 Should we start? Yeah, cancellation of instruments has always been a topic which also touches the common man as well as the lawyers need this to say. There's a lot of march of in this particular aspects. Today, in fact, one of my friend had shared the latest judgment or even as to whether for the purposes of cancellation of an instrument, whether you can proceed under the civil court arbitration act that judgment can be shared later on. But today we are obliged that Mr. Shinghar Murali has acceded to our request to share his knowledge. And we all know that Shinghar Murali and Adilakshmi ma'am have been always a good resource persons. Without taking much time since there was some glitch with the YouTube, I request Mr. Shinghar, a dear friend of mine to take over the session. Thank you, sir. Good evening to all. The topic is cancellation of instruments. Often there is a confusion among the lawyers. When we want to file a suit to satisfy the document or any instrument, whether your suit for setting a certain instrument is sufficient or we can file a suit for declaration to declare that the document is illegal and unlawful. The reason is very obvious. If you want to file a suit to set aside the instrument, necessarily you have to pay court fees on the amount mentioned in the document, which is hard to be cancelled. But if you want to file a suit for declaration, you can value the subject matter tentatively and you can pay the court fees. Court fees will be lesser in your suit for declaration. When your suit for declaration will lie, when your suit to set aside an instrument will lie, this is often confusing questions. Now, let us see the nuances and the intricacies of section 31 of the specifically packed, which deals with when cancellation may be ordered. This section is based on the maxing, that is for fear that the instrument agreements, securities, deeds may be vexaciously or injuriously used against the person who wants to avoid it. Three conditions have to be satisfied before invoking section 31 of the specifically packed. Number one, that the instrument must be in the instrument is Y or Y double. Y or Y double. Then the plaintiff must show that he has reasonable apprehension, that the instrument if left outstanding, it may cause severe injury to him. And the court may exercise its discretionary power to set aside or deliver up or cancel the instrument. So, unless these conditions are satisfied, we cannot invoke section 31 of the specifically packed. Then who can file a suit to set aside an instrument? The word employed in section 31, any person, whether the term any person is an inclusive definition or not. But in strict sense of section 31 are specifically packed. The word any person does not include a third party. A third party to an instrument cannot maintain an action to set aside the instrument. It is restricted to a party to the return instrument or any other person who can bind such party or any persons claiming right, derived title from the party. It includes a person seeking derived to title from his vendor or seller. Suppose I have not at all executed a document, but it affects my right or title about the property. What is the remedy available to me? Because I am not a party to the return instrument, so I cannot maintain an action under section 31, but I am not remedy less my remedy. That is the non-executant of the instrument used to file a suit to suit for declaration under section 34 of the specifically packed. So, this is held by our Honorable Supreme Court, 2021, 4 SEC, page 786, Deccan Paper Mills Company versus Regency Mahavir Properties, 2021, 4 SEC, Supreme Court cases, page 786. Then, whether an action institute under section 34 of the specifically packed is an action in room or action in person, you are aware that a right in room is a right exercisable against the world at large, whereas right in person is an interest protected solely against specific individuals and determining the rights and interests of the party themselves in the subject matter of the case. Therefore, an action institute under section 31 of the specifically packed is an action in persona, is an action in persona. Asian Avenue Private Limited versus Syed Chaukat Wazain, 2023, SEC, online Supreme Court, page 514, 2023, Supreme Court cases, online Supreme Court, page 514. Then, next question, what is the court piece favorable in your suit to set aside the instrument? That is a very big issue. Suppose, I think we are in Tamil Nadu and Andhra, we are having a separate statue known as Tamil Nadu Court piece and suit valuation act. But I know that in Punjab and Haryana, you are following the Central Act, Court piece valuation act, and when you want to file a suit for party and when you are out of possession, you have to pay Court piece on the market value of the subject matter, market value of the subject matter. If you want to file, market value of the subject matter. But to set aside the sale, to set aside any instrument or deed, in section 40 of the Tamil Nadu Court piece and suit valuation act under section 37 of the Andhar Pradesh Court piece and suit valuation act, the word employed is value of the property, it does not deal about the market value of the property. So, market value of the property, there are specific sections wherein you have to pay Court piece on the market value of the property, market value of the property. Whereas, in a suit to set aside the instrument, the proper Court piece is on the amount mentioned in this document which is sought to be cancelled. You need not worry about the market value of the property. Document may be executed 2 years prior to that, prepared to the filing of the suit. At the time of filing of the suit, its market value will be increased, but we need not worry about it. We have to value the subject matter of the suit on the amount mentioned in this document or instrument which is sought to be cancelled or set aside. So, the proper Court piece is on the amount mentioned in the instrument sought to be set aside. This has been held in 2014. Then, next point. What is a period of limitation to file a suit to set aside instrument or set aside the instrument? When the facts entitling the plaintiff to have the instrument set aside, first became known to him. When he came to know about that, this document is left outstanding would cause serious injury. For example, we entered into a sale agreement with your purchase. The purchase did not turn up during the currency of the sale agreement. So, there is a delay. If it is a registered instrument, you cannot sell the property in favor of others because your entry shows that there is a registered sale agreement. Then you have to file a suit to set aside the registered sale agreement. Then you have to file a suit to set aside the registered sale agreement on the ground. Your purchaser failed to perform his part of obligation within the stipulated time. If the sale agreement is allowed to be left outstanding, it would cause severe injury because you may not be in a position to sell the property. So, under those circumstances, you can invoke section 31. But here the period of limitation is the date of from the date when you came to know that the defendant that is that is your purchaser failed to perform his part of obligation from the date within a period of three years. Three years. Now, in one case, father executed a registered gift deed favor of his son. And another son wanted to impeach the said gift deed and he has filed his objection before the revenue officials not to mutate the name of the donor in the revenue records. But he has filed the suit after the expiry of three years from the date of mutation order. Then the court has held that the suit is barred by limitation, hopelessly barred by efflux of time. Abdul Ragim versus HK Abdul Jabbar 2009, 6 SCC paid 160. Then in the case of involvement of minors interest in the property. Suppose minors property is sold what is the remedy available to the minor? Minor has two options. One, he can file a suit within a period of 12 years to recover the property under article 65. Or he can file a suit within a period of three years of attaining majority under section 60 of the limitation act to set aside the sale. To set aside the sale which affects his interest over the property. This is 2006 by SCC page 353. 2006 by SCC page 353. Now another question that is often asked the question in case of registered instrument, can it be set aside? Then what is the presumption? Section 60 of the registration act under section 60 of the registration act, there is a presumption that the registered document is duly executed under registered. Of course it is a reputable presumption. You want to attack the registered written instrument then it is on view to lead evidence that to repute the presumption. Repute the presumption under section 60 of the registration act. Braem Singh and others versus Birbal and others 2006 by SCC page 353. Then section 31 deals with void or voidable document. Another important question is when a document which is void and the pace of the record, can it be adjudicated as a void document? Suppose you are the owner of the property some third party by forging a signature executed a sale deed in favor of third party. You are not a party to the document. There is some fabrication or impersonation. Whether such sale deed affects your title to the property or you are not a party to the document. So far as you are concerned the document is void on the pace of the record. You can just discard it. You need not file a suit to satisfy the document because the document itself is void on the pace of the record. You can just discard it. If you want to cancel it, you can file a suit for cancellation and not to file a suit to satisfy the sale deed because since you are not a party party to the instrument you can very well file a suit for declaration by tentatively value the subject matter of the suit. If you want to file a suit to satisfy the sale deed, you have to pay the court piece on the amount mentioned in the documents are to be impeached. Why property conveyed by a person who had no title then such a document would be void? This is because of the maxim, no one can have a higher right over the property than he does. No more that but not have it. Such void document need not be declared by the court that the document is void because document itself is void. There is a question of declaring it again. It has void documents. It will not bind the parties. But instruments obtained by misrepresentation, fraud or undue influence, then these documents or instruments are voidable documents. You can only refer section 18, 19a and 19 of the Indian contract act. For example, you availed loan. You wanted to execute a mortgage deed in favor of your mortgagee. But mortgagee instead of registering the mortgage deed, registered a sale deed. You are a party to the document. You are a party to the document. You are challenging the nomenclature of the documents. Then it is a void document. You can file a suit to declare that the sale deed is illegal and null and void because I intend to execute only the documents. But it was registered as a sale deed. So the Badana proof is on you to prove that fraud was played on you or misrepresentation was made. Undue influence was exercised. Assuming for a moment that you are an illiterate person not possessed with sufficient worldly affairs. You want to impeach a document executed by you. Then the Badana proof is on the person who obtained the document. The Badana proof is not on you. This is a peculiar character. This is peculiar. It is applicable only to the person who are illiterate or not possessed with the sufficient worldly affairs. The Badana proof is not on the plaintiff who instituted the suit to set aside the instrument under section 31. Badana proof is on the, on his aggression. So void document person who had no title in the document on the face of the record is void. It will not confer any title. So you can just discard it. You need not file a suit to set aside the void document. Whereas in the case of voidable documents, you may be the party to the document and you are challenging the recitals in the document. Then it is a voidable document necessarily it has to be set aside by taking recourse to section 31 of the specific visit fact. Because fraudulent misrepresentation in respect of character of a document is void. fraudulent misrepresentation in respect of character of the instrument is void. But when it is in respect of contents of the document, it is void. It is void. If it is voidable necessarily you have to seek the relief to set aside the same. If it is void, you may or may not file a suit for declaration. This is the very same judgment 2006. 5 SCC page 5 3 5 3. Suppose if any instrument is affected, it affects what right over the property or title over the property. That instrument was executed by the person competent to execute. Then what is the remedy? Your remedy used to set aside the instrument. Suppose you are one of the co-operation. Your father executed a sale deed not for any legal necessity. You can impeach the sale because the katha is competent to execute sale deed. But it affects your right because the sale is not for any legal necessity. You can impeach it. But your remedy is to file a suit to set aside the sale deed and you cannot file a suit for declaration that the sale deed is illegal and not binding on you. Because the person executed the document is a competent to execute it. But at the same time your right is affected, then your remedy is to take recourse under section 31 and not under section 34 of the specific required. This is Chaco versus Mahadevan 2007. 2007 SCC page 363. Then assuming for a moment there are co-sharers. Co-sharers in joint association. But one of the co-sharers executed a sale deed including the off share of the other co-sharer. Now it came to know that one of the co-sharers who has not executed a sale deed came to know that his share was also conveyed by the other co-sharer. Then what is the remedy available to him? Whether he can file a suit for declaration to declare the sale deed executed by the other co-sharer. Conveying his property is illegal. Or he can file a suit to satisfy the sale deed on the ground that his share was also conveyed he has no better title to convey your property. Then what is the remedy? You can just ignore the sale you can just file a suit for declaration, suit for partition. That is enough because the document on the face of the record is void. The person who has executed the sale deed is competent only to execute his share is concerned not in respect of your share. So to that extent the document is void so far as you are concerned. You can just ignore it and you can very well file a suit for partition of your off share in the property. This is 2022 1 law weekly page 241 Supreme Court Cable Christian versus Rajesh Kumar and others 2022 1 law weekly page 241 then another important aspect so far as section 31 of the specifically practice concern whether unilateral cancellation of sale deed is permissible. In Satyapal case our Honourable Supreme Court said unilateral cancellation of the sale deed is permissible then it shocked the entire legal fraternity. How it could be? Sale deed is you know that it is a bilateral document without the knowledge of the vendi purchaser how the vendor is bold enough to cancel the document even after receiving the sale but in that case Satyapal case the facts is entirely the facts are entirely different a property or a conveyance deed a sale deed was executed by the cooperative society register or secretary in favour of the Allati. There is a condition in that Allatman that the Allati has to put up construction within a period of 2 years from the data of Allatman. If no construction is made by the Allati within the stipulated period then the society has got power to cancel it unilaterally. So based on this specific governance our Supreme Court is held that there is a covenant parties to the agreement not bind by the terms and conditions of the agreement so the unilateral cancellation of the sale deed by the society by the cooperative society secretary of the cooperative society is correct and the suit is bind by the Allati to cancel the unilateral cancellation of sale deed was discussed but that is on NETL and different footing but once a sale deed is executed register it can only be impeached by filing a suit to set aside the sale deed there cannot be any unilateral cancellation of sale because it is a bilateral document previously under the registration act any document is presented by registration the registering authority will receive it and just he has to verify whether the proper stamp is paid or not if it is okay then he will register the same unmindfully but after this Satyabal judgment and Tamil Nadu amendment was made in the registration act that a sale deed which was newly executed register can only be cancelled by both the vendor and vending there cannot be any unilateral cancellation amendment now is made so unilateral cancellation of sale deed is impermissible Tota Ganga Lakshmi Tota Ganga Lakshmi versus Government of Andhra Pradesh 2010-15 SCC page 207 because the full bench of the honourable Andhra Pradesh has held that unilateral cancellation of sale deed is permissible because there is no provision under the registration act debarring the registering authority from registering the cancellation of sale deed submitted by the vendor seller so after this judgment amendment was made but our honourable Supreme Court is held once a document is bilateral it cannot be unilaterally cancelled as I said earlier sale deed executed by Kartha not for legal necessity you can file a suit to you can file a suit for declaration to declare that the sale is illegal not binding on this this is 2020 2014 SCC page 436 then another important point we are all well aware a person in settled possession even if he is a trespasser or an encroacher can only be evicted in a manner not to law he can only be evicted by taking recourse to the due process of law or recourse to law this is well known principles of law person in settled possession even if he is a trespasser cannot be his possession cannot be disturbed without taking recourse to the due process of law but what is the meaning of the word due process of law suppose suit for declaration has been filed and for the consequential relief of injunction the court comes to know that the plaintiff has no title to the property and he believed the title of the defendant after overall assessment of both the oral and the document evidences the court came to the conclusion that the plaintiff has miserably failed to establish title to the property and the title of the defendant is proved then automatically declarator relief can be dismissed but if it is found that the plaintiff is in possession and enjoyment of the suit property whether the court is entitled to dismiss the declarator relief and grant a consequential relief for permanent injunction this is the point for consideration because the court finds that the plaintiff is in possession so his possession cannot be disturbed even by the true one of course believe the true owner has to file a suit for recovery of possession that is the law but our supreme court recently held once the rights of the parties are adjudicated in a case plaintiff's title is not proved so he is not entitled to get a degree for declaration but even if he is in possession of the property he is not entitled to get an order of injunction this is because when the substantive relief is declined the consequential relief cannot be granted the consequential relief cannot be granted even if the plaintiff is in possession and enjoyment of the suit property once the court adjudicated his title over the same property the granting a degree in respect of injunction has to be set aside so that was done by our Honourable Supreme Court in the case reported in 2022 12 HCC page 128 2022 12 HCC page 128 this is very important judgment I have come across 30 years of practice I have seen so many cases even if title is not proved if the plaintiff is found to be in possession of the property invariably the court has granted a degree for permanent injunction even though it dismissed the declared relief but that is not the correct proposition of law our Supreme Court said once adjudication is by the court with respect to the title of the property title of the property then even if he is in possession he is not entitled to get an order of injunction 2022 12 HCC page 128 then whether an unregistered document can be cancelled section 31 does not say that the registered instrument alone can be cancelled so even an unregistered document if you feel that if it is allowed to be left outstanding could cause severe injury and irreparable loss to you you can verify a suit to set aside the instrument which is not a registered instrument then what is the procedure after the cancellation of the instrument so yet after the degree is passed setting aside or canceling the instrument then section 2 of subclass 2 of section 31 the court has to send its degree copy to the consent subregister to make an entry in book 1 that the document is cancelled because unless the entry is made that the document is cancelled by the competent court of law then there is a chance of encumbering the property then the right third party is right innocent bona fide purchasers right will be prejudiced so cautiously our legislature has drafted section 31 subclass 2 says once an instrument or degree is set aside and if it is registered then the court must send the copy of its degree to the consent subregister to make an entry in book 1 in the relevant book maintained right whether an instrument can be partially cancelled or partially allowed to be enforced yes it can be suppose the document contains two separate description of properties so for one item of property if you want to avoid it you can file a suit to set aside the instrument only in respect of those property which affects title or right over the property so partial cancellation of the instrument is also permissible under section 31 of the specific category then section 33 deals with the payment of property or compensation suppose the document has set aside for setting aside the document it takes it consumes certain time limit 5 years or 10 years but the person in possession has derived profit it is resembling like section 2 subclass 12 of the CPC which contemplates the payment of mean profits mean profit means a profit earned by the person in wrongful possession so after setting aside the instrument if the party enjoyed any benefit then he has to pay such a profit to the party affected when it is not possible to ascertain the mean profit then the court may award compensation for the loss sustained by the person who has filed a suit to set aside the instrument and obtain the degree to set aside the instrument so section 31 is very small subject but it involves lot of legal nuances so document which is void it need not be declared as void by the competent court but if it is left outstanding then you can file a suit to set aside the instrument which is void if it is voidable obtained by fraud, misrepresentation and due influence then it can be challenged by via filing suit to set aside the instrument so limitation period is 3 years and the court B is on the amount mentioned in the document not on the market value of the property so after setting aside the instrument the court has to send its degree copy to the consent of register to make an entry and the court is also entitled to award compensation or order to pay profit and by the person in whose name the instrument was executed and which was subsequently cancelled by taking the degree course to section 31 of the specific relief act because they for a small subject it will be very useful to all the participants they say that though it is a small section but it has layers within layers to understand this thing so the document which we said at the first instance I will follow the copy you can post it the document which we said that in respect to section 31 and if there is an arbitration clause I have also seen the latest judgment the right the power to set aside any instrument sale D is well within the domain of the competent civil court the arbitrator has no right to set aside the registered instrument that is the judgment because the power to cancel the power to set aside instrument can only be made by the court by the competent civil court and not by any arbitrator or even tribunal has no power to set aside the instrument which was registered it can only be cancelled or set aside by the court on the specified grounds by taking recourse to section 31 of the specific legal act that is the latest judgment of the supreme so thank you Mr. Shinghar and thank you Doha Dilakshmi has not joined for helping us to connect to such a good resourceful person and the team of legal legal elites so do stay connected with beyond law CLC team on the whatsapp thank you