Rectification of Instrument
Rectification of Instrument
Rectification means correction of an error in an instrument in order to give effect to the true intention of the parties. Where a contract has been reduced into writing, in execution of a previous engagement, an the writing, owing to fraud or mutual mistake, fails to express the real intention of the parties, the court will rectify the written instrument in accordance with the true intention.
Requisition of Rectification
The conditions necessary for obtaining rectification are-
1. There must be complete agreement
There must have been a complete agreement reached prior to the written instrument which is sought to be rectified.
There must be two distinct stages:
(i) an agreement, oral or written, which absolutely expresses the real and final intention of the parties and
(ii) an instrument which purports to embody that intention.
2. Terms of contract must be in writing
Both the parties must have intended, and be still intending that the exact terms of the prior contract should be reduced to writing.
3. Apparent Common mistake or fraud
Clear evidence of mistake common to both parties or fraud.
The principle on which the court acts in correcting instruments is that the parties are to be put in the position as that in which they would have there if no error had been made.
Sometimes , the written agreement contains more, or sometimes it simply varies from intent by expressing something different in substance from the trust of that intent. In all such type of cases if the mistake is clearly made out by entirely satisfactory proof equity reforms the written instrument so as to make it conformable to the precise intent of the parties.
Provisions of Act, 1963 regarding rectification of Instruments
Section 26 of the Specific Relief Act, 1963 deals with rectification of Instruments.
This section lays down:
1. When, through fraud or mutual mistake of the parties, a contract or other instrument in writing ( Exception : articles of association of a company , to which Companies Act, 1956, is apply) does not express their real intention, then-
(i) either party or his representative-in-interest may institute a to have the instrument rectified , or
(ii) the plaintiff may, in any suit in which any right arising under the instruments in issue, claim in his pleading that the instrument be rectified, or
(iii) a defendant in any such suit as 1s referred to in clause (b) may, in addition to any other defence open to him, ask for rectification of the instrument.
2. If in any suit in which a contract or other instrument is sought to be rectified under sub-section (1), the court finds that the instrument, through mistake or fraud , does not express the real intention of the parties, the court may, in its discretion, direct rectification so as to express that intention so far as this can be done without prejudice to rights acquired by third person in Bona Fide faith and for value.
3. A contract in writing may first be rectified and then if the party claiming rectification so prayed in his pleading and the court thinks fit. my be specifically enforced.
4. No relief for the rectification of any instrument shall be granted to any party under this section , unless it has been specifically claimed.
Provided that where a party has not claimed any such relief in his pleading the court has to , at any stage of the proceeding allow him to amend the pleading on such terms as may be for including such claim.
This clause (4) of Section 26 prohibits the power of the court to grant relief for rectification of an instrument unless it has been specifically claimed .
Related Case Law
In Commission of Income Tax v. Kamala Tiru Trust (AIR 1996 SC 620), the question before the Apex Court was whether the instrument of trust can be rectified, for in the strict sense, trust is not a contract.
Held : The Apex Court held that in Section 26 words other instruments have been used and these words also include the instrument of trust.