Introduction – Rectification of Instruments

Section 26 of the Specific Relief Act talks about rectification. Let us understand in more clear terms. Rectification’ means correction and here ‘instrument’ means any legal document/contract.

So rectification of instruments means correction or changes in the contract. Under Section 26 of the Specific Relief Act,1963, it is provided that when any contract may be rectified

Section 26 When instrument may be rectified :

1. When there is a fraud or when there is a mutual mistake by both the parties. The persons who are entitled for the rectification of instrument are as follows: –

(a) Either party or his representative can file.

(b) The plaintiff in any suit can file if any rights arising under the rectification of instruments is in issue, claim in his pleading that the instrument be rectified.

(c) Defendants can file in any suit as mentioned in sub-clause (b), may, in addition to any other defense open to him, ask for rectification of the instrument.

2. If in any case in which a contract or instrument is to be rectified under clause (1), the court finds that contract is done by fraud or by mutual mistake of the parties, then the court has discretionary power to rectify it.

3. If parties claim for rectification and the court thinks fit, then it will be specifically enforced.

4. No relief shall be granted until the parties specifically claim for rectification of the instrument.

Provided that, where a party has not claimed any such relief, in this pleading, the Court shall at any stage of the proceedings, allow him to amend the pleading on such terms as may be just for including such claim.

Modes of Rectification of Instrument

Chapter three of the Specific Relief Act, 1963 deals with the rectification of instruments and Chapter five of the Specific Relief Act, 1963 deals with the cancellation of instruments.

Under Sec 26 of The Sp Relf Act, the modes of rectification of instrument are: –

Fraud  : Whenever someone intentionally misrepresents the other regarding the contract, there is a way of rectification of the instrument. (Fraud means, when:

A person suggests a fact which is not true. A person hides a fact, which he already knows about. A person made a promise without any intention of performing it.)

Mutual mistake of parties : The term ’mutual mistake’ means the common mistake on the part of both the parties to contract. A party who wants rectification of the instrument has to establish that there was a prior complete agreement that was reduced to writing in accordance with the common intention of the parties and by reason of mistake the writing did not express the real intention of the parties. A mutual mistake can be established by any parties to a contract. On the basis of unilateral mistake not amounting to fraud, there cannot be rectification.

Real Intention of the Party : The rectification of the instrument always involves the real prior agreement between the parties and the absence of such facts in the agreement of the document as a result of fraud or mutual mistake.

Requirements For Rectification of Instrument Under Section 26

There are certain requirements under Section 26 of the specific relief act.

Existence of fraud or mutual mistake: – for the rectification of instrument, one has the proof regarding the fraud and the mutual mistake. The intention must be truthful which is owing to fraud or common mistake.

 ‘Real intention of the parties’ means it’s not only the party to prove fraud or mutual mistake but also the court has to find out and further the court has to also ascertain the real intention of the parties. 

The burden of proof lies on the person who wants rectification of the instrument.

Parties To Rectification of Instrument : Either party to a contract or their legal representative in interest can take action for the rectification of the instrument under Section 26. Any other person does not have any right to maintain a suit for its rectification.

Effect of rectification of Instrument

A deed can only be rectified by the court so as to confirm the true intention of the executing party at the moment of execution. After the execution the written agreement does not continue to exist with a parol variation (oral), it is to be read as if it had been originally drawn in its rectified form. When the court rectifies a deed of transfer it becomes a conveyance and so no further conveyance is required. The order should be declared that the deed ought to be rectified, point out the way in which it should be rectified and direct an endorsement of the order on the conveyance.

Joseph John Peter Sandy v. Veronica Thomas Rajkumar : Section 26 of the Act has a limited application, and is applicable only where it is pleaded and proved that through fraud or mutual mistake of the parties, the real intention of the parties is not expressed in relation to an instrument. Such rectification is permissible only by the parties to the instrument and by none else.

Cancellation of instrument

Cancellation of instruments means the nullification of a written document which is proof of a transaction between the parties that are part of the transaction.

Cancellation of documents is dealt with under Sections 31, 32 & 33 of the Specific Relief Act, 1963. If there is an instrument, which is void or voidable due to some reason and a party to such an instrument has enough reasons to believe that the said instrument has the potential to act against him and may even cause serious injury to him, then such a person can file a suit with regards to the cancellation of such an Instrument. This is a discretionary relief 

Section 31. When cancellation may be ordered :

1. The person against whom a written instrument is void or voidable and who has reasonable apprehension that such an instrument, if left outstanding, may cause him serious injury may sue to have it adjudged void or voidable and  the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.

2. If the instrument has been registered under the Registration Act, the court shall send a copy of the order to that officer in whose office that instrument has been registered and that officer shall note of the copy of the instrument contained in his books for the cancellation.

Cancellation of Instruments can be done in two ways, as follows:

*Complete cancellation where the court decides to cancel the whole instrument.

*Partial cancellation where only a part of the instrument is cancelled out. (These types of cancellations are mentioned under Section 32 in the Specific Relief Act and have been further explained later in this article.)

Main requirements for cancellation :

The cancellation of an instrument can be done by the Civil Courts on request of a party to a transaction only after considering certain requirements. A suit for cancellation of an instrument filed by a party, shall be entertained only if any of the following requirements are met:

• If the instrument against which the cancellation suit is filed by the party is void.
• If the instrument against which a cancellation suit is filed by the party is voidable.
• If the instrument against which a cancellation suit is filed has the potential to cause injury/harm to the party filing the suit.
• If the party who has filed a suit for cancellation of an instrument is under reasonable apprehension of an injury being caused to him/her due to the performance of the instrument.
• When the instrument whose cancellation is requested by the party has already caused enough damage/injury to the requesting party.
• In the view of all the circumstances of the case, the Court must be satisfied that such cancellation of an instrument is reasonable and would serve justice to the parties coming to the courts for such claims.

If any of the above conditions/requirements are satisfied, then a person may successfully proceed with a suit for the cancellation of an instrument.

Partial cancellation of instruments (Section 32)

The process of partial cancellation of instruments is mentioned under Section 32 in The Specific Relief Act, 1963. 

This section says, that when a particular part of an instrument is up for a question of cancellation in front of the court or when such an instrument has several rights and obligations required under it, the court upon its discretion may cancel only a part of that instrument and let the rest of it stay as it is. Partial cancellation basically means that a part of the instrument which is inconsistent, void or voidable shall be cancelled by the court and such cancellation shall not have any effect upon the performance of the other rights and obligations associated with the instrument.

Sec 32. What instruments may be partially cancelled.—Where an instrument is evidence of different rights or different obligations, the court may, in a proper case, cancel it in part and allow it to stand for the residue

Power to require benefit or compensation (Section 33)

The provisions with regards to the power of the Court, to require restoration of benefits received and fair compensation which are supposed to be made when an instrument is cancelled are provided under Section 33 in the Specific Relief Act, 1963. The primary aim of this section lies in serving justice to the participants of a particular instrument/contract in case such is cancelled by the court.

Sec 33. Power to require benefit to be restored or compensation to be made when instrument is cancelled or is successfully resisted as being void or voidable.—

(1) On adjudging the cancellation of an instrument, the court may require the party to whom such relief is granted, to restore, so far as may be any benefit which he may have received from the other party and to make any compensation to him which justice may require.

(2) Where a defendant successfully resists any suit on the ground—

(a) that the instrument sought to be enforced against him in the suit is voidable, the court may if the defendant has received any benefit under the instrument from the other party, require him to restore, so far as may be, such benefit to that party or to make compensation for it;

(b) that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under section 11 of the Indian Contract Act, 1872 (9 of 1872), the court may, if the defendant has received any benefit under the agreement from the other party, require him to restore, so far as may be, such benefit to that party, to the extent to which he or his estate has benefited thereby.

Jeka Dula v. Bai Jivi (1937) :  This case helps us to understand the importance of Court intervention with regards to the cancellation of an instrument as well as the logic used by the courts for such cancellations. The judgement talks about the importance of justice to be served by the court. Justice to be served by the court is hence linked with the aspect of cancellation of an instrument. 

If an instrument is being used unfairly by any of the parties to a transaction, which is causing harm or is intended to cause harm to the aggrieved party who has approached the court, then such an instrument should be cancelled at the discretion of the court for the purpose of serving justice.

The cancellation of an instrument is a protective measure under the Specific Relief Act, 1963 for the protection of such parties who are at a fear of being harmed by the other party through the performance of an instrument of which they are a part of.

Conclusion : The purpose of cancellation of instruments by the courts in India under the Specific Relief Act of 1963 has always been with an intent to serve justice to the parties who are in a fear of being harmed or are actually being harmed by the other party due to the performance of such instrument/contract. The court serves justice in such situations by way of cancellation of the instrument/contract. Thus it can be said that provisions with regards to the cancellation of instruments under the Specific Relief Act, 1963 is commendable and falls in line with the purpose of Courts to serve justice.