When is a sale deed cancellable? What is the compensation provided? Is there a relief provided? Is the sale deed partially cancellable? These are the questions answered in this article to help buyer or sellers who are stuck in bad sales deed and give them more clarity on the topic.
Cancellation of a sale deed can be a tricky and critical aspect of the civil laws in India. The suppression and misrepresentation of facts, lead to situations wherein cancellation becomes the only plausible way out of a bad deal. But such cancellation requires specific grounds and reasons as in general such cancellation is not allowed by the law. The legal provisions regarding the dissolution of a deed have been described below.
Sections 31 to 33 of the Specific Relief Act, 1963 gives information regarding when a deed can be cancelled. According to this Act, cancellation is possible when and if:
- An individual feels that the deed is voidable or has a doubt that such a deed will cause him injury if left outstanding.
- If the deed was registered according to the laws prescribed in the Indian Registration Act, 1908.
- The cancellation may be executed by mutual consent of all parties.
For partial cancellation
- When the deed has clear signs of partiality or when it is evident that different people mentioned in the document have different rights or obligations, the court may partially cancel it and agree to let it stand for the residue.
- On cancellation, if the court sees it fit, it may ask the other party to offer compensation or return the benefits enjoyed by the former due to the unfair nature of the deed and pay the offended all the dues owed to them.
- If a defendant resists a suit because the deed against him or her is voidable, or because the defendant has received several benefits due to it, the court may order the defendant to make compensation for it.
- If the deed has not been drawn up according to the laws stated in Section 11 of the Indian Contract Act, 1872, the court may choose to let him restore any benefit to that party, that he or she enjoyed, courtesy of the deed.
The relief provided works on the principle of protective or preventive justice and hence applies to documents executed by the plaintiff. This does not mean that the plaintiff has to be a party to the contract, but instead, he or she may file a suit if the deed is against the best of their interest.
- The deed must be void or voidable against them
- A reasonable apprehension regarding severe injury for the plaintiff
- The case is fit for the court to make a verdict
- Is not a right and hence requires a lot of discretion
- If parties are in pari delicto( in equal fault) and fraud is then alleged, the court may dismiss the claim as the defendant is equally responsible
- If there is only mere inadequacy of consideration
- Cannot be filed during testator’s lifetime
Partial cancellation is possible only when rights listed under a deed are distinct, and in such cases, the plea for compensation must be filed early on in the case.