Whether seller can execute second sale deed after cancellation of first sale deed?

 In the case in hand, as has been concurrently held by both the Courts, the Defendant Nos. 6 and 7 executed and registered the sale deed in favour of the Plaintiff on 30.9.1974 and handed over possession. Subsequently on 5.10.1974, they have cancelled the sale deed by execution of another deed and alienated the property once again to Defendant No. 1 and father of Defendant Nos. 2 to 5. In view of the earlier registered sale deed executed in favour of the Plaintiff on 30.9.1974, Defendant Nos. 6 and 7 lost their title. Thus, by virtue of 2nd sale deed dated 10.10.1974, Defendant No. 1 and father of Defendant Nos. 2 to 5 derived no title.

IN THE HIGH COURT OF ORISSA

Decided On: 19.01.2009

 Laxmidhar Naik and Ors.
Vs.
 Sridhar Naik and Ors.

Hon'ble Judges/Coram:
A.S. Naidu, J.

Citation;2009(2) Civil LJ 643

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Whether absolute sale can be cancelled by execution of Cancellation deed?

After giving our anxious consideration on the questions raised in the instant case, we come to the following conclusion: -
(i) A deed of cancellation of a sale unilaterally executed by the transferor does not create, assign, limit or extinguish any right, title or interest in the property and is of no effect. Such a document does not create any encumbrance in the property already transferred. Hence such a deed of cancellation cannot be accepted for registration. (ii) Once title to the property is vested in the transferee by the sale of the property, it cannot be divested unto the transferor by execution and registration of a deed of cancellation even with the consent of the parties. The proper course would be to re-convey the property by a deed of conveyance by the transferee in favour of the transferor. (iii) Where a transfer is effected by way of sale with the condition that title will pass on payment of consideration, and such intention is clear from the recital in the deed, then such instrument or sale can be cancelled by a deed of cancellation with the consent of both the parties on the ground of non-payment of consideration. The reason is that in such a sale deed, admittedly, the title remained with the transferor. (iv) In other cases, a complete and absolute sale can be cancelled at the instance of the transferor only by taking recourse to the Civil Court by obtaining a decree of cancellation of sale deed on the ground inter alia of fraud or any other valid reasons.
Sale made absolute by transfer of property from vendor to purchaser. Such transfer cannot annulled by executing deed of cancellation. Cancellation of Sale deed can be ordered only under section 31 of specific relief act. Or purchaser can reconvey said property to vendor by paying stamp duty of sale deed.

Madras High Court

M/S.Latif Estate Line India Ltd vs Mrs. Hadeeja Ammal on 11 February, 2011
W.A. Nos. 592 and 938 of 2009

Citation;AIR 2011 Mad 66 (F.B.)

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