2014 (3) TMI 1206 - HC - Indian Laws

Court upholds cancellation of sale deed due to fraud, emphasizing prevention of void transactions.

The Court dismissed the writ petition, upholding the cancellation of the sale deed based on fraud. The petitioner was given the option to pursue ... Cancellation of sale deed - Government order has been introduced on 13th August, 2013 an sale deed in question is prior to it - whether the sale deed can be cancelled by taking reference of the Government order dated 13.8.2013 - HELD THAT:- The question of retrospectivity and prospectivity does not arise in such cases if it has been obtained by fraud as fraud unravels everything. In the present case, rightful order has been passed by the Registering Authority in the facts of the case, after enquiry. Petitioner's much insistence is on the fact that he is bona fide purchaser for value of the property and accordingly his interest be protected. This Court is not at all going on the issue, as to whether he is bona fide purchaser for value or not, the crucial issue is that the incumbents from whom he has purchased the property, they had no right to sell the property i.e. they had no legal authority to execute sale deed. Such transactions by imposters cannot be approved of. Once incumbents who have proceeded to execute the sale deed have no authority to execute sale deed then rightful order has been passed and accordingly in the facts of the case, there is no occasion for this Court to take a different or contrary view as any interference would subscribe void transactions - writ petition is dismissed. Issues Involved:Challenge to cancellation of sale deed based on Government Order dated 13.8.2013 due to fraud and misrepresentation.Detailed Analysis:Issue 1: Challenge to cancellation of sale deed based on Government Order dated 13.8.2013The petitioner challenged the cancellation of the sale deed by the Assistant Inspector General of Registration, citing the Government Order dated 13.8.2013. The petitioner contended that as a bona fide purchaser, the sale deed should not have been cancelled based on the said Government Order. The petitioner argued that the sale deed was executed before the introduction of the Government Order and, therefore, should not be affected by it.Analysis:The Standing Counsel argued that the Government Order merely reiterated the established legal principle that authorities have the inherent power to recall their orders if obtained through fraud or misrepresentation. The Court approved of the Government Order as a means to address situations where fraud has been committed. The Court emphasized that fraud unravels everything, and in cases of fraud, retrospective or prospective application of laws does not apply. The Registering Authority, after due enquiry, found that the sale deed in question was obtained through fraud, justifying its cancellation.Issue 2: Protection of interests of a bona fide purchaserThe petitioner insisted on protection as a bona fide purchaser for value of the property, arguing that his interests should be safeguarded. However, the Court did not delve into whether the petitioner was a bona fide purchaser. The crucial issue highlighted was that the incumbents from whom the property was purchased had no legal authority to execute the sale deed, rendering the transaction invalid.Analysis:The Court referenced a Full Bench decision of the Andhra Pradesh High Court, emphasizing that authorities have the power to cancel fraudulent transactions, even if registered. The Court stressed that in cases where a person sells property belonging to another, it constitutes fraud on the statute. The Court upheld the principle that a person with a valid title must have the liberty to enjoy their property, and unauthorized transactions should not be allowed to harm public interest or policy.Conclusion:The Court dismissed the writ petition, upholding the cancellation of the sale deed based on fraud. The petitioner was given the option to pursue appropriate remedies in the pending suit. The judgment reinforced the importance of preventing void transactions resulting from fraud and unauthorized dealings in property, emphasizing the authority of registering officers to cancel such transactions in the interest of justice and public welfare.