REG 092 Cancellation of Registration and Cancellation of Instrument

Cancelling the Registration and Cancelling the Instrument: Why Only a Court Can Do the Second and Nobody Can Do the First

These are not two ways of achieving the same result. Cancelling the instrument is a judicial act: a civil court, on a suit under Section 31 of the Specific Relief Act, 1963, adjudges a written instrument void or voidable and orders it delivered up and cancelled. Cancelling the registration is not an act known to the Registration Act at all. The Act contains no provision by which a completed registration can be undone, and the registering officer becomes functus officio the moment registration is complete. What Section 31(2) requires of him after a decree is that he note the fact of cancellation on the copy in his books, and nothing more.

The judicial act, the ministerial act that follows it, and the deed that is a nullity

1. Cancelling the Instrument

• The plaintiff must be a person against whom the instrument is void or voidable. A stranger with no interest cannot maintain the suit.
• He must have a reasonable apprehension of serious injury if the instrument is left outstanding. That is what makes the relief necessary.
• The relief is discretionary. The section says the court "may, in its discretion, so adjudge it".
• Section 32 allows partial cancellation, where the instrument is in several parts or evidences different rights or obligations.
• Section 33 allows the court to require restoration of benefit. A party who has received a benefit under the instrument may be required to restore it.
• Limitation is three years under Article 59 of the Limitation Act, 1963, where the instrument is voidable, running from when the facts entitling the plaintiff to have it cancelled became known to him.

2. What the Registering Officer Does After the Decree

• The court sends him a copy of the decree. That is the court's duty under Section 31(2), not the party's.
• He notes the fact of cancellation on the copy of the instrument contained in his books.
• He does not remove the entry. The register is a record, and an entry once made stays in it.
• He does not adjudicate. The note records what the court has decided, and the officer has no power to examine whether the court was right.
• The note is what a later searcher finds. A search of Book 1 will show both the original entry and the note beside it, which is exactly the publicity the Act exists to provide.

3. Why There Is No Power to Cancel a Registration

4. The Unilateral Deed of Cancellation

5. The Two Compared

6. The Registration of a Cancellation Deed by Consent

• A cancellation deed executed by all parties stands on a different footing from the unilateral deed condemned in Thota Ganga Laxmi, because it is a consensual transaction and not an attempt to undo the other party's title behind his back.
• It operates as a fresh transaction, not as an erasure. Where title has already passed by a registered conveyance, a consensual cancellation ordinarily works as a reconveyance back to the original transferor.
• It is chargeable accordingly. Because the substance is a retransfer, the stamp authorities and the courts look at what the instrument achieves and not at what it is called, and the duty follows the substance.
• It does not remove the original entry. Both instruments appear on the register, and the chain shows the transfer and the retransfer.
• Where consent is absent, only the court can act, on a suit under Section 31.
• Several States have framed rules to the same effect, requiring the concurrence of all parties or an order of a competent court before a cancellation deed is accepted, and those rules were upheld in Thota Ganga Laxmi.

7. The Common Errors

• Supposing that a registering officer can cancel a registration. He cannot; Satya Pal Anand is direct.
• Supposing that a deed of cancellation executed by the vendor alone undoes a sale. Thota Ganga Laxmi holds that its registration is void.
• Supposing that a decree under Section 31 removes the entry from the register. It does not; the officer notes the cancellation on the copy in his books.
• Supposing that the party must carry the decree to the registry. Section 31(2) puts that duty on the court.
• Supposing that a void instrument must be cancelled before it can be ignored. It need not, though a suit may be brought to remove the cloud on title.
• Supposing that the relief under Section 31 is available as of right. It is discretionary in terms.
• Supposing that a consensual cancellation is a mere erasure. Where title has passed, it works as a reconveyance and is treated as such.

8. The Position Stated Shortly

1. Cancelling the instrument is a judicial act under Section 31 of the Specific Relief Act, 1963; cancelling a registration is not an act known to the Registration Act at all.

2. A person against whom a written instrument is void or voidable, with reasonable apprehension of serious injury, may sue to have it adjudged void or voidable.

3. The relief is discretionary, and Sections 32 and 33 allow partial cancellation and restoration of benefit.

4. Where the instrument is registered, the court must send a copy of its decree to the registering officer, who notes the fact of cancellation on the copy in his books.

5. The entry itself is not removed. The register is a record, and what changes is the note beside the entry.

6. Satya Pal Anand holds that the registering officer is functus officio once registration is complete, and has no power to cancel or recall it.

7. Thota Ganga Laxmi holds that a unilateral deed of cancellation of a registered sale deed cannot be registered, and that its registration is void.

8. A cancellation by consent, where title has already passed, operates as a reconveyance and is treated as such for duty.

9. Limitation for a suit to cancel a voidable instrument is three years under Article 59 of the Limitation Act, 1963.

10. A void instrument need not be cancelled to be ignored, though a suit may be brought to remove the cloud it casts on the title.