is there a relief provided? Is the sale deed partially cancellable? These are the questions answered in this article to help buyer or sellers who are stuck in bad sales deed and give them more clarity on the topic.

Cancellation of a sale deed can be a tricky and critical aspect of the civil laws in India. The suppression and misrepresentation of facts, lead to situations wherein cancellation becomes the only plausible way out of a bad deal. But such cancellation requires specific grounds and reasons as in general such cancellation is not allowed by the law. The legal provisions regarding the dissolution of a deed have been described below.

Listed below are some of the legal services provided at Vakilsearch. If you find them useful, feel free to contact us.

Cancellation

Sections 31 to 33 of the Specific Relief Act, 1963 gives information regarding when a deed can be cancelled. According to this Act, cancellation is possible when and if:

    1. An individual feels that the deed is voidable or has a doubt that such a deed will cause him injury if left outstanding.
    2. If the deed was registered according to the laws prescribed in the Indian Registration Act, 1908.
    3. The cancellation may be executed by mutual consent of all parties.

Get the property documents verified

For partial cancellation

  • When the deed has clear signs of partiality or when it is evident that different people mentioned in the document have different rights or obligations, the court may partially cancel it and agree to let it stand for the residue.

Compensation

  • On cancellation, if the court sees it fit, it may ask the other party to offer compensation or return the benefits enjoyed by the former due to the unfair nature of the deed and pay the offended all the dues owed to them.
  • If a defendant resists a suit because the deed against him or her is voidable, or because the defendant has received several benefits due to it, the court may order the defendant to make compensation for it.
  • If the deed has not been drawn up according to the laws stated in Section 11 of the Indian Contract Act, 1872, the court may choose to let him restore any benefit to that party, that he or she enjoyed, courtesy of the deed.

Relief

The relief provided works on the principle of protective or preventive justice and hence applies to documents executed by the plaintiff. This does not mean that the plaintiff has to be a party to the contract, but instead, he or she may file a suit if the deed is against the best of their interest.

Required conditions

  1. The deed must be void or voidable against them
  2. A reasonable apprehension regarding severe injury for the plaintiff
  3. The case is fit for the court to make a verdict

Void and Voidable Deeds

An agreement or document that is not enforceable by law is said to be void under Section 2(8) of the Indian Contract Act. A contract is said to be void if and when:

  1. its consideration is forbidden by law
  2. If permitted would go against any law
  3. Is fraudulent
  4. Involves or implies injury to anyone or anything
  5. Is immoral or against the best interests of the public

It is to be noted that a contract by a minor is void.

An agreement or document which is enforceable by law, by the consensus of one or more parties but not so by the interest of several other parties is said to be a voidable contract. A deed is said to be voidable if and when:

  1. The agreement is brought about by coercion, fraud or misrepresentation
  2. Induced by undue influence

Reasonable Apprehension

Reasonable apprehension section comes under Section 31 of the Specific Relief Act and is based on the concept of protective justice and quia time(for fear).  Reasonable apprehension varies from case to case as per the conditions and circumstances of the query or suit in particular.

Limitations

  • Is not a right and hence requires a lot of discretion
  • If parties are in pari delicto( in equal fault) and fraud is then alleged, the court may dismiss the claim as the defendant is equally responsible
  • If there is only mere inadequacy of consideration
  • Cannot be filed during testator’s lifetime

Partial cancellation is possible only when rights listed under a deed are distinct, and in such cases, the plea for compensation must be filed early on in the case.

 Limitation

  • A gap of 3 years for the cancellation of a deed

As these cases tend to get drawn out and complicated, it is always best to employ a competent lawyer to go through your situation and find the most amicable solution for both parties. There have been several cases of such nature that have gone on for considerable periods becoming a burden for even the ones carrying on the fight at the courts and hence, these cases have become notorious of late. Make sure you have a good understanding of your situation and also make it clear to your lawyer to prevent any miscommunication later on in the proceedings.

To put it pithily, Sections 31 to 33 of the Specific Relief Act, 1963 defines when a sales deed can be cancelled and under what conditions. They range from clear signs of partiality to deeds that are void. If you are stuck in a sales deed case, consult a lawyer as the terms of the law is complicated.

 

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