• Cancel registered sale deed and registered construction agreement

Respected Madam/Sir,

I want to cancel the registered sale deed(UDS) and the registered construction agreement, which I made at chennai three months back, for two apartments.

The reason is, the builder orally agreed/promised with a very good plan. However, now it seems the plan is not good and we do not like the two apartments totally. However, the builder has started the construction and it is in full swing. Almost 60% of the works have been done. 

I have made 60% of the cost and rest 40% have to be paid in 2 months. But since I really do not like plan and construction I want to cancel this. 

Hence it would be really helpful for me if anyone could guide me to solve my issue. 

Thanks,
Asked 4 years ago in Property Law
Religion: Hindu

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13 Answers

Registered contract agreement between you and the Builder can only be cancelled in case of any breach of terms and conditions of the agreement by the Builder.

If the Builder has committed any grave deficiency in service or any fraud has been committed during the tenure of agreement, then the sale deed as well as lease agreement can be cancelled. Non compliance of terms should be the major point, which you should raise in court.

Siddharth Jain
Advocate, New Delhi
5928 Answers
101 Consultations

5.0 on 5.0

See if the construction has started and there is no default on part of the builder and the cancellation is at your instance the builder shall forfeit the advance amount on cancellation that is 10 percent for each apartment. You can put up a cancellation request with the builder the builder has to refund rest of amount in 45 days.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1) you cannot cancel registered sale deed unilaterally

2) you can cancel it by mutual consent

3) in alternative you need court orders to set aside regd sale deed

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

Hi,

You need to write to builder all the issues and ask for correction as per agreement. If he fails in compliance, you may cancel agreement and sale deed as per law.

You may also ask for specific performance of contract.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Dear Client,

Since construction is not complete and possession-not delivered nor full payment, How come sale deed executed ?

Project must be registered with RERA.

WELL,

The promoter at the time of the booking and issue of allotment letter shall be responsible to make available to the allottee, the following information, namely:—

(a) sanctioned plans, layout plans, along with specifications, approved by the competent authority, by display at the site or such other place as may be specified by the regulations made by the Authority;

If such is not done than you can withdraw with complete refund otherwise,

The allottee shall have the right to cancel/withdraw his allotment in the project as provided in the Act, provided that where the allottee proposes to cancel/withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. The balance amount of money paid by the allottee shall be returned by the promoter to the allottee within 45 days of such cancellation,” says the Real Estate (Regulation & Development) Act, 2016.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

You will have to file a suit for cancellation of the deed.

However, it will not be possible now.

You may seek compensation for violating the terms of the construction agreement.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

Hello

The construction and the works must have been started under s contract and hence there must be clause in it in case any of the parties do not want to go ahead with the plan. Proceed accordingly. Also it must be containing an arbitration clause and therefore an independent arbitrator must be appointed by both the Parties.

Regards

Rahul Mishra
Advocate, Lucknow
13757 Answers
65 Consultations

5.0 on 5.0

A property sale deed cancellation can be done in two ways :

i) by executing a registered cancellation deed on which registration and stamp is payable, (FYI you dont get any refund of stamp duty)

ii) through court if the sale deed itself is flawed due to lack of free consent etc.

2)what are the terms and conditions of the construction agreement.

Mohammed Mujeeb
Advocate, Hyderabad
19031 Answers
32 Consultations

4.5 on 5.0

If it is a registered sale deed it can be canceled only after execution of cancelation deed by you and the builder. And it is just an agreement then you can send them legal notice and cancel the agreement.

if there is violation of terms and conditions by the builder in respect of construction agreement you can seek for cancelation of agreement and since some amount of work is completed that amount you cannot recover but rest amount for which work is not completed you can recover by filing civil suit for recovery of money

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

1. i assume the project in which you have invested is registered with the RERA Tribunal

2. if you wish to withdraw from the project for no fault of the builder then you can. However you need to check the consequence stated in your registered agreement when allottee wishes to cancel his booking and withdraw from the project

3. even if you approach RERA Tribunal for seeking relief of refund with other amounts, the Tribunal will ask you to explain what particular misrepresentation was made to you by the builder when you booked the apartment in his project

4. you will need all cogent materials and proofs in support of your claims

5. you will have to file a complaint with RERA u/s 12 of RERA for misrepresentation by builder, subject to proof as above

6. if you have such proofs then well and good. If not then the tribunal is not very hesitant to reject such complaints for want of positive proof

7. you will have to show to the Tribunal that the builder is making constriction in violation of the sanctioned plans or that he made such representations to you which led you to alter your position to your detriment

8. let me explain from another angle - suppose you were the seller and if your buyer comes and tell you - look, though i had agreed to buy apartments in your project, i am now not keen because i do not like the way the building is coming up - so please return my money

9. the tribunal will definitely NOT allow above claim unless it is supported by positive proof of misrepresentation - this is plain - because if every second purchaser goes to the builder and asks him to return his money just because he does not like the way in which the building is coming up, then the builder will never be able to complete the project within promised date. This will create a situation for the builder leading him to face acute shortage of funds. Law is equitable and does not allow such claims unless ofcourse there is a very strong ground substantiating such claim

10. so weigh the pros and cons and take a decision accordingly

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

The Sale deed has a forfieture clause with penalty of 2% forfieture amount if the deal is cancelled. Sale deed also mentions if the Buyer fails to pay the balance consideration amount by the stipulated date then the deal will be cancelled and the buyer will have to come to registrar to cancel the deal.

Cancellation of a sale deed or a written instrument is a very important and crucial aspect of the civil laws in India. Such situations often arise due to misrepresentation of facts, suppression of facts and other related factors. The cancellation of any sale deed or any other document related to the property requires specific grounds about which a discussion is being given here by our experts. The legal provisions related to the cancellation of the deed are being described in brief for giving a broad idea about the same.

Section 31 to 33 of the Specific Relief Act, 1963 provides for the cancellation of instruments which reads as under:

When cancellation may be ordered:

(1) Any person against whom a written instrument is voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, atits discretion, so adjudge it and order it to be delivered up and cancelled.

(2) If the instrument has been registered under the Indian Registration Act, 1908 the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.

What instruments may be partially cancelled: Where an instrument is evidence of different rights or different obligations, the court may, I a proper case, cancel it is part and allow it to stand for the residue.

Power to require benefit to be restored or compensation to be made when instrument is cancelled or is successfully resisted as being void or voidable(1) On adjudging the cancellation of an instrument, the court may require the party to whom such relief is granted, to restore, so far as may be, any benefit which he may have received from the other party and to made any compensation to him which justice may require.

(2) Where a defendant successfully resists any suit on the ground–

(a) that the instrument sought to be enforced against him in the suit is voidable, the court may, if the defendant has received any benefit under the instrument from the other party, require him to restore, so far as may be, such benefit to that party or to make compensation for it;

(b) that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under Section 11 of the Indian Contract Act, 1872, the court may, if the defendant has received any benefit under the agreement from the other part, require him to restore, so far as may be, such benefit to that party, to the extent to which he or his estate has benefited thereby.

When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement it a contract voidable at the option of the party, whose consent was so caused.

A contract induced by undue influence is voidable at the option of the party whose consent was so caused.

Reasonable apprehension relief provided under Section 31 of the Specific Relief Act is based upon protective justice and upon the idea of quia time(for fear) and, therefore, where there is no apprehension of injury to the plaintiff, no suit can be instituted. Reasonable apprehension is to be determined with reference to the circumstances of each case which the court has to deal.

Limitations(1) The relief under Section 31 of Specific Relief Act cannot be claimed as a matter of right; the court will act upon the principle of the exercise of sound discretion, having due regard to the conduct of the parties.

(2) Where the parties are in pari delicto and fraud is alleged as the ground for cancellation, the court may refuse the relief to the plaintiff, as he is equally to blame with the defendant.

(3) No relief can be granted under Section 31 of the Specific Relief Act where there is a question of mere inadequacy of consideration.

(4) No suit for the cancellation of a will can be instituted during testators lifetime.

Partial cancellation section 32 of the Specific Relief Act will be applicable only when rights and obligations under an instrument are distinct and separable.

Compensation The plea of compensation must be taken in the first court.

Limitation: Article 59 of the Indian Limitation Act, 1953 prescribes a period of 3 years for a suit for cancellation of an instrument computable from the date when the fact entitling the plaintiff where the instrument cancelled first becomes known to him.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

If you want to cancel the construction agreement then you can communicate your decision to the builder and ask him to stop the construction work immediately.

You may express your willingness to abide by the conditions of the agreement in this regard including settlement of money to the builder as per the agreement.

But cancellation of registered sale deed would depend on ow you convince the seller about this. You can assure him of the delivery of vacant possession of the property.

Legally you cannot cancel the registered sale deed until the seller accepts it and cooperates with you..

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

1. It is not clear registered the sale deed or agreement for sale?

2. It can not be registration of sale deed since you have not yet paid the full consideration to the seller. It might be agreement for sale.

3. If you have registered an agreement for sale and also construction agreement, then certainly a sanctioned construction plan was enclosed or mentioned in the said agreement which you have registered being present at the office of the Registrar without any objection and also have made 60% of the agreed payment to the builder/vendor.

4. At this stage you can not file any case before the Court seeking cancellation of the said registered agreement and also with the back ground that the vendor also will not agree for registering a Cancellation Deed duly signing before the Registrar along with you.

5. In the instant case, the vendor/seller will not handover the physical possession of the said constructed flats and register the concerned sale deeds in your favour unless you make the balance payment.

6. It will be prudent on your part to negotiate with the seller/vendor/builder to make necessary changes in the construction to suit your liking, after getting the deviation plan sanctioned by the local Municipal Corporation.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

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