• Obtaining payment via cheque on the date of registration

Is it recommended to take cheque as a payment mode from the buyer on the date of registration of the sale deed? Note that there is no bank involved - only my buyer and me.
Asked 2 years ago in Property Law
Religion: Hindu

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21 Answers

It's recommended to take DD and not cheque as a payment mode from the buyer on the date of registration of the property through sale deed.

Shashidhar S. Sastry
Advocate, Bangalore
5068 Answers
314 Consultations

5.0 on 5.0

Cheque is subject to realisation 

 

insist on demand draft or bankers cheque or funds transfer by NEFT or RTGS 


Cheque is subject to realisation 

 

insist on demand draft or bankers cheque or funds transfer by NEFT or RTGS 

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

Dear Sir

It is advisable that you take DD or ask for a NEFT transfer instead of cheque.

These methods are generally safer and have less room for fraud.

Thank you

Anik Miu
Advocate, Bangalore
8742 Answers
109 Consultations

4.7 on 5.0

No. Only cash or DD.

Regards

G.RAJAGANAPATHY

High Court of Madras 

Rajaganapathy Ganesan
Advocate, Chennai
2132 Answers
8 Consultations

4.9 on 5.0

Registration  is of sale deed is not concluded on payment  of cheque. The sale deed has to be drafted adding clause that the sale deed will be finalized only subject to cashing of the cheque. Receiving and registering sale deed without such clause will be risky for seller. He cannot afterwards recover the sale consideration.

Ravi Shinde
Advocate, Hyderabad
4041 Answers
42 Consultations

5.0 on 5.0

No, not at all advisable. If the cheque bounces later, you have to seek legal remedy through court. Better insist on bank draft, check with the issuing bank if it is  genuine before registration. Or ask for electronic transfer just before registration.

Swaminathan Neelakantan
Advocate, Coimbatore
2773 Answers
20 Consultations

4.9 on 5.0

If the sale consideration amount is paid through cheque then you may insert a clause about validity of registration subject to realization of the cheque. 

It will protect your interests. 

 

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

If it bounces then it may be an issue. Better is rtgs or dd. 

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

If the cheque is not encashed, the sale deed becomes void as it is the condition precedent for validity of sale deed. Possession of property is to given only after receiving payment  under cheque.

Ravi Shinde
Advocate, Hyderabad
4041 Answers
42 Consultations

5.0 on 5.0

Terms of contract are sacrosanct and binding on parties 

 

it is better to take demand draft or bankers cheque from buyer 

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

There can be a clause in the sale deed stating that if the cheque payment is not realised, then the sale deed automatically becomes Null & Void as also the possession of the house will be handed over to the prospective buyer only after the payment is received in full.

If there's sufficient money in the Bank Account, then obtaining DD will not be difficult. My personal suggestion to you is to receive the DD first and then only execute the sale deed in favour of the buyer.

Shashidhar S. Sastry
Advocate, Bangalore
5068 Answers
314 Consultations

5.0 on 5.0

Hi, it is better you can accept the money through RTGS. If you accept the cheque then it was dishonored, then you need to file a suit for cancellation of the Sale Deed and you are in trouble.

Pradeep Bharathipura
Advocate, Bangalore
5604 Answers
335 Consultations

4.5 on 5.0

1. not advisable

2. take a DD or pay order

3. if buyer insists on cheque then do take a registered POA from the buyer so that in the event he defaults, you can use his POA to enter into a deed of cancellation of the sale deed which would be registered between you and the buyer

Yusuf Rampurawala
Advocate, Mumbai
7485 Answers
79 Consultations

5.0 on 5.0

There is no legal infirmity to insert the desired clause in the sale deed and you can also withhold the delivery of possession of the property being sold vide this sale deed until  retaliation of the cheque amount paid towards the sale consideration. 

If he has agreed to the conditions and signed the deed then he is bound by the said stipulation. 

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

- If there is no bank involved then you should take precautionary step at the time of registration , and don't accept the cheque instead of a draft or prior payment through NEFT etc. 

- As per law if the said cheque will bounce then the sell deed executed by you will not cancel on this ground , specially when you have received some part payment out of this cheque. 

- Further for the recovery the cheque amount you will have to approach the court under section 138 of N.I. Act. 

Mohammed Shahzad
Advocate, Delhi
13105 Answers
195 Consultations

5.0 on 5.0

Dear Sir

Such transaction are best not done through cheque payment.

It would be better if it was done by DD, NEFT or any other payment method.

Thank you

Anik Miu
Advocate, Bangalore
8742 Answers
109 Consultations

4.7 on 5.0

No, it will not be tenable. Please follow the advice given earlier.

Swaminathan Neelakantan
Advocate, Coimbatore
2773 Answers
20 Consultations

4.9 on 5.0

absolutely no.

If you apply Bank loan, then even Bank also gives DD on day of registration. 

So ask for DD.

 

The Sale Deed does not become VOID by cheque dishonour. 

You have to enter legal arena. 

 

but if you still want to take cheque then add condition in Sale Deed for possession after realization of cheque and add heavy penalty for cheque dishonour.

Ankur Goel
Advocate, Bangalore
454 Answers

4.9 on 5.0

Yes you can do the same 

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

No, not advisable.

You need to get the payment through either of the following: DD / RTGS / NEFT and not Chequue.

In sale deed it will capture as entire sale consideration is paid, if for any reason the cheque is returned unpaid, you will be at receiving end.

 

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

5.0 on 5.0

Sale Deed will not be registered with conditional clause(s).

Not advisable to take cheque towards sale consideration.

This act is nothing but, you will be purchasing litigation, just avoid it by taking either of above mentioned modes of payment.

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

5.0 on 5.0

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