• Cancellation of sale agreement

I got into a sale agreement (SA)for my house in Chennai.This is a registered SA. As part of the SA there was an advance receipt of Rs 15 Lakhs. We had a "time is of essence" clause and the SA also very clearly states that, if, buyer doesn't execute the purchase within time frame the SA is automatically cancelled and advance paid will be forfeited and adjusted as SELLERS cost and expenses.
This expired April 2020. in view of the COVID situation, we did not pursue anything then. However, since last 3 months we have started getting into the act. He is now using vague excuses and making no commitment whatsoever.(the SA has the wife's name - meaning, we are talking to the husband on these matters)
How do I get this SA cancelled? Is the buyers signature required? Must the cancellation be done at the registrar's office in his presence ? - just as when w e got into the SA. Can I sell this property to another buyer as is?
Thank you
Asked 23 days ago in Property Law
Religion: Hindu

First answer received in 30 minutes.

Lawyers are available now to answer your questions.

31 Answers

Terms of contract are sacrosanct 

 

2) as per terms of agreement if buyer fails to pay balance amount within time stipulated agreement stands cancelled 

 

3) you need buyer presence for execution of deed of cancellation 

 

4) you are at liberty to sell property to third party 

Ajay Sethi
Advocate, Mumbai
82096 Answers
5156 Consultations

5.0 on 5.0

1. Well,  the clause of ' time is essence of the contract ' is subject matter of interpretation. Therefore the buyer can litigate the property to avoid which a mutual deed of partition is best suited. 

2. If its not done then offer them full refund  to cancel. 

3. Even if this is not done then send a cancellation notice and make a new sale agreement with another. 

Devajyoti Barman
Advocate, Kolkata
22341 Answers
343 Consultations

5.0 on 5.0

If you try to sell the property, he will approach civil Court and obtain stay on some ground like covid or something else if the deal is profitable, he can file a suit from specific of contract. You have to preempt his attempt. Issue a him lawyer's notice stating that sale agreement will be treated as void and advance forfeited if he fails to get sale deed executed in one week. Wait for one week, after that you can sell the property to anyone. But he can approach civil court within one seeking specific performance of agreement and obtain stay against sell but in that case he has to first deposit the full sale consideration in the Court. If he does that you have to wait till the disposal of the civil suit. Under such circumstances the best option is, offer him refund of certain advance and convince him to cancel the sale agreement. You will avoid putting the property under litigation.

Ravi Shinde
Advocate, Hyderabad
797 Answers
7 Consultations

5.0 on 5.0

Hello, 

  1. You need to issue a legal notice to the purchaser(wife and not husband) demanding them to either comply or get the cancellation of Sale Agreement registered. 
  2. The signatures of both the parties are required to get the cancellation registered and it has to be before the Registration as it happened at the time if registration of sale agreement
  3. You cannot sell it to another buyer legally without cancellation of the Sale Agreement

S J Mathew
Advocate, Mumbai
3246 Answers
139 Consultations

5.0 on 5.0

The cancellation of Registered sale agreement has to be done by executing a registered cancellation deed jointly by buyer and seller.

One cannot impose the conditions of forefeiting the entire advance amount on the failure of buyers to perform their part of contract within the time stipulated in the sale agreement.

You first issue a notice to the buyer stating that since the buyer showed no interest in buying the property within the time limit as mentioned in the sale agreement, you are hereby cancel the agreement for sale.

Subsequently you can approach court with a suit for declaration to declare the sale agreement as cancelled.

You may implead the registrar in the suit seeking the relief of direction to sub registrar to permit you to execute the cancellation deed unilaterally for the reasons you rely upon.

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

Dear Sir/Maam,

1) You will have to execute a registered cancellation deed.

2) Presence of both parties will be required for the same.

3) You cannot sell the property to third party if the registered  deed of cancellation of SA is not made.

4) Send legal notice to the buyer to either execute the sale and make payment or apply for cancellation deed together.

5) If no reply is made within time, you can file suit for recession of the SA.

Thank you

  • For more assistance, you can book a consultation with me.
  • If you like my answer, please give a good rating and leave a review

Anik Miu
Advocate, Bangalore
1125 Answers
10 Consultations

5.0 on 5.0

It has to be cancelled by both. And forfeiture of money seems to be harsh. Send a notice to deposit the balance money and perform hs part.

Regards 

G.Rajaganapathy 

High Court of Madras 

Rajaganapathy Ganesan
Advocate, Chennai
1933 Answers
8 Consultations

4.9 on 5.0

If you are willing to pay back advance money received by you he would cooperate and come for execution of deed of cancellation 

 

You can sell the house as buyer has failed to make balance payment within stipulated period 

Ajay Sethi
Advocate, Mumbai
82096 Answers
5156 Consultations

5.0 on 5.0

The option is to approach the court to cancel the SA and claim compensation. 

G.Rajaganapathy 

High Court of Madras 

Rajaganapathy Ganesan
Advocate, Chennai
1933 Answers
8 Consultations

4.9 on 5.0

- As per Contract Act, after entering into an agreement , both the parties are bond with the contents mentioned therein .

- Hence, if that SA having clause of time during which this agreement should be executed , then after expire of that period the said SA will automatically canceled. 

- However, if that expiration period was during the period of Covid-19 situation , then the period of that SA will be extended for further period of lockdown i.e. simply three months. 

- Further , if after expiration of 3 months of the time mentioned in the SA no steps are taken to execute Sale deed and payment , then the seller can cancel the SA after sending a legal notice to the purchaser . 

- Further, after sending the said notice , the seller is free to sell the property to third party. 

Mohammed Shahzad
Advocate, Delhi
6719 Answers
71 Consultations

5.0 on 5.0

Dear Sir,

1) Sir, if your willing to pay back money he will show up.

2) After you send him the notice and no reply with regards  to complying with payment is made you are free to sell house to third party.

3) The sending of legal notice is a pre requisite to make yourself free form future liability. After the term under notice ends file a suit for recession of agreement. If the buyer does not agree to come for cancellation.

Thank you

  • For more assistance, you can book a consultation with me.
  • If you like my answer, please give a good rating and leave a review

Anik Miu
Advocate, Bangalore
1125 Answers
10 Consultations

5.0 on 5.0

Hello, 

  1. If he refuses to come for cancellation, despite your issuing a legal notice and willing to refund, that in itself is not legally sufficient to let you sell to another purchaser. 
  2. Your remedy in law is to file a suit in the competent civil Court seeking cancellation of the agreement or specific performance on part of the buyer. 
  3. Toh beef to be prepared for a long court battle. However, an order from the Court will enable you to sell the property. You must seek compensation for having entangled you in a sale that was not executed in effect by specific performance and unwanted litigation. 

S J Mathew
Advocate, Mumbai
3246 Answers
139 Consultations

5.0 on 5.0

You can file a suit seeking declaration that the registered agreement  is null and void as the buyer failed to follow the timeline stipulated in the agreement. It doesn’t matter after declaration the agreement  is cancelled or not.

Ravi Shinde
Advocate, Hyderabad
797 Answers
7 Consultations

5.0 on 5.0

You cannot sell the house property during the subsistence of a sale agreement, without cancelling it. 

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

an agreement for sale is not even compulsorily registrable

by registering the SA, you have essentially locked your property in dispute

unless the SA is cancelled by a duly a registered cancellation deed, your title to the property will remain encumbered and any new buyer will obviously ask for a registered cancellation deed with the previous buyer

so it is not that you cannot sell your house since there is a registered SA. You will just not find buyers since no person would risk purchasing a property over which there is a pending claim of the previous buyer under a registered agreement for sale. So unless that registered document is cancelled as aforesaid, no buyers will show interest.

if the buyer does not come forward for registering the cancellation deed, then you will have to file a suit against him

this is the result of registering agreements for sale!

Yusuf Rampurawala
Advocate, Mumbai
6157 Answers
50 Consultations

5.0 on 5.0

You may file a suit for cancellation of sale agreement (SA). A notice shall be issued to the other party (buyer) who would come and explain its circumstances. The Court may exercise its discretion whether SA should be declared void or not.

If your SA gets cancelled, a copy of the decree shall be sent to registrar's office then it will get updated in the records of the registrar as 'cancelled'. Then you can sell your property to another buyer. 

Hope this satisfies your query !

Abhinav Srivastava
Advocate, New Delhi
22 Answers

5.0 on 5.0

Dear Sir,

 You can just get issue legal notice and issue paper publication. If necessary file a suit for cancellation by depositing advance amount. 

Kishan Dutt Kalaskar
Advocate, Bangalore
5787 Answers
283 Consultations

4.8 on 5.0

If the buyer is buying the property without perusing the connected relevant documents then it is the problem of the buyer to face the litigation that may arise due to the subsisting registered sale agreement.  

Thus it will always be a problem for the buyer to buy the property without the seller cancelling the existing  sale agreement properly.  

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

Unless agreement is cancelled you cannot execute sale deed in favour of third party 

 

after cancellation execute sale deed in favour of company or husband or any other person 

Ajay Sethi
Advocate, Mumbai
82096 Answers
5156 Consultations

5.0 on 5.0

Dear Sir,

Without your presence it cannot happen.

Kishan Dutt Kalaskar
Advocate, Bangalore
5787 Answers
283 Consultations

4.8 on 5.0

- If no response to the Legal notice sent by you, then seller is free to sell the property to the third party.

- Further, without the consent of both the parties that SA cannot be cancelled .

- However, the buyer can approach the court within a period of 3 years from the date of SA. 

Mohammed Shahzad
Advocate, Delhi
6719 Answers
71 Consultations

5.0 on 5.0

Dear Sir,

If you want to switch the name of the person in whose favor the sale agreement is registered you need to make a new sale deed. Since you have registered the sale agreement in wife's name you cannot execute it in her husband's name. However, once the sale is done the new owner can transfer the ownership by way of gift deed or all the parties can enter into a tripartite agreement for transfer of ownership where the lady can become the confirming party. 

Please rate my answer if you found this helpful.

Anik Miu
Advocate, Bangalore
1125 Answers
10 Consultations

5.0 on 5.0

the new buyers - husband of the lady or the company in which this lady is a member - are NOT the lady!!!!

so you have to cancel the SA with the lady anyhow

without that your title is not clear 

what if the buyer husband or the company enters into a contract with you and later on the lady surfaces with her claim?

can you then say that since the buyer is the husband of the lady or since the buyer is the company in which this lady is a member, you have essentially entered into a contract with the lady only??

that is clearly not possible

the lady, her husband and the company are all different persons and not the same person

 

Yusuf Rampurawala
Advocate, Mumbai
6157 Answers
50 Consultations

5.0 on 5.0

You can engage any lawyer for sending legal notice 

 

better option is to engage lawyer from Chennai 

Ajay Sethi
Advocate, Mumbai
82096 Answers
5156 Consultations

5.0 on 5.0

You can issue a legal notice through a lawyer from any part of the country. 

It is not necessary that you have to subsequently prosecute the case through the same advocate.

You can choose an advocate of your choice at the time of filing the case. 

You may better concentrate on what's to be done immediately. 

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

Hi,

There is no restriction that a lawyer from Chennai can only send the legal notice. It can be sent from anywhere. When the case is called in the court a lawyer should be present to represent you.

Please rate my answers if you found them helpful. Thank you.

Anik Miu
Advocate, Bangalore
1125 Answers
10 Consultations

5.0 on 5.0

Problem is registrar would not permit registration unless and until earlier agreement is cancelled 

 

hence you cannot purchase the property 

Ajay Sethi
Advocate, Mumbai
82096 Answers
5156 Consultations

5.0 on 5.0

1. The buyer will not come forward to buy the property in which there is an encumbrance of a subsisting registered sale agreement.

The buyer will not take the risk of facing litigation and legal disputes at a later stage due to this subsisting encumbrance.

2. The original buyer who entered into the sale agreement shall drag the vendor to the court of law with a suit for specific performance of contract.

He has no business with the subsequent buyer because he entered into the sale agreement with the vendor and not with the new buyer.

The original buyer may implead the subsequent buyer as a party to the suit for proper adjudication as a necessary party.

In any case the vendor is the person who will be liable and responsible before court of law to contest or admit the case filed against him by the original buyer  and not the subsequent buyer.

3. If the subsisting registered sale agreement comes to the notice of the registrar, h may stop the registration process.

Sometimes the brokers/deed writers may bribe the registrar who may ignore the facts and law involved in this because once the registration is completed, the registrar can claim innocence of the existing fact blaming the work burden as a reason for this omission.

4. If as a buyer you still want to take a risk and have sufficient time to face the litigation, have sufficient money and energy to participate in the ongoing litigation which will either be disposed against the interests of the buyer or the buyer may ultimately have to pay a heavy mount for a compromise at the end of the cae, then the buyer may have to pay for the intentional wrong he has committed in this despite being warned about the consequence for this act of ignorance.

 

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

Dear sir,

yes, you can.

Anik Miu
Advocate, Bangalore
1125 Answers
10 Consultations

5.0 on 5.0

you can but the encumbrance if any will affect your title till court verdict if the same is under litigation or goes in future litigation

Prashant Nayak
Advocate, Mumbai
23361 Answers
49 Consultations

4.4 on 5.0

- A legal notice can be send by any lawyer of any place , hence you can engage any lawyer for the same. 

- You should not 

- Further, registration can be stopped by the Registrar .

Mohammed Shahzad
Advocate, Delhi
6719 Answers
71 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer