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Pankaj Tyagi
| Updated: 23 Jun, 2021 | Category: Deeds Agreements

Cancellation of the Sale Deed: A Comprehensive Outlook

Cancellation of the Sale Deed A Comprehensive Outlook

Drafting a good sale deed doesn’t necessarily mean it cannot cause complete wreak havoc. Parties that confront such a situation are left with no other option than to opt for the cancellation of the sale deed. Generally, revoking an active sale deed can be tricky for the non-offending party owing to conditions cited under the civil laws of India. This is because there is no concrete provision within our legal framework that supports parties to find their way out of the bad agreement.  In this write-up, we will shed some light on the cancellation of the sale deed along with other vital facts.

Prevailing legal provisions supporting partial or full cancellation of the sale deed

The provisions for deed cancellation are mentioned under Sections 31 to 33 of the Specific Relief Act, 1963[1]. The Act specifies the conditions under which an active sale deed could be revoked.

Cancellation of the sale deed

A cancellation is only possible when and if:

  • An individual has some doubts regarding the legitimacy of the deed or suspecting that the same could cause trouble in the future.
  • If the deed was registered as per the provisions of the Indian Registration Act, 1908.
  • both parties agree to cancel the deed.

Read our article:An Outlook on the Essential Sale Deed Components for Property Transfer

Partial cancellation of the sale Deed

The court may partially cancel the deed if;

The deed manifests a certain degree of prejudice around any aspects mentioned therein. After revoking the suspecting parts, the parties can utilize the deed by adhering to remaining norms.

Compensation for non-offender party under Sale deed

On cancellation of the deed, the court may compel the offending party to offer compensation or returns of benefits accessed by the former owing to the prejudiced nature of the deed and pay the non-offending party all the dues owed to them.

If a defendant shows resistance against the lawsuit because the deed against him or her seems non-enforceable, or because the defendant has availed many benefits due to it, the court may compel the accused to make compensation for it.

If the deed is not drafted per provisions cited in Section 11 of the Indian Contract Act, 1872, the court may direct the defendant to compensate any benefits that he or she availed due to the deed.

Relief for non-offender party under Sale deed

The relief rendered revolves around the principle of preventive or protective justice and therefore applies to dossiers executed by the accuser. This does not imply that the accuser has to be a party to the contract, but rather, he or she may opt for the lawsuit if the deed is breaching their interest.

Required conditions

  • The deed must be non-enforceable. 
  • The deed is potentially destructive for the plaintiff
  • The case seems fit in the legal context.

An overview on Void and Voidable Deeds

An agreement or instrument that is non-enforceable from the legal standpoint shall stand voidable u/s Section 2(8) of the Indian Contract Act. A contract shall stand voidable if and when:

  • Its consideration is baseless under the law.
  • It is found to be fraudulent.
  • Its manifests prejudice or has some detrimental elements.

Please note that the contract shall be treated voidable if it entails the minor.

An agreement that is non-voidable by law, by the agreement of one or more parties but not so by the interest of other parties will be treated as a voidable contract. A deed shall stand non-enforceable if and when:

  • The agreement is drafted with illicit intention or entails misleading information.
  • Drafted by undue influence

The concept of Reasonable Apprehension

Reasonable apprehension is a part of Section 31 of the Specific Relief Act and it revolves around the notion of protective justice &quia time. Reasonable apprehension differs case-wise as per the conditions of query or suit in particular.

Limitations

  • Reasonable apprehension is not a right and therefore seeks a higher degree of discretion.
  • If both parties allegedly commit an equal fault, then the court might dismiss the claim as the accused is equally accountable.
  • If there exists an inadequacy of consideration
  • Cannot be filed during the lifetime of the testator.

Partial cancellation is only feasible when rights cited under the deed are unique, and in such cases, the request for compensation should be filed on priority in the case. 

Limitation

A gap of a period equal to 3 years for the deed’s cancellation.

As these cases tend to get complicated owing to heaps of legal conditions, it is good to leverage the services of a lawyer to find out the most precise solution. There have been a lot of cases of such nature that continue to baffle the parties for long and eventually reach a state where no conclusion can be drawn due to legal contradiction.

So it is advisable to stay ahead of such anomalies by availing clarity on the case. Consult with your lawyer long enough to pinpoint applicable laws and weakest links in your case.  

Section 31 to 33 of the Specific Relief Act, 1963 laid down the conditions for cancellation of the sale deed. The deed with clear signs of partiality or misleading information is more prone to cancellation given this Act. Depending upon what you expect from a deed,

Read our article:Sale Deed Format: Know the Process of Drafting a Sale Deed in India

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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