Sec.31 Specific Relief Act | Not Mandatory For Third Party, Against Whom A Sale Deed Is Void, To Seek Its Cancellation : Supreme Court

The Supreme Court observed that as per Section 31 of the Specific Relief Act, 1963 (“SRA”), it is not mandatory for a third party, agaisnt whom a sale deed is void,  to seek its cancellation.

In essence, the court said that when a sale deed is executed between the parties, a third person who was not party to the sale and affected by the sale deed cannot be asked to file a separate application seeking cancellation of the sale deed under Section 31 of SRA.

In the present case, the dispute concerned the legality of a co-owner's act to sell the entire joint family property to the subsequent purchaser (here in Appellant) via a sale deed without authorization from other co-owners (here in Respondent). Also, when the property transfer took place in favor of the appellant, the co-owner's share in the property remained undetermined.

The Respondent challenged the co-owner's act of transferring the entire suit property to the Appellant by filing a title suit on the ground that the transfer was void as the co-owner/ transferor was only entitled to share his part in the suit property and not the entire suit property to the appellant.

Holding the respondent's contention to be tenable, the bench comprising Justices Sudhanshu Dhulia and Pankaj Mithal observed that when there exist various co-owners in the property, then the subsequent purchaser of the suit property (Appellant) cannot acquire right, title, and interest in the whole of the suit property solely based on the sale deed executed by one co-owner/transferor.

While holding so, the Court had also dealt with an argument raised by the Appellant that since the Respondent had not asked for cancellation of the sale deed, therefore, the sale deed could not be canceled on its own.

Relying on Section 31 SRA, the Court opined that in every case. it is not mandatory to file an application seeking a declaration of the sale deed as void especially when the person/Respondent was not a party to the deed.

“A faint effort was made in the end to contend that the plaintiff-respondent Nandu Lal had not asked for any relief of cancellation of the sale deed by which the property was purchased by the defendant-appellant S.K Golam Lalchand and, therefore, is not entitle to any relief in this suit. The argument has been noted only to be rejected for the simple reason that Section 31 of the Specific Relief Act, 1963 uses the word 'may' for getting declared the instrument as void which is not imperative in every case, more particularly when the person is not a party to such an instrument.”, the court observed.

In M/s Asian Avenues Pvt Ltd vs Sri Syed Shoukat Hussain, 2023 LiveLaw (SC) 369,  the Court held that since an action instituted under Section 31 of the Specific Relief Act, 1963 for cancellation of an instrument is not an action in rem, an inference can be taken that the cancellation of the instrument as per this section will bind only the parties to the proceedings and will not operate against a person not party to the instruments i.e., Respondent in the present case.

Also From Judgment: Co-Owner Whose Share In Joint Property Remained Undetermined Cannot Transfer Entire Property : Supreme Court

Case Title: SK. GOLAM LALCHAND VERSUS NANDU LAL SHAW @ NAND LAL KESHRI @ NANDU LAL BAYES & ORS., CIVIL APPEAL NO.4177 OF 2024

Citation: 2024 LiveLaw (SC) 705

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