Distinguish the following: Rectification of Instrument and Cancellation of Instrument.

CS Executive · Economic, Business and Commercial Laws · PYQS · June 2022
Distinguish the following: Rectification of Instrument and Cancellation of Instrument.

Answer & Explanation:

Rectification of Instrument: Rectification means correction of an error in an instrument in order to give effect to the real intention of the parties. According to Section 26 of the Specific Relief Act, 1963 when, through fraud or a mutual mistake of the parties a contract or other instrument in writing not being the articles of association of a company to which the Companies Act, applies does not express their real intention, then: either party or his representative in interest may institute a suit to have the instrument rectified; or the plaintiff may, in any suit in which any right arising under the instrument is in issue, claim in his pleading that the instrument be rectified; or a defendant in any such suit as is referred to in clause (b), may, in addition to any other defence open to him, ask for rectification of the instrument. If, in any suit in which a contract or other instrument is sought to be rectified, the court finds that the instrument through fraud or mistake, does not express the real intention of the parties, the court may in its discretion direct rectification of the instrument so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value. A contract in writing may first be rectified, and then if the party claiming rectification has so prayed in his pleading and the court thinks fit, may be specifically enforced. Rectification of an instrument shall not be granted to any party under this section unless it has been specifically claimed. Cancellation of Instrument: Section 31(1) of the Specific Relief Act, 1963 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. As per Section 31(2), if the instrument has been registered under the Indian Registration Act, 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. According to Section 32 of the Act, where an instrument is evidence of different rights or different obligations, the court may, in a proper case, cancel it in part and allow it to stand for the residue.

Topics: Commercial Laws

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