Supreme Court Judgement On Conveyance Deed Cancelled

Understanding the legal nuances of property transfer in India is essential for anyone dealing in real estate. One critical legal instrument in this process is the conveyance deed—a document that legally transfers ownership from one party to another. But what happens when such a deed is challenged or cancelled? In a landmark Supreme Court Judgement On Conveyance Deed Cancelled, the apex court recently clarified several key legal positions, especially around arbitration, property rights, and allegations of fraud. This article explores the significance of conveyance deeds, the different types, the legal framework governing them, and a deep dive into the Supreme Court’s ruling in Sushma Shivkumar Daga vs Madhurkumar Ramkrishnaji Bajaj, which sets a crucial precedent for future property and arbitration disputes.

What Is a Conveyance Deed?

In India, the transfer mechanism of a property requires the preparation of a legal document called the conveyance deed. A conveyance deed is the legal document that is executed transferring all rights, title, and interest in a property from one person to another person. It is a legal document that stands as a testimonial to the transaction of transfer of a property. The most common is a sale deed, but there are conveyance deeds in the name of various other deeds such as a gift deed, exchange deed, lease deed, etc.

For anyone wanting to trade in property or invest in property in India, it is essential to have a proper understanding of the meaning, purpose, applicability of stamp duty, registration process, and different types of conveyance deeds. The article gives an overview of some important conventions on conveyance deeds, sale deed meaning, and why they matter for real estate transfers per Indian laws.

Conveyance Deed Types

Various types of deeds may be used in the conveyance of property, depending on the real estate activity concerned:

• Sale Deed- The most common type of deed executed at the time of sale and purchase of property. It will confirm that payment has been made and then ownership will be transferred from one person to another.
• Gift Deed- Used to transfer property legally as a gift without any monetary consideration. Payment of stamp duty is required.
• Exchange Deed-Executed when two parties mutually agree to interchange their respective properties.
• Settlement Deed- Transfers property as part of a settlement, for instance, in the case of partitioning ancestral property.
• Lease Deed- This is a type of deed through which leasehold rights of a property are granted for a fixed period. Ownership itself remains with the lessor.
• Will Deed- This deed transfers the ownership of the property to his or her legal heirs in accordance with the provisions that he or she has made in the will. A will will take effect only when its maker is dead.

Also Read : Difference Between Conveyance Deed And Sale Deed

Supreme Court Judgement On Cancellation Of Conveyance Deed

A recent judgement on the cancellation of the conveyance deed is ‘Sushma Shivkumar Daga vs Madhurkumar Ramkrishnaji Bajaj.’ This article further presents a detailed analysis of this judgment.

Case Background

In 2021, the appellants filed a civil suit seeking to declare the Conveyance Deed dated 2019 as null and void and to validate the termination of certain Development Agreements dated 2007-2008. The respondents invoked Section 8 of the Arbitration & Conciliation Act, 1996, by relying on the arbitration clauses present in two Tripartite Agreements from the years 2007-2008. The trial Court allowed the application of the respondents and referred the matter for arbitration. The decision was confirmed by the Bombay High Court on dismissal of the writ petition by the appellants. The appellants thus moved to the Supreme Court in appeal.

Key Issues

The additional concerns that the Supreme Court examined were almost to the extent substantively normal with regard to the preceding scope of the case developed in the appeal:

• Were the reference challenges to Arbitration valid and logical?
• Whether the reference being challenged in Arbitration was valid based on No Arbitration Clause in Conveyance Deed?
• Whether a dispute regarding the cancellation of a deed is inherently non-arbitrable?

Factual Matrix and Agreements

On the date of establishment of M/s Emerald Acres Private Limited (EAPL), Shivkumar Daga (SD) and his wife (Appellant 1) were the promoters of the company. Between SD, Madhurkumar Ramakrishnaji Bajaj (MB), and EAPL, there were two Tripartite Agreements executed during the period 2007-2008, with a broad arbitration clause therein. After the demise of SD, his assets devolved to his wife and son, who are the appellants herein. The appellants challenged the Conveyance Deed of 2019 and Development Agreements on the grounds that they emanated from the Tripartite Agreements.

Analysis & Reasoning By The Supreme Court

The Supreme Court presented the following analysis:

Arbitration Clause Validity

The Court further stated that the Development Agreements and the Conveyance Deed arose from the first two of three Tripartite Agreements and were also assuredly guided by valid arbitration clauses within those agreements. In sufficiently broad terms, the arbitration clauses involved, "any disputes or differences...in relation to this Agreement or...arising from this Agreement," covered the dispute at hand.

Judicial Intervention in Arbitration

The fundamental principle of minimal judicial intervention in arbitration is reiterated by the Court through Section 5 and Section 8 of the Arbitration Act. The amended Section 8 makes it clear that courts ought to refer the parties to arbitration unless there prima facie does not exist a valid arbitration agreement.246th Law Commission's recommendation as touched on by the Court speaks to the legislative intent lying behind the 2015 amendments.

Arbitrability of Disputes Related to Immovable Property

The appellants contended that their suit for cancellation of a deed in respect of immovable property amounted to an "action in rem," hence it could not be referred to arbitration; this contention was rejected. The court relied on the landmark judgment of Deccan Paper Mills v. Regency Mahavir Properties, wherein it was held that such disputes are "actions in personam" and they can be arbitrable. The court, however, rejected the decision of Aliens Developers (P) Ltd. v. Janardhan Reddy.

Plea of Fraud

The appellants were unable to substantiate their allegations of fraud, so that their plea was dismissed. The Court cited the case of "Rashid Raza v. Sadaf Akhtar," which established that a plea of fraud must be serious and have implications in the public domain to oust the arbitration jurisdiction.

Competence of Arbitral Tribunal

The Court has once again underscored the principle with respect to "kompetenz-kompetenz" in Section 16 of the Arbitration Act and which was reaffirmed in the case of "Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd.". By virtue of the doctrine, the Arbitral Tribunal is empowered to determine its jurisdiction, including the existence and validity of the arbitration agreement. The court further refers to "Weatherford Oil Tool Middle East Ltd. v. Baker Hughes Singapore PTE".

Non Arbitrable disputes

The court further clarifies the rulings of Booz Allen and Hamilton, Inc. v. SBI Home Finance Limited and Others and Vidya Drolia v. Durga Trading Corporation. This has been explicated further by the four-fold test on arbitrability, clarifying that certainly the current matter does not fall within numerical categories. It further clarifies that consumer disputes, by their very nature, are not arbitrable.

Decision and Implications

The Supreme Court dismissed the appellant's appeal, confirming the decisions from the Trial Court and the High Court. The judgment reinstates the rule of minimal judicial interference in arbitration and furthers the enforceability of arbitration agreements. In this ruling, it clarified that disputes pertaining to conveyance deeds and development agreements are, as a general rule, arbitrable. The decision sets a precedent for dealing with allegations of fraud in matters of arbitration, which will require serious proof.

Significance

The ruling narrows the technical arguments between two competing parties willing to avoid any arbitration agreement. Thus, it clarifies and makes sure arbitration law towards an effective and utmost navigable course for such arbitration. This additionally enforces the independence of Arbitral Tribunals to determine their own jurisdiction.

Also Read : Legal Procedure For Cancellation Of A Conveyance Deed

Conclusion

The recent Supreme Court Judgement On Conveyance Deed Cancelled has reaffirmed the legal standing of arbitration clauses in property-related agreements and clarified the arbitrability of disputes involving conveyance deeds. By upholding the principles of minimal judicial intervention and emphasizing the competence of arbitral tribunals, the Supreme Court has set a strong precedent for future cases involving similar property disputes. For anyone involved in real estate transactions in India—whether buyers, developers, or legal professionals—this ruling highlights the importance of clearly drafted agreements and understanding the legal remedies available. It also underscores that cancellation of a conveyance deed, even when involving immovable property, can fall under the purview of arbitration, provided valid agreements exist. Staying updated on such legal developments is crucial for navigating the Indian property law landscape effectively.

FAQs

A few FAQs based on the Supreme Court Judgement On Conveyance Deed Cancelled are:

Q1: Is a conveyance deed legally required in India?

Yes, a conveyance deed is legally required to transfer property ownership in India. It is essential for establishing legal ownership and completing property transactions.

Q2: What was the Supreme Court's ruling in "Sushma Shivkumar Daga vs. Madhurkumar Ramkrishnaji Bajaj"?

The Supreme Court ruled that disputes related to conveyance deeds and development agreements are generally arbitrable, even if the conveyance deed itself doesn't contain an arbitration clause, provided the underlying agreements do. It also reinforced the principle of minimal judicial intervention in arbitration matters.

Q3: Can disputes regarding the cancellation of a conveyance deed be referred to arbitration?

Yes, according to the Supreme Court ruling in "Sushma Shivkumar Daga vs. Madhurkumar Ramkrishnaji Bajaj," disputes regarding the cancellation of a conveyance deed are considered "actions in personam" and can be referred to arbitration, if a valid arbitration agreement exists in the underlying contracts.

Q4: What is the significance of the "kompetenz-kompetenz" principle in arbitration?

The "kompetenz-kompetenz" principle, as highlighted by the Supreme Court, empowers the Arbitral Tribunal to rule on its own jurisdiction, including the existence and validity of the arbitration agreement. This minimizes judicial interference and streamlines the arbitration process.