Hi Sir, X person had GPA cum Agreement of sale to the independent house of 150 Sq. Yards. X had sold to Y through Sale deed for 1.5 Lakh amount shown as value in the deed and no agreement of sale towards it. Later now X & Y with mutual consent had Cancelled the Sale deed in registrar office and same reflected in EC as well. But there is no amount mentioned in the Cancellation deed, just mentioned like " both parties are decided to Cancel the Document due to personal problems. Now the X person is selling to me. I am questioning him since there is no amount mentioned in Cancel deed. how I am secure with this transaction. Builder is suggesting that they would give the amount receipt(from X to Y) and in 100 rupees bond paper, Y would acknowledge the amount received and no right to the said property. My Questions: 1. Does the Cancellation Deed is valid even without amount consideration ? 2. Amount receipt and Bond paper is legally valid in the eye of Law if the Y person would bring any litigation later ? 3. Can I ask to Cancel the Cancellation Deed & go for a new Cancellation deed (for the Sale deed made earlier) by mentioning amount. ? Thanks, Subash
It should have been mentioned that deed is cancelled and sale consideration returned to seller
2) advisable to execute deed of rectification to rectify mistake in sale deed
3) amount receipt is legally valid but advisable to mention receipt of consideration in deed of cancellation
Hi
In law, once cancellation deed is registered, then Y cannot have any claim on the property.
However, as rightly pointed out by you, you can get an official receipt from Y to X that there are no dues from him and enjoy the property without any remotest fear from Y.
Another alternative can also be that
1) In the sale deed between X and You , Y can be introduced as a consenting witness and hence in the sale deed there will be 3 signatories, X(as seller), Y(Consenting Witness) and You (Buyer).
2) Please note consenting witness is different from attesting witnesses
Hope this information is useful.
1. Sale deed once made though execution and registered sale deed can not be set aisde by registering another deed of cancellation , even if the same is registered.
2. So to effectuate the reversal fo sale the trasferred property is to be recoveyed to the seller and the same could be done by another sale deed.
3. Since the property sold to the buyer is to be re sold to seller once again , it is to be done through another registered deed of conveyance only . The deed of cancellation by means can be called or equated with deed of conveyance.
4. In other words X even after cancellation deed had not get back the property and hence could not sell it to anyone including you.
5. Now X having no title left in the property he cna not pass any semblance of title in your favour.
So it is needless to advise that do not by this property.
1. You can purchase the property via a registered Sale Deed with "consenting & confirming parties" signatures of Builder, X & Y.
2. You have also compulsorily to take a "irrevocable indemnity bond" from Builder, X & Y, to indemnify you against any futuristic legal litigation's, claims & damages. This way your financial investment will be permanently & legally protected.
Thank you and respect your views and all your replies are helpful to me. below are the two queries I had from the responses. As per Sir, Devajyoti Barman Sir. Cancellation deed is not valid here to return the property rights back to mr X. 1. If this is true, If I do register even with Mr. Y as consent witness, does my sale deed is valid legally ? 2. Indemnity bond means is it an 100 rupees stamp paper, does it need to be get register at registrar office ?
You would not have clear and marketable title to property
2) indemnity bond is not required to be registered
A sale deed may be registered with the registrar office but the registrar doesn't have any power to cancel the deed. If they are stating what you have written then they are duping you into parting with your money. This deal is a complete fraud.
Your deed has no value and you will not have any rights as per the law. They will evict you.
All averment should be present in CD
If not then interpretation will be difficult.
Yes bond paper is valid registration is also necessary. Notarisation may help.
Indemnity bond is on 200 stamp paper.
1. Indemnity Bond Stamp Duty = 500/-
2. MUST be duly Registered in the Notary Register.
1. You need to make the sale deed executed from Y with X making him a confirming party.
2. Indemnity bond is of no use here.
1. If the cancellation deed has been done by a registered deed then it is valid.
The recital in the cancellation deed confirms that the buyer has no claims agaisnt the seller in this regard, moreover if he has given a receipt for the amount acknowledging the receipt for the same duly witnessed, that shall be more than sufficient.
2. Since both the buyer and the seller have jointly executed the registered cancellation deed cancelling the registered sale deed executed by the seller in favor of the buyer, any claim that may be made by the buyer shall be with the seller alone and not on the subsequent buyer.
Further, since the buyer has acknowledged the receipt of the return of the sale consideration amount, the buyer cannot claim any amount at a later stage and even if he does, it would not be maintainable in law.
3. Not necessary, and it is not possible to cancel the cancellation deed and again execute a cancellation deed, If necessary you may ask hem to execute a registered rectification to rectify the error i.e., to include the left out words i.e., the return of the sale consideration amount.
1. The registered cancellation executed jointly by the buyer and the seller is very much valid.
If you are worried about the missing recital i.e., 'return of sale consideration amount' in the cancellation deed, then you may ask the seller to get a joint registered rectification deed to include the said missing recital in it.
This will confirm the validity of the cancellation deed.
If you still want to doubly confirm about it then you can ask Y to witness the proposed registered sale deed in your favor which would almost solve all the problems.
2.Indemnity bond may be unnecessary.
It will not serve any purpose.
It is a burden of an additional document which cannot come to your rescue in case of any dispute.
Bilateral registered cancellation deed is valid. Collect original of Amount receipt and Bond paper or duly attested notory copies and declaration from Y that he has received the amount.
Cancellation deed is perfect. Or let the Y and X jointly act as seller in sale deed.
1) It is advisable to get the same rectified by executing Rectification Deed capturing the receipt of sale consideration.
2) Yes, it is valid, subject to transferring it through bank and witnessed in presence of witnesses.
3) Yes, it is advisable. Follow (1) above.
Reply to second post:
You can make Y as consenting party to the sale deed, through it gives you more validity.
Indemnity bond needs not be registered. Once both X & Y execute the Sale Deed, i.e., when Y is reflected as consenting party, the Indemnity Bond is not required.
1. It would have been appropriate had it been mentioned in the cancellation deed that the consideration has been returned by X to Y.. However, the cancellation deed is valid in the eyes of law if it has been registered.
2. Showing that the amount has been received by Y by issuing a receipt is a patch up work in this regard for which no bond paper is required.
3. You can ask for rectification of the said cancellation deed by incorporating the statement that Y has received back from X the amount of consideration he had paid while registering the sale deed.
You must obtain a Indemnity Bond and notarize them and make sure that, clauses are added which shifts the liability on the seller.
1. After the registered sale deed conveying the title of the property of X to Y by taking an amount as consideration is cancelled and the cancellation deed is registered, the title of the property goes back to X since the said transfer to Y has been cancelled. However, you can bye the property from X making Y as the witness in the said sale deed to be registered in your favour.
2. No indemnity bond is required in the instant case.
1. The cancellation deed is only to cancel the transfer of title which had taken place through execution of sale deed. The refund/return of sale consideration is not required to be mentioned in it.
2. Since X was holding a GPA on the basis of which he executed the sale deed in favour of Y he could not have acted under the same GPA to execute a cancellation deed. There had to be fresh authority executed in his favour by the principal to execute the cancellation deed.
3. There may be more than what meets the eye in your case. You better consult a lawyer with all the documents on the basis of which the seller is claiming title.
4. You are free to consult a lawyer from this portal.
1. Yes cancellation deed is valid even without any amount mentioned on it as it is just for cancellation of already executed agreement.
2. Yes they are valid evidence in case of any dispute.
3. No need for a fresh cancellation deed.
