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Sale Deed

Cancellation of Sale Deed According to the Indian Law

When can a selling deed be revoked? What kind of compensation is available? Is there any relief offered? Can a sale deed be partially canceled? In order to assist buyers or sellers with such queries, these issues are addressed in this article.

This expert article explores the legal aspects of the cancellation of sale deed in India. It delves into the conditions specified by Sections 31 to 33 of the Specific Relief Act, highlighting scenarios where cancellation is permissible. 

Emphasizing the importance of mutual agreement between parties, the article also notes the involvement of the Civil Court in such cases. Additionally, it touches upon partial cancellation options and frequently asked questions.

Laws About Cancellation of Sale Deed

Cancellation of a sale deed annuls the property transfer transaction between the buyer and the seller, requiring the signatures of both parties. Similar to other deeds, a cancellation deed is a legally binding document that terminates the buyer’s rights to the property. Understanding the legal implications is crucial when extinguishing these rights.

According to Sections 31 to 33 of the Specific Relief Act, a sale deed can be canceled under the following circumstances:

  1. When an individual believes the executed deed is voidable or might cause harm.
  2. When both parties mutually agree to cancel the deed.
  3. If the deed was registered under the Indian Registration Act, 1908, the court must send a copy of the decree to the officer overseeing the deed registration. The officer will then update the records to reflect the cancellation.

It is important to note that a suit for the cancellation of a sale deed falls under the jurisdiction of the Civil Court, not revenue courts.

Meaning of Reasonable Apprehension

The Specific Relief Act’ under Section 31 speaks about reasonable apprehension that is founded on the ideas of protective justice and quia time (for fear).The definition of ‘reasonable apprehension’ changes from case to case depending on the specific facts and circumstances of the inquiry or lawsuit.

Ready to register your Sale Deed? Follow our step-by-step guide on How to Register Sale Deed for a seamless property transfer process.

Scope for Partial Cancellation

The court may partially invalidate a deed and agree to let it stand for the rest where there are obvious indicators of unfairness or when it is obvious that various parties referenced in the instrument have different rights or obligations.

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.

Compensation for Cancellation of Sale Deed

  • 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 Provided for Cancellation of Sale Deed

Because the relief is based on the idea of preventive or protective justice, it also applies to paperwork that the plaintiff has signed. This does not imply that the plaintiff must be a party to the agreement; rather, the plaintiff may even bring a lawsuit if the deed is not in their best interests. However, the following conditions must be fulfilled –

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

Nature of Void and Voidable Sale 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
  6. It must also be noted that a contract by a minor is void.

A voidable contract is enforceable by law, by the consent of one or more parties, but not by the interests of the parties that imposed the contract in the first place.

It is argued that a deed is voidable if and when:

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

However, such contracts are not a right and hence require a lot of discretion. Additionally, 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. Moreover, such suits cannot be filed during the testator’s lifetime.

 Limitation

A timeline of 3 years is prescribed for the cancellation of a deed.

Partial Cancellation of Sale Deed

In cases where complete cancellation is deemed unjustifiable, the court may opt for partial cancellation of the sale deed. This involves canceling only the part that appears unfavorable to a party. This scenario often arises when multiple parties are involved in the sale deed, each having different rights and obligations. In such instances, parties may also seek compensation through a plea.

FAQs

Is cancellation of sale deed possible?

Yes, cancellation of a sale deed is possible under certain circumstances and within the stipulated limitation period.

How do I cancel a property sale agreement?

To cancel a property sale agreement, you should draft a cancellation deed and submit it to the court for approval. The terms of the cancellation deed should be in accordance with the Specific Relief Act, 1963.

What is the limitation period for cancellation of gift deed?

The period of limitation for cancellation of a gift deed is 3 years from the day when the plaintiff learns of the fact that entitles them to have the Gift Deed cancelled.

What is the limitation for cancellation of sale deed by minor?

The limitation for cancellation of a sale deed by a minor is 3 years from the date they attain majority.

What is the Supreme Court Judgement on cancellation of sale deed?

The Supreme Court has held that a registered sale deed cannot not be cancelled over partial payment.

Can a sale deed be challenged by legal heirs?

A sale deed can be challenged by legal heirs on grounds such as forgery, fraud, or undue influence. However, the court may not grant relief if the sale deed has been registered and the limitation period for cancellation has expired.

Can sale deed be Cancelled after 3 years?

A sale deed can be cancelled within three years from the date of registration of the deed. After this period, it cannot be cancelled unless there are valid grounds for cancellation, such as forgery or fraud.

How long is a sale agreement valid?

A sale agreement is generally valid for two years from the date of execution. However, it can be extended by mutual consent of both parties.

What is the court fee for cancellation of gift deed?

The court fee for cancellation of a gift deed varies depending on the jurisdiction and the value of the property involved. It is usually a percentage of the property's value.

Can a gift deed be Cancelled after 15 years?

A gift deed can be cancelled after 15 years only if there are valid grounds for cancellation, such as forgery, fraud, or undue influence. The court may not grant relief if the gift deed has been registered and the limitation period for cancellation has expired.

What are the grounds for gift deed cancellation?

Grounds for gift deed cancellation include forgery, fraud, undue influence, and lack of consent from the donor. The court may not grant relief if the gift deed has been registered and the limitation period for cancellation has expired.

When a sale deed can be declared as null and void?

A sale deed can be declared null and void if it is found to be forged, fraudulent, or obtained through undue influence or coercion.

Can a sale deed be Cancelled under Senior Citizen Act?

Cancellation of a sale deed under Section 23 of the Senior Citizen Act is subject to the specific provisions of the Act and the court's discretion.

What is the Article 59 limitation?

The Article 59 under the Limitation Act pertains to any suit filed overrule any decree by fraud or any other ground.

The Bottom Line

Cancellation of Sale Deed – Numerous instances of this sort that have dragged on for lengthy periods have been burdensome for everyone involved in the legal battle, and as a result, these cases have gained notoriety in recent years. It is always advisable to hire a capable attorney from Vakilsearch to review your case and find the most amicable resolution for both sides since these matters often tend to get drawn-out and complicated.

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