Non-executants with derivative title may seek cancellation of instruments under Section 31, Specific Relief Act.

The dispute concerns a 100 sq. yard property in Subhash Nagar, Delhi.

In 1988, the original co-owners, Smt. Bassi Devi and her son Shri Som Nath (Respondent No. 2), executed an unregistered Agreement to Sell, a registered GPA, and two registered Wills in favor of Smt. Urmil Gujral (Respondent No. 1) and her husband for a consideration of Rs. 48,000

Smt. Bassi Devi died in 1995

In 2006, Som Nath obtained a substitution letter from the L&DO in his name and subsequently executed a registered Agreement to Sell, GPA, and Will in favor of the Appellant (Rajeev Miglani) for Rs. 4.9 Lacs

Upon learning of this, Respondent No. 1 filed a suit under Section 31 of the Specific Relief Act seeking a declaration that the 2006 Agreement was null and void

The Trial Court decreed the suit in favor of Respondent No. 1

The Appellant challenged the decree, arguing inter alia that a non-executant cannot sue for cancellation under Section 31 and that he was a bona fide purchaser

1. Whether a suit for cancellation of an instrument under Section 31 of the Specific Relief Act is maintainable at the instance of a person who is not an executant of said instrument

2. Whether the documents executed in 1988 in favor of Respondent No. 1 conferred a superior right/interest over the property compared to the 2006 documents executed in favor of the Appellant

3. Whether the Appellant qualifies as a bona fide purchaser for value without notice

4. Whether Respondent No. 1 successfully proved possession of the suit property

The Court applied Section 31 of the Specific Relief Act, 1963, which allows "any person" against whom a written instrument is void or voidable to seek its cancellation

It relied on Md. Noorul Hoda v. Bibi Raifunnisa, holding that "any person" includes those seeking derivative title from a seller

The Court applied Section 48 of the Transfer of Property Act (TPA), 1882, regarding the priority of rights created by successive transfers (the maxim qui prior est tempore potior est jure)

It further applied Section 54 of the TPA and the principle from Suraj Lamp and Industries v. State of Haryana, establishing that Agreement to Sell/GPA/Will transactions do not convey title but may protect possession under Section 53-A

the Court applied the doctrine of constructive notice under Section 3 of the TPA, which deems a purchaser to have notice of facts they would have discovered through due diligence or by inquiring into the nature of a tenant's possession

The Court rejected the Appellant’s challenge to maintainability, clarifying that Section 31 SRA is not restricted to executants but extends to any party whose rights are prejudiced by an outstanding instrument, provided the executant is not a complete stranger to the plaintiff's title

On the merits, the Court found that the 1988 Wills and GPA were duly proved via attesting witnesses (PW-5)

Crucially, since Bassi Devi's 1988 Will in favor of Respondent No. 1 became operational upon her death in 1995, Som Nath lost the authority to transfer her 50% share to the Appellant in 2006

Applying Section 48 TPA, the Court held that Respondent No. 1’s prior rights took precedence

Regarding the bona fide purchaser defense, the Court found the Appellant failed the due diligence test under Section 3 TPA; he relied solely on oral assurances from Som Nath and failed to verify L&DO or MCD records, which would have revealed Respondent No. 1 had been paying property taxes and water bills since 1988

The Court also noted that the Appellant failed to inquire into the nature of the tenants' possession, which constitutes constructive notice of the possessor's title

(i) Respondent No. 1 had the locus to sue under Section 31 SRA as she held derivative interest from the original owners [para 48]; (ii) the 1988 documents created a superior right in favor of Respondent No. 1 [para 131]; (iii) the 2006 Agreement was null and void as the seller lacked authority to transfer the entire property after the 1988 Will became operational [para 102]; and (iv) the Appellant was not a bona fide purchaser due to "wilful abstention" from conducting proper inquiries

The 2006 Agreement to Sell was ordered cancelled, and the Registry was directed to notify the concerned Sub-Registrar