• Land purchase may not be completed within stipulated time, advance and part payment can be refunded.

I have signed an agreement for buying a plot of land in Guwahati. As per the sale agreement which was executed on 3rd August 2019 the following points are mentioned. 
1. Advance amount of Rs. 5 lakhs paid on date of sale agreement and within next 4 months paid again Rs. 5 lakhs. And the remaining amount has to paid within 8 months. 
2. All the necessary permissions will have to take out by us from the respective Authorities. 
3. The deal has to be finalised before 31/03/2020 otherwise the agreement will be cancelled. Nothing is mentioned in the agreement that the Advance money will be forfeited.
Now, my question is that:
1. If we fail to get the required permissions in time, than the agreement can be extended. 
2. If agreement can't be extended, than whether we will get back our advance and part payment. 
3. Can we pay the full amount to the seller without the required permissions. If yes, than how. 
Please advice
Asked 6 years ago in Property Law
Religion: Hindu

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15 Answers

It is necessary to peruse agreement for sale entered into by you to advice 

 

2) agreement canbe extended by mutual consent 

 

3) if there is no forfeiture clause you should get your advance back in case agreement is not extended 

 

4) you can make full payment to seller but you are liable to obtain permission from authorities 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

1. See agreement can be extended only with mutual decision of both the parties. You cannot extend the agreement.

2. See since there is no condition to forfeit the advance the seller has to refund the amount back.

3. See you can pay the amount simultaneously apply for permission accordingly agreement can be extended.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

1. Agreement can be extended ONLY by mutual consent (written) for any length of time, terms & conditions.

2. Yes. You are entitled to claim refund, by legal default, despite no such conditions in agreement. Once agreement stands canceled /revoked THEN all payments under agreement have to be reverted back and no amount will stand forfeited.

3. IT is legally not advisable to make full payment, still all the relevant documentations are clear.  It is better to have it duly vetted thru a local property lawyer, via a Title-Search Report, before proceeding on anything, whatsoever ....

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

1. Typically an "Agreement to Sale" is not a final "Sale Deed" (there is vast difference between the two).

2. Such Agreement to Sale can be Canceled /Revoked at ANYTIME by either of the parties, by giving cogent /justifiable reasons, via a proper Legal Notice and claim back their monies.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

1.  See this clause is stating that in case there is default then you shall get complete refund, though also it is no where written that in case agreement is cancelled the amount shall be fortified.

2. Before the expiry of the agreement.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

1. Yes pay full amount without required permission as if you don't pay he may forfeit the advance and you will need to file suit in court

You can also try to extend the agreement if possible before the expiry

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

You are entitled to refund if there is defect in title 

 

2) in case you fail to make payment within stipulated period and agreement expires you would be entitled to refund of money as there is no forfeiture clause 

 

3) if seller  extends agreement you have time to make balance payment and question of refund does not arise 


You are entitled to refund if there is defect in title 

 

2) in case you fail to make payment within stipulated period and agreement expires you would be entitled to refund of money as there is no forfeiture clause 

 

3) if seller  extends agreement you have time to make balance payment and question of refund does not arise 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

1. Yes.

2. No. because this amounts to cancellation of the agreement.

3. Not advisable.

Koshal Kumar Vatsa
Advocate, Gurgaon
2282 Answers
3 Consultations

Extension by mutual consent. There is no forfeiture clause which is an important condition, so in absence of it, general principal of contract will follow - that contract did not materialize, paid amount will refund.

Without permission only on seller written consent.  And what is the value of seller consent, it is you who is effecting party if permission whatsoever not granted. So you can complete the deal without permission, do not bother to inform seller about permission.

You will get refund but without interest if deal not materialize. You can rescind the agreement even now for permission cannot be granted.

Don`t agreement have termination clause ?

Extension before expiry.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

Depending on the terms of the agreement, if the seller does not wish to grant an extension, you may request to have the earnest money deposit returned.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. The agreement can always be mutually extended.

2. Since there is no forfeiture class the seller is bound to refund the advance and part payment made, failing which you can file a suit for recovery of money in the civil court.

3. The agreement has to be perused threadbare to decide if the amount can be paid prior to obtaining necessary permissions.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

1. The clause extracted by you makes the seller liable to refund the money only if a defect is found in title.

2. Independently of this clause the seller is still liable to refund the money paid thus far if there is no forfeiture clause.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

First of all you have not mentioned that whether the agreement was by a registered document or it is an unregistered sale agreement.

You have stated that there is no forfeiture clause attached to the conditions of the agreement, hence any action by the seller in this regard would be considered as an illegal act.

If you are not able to get the necessary permissions from the governmental agencies within the prescribed time limit, you may communicate the same to the seller in writing one week in advance in writing and send the same by registered post while seeking permission to extend the time limit .

Let the seller deny or reject your request, you may then file a suit for specific performance of contract within three years from the date of original agreement seeking direction of court to direct the seller to execute a registered sale deed  with an alternate prayer to direct him to return the advance amount received by him so far with interest. 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

The seller has to refund the booking amount if you file a suit for specific performance of contract provided he is not ready to execute a registered sale deed in your favor.

You can recover the same through court of law if he fails to return.

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

1. Yes agreement can be extended by mutual consent.

2. If agreement will not get extended then you are eligible to get refund of advance paid without any interest if it is due to default from your end. 

3. Yes you can pay complete amount to seller through cheque or DD. 

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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