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2016 (8) TMI 423 - HC - Benami PropertyCancellation of the auction - whether the application seeking for directions to set aside the auction purchase is time-barred? - Held that:- The applicant was aware and presumably advised as to his rights when the previous application was filed. Yet, no relief that the auction sale was invalid, because the title vested in the applicant, was sought. Having abandoned the relief at the relevant time, the said applicant cannot now seek it. It was held that Section 31 of the Specific Relief Act, 1963 regulates suits pertaining to cancellation of an instrument. It enacts that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled. Ownership of a property is transmitted by a registered sale deed as per Section 54 of the Transfer of Property Act, 1882. Every sale deed has an effect of divesting the transferor of the ownership of the property and the vesting of the ownership in the transferee. A sale deed by which ownership in an immovable property are transferred can be ignored only where it is void ab initio. In all other cases where it is pleaded that sale deed is a voidable document because it ought not to have been executed or that there is a fraudulent transfer of title by means of the particular sale deed or for any reason which makes the transfer voidable, it is necessary that a claim has to be filed for cancellation of such a sale deed within a period of three years from the date a person comes to know of execution and existence of the sale deed which goes against the interest of such person. This is the enacted by Article 59 of the Limitation Act, 1963. The Supreme Court in the judgment reported as Prem Singh vs. Birbal [2006 (5) TMI 517 - SUPREME COURT ] has held that Article 59 applies to voidable transactions and not void transactions. If the said ratio were to be applied to this case, it is evident that the applicant should have sought for recall and setting aside of the auction sale, immediately after his dispossession. In not doing so, within the time (3 years from date of knowledge) and in preferring an application in that regard after 5 years, the applicant sought a relief that was time-barred in law. As regards other grounds, the SFIO report itself clarifies that the applicant/appellant was unable to show that he had sufficient sources of income to purchase the suit lands. Though the company did not list the suit properties in the returns and annual reports filed by it, nevertheless the address of the GPA holder is shown to be that of the company’s office in Bangalore. The Court is also of the opinion that there is merit in the company’s contention that the money for purchasing the property was defrayed by it; the sale deeds of the suit property too were with Shri V.K. Sharma- over 11 years after purchase. If indeed the applicant’s claims were genuine, he would have taken steps to secure back such title deeds.
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