How to ascertain limitation for cancellation of document executed due to force or fraud?

 In law, once documents are alleged by the appellant/plaintiff to be forged and fabricated documents, such a plea would ordinarily include challenge to the documents on the ground that the contents of the documents are not known to the appellant/plaintiff. Once the contents of the documents are not known, then the period of limitation can only start against the appellant/plaintiff to question the documents when the contents of the documents are known to her. This is clarified by the Hon'ble Supreme

Court in the judgment in the case of Prem Singh and Others v. Birbal and Others (2006) 5 SCC 353 that a voidable document is a document which is sought to be cancelled under Article 59 of the Limitation Act whereas a void document need not be cancelled. It has also been held by the Hon'ble Supreme Court in the case of Mohd. Noorul Hoda v. Bibi Raifunnisa and Others (1996) 7 SCC 767 that the starting point of limitation under Article 59 of the Limitation Act is the knowledge of the alleged fraud. The relevant paragraph of this judgment is para 6 and this para 6 reads as under:-
“6. The question, therefore, is as to whether Article 59 or Article 113 of the Schedule to the Act is applicable to the facts in this case. Article 59 of the Schedule to the Limitation Act, 1908 had provided inter alia for suits to set aside decree obtained by fraud. There was no specific article to set aside a decree on any other ground. In such a case, the residuary Article 120 in Schedule III was attracted. The present Article 59 of the Schedule to the Act will govern any suit to set aside a decree either on fraud or any other ground. Therefore, Article 59 would be applicable to any suit to set aside a decree either on fraud or any other ground. It is true that Article 59 would be applicable if a person affected is a party to a decree or an instrument or a contract. There is no dispute that Article 59 would apply to set aside the instrument, decree or contract between the inter se parties. The question is whether in case of person claiming title through the party to the decree or instrument or having knowledge of the instrument or decree or contract and seeking to avoid the decree by a specific declaration, whether Article 59 gets attracted? As stated earlier, Article 59 is a general provision. In a suit to set aside or cancel an instrument, a contract or a decree on the ground of fraud, Article 59 is attracted. The starting point of limitation is the date of knowledge of the alleged fraud. When the plaintiff seeks to establish his title to the property which cannot

be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded. Section 31 of the Specific Relief Act, 1963 regulates suits for cancellation of an instrument which lays down that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled. It would thus be clear that the word „person‟ in Section 31 of the Specific Relief Act is wide enough to encompass a person seeking derivative title from his seller. It would, therefore, be clear that if he seeks avoidance of the instrument, decree or contract and seeks a declaration to have the decrees set aside or cancelled he is necessarily bound to lay the suit within three years from the date when the facts entitling the plaintiff to have the decree set aside, first became known to him.”
 IN THE HIGH COURT OF DELHI AT NEW DELHI
RFA No. 332/2018
Dated: 11th October, 2018 

ANITA RANI MANGLA  Vs BHAGWAT DAYAL 

 CORAM:  MR. JUSTICE VALMIKI J.MEHTA 

Print Page

SHORT NOTES ON SPECIFIC RELIEF ACT PART 2

Chapter 3 Rectification of instruments

S 26. When instrument may be rectified:-

Sub S 1. When through fraud or mutual mistake of parties,a contract or other instrument in writing does not express real intention of parties, then-

a) either party or his representative in interest may institute a suit to have instrument rectified.

Sub S 2. Court may direct rectification of instrument so as to express that intention,so far as this can be done without prejudice to rights acquired by third person in good faith and for value.

Sub S 3. A contract in writing may first be rectified, and then if the party claiming rectification has so prayed in his pleading and the court thinks fit,may be specifically enforced.

Sub S 4. No relief is to be granted unless prayed. If not prayed court can allow amendment to incorporate said prayer.

Print Page

Leading Judgment on cancellation of deed and declaration that deed is void and voidable

  Section 31 of the Act (corresponding to Sec.39 of the Specific

Relief Act, 1877 - for short, "the old Act") states:



                      "31.    When cancellation may be ordered:-



               (1) Any person against whom a written instrument is

               void   or    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, in its

               discretion, so adjudge it and order it to be delivered

               up and cancelled.



                      (2)     ...................................."



It is clear from Sub-sec.(1) of Sec.31 of the Act that to enable the appellant get

Ext.B1 cancelled, it must be shown that the said instrument is void or voidable as

against her and the appellant has a reasonable apprehension that if Ext.B1 is

left outstanding, it may cause her serious injury.



        14.    It is said that most part of Sec.39 of the old Act (corresponding to

Sec.31 of the Act) was borrowed from Articles 1906 and 1908 of the Draft New

York Civil Code. The provision for cancellation of a written instrument is based

upon the administration of protective justice for fear that the instrument may be



vexatiously or injuriously used by one against another when the evidence to

challenge such written instrument may be lost or that it may throw a cloud or

suspicion over his title or interest.



      15.     Story, in Equity Jurisprudence (English Edition), 1920 in Article

694 states:



                    "In the first place, then, let us consider in which

             cases, court will direct the delivery up, cancellation or

             rescission of agreements, securities, deeds or other

             instruments. It is obvious that the jurisdiction

             exercised in cases of this sort, is founded upon the

             administration of a protective or preventive justice. If,

             therefore, the instrument was void for matter apparent

             upon the face of it, there was no call to exercise the

             jurisdiction, with the possible exception of instruments

             forming a cloud upon the title to land. The party is

             relieved upon the principle, as it is technically called

             quia timet: that is, for fear that such agreement,

             securities, deeds, or other instruments may be

             vexatiously or injuriously used against him when the

             evidence to impeach them may be lost; or that they

             may now through a cloud or suspicion over his title or

             interest."



      16.     Referring to Chapter V of the Old Act, Whitely Stoks states in

Anglo-Indian Code (Vol.I) at page 934:



                     "Chapter V declares that any person against

              whom a written instrument is void or voidable, who

              has reasonable apprehension that if left outstanding it

              may cause him serious injury, may obtain an

              adjudication that it is void or voidable and an order

              that it be delivered up and cancelled.       The relief

              extends    to a forged instrument, and also to one

              originally valid but which has subsequently forged.

              The Chapter applies to cases not unfrequent in India,

              where a party gets possession of document on which

              he might not indeed be able to found a claim in a

              court of justice but which might give him such prima

              facie right against the other as would expose him to

              vexatious demands and litigation."



      17.     The Bombay High Court, in Jeka Dula v. Bai Jivi and others

(AIR 1938 Bombay         37) laid down the      following three conditions for the

application of Sec.39 of the old Act (Sec.31 of the Act):



                     "i.     The written instrument is either void or

              voidable as against the plaintiff.



                     ii.      The plaintiff may reasonably apprehend

              serious    injury     from  the    instrument  being   left

              outstanding.



                     iii.     In view of all the circumstances of the

              case the court considers it reasonable and proper to

              administer the protective and preventive justice asked

              for."



      18.     A Full Bench of the Madras High Court considered the scope of

Sec.39 of the old Act (Sec.31 of the Act)                 in Muppudathi Pillai v.

Krishnaswami Pillai (AIR 1960 Madras 1) and held at page 4 as under:



                     "........... It stands to reason that the executant

              of the document should be either the plaintiff or a

              person who can in certain circumstances bind him. It

              is only then it could be said that the instrument is

              voidable by or void against him. The second aspect of

              the matter emphasises that principle. For there can

              be no apprehension if a mere third party, asserting a

              hostile title creates a document. Thus relief under

              Sec.39 would be granted only in respect of an

              instrument likely to affect the title of the plaintiff and

              not of an instrument executed by a stranger to that

              title."



The Full Bench       illustrated that when a trespasser purports to convey the

property in his own right and not in the right of the owners, the remedy of

cancellation of such an instrument cannot be granted because such a relief

would not remove the cloud upon his title by the instrument and the proper

remedy is to seek a declaration of the plaintiff's own title or a declaration that the

sale deed is not binding or valid against the plaintiff. Thus, when a document is

not executed by the plaintiff or by a person who can in any circumstance bind

him, that document cannot create a cloud upon the title of the true owner, nor

does it create apprehension that it may be a source of danger to him.



      19.     It is only in the case of instruments which are either executed by a

party or purports to have been executed by a party or by a person who can

under certain circumstances bind him that the relief under Sec.31 of the Act can

be claimed in law because in such cases only, could it be said that "there is a

cloud on his title and an apprehension that if the instrument is left outstanding, it

may be a source of danger."          To illustrate, a party who has executed the

document, or a principal in respect of a document executed by his agent or a

minor in respect of a document executed by his guardian, etc., could under

Sec.31 of the Act request the court to deliver up and cancel the document. A

person who neither has executed the document, nor is bound in any

circumstance by the person who executed the document could not seek relief

under Sec.31 of the Act as the document is neither void nor voidable against him

and as such document even if left outstanding is not capable of causing any


injury to him. The remedy of such person, if he thinks that the document may

create a cloud on his own title is to seek a declaration of his own title or that the

impugned document does not affect his title.
 In the present case appellant is not a party to Ext.B1. Nor is the

appellant bound under any circumstance by the person who has executed

Ext.B1. Exhibit B1 is executed by the 2nd respondent acting as power of attorney

holder of the 3rd respondent.    In the circumstances Ext.B1, assignment deed is

neither void nor is voidable against the appellant and hence she could not seek

relief under Sec.31 of the Act. If the appellant thinks that Ext.B1 might create a

cloud on the title she has claimed, her remedy was to sue for declaration of the

title she claims or that Ext.B1 does not affect the titled she claims.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                                        PRESENT:

                           MR.JUSTICE THOMAS P.JOSEPH

                    WEDNESDAY, THE 6TH DAY OF JUNE 2012

                                         RSA.No. 1139 of 2010

   KAMALAKSHI AMMA, 
Vs
 Sangeetha    

Print Page

Whether Cancellation of sale deed which is executed unilaterally by one party to the contract is legal?

A sale is essentially an executed contract, whereby the seller has transferred his title and declared that by means of the execution of the sale deed for lawful consideration, the purchaser has become the owner of the property. Thus it is bi-lateral. No such contract can be cancelled unilaterally by one party, unless such a right has been reserved in the contract itself. There is no specific provision for cancellation of a sale in the Transfer Of Property Act. Section 4 of the said act states that the chapters and sections of the said Act which relate to contracts shall be taken as part of the Indian Contract Act. Since, a sale is an executed contract, Sec. 62 of the Indian Contract Act is applicable which speaks of conditions under which novation, recession and alteration of a contract can take place. In City Bank, N.A. v. Standard Chartered Bank and othersreported in (2004) 1 SCC 12, the Hon'ble Supreme Court holds "novation, recession or alteration of a contract under Section 62 of the Indian Contract Act can only be done with the agreement of both the parties to the contract. Both the parties have to agree to set aside the original contract with the new contract or for recession or for alteration. Thus, it is now too well settled that a cancellation deed, which is executed unilaterally by one party to the contract is illegal.

Madras High Court

G.D.Subramaniam vs The Sub Registrar on 10 February, 2009

Print Page