Introduction:

In a recent judgment, the Supreme Court addressed critical aspects of property transfer and the validity of sale deeds involving joint family property. The case, *SK Golam Lalchand v. Nandu Lal Shaw & Ors.*Civil Appeal No. 4177 of 2024, delved into whether a third party, who was not part of the original sale deed, needs to seek its cancellation under Section 31 of the Specific Relief Act, 1963 (SRA). The Court’s ruling clarifies the obligations of third parties in such legal contexts.

Background:

The dispute centered around a sale deed executed by one co-owner of a joint family property, transferring the entire property to a subsequent purchaser, the appellant, without the authorization of the other co-owners. The respondent challenged this transfer by filing a title suit, arguing that the sale deed was void because the transferring co-owner could only sell his share of the property, not the entire property. The core issue was whether the respondent, who was not a party to the sale deed, was required to seek its cancellation under Section 31 of the SRA.

Petitioner’s Argument:

The appellant contended that since the respondent did not specifically seek the cancellation of the sale deed, the sale deed could not be annulled on its own. They argued that Section 31 of the SRA mandates that a party must apply for a declaration that the sale deed is void, and such an application was not made by the respondent.

Respondent’s Argument:

The respondent, on the other hand, argued that the sale deed executed by one co-owner was void ab initio because the co-owner did not have the authority to transfer the entire property. The respondent asserted that even though they had not explicitly sought cancellation of the sale deed, the deed’s void nature was evident, and a formal application for cancellation was not mandatory for challenging the validity of the deed.

Court’s Judgment:

The Supreme Court, comprising Justices Sudhanshu Dhulia and Pankaj Mithal, ruled in favor of the respondent. The Court observed that Section 31 of the SRA does not make it mandatory for a third party, who was not a party to the sale deed, to seek its cancellation. The Court emphasized that while the respondent had not explicitly sought the cancellation, the argument to dismiss the case based on this omission was misplaced.

The Court referred to its earlier ruling in *M/s Asian Avenues Pvt Ltd vs. Sri Syed Shoukat Hussain* (2023 LiveLaw (SC) 369), which clarified that an action under Section 31 of the SRA for declaring an instrument void is not an action in rem. This means the cancellation affects only the parties to the proceedings and does not automatically bind a third party. The Court highlighted that the sale deed, executed by a co-owner without the consent of the other co-owners, could not confer full rights to the subsequent purchaser.

Justice Dhulia and Justice Mithal emphasized that the respondent’s claim was valid because the co-owner’s authority was limited to their share of the property, and transferring the entire property was legally impermissible. The Court rejected the appellant’s argument and upheld the respondent’s right to challenge the sale deed’s validity without needing to file a separate application for it’s cancellation.