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‘Property once sold can’t be cancelled’
First Published : 16 Feb 2011 03:09:06 AM IST
Last Updated : 16 Feb 2011 09:11:37 AM IST
CHENNAI: Property once sold cannot be cancelled by execution of unilateral cancellation deed, the Madras High Court has ruled.
A Full Bench comprising Chief Justice MY Eqbal, Justices P Jyothimani and TS Sivagnananm gave the ruling on Tuesday while passing orders on a writ appeal from a realtor challenging the orders of a single judge.
The bench said that a deed of cancellation of a sale unilaterally executed by the transferor did not create, assign, limit or extinguish any right, title or interest in the property and was of no effect.
Such a document did not create any encumbrance in the property already transferred.
Hence, such a deed of cancellation could not be accepted for registration.
Once the title to the property was vested in the transferee by the sale of the property, it could not be divested unto the transferor by execution and
registration of a deed of cancellation even with the consent of the parties, the bench added.
The proper course would be to reconvey the property by a deed of conveyance by the transferee in favour of the transferor.
Where a transfer was effected by way of sale with the condition that title would pass on payment of consideration and such intention was clear from the recital in the deed, then such instrument or sale could be cancelled by a deed of cancellation with the consent of both the parties on the ground of non-payment of the consideration.
The reason was that in such a sale deed, admittedly the title remained with the transferor.
In other cases, wherin a complete and absolute sale could be cancelled at the instance of the transferor, only by taking recourse to the civil court by obtaining a degree of cancellation of sale deed on the ground inter alia of fraud or for any other valid reason, the bench added.
