Supreme Court: Plaintiff in suit for specific performance of contract Need Not Seek Cancellation Of Subsequent Sale Deed Executed With Prior Knowledge Of Agreement To Sell

A bench of two Hon'ble Judges has rendered this decision. Unfortunately, the attention of the Bench was not invited to binding precedent in the form of a decision of a larger bench in the case of Lala Durga Prasad and Ors. MANU/SC/0008/1953 : (1953) 2 SCC 509. Hence, the decision in the case of B. Vijaya Bharathi   MANU/SC/1032/2017 : 2017:INSC:734 : (2018) 11 SCC 761 is not a binding precedent. Therefore, there was no requirement to make a prayer in the plaint for cancellation or setting aside the subsequent sale deeds.

16. Clause (a) to (c) of Section 19 of the Specific Relief Act read thus:

19. Relief against parties and persons claiming under them by subsequent title.- Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against-

(a) either party thereto;

(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;

(c) any person claiming under a title which, though prior to the contract and known to the Plaintiff, might have been displaced by the Defendant;

(d).........................................................

(e) .........................................................

(emphasis added)

In view of Clause (b) of Section 19, the Defendants who are claiming under the sale deeds executed after the execution of the suit agreement can be subjected to a decree of specific performance as the suit agreement can be enforced specifically against such Defendants unless they are bona-fide purchasers without the notice of the original contract. When, in a given case, the Defendants, who are subsequent purchasers, fail to prove that they entered into the sale deed in good faith and without notice of the suit agreement, in view of Section 19(b), a decree for specific performance can be passed against such Defendants. Therefore, in such a case where Section 19(b) is applicable, under the decree of specific performance, the subsequent purchasers can be directed to execute the sale deed along with the original vendor. There is no necessity to pray for the cancellation of the subsequent sale deeds.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6782 of 2013

Decided On: 09.07.2024

Maharaj Singh and Ors. Vs. Karan Singh (Dead) thr. L.Rs. and Ors.

Hon'ble Judges/Coram:

Abhay Shreeniwas Oka and Sanjay Karol, JJ.

Author: Abhay Shreeniwas Oka, J.

Citation: MANU/SC/0587/2024,2024 INSC 491.

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Supreme Court: A party should not claim relief of cancellation of sale deed if he is not party to it

 A faint effort was made in the end to contend that the

plaintiff-respondent Nandu Lal had not asked for any

relief of cancellation of the sale deed by which the

property was purchased by the defendant-appellant S.K.

Golam Lalchand and, therefore, is not entitle to any relief

in this suit. The argument has been noted only to be

rejected for the simple reason that Section 31 of the

Specific Relief Act, 1963 uses the word ‘may’ for getting

declared the instrument as void which is not imperative

in every case, more particularly when the person is not a

party to such an instrument. {Para 23}.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4177 OF 2024

SK. GOLAM LALCHAND Vs NANDU LAL SHAW @ NAND LAL KESHRI @ NANDU LAL BAYES & ORS.

Author: PANKAJ MITHAL, J.

Citation: 2024 INSC 676.

Dated: SEPTEMBER 10, 2024. 

Read full Judgment here: Click here.

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Whether plaintiff can claim permanent injunction against defendant if the court has rejected her prayer for declaration and cancellation of sale deed?

In the present case the plaintiff, who has failed to get any declaratory relief and the defendant No.1 is held to be a true and absolute owner on the basis of the registered sale deed on payment of full sale consideration thereafter the plaintiff’s possession cannot be said to be “lawful possession”. Therefore, the plaintiff is not entitled to any permanent injunction against the true owner in the instant case.

11. From the impugned judgment and order passed by the High Court, it appears that the High Court has not properly appreciated the distinction between a substantive relief and a consequential relief. The High Court has observed that in the instant case the relief of permanent injunction can be said to be a substantive relief, which is clearly an erroneous view. It is to be noted that the main reliefs sought by the plaintiff in the suit were cancellation of the sale deed and declaration and the prayer of permanent injunction restraining defendant No.1 from disturbing her possession can be said to be a consequential relief. Therefore, the title to the property was the basis of the relief of possession. If that be so, in the present case, the relief for permanent injunction can be said to be a consequential relief and not a substantive relief as observed and held by the High Court. Therefore, once the plaintiff has failed to get any substantive relief of cancellation of the sale deed and failed to get any declaratory relief, and as observed hereinabove, relief of injunction can be said to be a consequential relief. Therefore, the prayer for permanent injunction must fail. In the instant case as the plaintiff cannot be said to be in lawful possession of the suit land, i.e., the possession of the plaintiff is “not legal or authorised by the law”, the plaintiff shall not be entitled to any permanent injunction.

IN THE SUPREME COURT OF INDIA 

CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO. 1382 OF 2022;

Padhiyar Prahladji Chenaji (Deceased) Through L.R.s Vs Maniben Jagmalbhai (Deceased) Through L.R.s and Ors.

Coram: M.R. SHAH; B.V. NAGARATHNA, JJ. 

Dated:  MARCH 03, 2022

Author: M.R. SHAH, J.

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Supreme Court: Plaintiff is not entitled to get cancellation of sale deed on the ground of non-payment of the part of sale consideration

The Plaintiffs have made out a case of alleged nonpayment

of a part of the sale consideration in the Plaint,

and prayed for the relief of cancellation of the Sale Deed on

this ground.

Section 54 of the Transfer of Property Act, 1882

provides as under :

“54. ‘Sale’ defined.—‘Sale’ is a transfer of ownership in

exchange for a price paid or promised or part-paid and part promised.”

The definition of “sale” indicates that there must

be a transfer of ownership from one person to another i.e.

transfer of all rights and interest in the property, which

was possessed by the transferor to the transferee. The

transferor cannot retain any part of the interest or right in

the property, or else it would not be a sale. The definition

further indicates that the transfer of ownership has to be

made for a “price paid or promised or part paid and part

promised”. Price thus constitutes an essential ingredient

of the transaction of sale.

In Vidyadhar v. Manikrao & Anr. (1999) 3 SCC 573. this

 Court held that the words “price paid or promised or part paid and part promised” indicates that actual payment of the whole

of the price at the time of the execution of the Sale Deed is

not a sine qua non for completion of the sale. Even if the

whole of the price is not paid, but the document is

executed, and thereafter registered, the sale would be

complete, and the title would pass on to the transferee

under the transaction. The non-payment of a part of the

sale price would not affect the validity of the sale. Once the

title in the property has already passed, even if the balance

sale consideration is not paid, the sale could not be

invalidated on this ground. In order to constitute a “sale”,

the parties must intend to transfer the ownership of the

property, on the agreement to pay the price either in

praesenti, or in future. The intention is to be gathered from

the recitals of the sale deed, the conduct of the parties, and

the evidence on record.

In view of the law laid down by this Court, even if

the averments of the Plaintiffs are taken to be true, that

the entire sale consideration had not in fact been paid, it

could not be a ground for cancellation of the Sale Deed.

The Plaintiffs may have other remedies in law for recovery

of the balance consideration, but could not be granted the

relief of cancellation of the registered Sale Deed.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9519 OF 2019

DAHIBEN  Vs ARVINDBHAI KALYANJI BHANUSALI

(GAJRA)(D) THR LRS & ORS.

INDU MALHOTRA, J.

Dated: July 09, 2020.

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When limitation to file suit for cancellation of sale deed will not commence from the date of registration of sale deed?

 In fact, not having made any inquiry from the plaintiff about the capacity of title under which he continues to be in possession, the present case would be squarely covered by Explanation II to Section 3 of Transfer of Property Act. There is nothing on record to indicate that prior to the issuance of termination notice dated 24/05/1978, defendant No. 1 had informed the plaintiff about execution of the registered sale deed dated 23/06/1975. It is not even the case of the defendant No. 1 that the plaintiff had knowledge of the transaction entered into between Krishna and the plaintiff. It is for this reason that Explanation II to Section 3 assumes relevance. It states that actual possession is notice of the title of the person in possession. The plaintiff entered the property in his capacity as a tenant but subsequently by an agreement of sale agreed to purchase the suit property. As indicated earlier, the time for payment of balance consideration under the agreement was upto 1978. There is nothing on record to indicate nor is it the case of defendant No. 1 that either the original owner or defendant No. 2 cancelled the agreement of sale on which basis plaintiff claims. Even the defendant No. 2 executed sale deed in plaintiffs favour in 1978.

33. As rightly pointed out by learned Counsel for the plaintiff, defendant No. 1 in his evidence has admitted that on 29/07/1975, the original owner Krishna made an application against defendant No. 1 to the Collector, Kolhapur alleging that consideration mentioned in sale deed was not paid to Krishna by the defendant. All these aspects would support to the plaintiff's case that the sale deed was executed between Krishna and defendant No. 1 only to defeat the rights accrued to the plaintiff under the agreement of sale dated 04/07/1973. The Appellate Court has also dealt with the matter in the context of Section 53A of the Transfer of Property Act in as much as the plaintiff was already in possession of the properties on the date of execution of agreement of sale. Mere issuance of a public notice is not sufficient to contend that the plaintiff had knowledge of the transaction. The date of registration of sale deed in defendant No. 1's favour would not be the starting point of limitation. The contention of defendant No. 1 that he is a bonafide purchaser for value without notice deserves to be rejected. In the facts of the present case, defendant No. 1 should have made inquiry as to interest or title of plaintiff who was in actual possession of the suit property.

IN THE HIGH COURT OF BOMBAY

Second Appeal No. 12 of 1994

Decided On: 11.07.2019

 Baburao Naroba Bargale Vs. Surendra Baburao Shetty

Hon'ble Judges/Coram:

M.S. Karnik, J.

Citation: 2020(1) MHLJ 596

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Whether it is necessary to seek cancellation of sale deed if it was executed during pendency of suit?

 In our opinion, when the sale deed had been executed during the pendency of suit the purchaser pendente lite is bound by the outcome of the suit. The provisions of Section 52 prevent multiplicity of the proceedings. It was not at all necessary to file a suit for cancellation of the sale deed as the vendor had no authority to sell land of other co-sharers. He had right to alienate his own share only which he had in the property to the extent of 14/104th. As such the right, title and interest of Bala Mallaiah were subject to the pending suit for partition in which a preliminary decree was passed in the year 1970 which had attained finality in which the vendor of Bala Mallaiah, Defendant 1 was found to be having share only to the extent of 14/104th.  { Para 48}

 Therefore, it is settled legal position that the effect of Section 52 is not to render transfer effect during the pendency of a suit by a party to the suit void; but only to render such transfers subservient to the rights of the parties to such suit and the pendente lite purchaser would be entitled to or suffer the same legal rights and obligations of his vendor as may be eventually determined by the Court. Therefore, in the present suit defendant No. 2 is bound by the decree which may be passed against defendant No. 1. Admittedly, by virtue of compromise decree in R.A. No. 272/2004 defendant No. 1 is aware that the suit property was allotted to the share of plaintiffs and he had no right title and interest so as to transfer the same in favour of defendant No. 2 by executing registered sale deed dated 02.05.1997 as per Ex. D1. In spite of knowing consequences of the same, defendant No. 1 executed the sale deed during the pendency of suit bearing O.S. No. 45/1994. Therefore, the said sale deed is hit by Section 52 of Transfer Property Act. Though, it cannot be held as void ab initio, as held by the Hon'ble Supreme Court in the judgment referred supra, Pendente lite purchaser defendant No. 2 herein is bound by the decree passed in the suit against his vendor.

IN THE HIGH COURT OF KARNATAKA (KALABURAGI BENCH)

RSA No. 1346/2007

Decided On: 24.04.2019

 Gurushantappa  Vs. Shankar and Ors.

Hon'ble Judges/Coram:

P.G.M. Patil, J.

Citation: AIR 2019 Karnat 113

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Within which period suit for cancellation of sale deed can be filed?

Suit barred by limitation: As discussed, suit was filed for declaration that the mortgage deed dated 21.11.1967 as well as sale deed dated 21.12.1970 executed by Wali Mohd. were not executed by him out of his free will and are void. In paragraph (14) of the plaint, it is averred that the cause of action of the suit arose on 21.11.1967 and 21.12.1970. Under Articles 58 and 59 of the Schedule to the Limitation Act, 1963 in a suit filed for any declaration is to be filed within three years when the right to sue accrues. Under Article 59 of the Limitation Act, suit filed to cancel or set aside the instrument or decree, the suit has to be filed within three years from the date when the facts entitling the Plaintiff to set aside or cancel the instrument or decree became first known to him. Plaintiff-Shami Mohd. has admitted in his evidence that he got knowledge about the execution of the sale deed dated 21.12.1970 on the third day of death of his father - 17.05.1971. The suit must have been filed within three years of the date of knowledge or the date of the sale deed but the suit was filed on 12.07.1978. In the case in hand, suit filed challenging the validity of the mortgage deed dated 21.11.1967 and sale deed dated 21.12.1970 is beyond the period of limitation of three years as prescribed Under Articles 58 and 59 of the Schedule to the Limitation Act and barred by limitation.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1007 of 2013

Decided On: 14.12.2018

Jamila Begum Vs  Shami Mohd. 

Hon'ble Judges/Coram:

R. Banumathi and Indira Banerjee, JJ.

Citation:(2019) 2 SCC 727.

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Leading Supreme Court Judgment on payment of court fees in suit for declaration that sale deed is null and void

Where the executant of a deed wants it to be annulled, he has to seek cancellation of the deed. But if a non-executant seeks annulment of a deed, he has to seek a declaration that the deed is invalid, or non-est, or illegal or that it is not binding on him. The difference between a prayer for cancellation and declaration in regard to a deed of transfer/conveyance, can be brought out by the following illustration relating to `A' and `B' -- two brothers. `A' executes a sale deed in favour of `C'. Subsequently `A' wants to avoid the sale. `A' has to sue for cancellation of the deed. On the other hand, if `B', who is not the executant of the deed, wants to avoid it, he has to sue for a declaration that the deed executed by `A' is invalid/void and non- est/ illegal and he is not bound by it. In essence both may be suing to have the deed set aside or declared as non-binding. But the form is different and court fee is also different. If `A', the executant of the deed, seeks cancellation of the deed, he has to pay ad-valorem court fee on the consideration stated in the sale deed. If `B', who is a non-executant, is in possession and sues for a declaration that the deed is null or void and does not bind him or his share, he has to merely pay a fixed court fee of Rs. 19.50 under Article 17(iii) of Second Schedule of the Act. But if `B', a non- executant, is not in possession, and he seeks not only a declaration that the sale deed is invalid, but also the consequential relief of possession, he has to pay an ad-valorem court fee as provided underSection 7(iv)(c) of the Act. Section 7(iv)(c) provides that in suits for a declaratory decree with consequential relief, the court fee shall be computed according to the amount at which the relief sought is valued in the plaint. The proviso thereto makes it clear that where the suit for declaratory decree with consequential relief is with reference to any property, such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) ofSection 7.
Reportable

Supreme Court of India

Suhrid Singh @ Sardool Singh vs Randhir Singh & Ors on 29 March, 2010

Bench: R.V. Raveendran, R.M. Lodha

Citation:AIR 2010 SC 2807:(2010)12 SCC112

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How to ascertain limitation for filing suit by mother for setting aside sale deed against her son?

The learned Lower Appellate Court on the basis of the
evidence on record has come to the conclusion that the respondent no.1
learnt about the sale deed only in December, 1988 and as such, the suit
filed on 15.03.1989 is within the time prescribed. While coming to
such conclusion, the learned Judge has examined the evidence on record
and upon appreciating such evidence has come to the conclusion that
the fact that the original plaintiff/respondent no.1 learnt about the sale
deed only in 1988 has been duly proved and as such the suit was not
barred by limitation. There is no material on record which would
suggest that the original plaintiff/respondent no.1 had knowledge about
the fact that the sale deed in question was executed in favour of the
original deceased defendant no.1/appellant no.1 on any date prior to
December, 1988. Though it was contended by the appellants that the
sale deed was in possession of the plaintiff/respondent no.1
nevertheless, this aspect was seriously disputed by the respondent no.1.
The receipts only were with the respondent no.1 and in fact, there is no
material on record that the deceased appellant no.1 has ever acted upon
the sale deed in question. The learned Lower Appellate Court has also
noted that the name of the respondent no.1 was figuring before the
Statutory Authorities and even the house tax was being paid in the name
of the respondent no.1. There were also permissions in her name
besides the fact that she was residing in the said house. The house was
also constructed by the respondent no.1 and her husband. In such
circumstances, the findings of the learned Judge that the suit filed by the
original plaintiff/respondent no.1 is within the time prescribed cannot be
faulted. The cause of action for filing a suit to cancel an instrument
arises when the facts which entitled the plaintiff to have an instrument
cancelled or set aside first become known to him. The fact finding
Court has categorically found that such knowledge of original plaintiff
no.1/respondent no.1 was only in December, 1988 and consequently,
the suit filed in 1989 is within the period of limitation. As already
pointed out herein above, the fact finding Court upon appreciating the
evidence has come to the conclusion that the deceased appellant no.1
had committed fraud on the plaintiff/respondent no.1 herein.
 IN THE HIGH COURT OF BOMBAY AT GOA
SECOND APPEAL NO. 38 OF 2007
 Shri Peter Francis Conceicao,

V 
Smt. Candolina Conceicao,

Coram:- F. M. REIS, J

 Judgment pronounced on : 15.10.2016

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Whether co-operative society can unilaterally cancel sale deed by executing extinguishment Deed?

For the reasons
stated supra, I have to grant the reliefs in
favour of the appellant as prayed by him and
quash the extinguishment deed dated
09.08.2001 along with the subsequent sale
deeds registered in favour of the respondent
No.5 who in turn has sold property in favour
of respondent Nos.6 and 7 without the
authority of law. The sale deed can be
cancelled under Section 31 of the Specific
Relief Act, 1963, by the competent civil
court if the same is challenged within the
period of limitation stipulated under Article
59 of the Limitation Act, 1963. Since the
facts are undisputed in the case on hand and
the respondent Society, after the lapse of 39
years has erroneously and illegally cancelled

the absolute sale deed registered in favour
of the appellant’s mother, the appellant has
acquired a valid and absolute title to the
property in question and the same could not
have been cancelled by the respondent Society
and the Sub-Registrar as it is void ab initio
in law. Hence, the High Court should have
responsibly exercised its extraordinary
jurisdiction and should have examined the
documents of the sale deed with respect to
the relevant provisions of the M.P
Co-operative Societies Act and Rules, 1962
and the Bye-laws of the Society. The
cancellation of the sale deed executed in
favour of the appellant’s mother in the year
1962 by way of the extinguishment deed could
not have been registered by the Sub-Registrar
as he is not empowered to do so. Hence, for
want of the competent jurisdiction, in
registering such document, the High Court
should have exercised its extraordinary
jurisdiction to annul the extinguishment deed

and the transactions of the subsequent sale
deeds, which has not been done by it.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6673 OF 2014
Satya Pal Anand 
Versus
State of M.P. and Others .
Dated:August 25, 2015.
Dipak Misra, J.

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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 in suit by minor for share in joint family property, it is necessary to ask for setting aside sale?

Property Laws – Sale by Guardian – Cancellation of sale deeds – Absence of sanction – Hindu Minority and

Guardianship Act 32 of 1956 (Act), Section 8 – Properties are ancestral properties of Appellant/Plaintiff’s father who

died intestate – 1st Defendant/mother had to sell property for family necessity and for purpose of marriage of 2

Defendant/sister – Property sold to Respondents/Defendants 5 and 4 – On date of sale, Appellant was minor – After

attaining majority, Appellant challenged sale by claiming 5/12th share in suit property – Trial Judge held alienation

void and decreed suit as prayed for – Respondents challenged same – Lower Appellate Court set aside judgment of

Trial Court – Second Appeal – Contention of Appellant that in absence of sanction from Court under Section 8, sale

is voidable at instance of Appellant – Whether Lower Appellate Court legally right in holding that since Appellant

not prayed for setting aside sale of his share, suit is not maintainable – Whether in suit by minor for share in joint

family property, is it necessary to ask for setting aside sale – Whether sale by guardian of minor without obtaining

sanction from Court for sale valid – Held, Section 8(2) of Act specifically states that without previous sanction of

Court, natural guardian shall not alienate – One minor chooses to repudiate sale within limitation, i.e., within 3

years from date of attaining majority, alienation for binding necessity no longer available – Appellant has right to

avoid alienation in terms of Section 8 and till alienation set aside, it is valid – Appellant has to set aside sale if

wants to avoid transfers and recover properties from purchasers – But Appellant has not asked for prayer for

setting aside sale, instead, asked for preliminary decree declaring his share in suit properties – Appellant ought to

have prayed for cancellation of sale deeds expressly or impliedly and pay required Court fees – As prayer for

setting aside sale not asked for, sale cannot be cancelled – Having failed to seek prayer for cancellation of sale

deeds by paying Court fees, relief sought for by Appellant cannot be granted – Appeal dismissed.

Equivalent Citation: (2014)7MLJ37

IN THE HIGH COURT OF MADRAS

S.A. No. 1082 of 2006

Decided On: 19.08.2014

 R. Nagarajan
Vs.
Sundaravelu

Hon'ble Judges/Coram:Pushpa Sathyanarayana, J.

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When plaintiff is not entitled to get cancellation of sale deed?

Code of Civil Procedure, 1908 - S. 100 - second appeal - plaintiff filed suit for cancellation of sale deed contending that when property was sold by mother and brother of plaintiff, plaintiffs were minor and their interest in the property was not taken care of - on facts, suit filed in collusion with venders of property - Trial Court dismissed suit - held, suit being abuse of process of court plaintiff not entitled to relief claimed - Trial Court was justified in dismissing suit - appeal dismissed.

5.2 This Court further finds that, and it is also the finding of the Court  below  that,  not  only  the  plaintiffs  were  not  entitled  for declaration as prayed for, but there was connivance of the plaintiffs with  the  family  members,  being  defendant  Nos.  3,4  &  5,  and thereby they had attempted to abuse the process of law. There is also finding to the effect that, the bona­fide purchaser is kept in litigation throughout these decades by one of the family members, since the prices of the property has gone up. The tendency to abuse the process of law needs to be curbed, for which even cost needs to be imposed. While recording so, this Court has kept in view the observations of Honourable the Supreme Court of India in the  case  of  Rakesh  Kumar  Goel  V.  U.P.  State  Industrial Development Corporation Ltd. and others, reported in AIR 2010 SC 2451, which is to the effect that, filing of a petition before the Court of law is not like buying a lottery ticket that if luck favours, might bring a windfall, but would cost no more than the expresses of litigation. This litigation is no exception to what is observed by Hon'ble the Supreme Court of India as recorded above. Further, this Court has also kept in view the observations of Hon'ble the Supreme  Court  of  India  in  the  case  of  Salem  Advocate  Bar Association vs. Union of India, reported in (2005) 6 SCC 344 which is to the effect that, judicial notice can be taken of the fact that unscrupulous  parties  take advantage  of the fact that  either  the costs are not awarded or nominal costs are awarded against the unsuccessful party, unfortunately it has become a practice to direct parties to bear their own costs, such a practice also encourages filing of frivolous  suits. The dismissal  of this Second  Appeal  in these  facts,  without  imposing  costs,  would  encourage  filing  of frivolous suits and appeals. Under these circumstances, cost is required  to  be  imposed  and  the  same  should  not  be  nominal either. In the facts of this case, the cost is quantified as Rs.25,000/­.

GUJARAT HIGH COURT

Hon'ble Judges:Paresh Upadhyay, J.

Vaghela Suryaba Ranchhodji Versus Becharbhai Adarbhai Patel-decd.

SECOND APPEAL No. 194 of 2013 ; J.Date :- JANUARY 08, 2014

Equivalent Citation(s): 2014 (2) GLR 1068 : 2014 JX(Guj) 58,AIR 2014(NOC) 449 GUJ

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Leading Supreme Court judgment on valuation of suit for cancellation of sale deed

In a suit for cancellation of sale deed which was executed for a specified amount, the Court Fee has to be paid on that amount and not on the basis of the market value of the property at the presentation of the plaint. Section 37 of the Court Fees Act which deals with the suits for cancellation of decrees etc. if interpreted in the light of the expression “save as otherwise provided” used in Section 7 of the Court Fees Act, it becomes clear that the rule enshrined therein is a clear departure from the one contained in Section 7 read with Sections 24, 26, 28, 29, 34, 35, 42 and 45, which provide for payment of Court Fee on the market value of the property. Section 37 is stand alone provision, wherein the legislature has designedly not used the expression “market value of the property”. Section 37 of the Court Fees Act contains a special rule for valuing the property for the purpose of Court Fee and jurisdiction and thus the expression “value of the property” used in Section 37 cannot be substituted with the expression “market value of the property”.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 2456-2457 OF 2014

Polamrasetti Manikyam Vs Teegala Venkata Ramayya & Anr. 

Citation;2014 (2) ALL MR92, SC 2014III AD (S.C.) 426, AIR2014SC1286, 2014(2) AKR 189,  2014 (103) ALR 687, 2014(2)ALT56, 2014(2)CTC458, 2014-2-LW534, 2014(2)SCALE523
Dated;February 19, 2014.

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Whether sale deed executed in favour of purchaser can be cancelled by cancellation deed?

(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.

Madras High Court

M/S.Latif Estate Line India Ltd vs Mrs. Hadeeja Ammal on 11 February, 2011

JUDGMENT

THE HON BLE CHIEF JUSTICE

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