Article 59: (Arts. 91 and 114 of the Act of 1908):
The period of limitation for a suit to cancel or set aside an instrument or decree or for the rescission of a contract is three years and the time of limitation starts to run when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first become known to him.
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ADVERTISEMENTS:
Article 59 applies to all suits— (i) to cancel or set aside all instruments; (ii) to cancel or set aside any decree; and (iii) for rescission of contract. Article 59 is the general Article.
Article 59 envisages any suit to cancel or set aside an instrument or document. An instrument is a formal legal writing such as, a record, charter, deed or agreement. An instrument is a deed, writ or other legal proceeding or matter reduced to writing. It includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.
The word ‘document’ denotes any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used, as evidence of that matter. Thus document is an instrument on which is recorded matter which may be used as evidence. The words ‘document’ and ‘instrument’ are sometimes interchangeably used.
An instrument or document may be valid, voidable or void. When the document or instrument is valid no question arises for its cancellation. Similar is the case when the document is void ab initio. When the instrument is void there is nothing to set aside or cancel it when it is a nullity.
ADVERTISEMENTS:
In Niasha v. Kasi Siddek Ali, (AIR 1963 Ass. 4), it has been held that in the matter of deeds which are void, there is nothing to prevent the plaintiff to file a suit for cancellation and if he files such suit it will be governed by Article 59. But in Easwara v. Kukkalia, (AIR 1954 Mad. 83), it has been held that to the suit for declaration that the deed is void the Article 59 will not apply.
In Rankanidhi v. Nand Kishore, (AIR 1990 Ori. 64), it has been held that it is only when the document is not void ab initio the plaintiff has the obligation to sue for setting aside or cancellation and to such suit Article 59 will be attracted.
In Murthia v. Sanmugham, (AIR 1969 SC 552), the Supreme Court has held that to a suit for setting aside or cancellation of the instrument or decree on the ground of fraud, Art. 59 is attracted. In Ningawa v. B.S. Hirekurabar, (AIR 1968 SC 956), the Supreme Court has clearly laid down the principle as to how to adjudge a document void or voidable on the ground of fraud. The fraudulent representation as to the character of the document renders it void whereas such misrepresentation as to its contents renders it voidable.
Article 59 governs suits to cancel or set aside a decree on the ground of fraud or on any other ground. Article 59 applies to a suit to set aside the decree but also to the sale in execution of such decree when sought to be set aside along with the decree.
ADVERTISEMENTS:
Article 59 applies only to the suits as between the parties to the instrument or decree or the party claiming under them. In Sarat v. Hemachandra, (AIR 1961 Cal. 411), it has been held that a party needs an instrument to be cancelled or set aside created either by himself or by his predecessor-in-interest.
All suits for rescission of contract will be governed by the Art. 59 of the Limitation Act, 1963.
In Sajid Ali v. Ibad Ali, [ILR 23 Cal. 1 (PC)], it has been held that a Will is not an instrument for the purpose of the Article 59 and a suit to set aside a Will is not governed by the Article 59.
In Sukaloo v. Puran, (AIR 1961 MP 176), it has been held that when an instrument is challenged for want of registration, Article 59 is attracted.
If a suit is prima facie within the time allowed by the Article 59 then if the defendant takes a plea that the suit is barred by limitation then it is for the defendant to prove it. Where, on the averment of the plaint the suit seems to be barred it is for plaintiff to make out the circumstances to prove that the suit is not barred by limitation.
Under the Article 59, any suit for cancellation or setting aside an instrument or for setting the decree or for rescission of contract has to be filed within three years from the date when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside the contract rescinded first came to the knowledge of the plaintiff, irrespective of the fact on what ground such a suit is filed.
In Budhi Bai v. Nagpur University, (AIR 1946 Nag. 377), it has been held that the time for setting aside a settlement deed executed undue influence starts from the date when the facts entitling the plaintiff to have the instrument cancelled or set aside became known to the plaintiff and not from the date of removal of the undue influence.
In Virendra Singh v. Kashiram, (AIR 2004 P&H 196), it has been held that the limitation for a suit for cancellation of the deed of gift would not arise from the date of the deed of gift but only from the date when the plaintiff discovers the fraud practised by the defendant upon him in procuring such deed of gift and the suit filed within three years thereof; is within time.
In Ranti Devi v. Union of India, [(1995) 1 SCC 198], it has been held that the execution and registration of the sale deed came to the knowledge to the plaintiff on the very date on which the sale deed was executed the suit filed more than three years after that date is barred by limitation.
In Sukalu v. Punau, (AIR 1961 MP 176), it has been held that the limitation for setting aside an instrument for want of consideration commences from the date of the registration of the sale deed.
Under Art. 59, limitation period starts running from the date of knowledge about the fraud. Such knowledge includes derivative or constructive knowledge.