We have signed sale agreement for a re-sale property in Bangalore on 22nd April 2015. This is a registered agreement and we have made it on a stamp paper amounting to 0.1% of sale value Sale agreement has following clause "The sale shall be completed within 45 days from this date of signing this sale agreement." Now problem is we have applied for a loan from SBI and loan disbursement is taking time. My question is a. What will happen if we are not able to sign sale deed and complete the sale after the expiry of 45 days. Do we need to sign another sale agreement and pay 0.1% of sale value again. b. Can the seller call off this deal and keep penalty amount with him based on following clause in sale agreement – “In the event of the PURCHASER not being able to complete the transactions as detailed above in this Sale Agreement for any reasons including personal, professional or others, All sum received by the VENDOR will be returned by deducting Rs.50,000./-(Rupees Fifty thousand only) to the PURCHASERS as damages for breach of this Sale Agreement.” c. What is the option for us in case seller is willing to wait till loan is disbursed. d. Can we sign sale deed and not register it as any how we have a time of 3 months to get sale deed registered. We can get it registered once our loan is sanctioned. Thanks I
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1) parties can mutually decide to extend the period within which sale has to be completed . Not necessary to register fresh agreement
2) seller can call off the deal and forfeit sum of rs 50000 as agreed by you under the penalty clause
3) seller will not execute sale deed with you unless full payment is received
4) registration can be done within period of 4 months of execution of sale deed . If seller is willing sale deed can be executed
1) Generally in such sale agreements where only time is mentioned and the exact dates are not mentioned, it can be treated as time is not essence of contract and thus the agreement can be considered as valid fora period of three years from the date of execution.Therefore the sale agreement may not become invalid hence need not go for an agreement again.
2) Though the clause is operative, the above answer will reply to this too.
3) Nothing, you can request the vendor to extend the time till the loan amount is disbursed which should be expected within a reasonable time and not should be an inordinate delay due to your non compliance of loan requirements.
4) How can you expect the vendor to execute a sale deed without receiving the entire sale consideration amount?, it is unfair on your part to ask such question.
1. If you do not execute the sale deed within 45 days the seller can file a lawsuit for compelling you to make the sale deed and also seek compensation for the delay.
2. The forfeiture clause has a clear mention of the fact that the seller shall be liable to refund the advance amount after deducting 50,000 INR.
3. Ideally speaking the time for completing the sale is not less than 90 days. It was lack of foresight on your part to have agreed to do so in 45 days.
4. It cannot be that you sign the sale deed and not register it. An unregistered sale deed is a waste paper.
1. Within the expiry of 45 days, both the seller and the buyer have to revalidate the duration of the sale agreement document, as mutually agreed, and extend the same on mutually agreed terms afresh. No need to sign another sale agreement and pay 0.1% of sale value again.
2. Convince the seller that the disbursement of money through bank loan takes much more time than 45 days and hence the revalidated sale agreement and request the seller not to resort to the clause of breach of sale agreement.
3. If the seller waits till the loan is cleared, its good for you to proceed with the sale after the loan is sanctioned.
4. It is true that you will have 3 months' time for the Absolute Sale Deed to be registered, but do you think that your seller, without receiving full consideration, agrees to execute the Absolute Sale Deed now itself in your favour.
