National Law Institute University

Bhopal

2017-18

THIRD TRIMESTER
CONSTITUTIONAL LAW - I

Constitutional rights of women

Submitted to: Submitted by:

 INTRODUCTION

Courts of equity frequently cancel instruments which have answered the end for which they
were created, or instruments which are void or voidable, in order to prevent them from being
vexatiously used against the person apparently bound by them. 1 Snell,2 The original and
proper meaning of the word “cancellation” is the defacement of a writing by drawing lines
across it in the form of crossbars or lattice work; but the same legal result may be
accomplished by drawing lines through any essential part, erasing the signature, writing the
word “cancelled” on the face of the instrument, tearing off seals, or any similar act which
puts the instrument in a condition where its invalidity appears on its face.

Cancellation of instruments is about nullifying a document. If there is a document which is

void or voidable due to some reason and any person having reasonable apprehension that the
said document is against him and may cause serious injury to him may sue against such
document. He can sue to cancel the document.

RELEVANT PROVISIONS3

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) 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.
32. What instruments may be partially cancelled

1
Black's Law Dictionary
2
Eq. 498
3
Specific Relief (Amendment) Act, 2018
Where an instrument is evidence of different rights or different obligations, the court may, in
a proper case, cancel it in part and allow it to stand for the residue

33. 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 make any compensation to him which justice may require.

(2) Where a defendant successfully resists any suit on the grounds-

(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
party, 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.

DISCRETIONARY RELIEF

Court may allow cancellation of instrument if all the necessary conditions required by the
above sections are proven by plaintiff. The use of word like “may” in the statute clearly
shows the intention of the drafters of the act to regard it as discretionary in nature. 4 According
to section 32 the court may allow cancellation of a part of the document which injures the
plaintiff. The good part may be allowed to stand. Hence it is upon the plaintiff to prove that
the document or any part of it injures his rights and therefore it should be cancelled.

4
Societe De Taction v Kaman Engineering Co Ltd AIR 1964 SC 558
TYPES OF CANCELLATION

1. Complete Cancellation of Instruments

Under specific Relief Act, court has discretion to adjudge an instrument, to order it to be
delivered up and cancelled. It reveals that complete cancellation of instruments has been
provided in law. The principle is that such document though not necessary to be set aside
may, if left outstanding, be a source of potential mischief. The jurisdiction under Section 31
is, therefore, a protective or a preventive one. It is not confined to a case of fraud, mistake,
undue influence etc. and as it has been stated it was to prevent a document to remain as a
menace and danger to the party against whom under different circumstances it might have
operated. A party against whom a claim under a document might be made is not bound to
wait till the document is used against him. If that were so he might be in a disadvantageous
position if the impugned document is sought to be used after the evidence attending its
execution has disappeared. Section 31 embodies the principle by which he is allowed to
anticipate the danger and institute a suit to cancel the document and to deliver it up to him.
The principle of the relief is the same as in quia timet actions5.

2. Partial Cancellation of Instruments

According to specific Relief Act, court can cancel an instrument in part and can allow
performance of its remaining part. It reveals that partial cancellation of instruments has also
been provided in law.6 When instrument is evidence of different rights or different
obligations, court can cancel it in part and can allow performance of its remaining part. The
good part may be allowed to stand. Hence it is upon the plaintiff to prove that the document
or any part of it injures his rights and therefore it should be cancelled.7

5
Madras High Court in Muppudathi v. Krishnaswami AIR 1960 Madras
6
http://thelawstudy.blogspot.com
7
senseoflaw.blogspot.com
 GROUNDS FOR CANCELLATION

Followings are considered grounds for cancellation of instruments or following circumstance

under which instruments can be cancelled.

 Void or Voidable Instrument

A ground for cancellation of instruments is that a written instrument should be void or

voidable against any person. The question whether an instrument can be said to be void or
voidable against a person claiming relief under the section 31 came to be considered by a Full
Bench of the Madras High Court8 it was observed:

".....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 Section 31 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".

Proceeding with the discussion their Lordships pointed out the example of a trespasser
purporting to convey the property in his own right and not in the right of the owner. In such a
case, to my mind, agreeing with respect with their Lordships of the Madras High Court, 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 to seek is a
declaration of his own title or a declaration that the sale-deed is not binding or valid against
him. It is only in the case of instruments which are either executed by a party or which
purport to have been executed by a party or by a person who can bind him that the relief
under Section 31 can be claimed in law because in such cases only can it be said, as observed
by the Madras High Court also in the said case, "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". They
went on further to illustrate the point by observing that such cases may arise in the following
8
supra note 5
circumstances: "A party executing 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 de jure
or de facto, a reversioner in respect of a document executed by the holder of a limited estate,
in respect of a document executed by the benamidar etc." Courts have also recognised in this
respect the right to challenge and to pray for cancellation of a forged document which is
purported to have been executed on his behalf. In all these cases there is no question of a
document by a stranger to the title as in the present case and it can further be found that in all
such cases a reasonable apprehension can be entertained that if such an instrument is left
outstanding the same may cause the plaintiff serious injury. In the present case it cannot be
successfully maintained that a reasonable apprehension can be entertained by the plaintiffs
that if the sale-deed is left outstanding it may cast a cloud upon their title or cause them
serious injury because the cloud upon their title will not be removed merely by a decree for
cancellation of the instrument. The cloud will continue to hang over the plaintiffs by the
hostile assertion of title by the executant of the sale-deed and those who claim a title to it.
Therefore, the proper relief for the plaintiffs to seek in a case of this kind is a declaration of
their own title or a declaration that the executant of the sale-deed in dispute has no title to the
property.

 Causing of Injury

Another ground for cancellation of instruments is that if an instrument is left outstanding, it

can cause injury to that person against whom instrument is void or voidable. It is a
misconception that in every situation, a person who suffers injury by reason of a document
can file a suit for cancellation of such written statement.Two conditions must exist before one
invokes Section 31 of Specific Relief Act. These are : the written instrument is void or
voidable against such person; and such person must have reasonable apprehension that such
instrument if left outstanding may cause him serious injury.9

 Reasonable Apprehension of serious Injury

Among grounds for cancellation of instruments, a ground is that there should be apprehension
of serious injury due to a written instrument. The test is "reasonable apprehension of serious

9
Sukh Lal And Ors. vs Devi Lal And Ors. AIR 1954 Raj 170
injury". Whether that exists or not, depends upon the circumstances of each case. It cannot be
laid down, as a rule of law, that in no case can a man, who has parted with the property in
respect of which avoid or voidable instrument exists, sue to have such instrument cancelled.10

The provisions of Section 31 make it clear that three conditions are requisite for the exercise
of the jurisdiction to cancel an instrument : (1) the instrument is void or voidable against the
plaintiff; (2) plaintiff may reasonably apprehend serious injury by the instrument being left
outstanding; (3) in the circumstances of the case, the Court considers it proper to grant this
relief of preventive justice. On the third aspect of the question the English and American
authorities hold that where the document is void on its face the court would not exercise its
jurisdiction while it would if it were not so apparent. In India it is a matter entirely for the
discretion of the court.

The question that has to be considered depends on the first and second conditions set out
above. As the principle is one of potential mischief, by the document remaining outstanding,
it stands to reason 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 emphasizes that principle.
For there can be no apprehension if a mere third party, asserting a hostile title creates a
document. Thus relief under Section 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.11

10
Kotrabassappaya v. Chenvirappaya 23 ILR 375 (Bombay) (D.B.)
11
Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors 2006 (6) ALT 523, 2007 (1)
CTC 97.
 NO UNILATERAL CANCELLATION, ONLY BY COURT
ORDER

A transfer by way of sale was made absolute by transfer of the property from the transferor to
purchaser. The court said that such transfer could not be annulled as cancelled unilaterally by
vendor by executing a cancellation deed. Such deed could not be accepted for registration.
Cancellation of sale deed can be ordered only by court under section 31 of the Specific Relief
Act.12

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. 13 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.14 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.

The court clearly held that the unilateral cancellation deed is allowed to be registered, without
the knowledge and consent of the other party to the earlier contract, as held by the Hon'ble
Division Bench of Andhra Pradesh High Court, such registration would cause violence to the
Principles of Natural Justice and lead to unnecessary litigation emanating therefrom.

12
Latif Estate Line India v. Hadeeja Ammal, AIR 2011 Mad66.
13
M.Manikandan vs The Sub Registrar 2017
14
Kaliaperumal v. Rajagopal (2009) 4 SCC 193
 IF DOCUMENT VOID AB INITIO THEN NO NEED FOR
CANCELLATION

It is true that in case a document suffers from voidability, the party who want to challenge the
said document, has to seek the cancellation of such document or a relief to get such document
set aside. When a document is per se illegal, in the sense that it is void ab initio, a party need
not seek for the cancellation of such a document.

Suppose a person executes a sale deed in respect of a property on which he has no right or
title and especially when title belongs to other person, the vendee will not get anything. 15 At
the same time, it cannot be said that the true title holder of the property should go for the
cancellation of such a document. In such case, the document is void ab initio and, therefore,
such a document is liable to be ignored, since it will not cause any cloud on title of the true
title holder.

In so far as a suit on behalf of a person of unsound mind to set aside a transaction to which he
was a party is concerned, it is not in any way substantially different from the one seeking to
set aside a contract by a minor during his minority and the contract by a person of unsound
mind is equally void as that of a minor's contract. Both are in the position of persons not
competent to contract and transactions entered into by them are void ab initio and there is no
need therefore in any suit or proceeding where such persons seek relief to have the
cancellation of such a document. 16 They might ignore the existence of such a document as
being void and of no effect and proceed to establish their right to other reliefs consequent on
the transaction being void.

15
Quilandy vs By Advs.Sri.P.B.Krishnan 2010
16
R. Muthammal v. Narmada and Ors. (1975) 2 M.L.J. 304 : A.I.R. 1976
 LIMITATION

The period of limitation for a suit to cancel or set aside an instrument or decree or for the
rescission of a contract is three years and the time of limitation starts to run when the facts
entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract
rescinded first become known to him.

The time for setting aside a settlement deed executed undue influence starts from the date
when the facts entitling the plaintiff to have the instrument cancelled or set aside became
known to the plaintiff and not from the date of removal of the undue influence. 17 The
limitation for a suit for cancellation of the deed of gift would not arise from the date of the
deed of gift but only from the date when the plaintiff discovers the fraud practised by the
defendant upon him in procuring such deed of gift and the suit filed within three years
thereof; is within time.18

Article 59 envisages any suit to cancel or set aside an instrument or document. An instrument
is a formal legal writing such as, a record, charter, deed or agreement. An instrument is a
deed, writ or other legal proceeding or matter reduced to writing. It includes every document
by which any right or liability is, or purports to be, created, transferred, limited, extended,
extinguished or recorded.The execution and registration of the sale deed came to the
knowledge to the plaintiff on the very date on which the sale deed was executed the suit filed
more than three years after that date is barred by limitation. 19 The limitation for setting aside
an instrument for want of consideration commences from the date of the registration of the
sale deed.20

Under Art. 59, limitation period starts running from the date of knowledge about the fraud.
Such knowledge includes derivative or constructive knowledge.

17
Budhi Bai v. Nagpur University, (AIR 1946 Nag. 377)
18
Virendra Singh v. Kashiram, (AIR 2004 P&H 196)
19
Ranti Devi v. Union of India, [(1995) 1 SCC 198]
20
Sukalu v. Punau, (AIR 1961 MP 176)
 RECENT CASE

Prem Singh & Ors vs Birbal & Ors on 2 May, 2006

FACTS

Prem singh a minor executed a deed to Babu Singh and Tek Singh for a consideration of
Rs.7,000/-. His age in the Sale Deed was shown to be 26 years. Deed of Sale got executed by
playing fraud on the plaintiff who was a minor at the relevant point of time and the said Deed
of Sale, thus, being void ab intio, the limitation of three years from the date of attaining of
majority, as is provided for in Article 59 of the Limitation Act, 1963, would not be applicable
in the instant case.

HELD

Limitation is a statute of repose. It ordinarily bars a remedy, but, does not extinguish a right
Article 59 of the Limitation Act applies specially when a relief is claimed on the ground of
fraud or mistake. It only encompasses within its fold fraudulent transactions which are
voidable transactions.

A suit for cancellation of instrument is based on the provisions of Section 31 of the Specific
Relief Act. Section 31 of the Specific Relief Act, 1963 thus, refers to both void and voidable
document. It provides for a discretionary relief.

When a document is valid, no question arises of its cancellation. When a document is void ab
initio, a decree for setting aside the same would not be necessary as the same is non-est in the
eye of law, as it would be a nullity.21

Once, however, a suit is filed by a plaintiff for cancellation of a transaction, it would be

governed by Article 59. Even if Article 59 is not attracted, the residuary Article would be.

21
Ponnamma Pillai Indira Pillai vs. Padmanabhan Channar Kesavan Channar & Ors. [1968
K.L.T. 673 : AIR 1969 Kerala 163]
The legal position will be different if there is a fraudulent misrepresentation not merely as to
the contents of the document but as to its character. The authorities make a clear distinction
between fraudulent misrepresentation as to the character of the document and fraudulent
misrepresentation as to the contents thereof. With reference to the former, it has been held
that the transaction is void, while in the case of the latter, it is merely voidable.22

In the present case there was fraudulent misrepresentation as to the character of document
and hence it is void not void ab initio and section 59 of limitation act will apply in the present
case.

There is a presumption that a registered document is validly executed. A registered

document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on
a person who leads evidence to rebut the presumption. In the instant case, Respondent No.1
has not been able to rebut the said presumption.23
If a deed was executed by the plaintiff when he was a minor and it was void, he had two
options to file a suit to get the property purportedly conveyed thereunder. He could either file
the suit within 12 years of the deed or within 3 years of attaining majority. Here, the plaintiff
did not either sue within 12 years of the deed or within 3 years of attaining majority.
Therefore, the suit was held to be barred by limitation.

22
Ningawwa vs. Byrappa Shiddappa Hireknrabnar & Ors [AIR 1968 SC 956]
23
Balvant N. Viswamitra & Ors. vs. Yadav Sadashiv Mule (Dead) Through LRS. & Ors.
[(2004) 8 SCC 706]