The Sale deed has a forfieture clause with penalty of 2% forfieture amount if the deal is cancelled. Sale deed also mentions if the Buyer fails to pay the balance consideration amount by the stipulated date then the deal will be cancelled and the buyer will have to come to registrar to cancel the deal.
Cancellation of a sale deed or a written instrument is a very important and crucial aspect of the civil laws in India. Such situations often arise due to misrepresentation of facts, suppression of facts and other related factors. The cancellation of any sale deed or any other document related to the property requires specific grounds about which a discussion is being given here by our experts. The legal provisions related to the cancellation of the deed are being described in brief for giving a broad idea about the same.
Section 31 to 33 of the Specific Relief Act, 1963 provides for the cancellation of instruments which reads as under:
When cancellation may be ordered:
(1) Any person against whom a written instrument is 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, atits discretion, so adjudge it and order it to be delivered up and cancelled.
(2) If the instrument has been registered under the Indian Registration Act, 1908 the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.
What instruments may be partially cancelled: Where an instrument is evidence of different rights or different obligations, the court may, I a proper case, cancel it is part and allow it to stand for the residue.
Power to require benefit to be restored or compensation to be made when instrument is cancelled or is successfully resisted as being void or voidable(1) On adjudging the cancellation of an instrument, the court may require the party to whom such relief is granted, to restore, so far as may be, any benefit which he may have received from the other party and to made any compensation to him which justice may require.
(2) Where a defendant successfully resists any suit on the ground–
(a) that the instrument sought to be enforced against him in the suit is voidable, the court may, if the defendant has received any benefit under the instrument from the other party, require him to restore, so far as may be, such benefit to that party or to make compensation for it;
(b) that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under Section 11 of the Indian Contract Act, 1872, the court may, if the defendant has received any benefit under the agreement from the other part, require him to restore, so far as may be, such benefit to that party, to the extent to which he or his estate has benefited thereby.
When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement it a contract voidable at the option of the party, whose consent was so caused.
A contract induced by undue influence is voidable at the option of the party whose consent was so caused.
Reasonable apprehension relief provided under Section 31 of the Specific Relief Act is based upon protective justice and upon the idea of quia time(for fear) and, therefore, where there is no apprehension of injury to the plaintiff, no suit can be instituted. Reasonable apprehension is to be determined with reference to the circumstances of each case which the court has to deal.
Limitations(1) The relief under Section 31 of Specific Relief Act cannot be claimed as a matter of right; the court will act upon the principle of the exercise of sound discretion, having due regard to the conduct of the parties.
(2) Where the parties are in pari delicto and fraud is alleged as the ground for cancellation, the court may refuse the relief to the plaintiff, as he is equally to blame with the defendant.
(3) No relief can be granted under Section 31 of the Specific Relief Act where there is a question of mere inadequacy of consideration.
(4) No suit for the cancellation of a will can be instituted during testators lifetime.
Partial cancellation section 32 of the Specific Relief Act will be applicable only when rights and obligations under an instrument are distinct and separable.
Compensation The plea of compensation must be taken in the first court.
Limitation: Article 59 of the Indian Limitation Act, 1953 prescribes a period of 3 years for a suit for cancellation of an instrument computable from the date when the fact entitling the plaintiff where the instrument cancelled first becomes known to him.