The Void and the Voidable Registered Document: What Registration Does Not Cure, and Who Must Sue Within What Time

Registration validates nothing. The registering officer enquires under Section 34(3) into execution, identity and the right to appear, and no further, so a document that is bad in law goes on to the register exactly as it was. Whether it is void or voidable is therefore decided by the substantive law, and the answer settles three practical questions: whether the document must be set aside at all, who may sue, and within what time. A void instrument is a nullity from the beginning and transfers nothing. A voidable instrument is good until avoided, transfers until set aside, and must be attacked within three years under Article 59.

The two categories, the fraud distinction that separates them, and the consequences of each

1. The Void Instrument

• It is a nullity from the beginning. It never transferred anything, and it confers no rights on anybody at any stage.
• The commonest instances are forgery, a deed executed by a person with no title whatever, a transfer the law forbids, and an agreement by a minor, who under Section 11 of the Indian Contract Act, 1872 is not competent to contract.
• A transfer of property that is not transferable under Section 6 of the Transfer of Property Act, 1882 falls in the same class.
• It need not be set aside. Anyone affected may plead that it is void, whenever the question arises, and the court will so hold.
• But a suit may still be brought, to remove the cloud it casts on the title, and in practice that is what is done where the void deed sits on the register.
• A later purchaser from the holder takes nothing. A nullity passes nothing, and nothing can be built on it.
• Limitation depends on the relief claimed. Where the plaintiff sues for possession on the strength of his title, Article 65 of the Limitation Act, 1963 gives twelve years from when the defendant's possession became adverse.

2. The Voidable Instrument

• It is good until avoided. Until the party entitled to avoid it does so, it operates and passes the interest.
• Only the party whose consent was vitiated may avoid it. A stranger cannot, and the other side certainly cannot.
• The election must be made within three years. Article 59 of the Limitation Act, 1963 gives three years to cancel or set aside an instrument, running from when the facts entitling the plaintiff to have it cancelled first became known to him.
• Section 31 of the Specific Relief Act, 1963 is the machinery, and the relief is discretionary.
• Restoration may be required. Section 33 of that Act allows the court to require a party who has received a benefit to restore it.
• A later purchaser may be protected. Under the proviso to Section 19 of the Contract Act a contract is not voidable against a person who has, in good faith and for consideration, acquired an interest before avoidance, and Section 41 of the Transfer of Property Act, 1882 protects a transferee from an ostensible owner who took reasonable care and acted in good faith.

3. The Fraud Distinction

• The distinction is between what the document is and what it says. A man told he is signing a receipt who in fact signs a sale deed has executed a void document. A man who knows he is signing a sale deed but is deceived about the price has executed a voidable one.
• It decides the article of limitation, and therefore very often decides the case.
• It also decides who may plead it. The void document may be challenged by anyone affected; the voidable one only by the party whose consent was obtained.

4. The Two Compared

5. Why Registration Changes Nothing

6. Practical Consequences

1. Frame the plea correctly. A plaintiff who says the deed is void need not sue to set it aside; one who says it is voidable must, and must do so within three years.

2. Watch Article 59. It is the commonest trap, because the three years run from knowledge of the facts entitling avoidance, not from the date of the deed and not from the date of the suit against the plaintiff.

3. Consider who is suing. A stranger to the transaction cannot avoid a voidable deed, however unjust it may be.

4. Consider the intervening purchaser. Avoidance is of no use against a person who bought in good faith for value before the election was made.

5. Do not rely on the register. Neither the entry nor the Section 60 certificate establishes that the deed was validly executed.

6. Cancellation does not clear the register. A decree under Section 31 of the Specific Relief Act does not remove the entry; the officer notes the cancellation on the copy in his books under Section 31(2).

7. And that a unilateral deed of cancellation achieves nothing. Thota Ganga Laxmi v. Government of Andhra Pradesh, (2010) 15 SCC 207.

7. The Common Errors

• Supposing that a registered document is presumed valid. There is no such presumption.
• Supposing that a void document must be set aside before it can be ignored. It need not, though a suit may be brought to clear the title.
• Supposing that anyone may avoid a voidable document. Only the party whose consent was so obtained may.
• Supposing that Article 59 governs a void document. Prem Singh v. Birbal holds that it does not.
• Supposing that all fraud makes a document void. Fraud as to character does; fraud as to contents makes it voidable.
• Supposing that avoidance defeats a bona fide purchaser for value who bought before the election. It does not.
• Supposing that a minor's deed is voidable. An agreement by a minor is void, Section 11 of the Indian Contract Act, 1872.

8. The Position Stated Shortly

1. Registration validates nothing. The officer's enquiry under Section 34(3) is confined to execution, identity and the right to appear.

2. A void document is a nullity from the beginning and transfers nothing to anybody at any stage.

3. A voidable document is good until avoided, and transfers the interest until it is set aside.

4. Forgery, a deed by a person with no title, a forbidden transfer and a minor's agreement are void.

5. Consent obtained by coercion, undue influence, fraud or misrepresentation makes the document voidable under Sections 19 and 19A of the Indian Contract Act, 1872.

6. Prem Singh v. Birbal draws the line at fraud: misrepresentation as to the character of the document makes it void; as to its contents, voidable.

7. A void document need not be set aside, though a suit may be brought to remove the cloud on title; a voidable one must be, within three years under Article 59 of the Limitation Act, 1963.

8. Only the party whose consent was vitiated may avoid a voidable document; anyone affected may plead that a document is void.

9. A person who acquired an interest in good faith for consideration before avoidance is protected, by the proviso to Section 19 of the Contract Act and Section 41 of the Transfer of Property Act, 1882.

10. Neither the entry on the register nor the certificate under Section 60 establishes that the deed was validly executed.