• Cancellation of property deal made without any formal documents

I entered into a purchase agreement with seller of a property. As the seller was located in another city, the broker prepared a letter with price and timeline to be followed and emailed to the seller. The seller signed it and sent back a scanned copy on email. I signed this letter. It mentioned that the payment had to be done in 60 days. I paid a token amount of Rs. 5 Lakhs through cheque.
At this time, the sale deed copy was not shown to me, saying that it will be shown later.
The seller didn't send the sale deed copy and on multiple follow ups on email, he initially said that it might be in his India house, then said might be in his USA house, then said might be destroyed in a house fire and will get a duplicate sale deed. 
This scared me as the original sale deed could have been with a lender like ICICI bank who do not go for registered mortgages and keep the original as surety . I decided not to go ahead and asked him to return the token and cancel the deal on day #45
Time was running out and the house #2 which i had shortlisted could have been sold off. Hence I bought the house #2 and again asked the seller to refund the token to me.
He finally found out on day #50 that the sale deed of this property which was 10 years old, was lying with the builder and provided me with the photocopy.
At this point, he argued that I had breached the contract so he will not pay back the token, whereas my contention was that he had not provided the sale deed copy to me within 7 days, which is the general norm. He argues that it was not mentioned in the plain paper letter we signed. My counter argument is that the plain paper letter didn't mention that the token can be forfeited too.
What is my legal strength in this case ?
We never had a Agreement to Sale nor any document on stamp paper nor any notarised document. It was just a letter with the details of the property, price to be paid, and that payment had to be done in 60 days, which was signed by me on the scanned copy sent by the seller.
Asked 7 years ago in Property Law
Religion: Hindu

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3 Answers

1) seller cannot forfeit the advance money of Rs 5 lakhs as there is no forfeiture clause in contract

2) issue legal notice to seller to refund the advance money paid of Rs 5 lakhs

3) if he fails to refund file suit to recover your advance money with interest

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

1. The said deal has been handled very non professionally.

2. The title of the property should have been searched and all the mother deeds checked.

3. At least production of all the mother deeds within a specified time should have been mentioned in the said agreement.

4. It is not a fact that the seller it is a general norm hat the seller shall have to produce the mother deed with in 7 days.

5. However, you can take the ground that he has not provided you the mother deed despite repeated requests to ascertain that the said property has not been kept under mortgage.

6. You can certainly claim back the advance amount paid by you since there is no forfeiture clause kept in the said agreement.

7. You can file a money suit claiming back your said money with interest, damage and cost.

Krishna Kishore Ganguly
Advocate, Kolkata
27245 Answers
726 Consultations

5.0 on 5.0

Since the agreement was made in the plain paper, it is not enforceable in law.

Unregistered sale agreement is a mere receipt for the amount received by the vendor.

You can very well ask him to return the amount with interest for the reason that he did not keep up his promise by issuing him a legal demand notice.

If he fail to comply with the demand made, you may drag him to the court with a money recovery suit.

You can file a petition for attachment before judgment and the same property also can be shown as the property for the purpose of security.

T Kalaiselvan
Advocate, Vellore
85409 Answers
2237 Consultations

5.0 on 5.0

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