The seller has not committed any default in the execution of the sale agreement. The only reason why you are backing out of the deal is due to fall in the real estate prices post demonetisation, but this is no legal reason to cancel the agreement. So if you are to cancel the agreement you may do so by serving a lawyer's notice to him. He will be entitled to deduct the losses and expenditure in terms of the cancellation clause.

1) if you cancel the agreement seller can deduct amount for losses and expediture and remaining amount would be returned to you

2) send letter to seller that you are unable to make balance payment and request him to refund the advance paid by you

3) if he refuses issue legal notice to selelr to refund advance paid as per terms of agreement

As per Indian contract act, commonly most of the agreement time is the essence of that contract. The vendor and vendee entered in to a contract, both of them ought to have obeyed the terms of the agreement. If any one of the person not fulfill the contract the other one has every right to withdrawn from that contract. In the case of a sale agreement since the purchaser has failed to comply with terms and conditions of the contract the seller has liberty to cancel the agreement and vise verse.

If the agreement has been registered then both parties must be present for its cancellation also.

If the agreement has not been registered but only notarized or signed on a stamp paper, then you the buyer can send an intimation to the seller that you are no longer interested in proceeding with the purchase (state specific reasons), since no money has been exchanged, the seller will only curse you and also might seek some monetary compensation for causing loss to him (negotiate with him on this amount) He can go to court seeking specific performance of the agreement against you only if

a) agreement is duly registered,

b) if agreement is sufficiently stamped

Send a legal notice to seller and intimate your withdrawal

1. you can cancel the agreement. according to section 73 of the indian contract act when an agreement is cancelled by any party, he is bound to compensate the loss incurred by the other party.

2. if amount of any anticipated loss is already mentioned then other party cannot claim higher than that.

3. in your case it is not mentioned that what would be the loss ? whether it would be whole consideration or earnest money shall be forfeited etc. so you should file a case for cancellation and make offer 25000 as compensation.

Since you as the buyer have the option to cancel the agreement of sale, you can exercise it by issuing a legal notice to the seller telling him that you now wish to cancel the agreement due to demonetization and for some financial difficulties, if the seller does not comply, then you have to file a suit for recovery of the money through a civil court.

1. You can not show demonetisation or drop of market price of the property as the cause for your cancelling the sale agreement.

2. There is a clause for cancellation of the agreement and the amount t be deducted from the advance paid by you has been clearly been mentioned in the said agreement.

3. Cancel the said agreement showing financial inadequacy or drop in income/earning and ask the seller to deduct the amount considered to have lost by him for your cancelling the agreement and return the balance amount to you wihin next 30 days.

4. If he fails or deducts abnormally high amount, file a complaint case before the local District Consumer dispute Redressal Forum alleging deficiency in service and unfair business practice claiming refund of an amount which you deem fit and proper with interest, damage and cost.

As a buyer I cannot go for registration due to reduction in the cost of property. What should I do for the cancellation of the Sale agreement?

The reduction in cost price is not the problem of the vendor.

He cannot agree to the changes in the cost of the property.

He can stick to the conditions of the sale agreement and your demand would be unjustified and unlawful.

You may cancel the agreement by abiding to the agreed conditions only and not as per your own will and wish.

7. The seller is not agreeing for the cancellation of the Sale agreement.

On expiration of the date mentioned in the agreement, it automatically stands cancelled and the vendor has to refund the booking amount after deductions.

8. What are the reasons to be given for cancellation of the agreement?

You may state the reasons you may rely upon but they should be a legally valid reason.

9. I am ready to cancel the agreement by giving Rs. 25,000 to seller.

That depends on the negotiation with the seller.

Thankyou for your answers. The amount of penalty is not mentioned the agreement, in my case how much he may claim for damages, losses and cost if the sale agreement is cancelled.

It would depend on the negotiation and an amicable setlement arrived between you both, there is no specified rule in this regard.

Seller would deduct around 10 per cent of advance amount and refund the balance amount

1. What damage claim he will prefer can not be assumed by you now.

2. If he charges anything abnormally, you have the legal recourse open to you to follw as advised in my earlier post.

If the amount is not mentioned then the seller cannot deduct any penny. You are entitled to full refund of the earnest money.