Can the True Owner Seek Cancellation of a Deed, Executed by a Stranger to the Property

Answer: No.

Saji Koduvath, Advocate, Kottayam.

Taken from: Cancellation of Sale Deeds and Settlement Deeds & Powers of Sub-Registrar in Registering Deeds

Abstract

               •➧Sect. 31 of the Specific Relief Act does not give a right to a stranger to a document (including the true owner of the property) to sue for cancellation. Sec. 31 reads –
“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 (16 of 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.”

             •➧Sec. 7 of the Transfer of Property Act, sets down that a transfer of property, made by a person who is not competent to transfer, is not valid. (It need not be got cancelled – for availing a substantive relief from a civil court.) Sec. 7 reads –
“7. Persons competent to transfer— Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force.”

Introduction

Sec. 7 of the Transfer of Property Act, sets down that a transfer of property, made by a person who is not competent to transfer, is not valid.

  • Siriki Appalaswamy v. Sub-Registrar (N.V. Ramana, J.) 2009-1 ALD 321; 2009-1 ALT 101;
  • Abdul Satar Haji Ibrahim v. Shah Manilal Talakchand, AIR 1970 Guj 12.

Sect. 31 of the Specific Relief Act does not give a right to a stranger to a document (including the true owner of the property) to sue for cancellation. That is, when an immovable property is transferred by a person without authority to a third person, the true owner cannot file a suit under Sec. 31 of the Specific Relief Act; such a suit is not maintainable. See:

  • Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1
  • Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57,
  • Deccan Paper Mills Co. Ltd. Versus Regency Mahavir Properties; (2021) 4 SCC 786,
  • Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330.

Also read:

Cancellation of Instruments – Sec. 31 Sp. Relf. Act

The Full Bench of the Madras High Court, in Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1, said analysing Sec. 39 of the Specific Relief Act, 1877 (pari materia provision to Sec. 31 of the 1963 Act) as follows:

  • “13. … The provisions of Section 39 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.
  • 14. 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 emphasises that principle. For there can be no apprehension if a mere third party asserting a hostile title creates a document. Thus relief under S. 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.” (Quoted in Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, AIR 2020 SC 4047.)

S. 31(1) – Action (only) by a Party to the Deed or by one obtained Derivative Title

After quoting Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1, it was held (R.F. Nariman, J.) in Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, AIR 2020 SC 4047, as under:

  • “A reading of the aforesaid judgment of the Full Bench would make the position in law crystal clear. The expression “any person” does not include a third party, but is restricted to a party to the written instrument or any person who can bind such party….
  • … A reading of section 31(1) then shows that when a written instrument is adjudged void or voidable, the Court may then order it to be delivered up to the plaintiff and cancelled – in exactly the same way as a suit for rescission of a contract under section 29. Thus far, it is clear that the action under section 31(1) is strictly an action inter parties or by persons who obtained derivative title from the parties, and is thus in personam.”

Title of True Owner Remains Intact even if a Stranger Conveys the Property

In Yanala Malleshwari v. Ananthula Sayamma, AIR 2007 AP 57, it is held as under:

  • “Unless and until, a person is competent to contract and entitled to transfer the property, a valid transfer of property cannot take place (Sections 5 and 7 of TP Act). As a necessary corollary, if the transfer of property is by a person without title or such transfer is opposed to nature of interest or for an unlawful object or consideration within the meaning of Section 23 of the Contract Act or transferee is legally disqualified to be transferee, title in the property does not pass to the transferee (Sections 6(h) and 8 of TP Act and Section 23 of the Contract Act). ….(Quoted in: Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330; Sahara India Commercial Corporation Ltd.  v. Uday Shankar Paul, AIR(NOC) 2022  Jhar  663; Latif Estate Line India Ltd. v. Hadeeja Ammal, AIR 2011 Mad 66)
  • 33. The law, therefore, may be taken as well settled that in all cases of void or voidable transactions, a suit for cancellation of a deed is not maintainable. In a case where immovable property is transferred by a person without authority to a third person, it is no answer to say that the true owner who has authority and entitlement to transfer can file a suit under Section 31 of the Specific Relief Act for the simple reason that such a suit is not maintainable. Further, in case of an instrument, which is void or voidable against executant, a suit would be maintainable for cancellation of such instrument and can be decreed only when it is adjudicated by the competent Court that such instrument is void or voidable and that if such instrument is left to exist, it would cause serious injury to the true owner…… (Quoted in: Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, AIR 2020 SC 4047; Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330)
  • 36. What would be the remedy for the person who actually and factually holds a valid title to a property in respect of which a fraudulent transfer was effected by deceitful vendors and vendees or deceitful vendors and genuine vendees, who parted with consideration. The legal maxims ‘nemo dat quod non habet’ and ‘nemo plus juris ad alium transferee potest quam ipse habet’ postulate that where property is sold by a person who is not the owner and who does not sell under the authority or consent of the real owner, the buyer acquires no title to the property than the seller had. The Indian law recognizes this principle in various provisions of various statutes which in pith and substance deal with Contracts, Transfer of property and Specific relief (See Sections 17, 18, 19, 20, 23, 25 and 29 of the Contract Act; Sections 6(h), 7, 25, 38, 42 to 48, 52, 53 and 55 of TP Act and Sections 13, 15, 17, 21, 31 and 34 of the Specific Relief Act)…..
  • 77. In the considered opinion of this Court if a person sells away the property belonging to other, it would certainly be fraud on the statute. It would be adding insult to injury, if such person is asked to go to civil Court and get the subsequent sale deed cancelled or seek a declaration. Be it also noted that under common law, as discussed supra, the title of a person remains intact even if a stranger conveys that title to another stranger, which is ineffective”

Execution of or Registration of a Document by itself Will not Create any new Title

In Siriki Appalaswamy v. Sub-Registrar (N.V. Ramana, J.) 2009-1 ALD 321; 2009-1 ALT 101, it was found as under:

  • “The transfer of property is subject to the provisions of the Transfer of Property Act, 1882, while the title, capacity of the parties to transfer the property etc. are governed by different laws such as Law of Succession, Testamentary or otherwise, etc. The normal understanding of the general public is that once a document is registered under the provisions of the Registration Act, they get title to the property. But that is not so. The law is well settled that execution of or registration of a document by itself will not create any new title, and the execution of or registration of such document covering an immovable property is governed by the principle Nemo Oat Quad Non Habet, which means that no one can transfer better title than what he has. Therefore, unless and until the vendor has title to the property, by mere registration of a document transferring the property vested in him, does not confer any title on the vendee.”

Sec. 7 of the TP Act – Person must be competent to contract; Otherwise, not valid

Siriki Appalaswamy v. Sub-Registrar (N.V. Ramana, J.) 2009-1 ALD 321; 2009-1 ALT 101, preceded as under:

  • The transfer of property has been defined under Section 5 of the Transfer of Property Act, to mean that an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons and, “to transfer property”, is to perform such act. The persons competent to transfer the property is dealt with under Section 7 of the Transfer of Property Act. As per Section 7 of the Transfer of Property Act, unless a person is competent to contract or entitled to transfer the property, transfer, if any, made is not valid. A conjoint reading of the provisions of the Registration Act, with the provisions of the Transfer of Property Act, would make it crystal clear that transfer of title in a property by way of registration, is subject to any other law for the time being in force. Therefore, mere registration of a document will not confer any new title, and in the case of any title disputes arising out of such registrations, they are subject to and to be decided under the provisions of various other laws, governing the transfer of immovable property.

In Pavakkal Noble John v. Kerala State, ILR 2010-3 Ker 979; 2010-3 KLT 941, held as under:

  • “Under Section 7 of the Transfer of Property Act, 1882, for a person to become competent to transfer property, two conditions have to be satisfied viz. (1) he has to be competent to contract and (2) he must be entitled to transferable property or he must be authorised to dispose of transferable property not his own.”

Factual Existence of Title, Important; and Not the Knowledge of Purchasor

In Moidu v. Mammunhi Beaky, ILR 1974-1 (Ker) 201; 1974 KLT 879, it is observed as under:

  • “Under S.7 of that Act a person is competent to transfer only property which he is entitled to or authorised to dispose of. In other words, it is the well-settled rule of the law of property that no one can transfer or convey title to property unless he himself has title to it or is authorised to transfer by a person having title to it. The question of title of the purchaser is not dependent upon his knowledge about the vendor’s title, but on the factual existence of his title; and, if the mortgagee-purchaser does not acquire title to a share of the property purchased the mortgage in respect of that share will subsist, unless there are circumstances which will go to show that the mortgagee-purchaser intended to wipe off the mortgage-transaction, by his purchase, though defective in respect of a portion of the property. …
  • 12. Those who conveyed properties to the mortgagee as per Exts. B 42 and B43 sale deeds had only 41/48 share in those properties. They could convey only that much interest in those properties. Though they purported to convey the full right in the whole of the two items, in fact what is conveyed is only their interests or shares.”

Competency of the transferor is dealt with in Abdul Satar Haji Ibrahim v. Shah Manilal Talakchand, AIR 1970 Guj 12, also.

No suit by True Owner will lie under S. 31 Where a stranger executed a sale: Real owner may file a suit under S 34 (for Declaration)

In Vinod Shankar Jha v. State of Jharkhand, 2024-1 CurCC 330, after considering all the above decisions, it is held as under:

  • “34. What follows from the above settled position of law, is that an executant can seek cancellation of a registered instrument on the ground of fraud, by a suit filed under Section 31 of the Specific Relief Act. In case, where a stranger without any title has executed a sale, such a suit will not lie under Section 31. Real owner may file a suit under Section 34, if his peaceful enjoyment of ownership right is impinged due to the said sale.
  • 2012-3 KerLT 264.

When one is NOT PARTY to Document, No Need to Annul by Cancellation

It is held in Y. G. Gurukul v. Y. Subrahmanyam, AIR 1957 AP 955, as under:

  • “When a person is not eo-nomine a party to a suit or a document, it is unnecessary for him to have the deed or the decree annulled, and he can proceed on the assumption that there was no such document or decree. (Followed in Sankaran v. Velukutty, 1986 Ker LT 794.)

In Usman Kurikkal v. Parappur Achuthan Nair, ILR 2012-3 Ker 343; 2012 3 KHC 89, it is held as under:

  • “Plaintiff is neither a party to the sale deed nor a party to the resolution empowering the Board to execute the sale deed. The prayer in the plaint is essentially for a declaration that the sale deed is not valid and binding on the plaintiff. The plaintiff has not sought for a cancellation of the sale deed obviously because he was not an executant thereto. The plaintiff can very well ignore the sale deed and need not seek its annulment as has been held in Sankaran v. Velukutty (1986 KLT 794).”
  • See also: SR Suresh Babu v. Beena, 2022 KHC OnLine 196.

The Supreme Court observed in V.  Kalyanaswamy v. L.  Bakthavatsalam, 2020 3 RCR(Civ) 404; 2020 9 Scale 367, as under:

  • “Plaintiffs-appellants in OS No. 36 of 1963 were not parties to the suit in 1958 and the compromise in OS No. 71 of 1958 will not bind the appellants.”

Incumbent for the Executant to Seek Cancellation of Sale Deeds

It is held in Chellakannu v. Kolanji (R. Banumathi, J.), AIR 2005 Mad 405, that the word “Cancellation” implies that the persons suing should be a party to the document; and that it is incumbent on the executant of the document (for avoiding its binding nature) to seek cancellation of sale deeds, and a prayer to declare the sale deeds as invalid  tantamount to cancellation; and therefore, court fee applicable to cancellation has to be paid. Our Apex Court approved this decision (Chellakannu v. Kolanji) in J. Vasanthi v. N. Ramani Kanthammal, AIR 2017 SC 3813.

Cancellation of alienations in Partition Suits

In Umadevi Nambiar v. Thamarasseri Roman Catholic Diocese, AIR 2022 SC 1640; 2022-7 SCC 90, it is held that in Partition of property, it is not always necessary for a plaintiff in a suit for partition to seek cancellation of alienations.

Propositions as to Questioning a Deed WHERE ONE is NOT a Party

In Noorul Hoda v. Bibi Rafiunnisa, 1996 (7) SCC 767, our Apex Court held as follows:

  • “When the plaintiff seeks to establish his title to the property which cannot be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded.” 

In Chellakannuv. Kolanji (R. Banumathi, J.), AIR 2005 Mad 405, it is observed as under:

  • “12. The word “Cancellation” implies that the persons suing should be a party to the document. Strangers are not bound by the documents and are not obliged to sue for cancellation. When the party to the document is suing, challenging the document, he must first obtain cancellation before getting any further relief. Whether cancellation is prayed for or not or even it is impliedly sought for in substance, the suit is one for cancellation. In the present case, when the Plaintiff attacks the Sale Deeds as having been obtained from him under fraud and mis-representation the Plaintiff cannot seek for any further relief without setting aside the Sale Deeds.”

Where one person is not a party to a deed, following propositions can be laid down:

  1. Where a deed is ‘null and wholly void‘ (e.g., unregistered sale/gift), he can simply avoid the deed and advance with other reliefs.
    • Limitation statute will have no application in such cases.
  2. If it is not ‘null and wholly void‘, he cannot simply avoid the deed and advance with other reliefs.
    • But, in such cases, it is not mandatory to seek ‘annulment’ of the deed – by ‘setting it aside’ or ‘cancelling it’.
    • It will be sufficient – to resort to “appropriate proceeding”, for avoiding the same, before a court of law, seeking proper declaration or otherwise.
    • It must be done within the limitation period prescribed.
    • In such cases the plaintiff need not pay Court Fee for ‘cancellation’ of a deed; it will be sufficient to pay the fee for ‘declaration’.

Person affected by a deed can obtain Cancellation if a co-sharer ‘sold’ it.

In Kedar Prasad v. Ganga Prasad, AIR 1980 All 85, it was held as under:

  • “16. … Section 31 has been expressed in the widest terms. In my judgment, an instrument can be void or voidable even against persons who are not directly parties to it. Where, as here, one of the members of a family or co-sharers of a property purports to transfer the whole of the rights in a property belonging to a family or to a body of persons, the other members and persons having a right, title or interest in that property are clearly persons against whom such a transaction would be void or voidable, even though they may not be parties to it. That being so, on the instrument being adjudged void, the Court may, in its discretion, order the instrument to be cancelled. In B. Rajgorhia v. Central Bank of India reported in (1972) 76 Cal WN 807 (858) it has been held that this section is available to a person affected by an instrument even though he may not be a party to the instrument. To the same effect are the decisions reported in (1948) 52 Cal WN 389 (392) and AIR 1934 All 1071 (1072).”

It Is Logically Impossible For A Person Not A Party To Ask For Its Cancellation

It is said in Hussain Ahmed Choudhury v. Habibur Rahman, 23 April, 2025, 2025 INSC 553, as under:

  • “33. In fact, it is logically impossible for a person who is not a party to a document or to a decree to ask for its cancellation. This is clearly explained by Wadsworth, J., in the decision rendered in Vellayya Konar v. Ramaswami, 1939 SCC OnLine Mad 149, (1939) 2 MLJ 400, AIR 1939 Mad 894, thus:
  • “When, the plaintiff seeks to establish a title in himself and cannot establish that title without removing an insuperable obstruction such as a decree to which he has been a party or a deed to which he has been a party, then quite clearly he must get that decree or deed cancelled or declared void ‘in toto’, and his suit is in substance a suit for the cancellation of the decree or deed even though it be framed as a suit for declaration. But when he is seeking to establish a title and finds himself threatened by a decree or a transaction between third parties, he Is not in a position to get that decree or that deed cancelled ‘in toto’. That is a thing which can only be done by parties to the decree or deed or their representatives. His proper remedy therefore in order to clear the way with a view to establish his title, is to get a declaration that the decree or deed is invalid so far as he himself is concerned and he must therefore sue for such a declaration and not for the cancellation of the decree or deed.”
  • 34. Therefore, filing a suit for cancellation of a sale deed and seeking a declaration that a particular document is inoperative as against the plaintiff are two distinct, separate suits. The plaintiff in the present case, not being the executant of the sale deed dated 05.05.1997 executed in favour of the respondent no. 1, was therefore, not obligated to sue for its cancellation under Section 31 of the Act, 1963. The question that remains is whether the plaintiff ought to have sought for a declaration that the sale deed dated 05.05.1997 was inoperative in so far as he is concerned or is not binding on him.”

Declaration Of Title Is As Good As A Relief Of Cancellation Of The Sale Deed

In Hussain Ahmed Choudhury v. Habibur Rahman, 23 April, 2025, 2025 INSC 553, it is held further as under:

  • “36. Therefore, the High Court having concurred with the Courts below on the legality and validity of the Gift Deed should not have dismissed the suit only on the ground that the plaintiff failed to pray for cancellation of the sale deed. The High Court should have kept the settled position of law in mind that the declaration of title is as good as a relief of cancellation of the sale deed or at least, a declaration that the sale deed is not binding on the plaintiff being void and thus non est.”

Proper Reliefs Can Be Granted, Though Not Directly Or Specifically Claimed

In Hussain Ahmed Choudhury v. Habibur Rahman, 23 April, 2025, 2025 INSC 553, it is held further as under:

  • “37. Furthermore, it is a well-known and settled principle of law that the plaint must be read as a whole and the actual relief sought can also be culled out from the averments of the plaint. Those reliefs can be granted, if there is evidence and circumstances justifying the grant of such relief, though not directly or specifically claimed, or asked as a relief. The plaintiff had averred in his plaint that the original defendant nos. 1 to 6 had no title or saleable rights over the suit property. This reflects the intention of the plaintiff to not be bound by any instrument which they may have executed in favour of another party.
  • 38. Courts have ample inherent powers and indeed it is their duty to shape their declaration in such a way that they may operate to afford the relief which the justice of the case requires. Section 34 of the Act, 1963 is not exhaustive of the cases in which a declaratory decree may be made and the courts have power to grant such a decree independently of the requirements of the Section. Section 34 merely gives statutory recognition to a well-recognised type of declaratory relief and subjects it to a limitation, but it cannot be deemed to exhaust every kind of declaratory relief or to circumscribe the jurisdiction of courts to give declarations of right in appropriate cases falling outside Section 34. The circumstances in which a declaratory decree under Section 34 should be awarded is a matter of discretion depending upon the facts of each case. [See: Supreme General Films Exchange Ltd. v. His Highness Maharaja Sir Brijnath Singhji Deo of Maihar and Ors., reported in (1975) 2 SCC 530]”

Partial or Complete Cancellation

In a proper case it may be possible to cancel a part of the document. But, if it is an indivisible agreement such bifurcation is not possible. It is held in Laxmanlal K. Pandit v. Mulshankar Pitambardas, (1908) 10 BomLR 553 7, as under:

  • “Finally, it was urged that even if part of the consideration for the rent note failed, yet part of it should be held not to fail, and to the extent of the part held good relief should be allowed to the plaintiff in this suit. It is, however, clear to us that the agreement was an indivisible agreement. Part of a single consideration for one object was unlawful, and therefore the whole agreement is void under Section 24 of the Contract Act. As was said by Mr. Justice Chitty in Baker v. Hedgecock (1888) 39 Ch. D. 520 it is not possible for the Court to “create or carve out a new covenant for the sake of validating an instrument which would otherwise be void.” The suit is a suit for rent, and is based upon a rent note which is void.”

How to Subscribe ‘IndianLawLive’? Click here – “How to Subscribe free “

Read in this cluster (Click on the topic):

Civil Suits: Procedure & Principles

Book No, 1 – Civil Procedure Code

Principles and Procedure

PROPERTY LAW

Title, ownership and Possession

Adverse Possession

Land Laws/ Transfer of Property Act

Power of attorney

Evidence Act – General

Sec. 65B

Admission, Relevancy and Proof

Law on Documents

Interpretation

Contract Act

Law on Damages

Easement

Stamp Act & Registration

Divorce/Marriage

Negotiable Instruments Act

Arbitration

Will

Book No. 2: A Handbook on Constitutional Issues

Religious issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Unknown's avatar

Published by sajikoduvath

Leave a Comment