Real -estate / Property and Law on Cancellation of Sale Deeds

Real -estate / Property and Law on Cancellation of Sale Deeds

In a recent judgment issue explained was "whether a civil suit seeking cancellation of a registered Sale Deed is maintainable before a Civil Court, despite the express bar to the jurisdiction of Civil Courts created under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002" ? The issue discussed also touched Order 7 Rule 11. 

Order VII Rule 11 of the Code of Civil Procedure, 1908 exhaustively sets out the circumstances in which a plaint can be rejected. It is trite law that while deciding an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 the Court must confine itself to the averments made in the plaint, which are to be read as a whole, without reference to the defence of the opposite party. The veracity or correctness of the allegations is not to be adjudicated at this preliminary stage. Failure to lodge a First Information Report ("FIR‟) or file a criminal complaint cannot be treated as a ground to reject the plaint. 

The next ground taken in the impugned order pertained to alleged absence of specific particulars of fraud as required under Order VI Rule 4 of the Code of Civil Procedure, 1908. A reading of the plaint, however, reveals that the word “fraud” has been used in conjunction with “coercion” and “misrepresentation,” particularly in paragraph 40. The case, therefore, is not one of fraud simpliciter, but of coercion and undue influence coupled with misrepresentation. The failure to set out elaborate particulars of fraud, even if assumed, does not justify rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908, as such a deficiency can always be cured by amendment or clarified during evidence. Whether or not the MoU binds the parties is a matter to be determined on the basis of evidence during trial.

Sections 91 and 92 of the IEA 1872, relied upon also do not furnish any basis for rejection of the plaint. These provisions merely limit the admissibility of oral evidence to contradict the terms of a written document, but the applicability of such provisions arises only when evidence is led. At the stage of considering an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, the Court is not concerned with questions of admissibility or evidentiary bar; it must only ascertain whether the plaint discloses a cause of action and whether it is barred by law on its face.

It is true that non-payment of the entire sale consideration, by itself, may not ordinarily constitute a ground for cancellation of a sale deed. However, here the case is that the very execution of the sale deed was vitiated by coercion, misrepresentation, and undue influence. Even though execution of a sale deed may ordinarily transfer title to the purchaser, if it is established that the execution was not the result of free consent, the document can be declared void, leading to its cancellation.

It is also settled law that even if the Court is of the opinion that the likelihood of success in the suit is remote or minimal, such a view cannot justify rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908. The plaint can be rejected only if it does not disclose a cause of action or is clearly barred by any law on its face, not merely because the claim may ultimately fail.

The jurisdiction to cancel or set aside a registered conveyance is not vested in the DRT, which is a statutory forum of limited jurisdiction. The proper forum for such relief continues to be the civil court.

For more details refer Rajeev Sareen v. Divyanshu Enterprises [2025] GCtR 1713 (Delhi).