There should be a valid sale deed in the said circumstances. On the unregistered mou you will not enjoy clear title

it is MOU Or Agreement to sell? 

MOU s merely a statement of understanding between two or more parties which when made has no enforceability in the eyes of law as such an agreement has no intention to create a legal bond between such persons. As a result of which, if in case there is a breach of such “MOU” there is no relief. 

It is not advisable to proceed with the proposed purchase of this property especially in the wake of the vendor not cancelled the sale agreement entered with a buyer earlier. 

Even though the agreement is for 60 days only,  it is legally valid for three years,  no doubt unregistered sale agreement is not enforceable in the court of law. 

The previous buyer may drag the new buyer along with the vendor to court seeking his relief. 

So you will be trapped with legal tangles if you proceed without obtaining a legal opinion. 

Seller should cancel MOU return Rs 5 lakhs advance received 

2) if refund not done buyer will file case seek stay of sale of property and refund of his money 

You can buy the property. It is safe.  Get one declaration by seller that it is free from all encumbrances and /or he shall do all necessary act to make it free from all encumbrances from any third party claim towards title before selling the property. 

There's is nothing like automatic cancellation and the previous buyer can still file a suit for specific performance of contract to enforce his sale agreement. 

So before proceeding with the present sale first get a cancellation of sale agreement executed between the seller and previous buyer. 

Without doing so its advisable to purchase this properly. 

Yes it is 100% safe to enter in a new MOU with the seller.

Yes previous MOU is cancelled due the clause mentioned in it.

1. In my opinion the earlier MOU should be expressly cancelled as the previous buyer can file a suit before court and may delay your transaction or may raise unnecessary issues.

First tell him to send legal notice to buyer of cancellation of MOU for failure to make payment in time. Return of earnest amount is between buyer and seller.

No impact on you. Also check if there is not force majeure clause in MOU and than only purchase the property.

1. MOU is a non-registered undertaking and not a agreement or contract, which can be legally enforceable.

2. You are in no way liable for the MOU or payments or whatever deal with the seller and previous buyer.

3. You are advised to execute a registered Sale Deed and also take a irrevocable indemnity bond from seller party to indemnify you against any legal litigation from anybody and/or losses caused to you in any manner, related to the property.

1. The MoU automatically stands cancelled on expiry of period mentioned in it but seller should send a notice for cancellation of MoU in ground of delayed payment.

2. The notice should be sent to be on the safer side so that previous buyer cannot claim that he was ready to make the payment but seller intentionally delayed the registration of property.

As that MoU is half binding between previous buyer and seller of the flat. 

It is not harm if you made new sale deed transaction and do mention this agreement clause and indemnity clause that all responsibility will be if seller. 

1. Irrespective of the clause for automatic cancellation in the previous agreement, to err on the side of caution, you should ask the seller to serve a legal notice for cancellation of the agreement to the previous prospective buyer.

2. Let the seller also publish his intention to sell the property to you in a regional daily.

3. Thereafter, you can purchase the property.

It is absolutely necessary to get the MOU cancelled with the earlier purchaser.

Let your seller send notice to the earlier purchaser cancelling the MOU and he has to refund the advance money (It is between both of them).

If the advance of five lakhs is not returned, the earlier purchaser may create problems for refund of his money and also can file suit seeking stay on alienation etc.

By following above, you can enter into MOU with flat owner.

No, it does not stand automatically cancelled, it has to be cancelled by flat owner by sending notice.

As a precautionary measure you withhold five lakhs till the issue is settled between flat owner and earlier purchaser.

- As per Section 10 of the Indian Contract Act , all agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void.

- Further , a MOU is a statement of understanding between two or more parties which when made has no enforcibility in the eyes of law , as such an agreement has no intention to create a legal bond between such persons. 

- But , when an MOU has been made as per section 10 of the Indian contract Act, then it is a valid agreement.

- Further , no stamp duty is required on MOU, but if the MOU for an agreement to purchase immovable property worth more than Rs. 100/- , then it is mandatory to be registered and stamped .

- Further, if the MOU contains its expiration , then it lost its value , otherwise , the limitation period to challenge an MOU is 3 years from the ate of its execution .

- Since, the said MOU with the earlier buyer is not registered and stamped , hence it is not a valid document to be produced in the court. 

- Further since, there is already given an expiry period in the MOU , then also the said MOU has lost its value .

- It means that the said buyer cannot file a suit for specific performance to perform the contract given in MOU. 

- However, the said earlier buyer can approach the court for the refund of the deposited amount within 3 years period of the exection of MOU against the seller. 

- The seller should send a legal notice to the said earlier buyer for cancelling the deal as given in MOU. 

- If no response from him , then your purchasing of the flat is fully safe .