CANCELLATION OF INSTRUMENTS :
Sub-section (1) of Section 31 provides that any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such 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. Sub-section (2) lays down that if the instrument has been registered under the Indian Registration Act, 1908, the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.
The relief of cancellation of instruments is founded upon the administration of protective justice which is technically known as “Quia time”. It is based upon the administration of protective justice for fear that the instrument may be vexatiously, or injuriously used by the defendant against the plaintiff when the evidence to impeach it may be lost or that it may throw a cloud of suspicion over the title or interest (Jekadula v. Bai Jini, 39 B T R.,1072).
Relief of cancellation under Section 31 would be available when (i) an instrument is void or voidable against the plaintiff; (ii) where the plaintiff may apprehend serious injury if the instrument is left outstanding and (iii) where it is proper under the circumstances of the case to grant the relief.
Illustrations
(a) A, the owner of a ship, by fraudulently representing her to be seaworthy, induces B, an underwriter, to insure her. B may obtain the cancellation of the policy.
(b) A agrees to sell and deliver a ship to B, to be paid for by B’s acceptance of four bills of exchange, for sums amounting to Rs. 30,000, to be drawn by A on B. The bills are drawn and accepted, but the ship is not delivered according to the agreement. A sues B on one of the bills. B may obtain the cancellation of all the bills (Anglo Danubian Co. v. Rogerson (1867) L.R. 4 Eq. 3).
Section 32 lays down that where an instrument is evidence of different rights or different obligations, the Court may, in proper case, cancel it in part and allow it to stand for the residue. The Court is not bound to cancel the whole of the instrument but may, in its discretion, when necessary, cancel it in part and allow rest of it to stand.
A executes a deed of mortgage in favour of B. A gets back the deed from B by fraud and endorses on it a receipt for Rs. 1,200 purporting to be signed by B. B’s signature is forged. B is entitled to have the endorsement cancelled, leaving the deed to stand in other respects (Ram Chandar v. Ganga Saran, (1917) 39 All. 103).
Section 33(1) provides that 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. The provisions of this Section are almost similar to the provisions of Section 30 of this Act. Under both the Sections, the plaintiff must make such compensation to the defendant as the justice may require.