Unregistered sale agreement and its time expired
I had made an unregistered agreement with buyer in March 2015 with 3 month time to get rest of the payment. Based on this agreement I booked a flat with advance money of 2,50,000.00 on unregistered agreement. Now the buyer is unable to pay the rest amount and want his advance back. As the first agreement was expired so that the second too. Need legal help for both cases.
Asked 2 years ago in Property Law from New Delhi, Delhi
1) you can cancel the agreement on grounds of failure to pay balance amount within period of 3 months as specified in agreement for sale
2) refund the advance amount received by cheque .
3) take receipt from the purchaser that sum of Rs 2.50 lakhs has been received
4) in respect of flat booked by you cancel your agreement and request seller to refund your advance money . i presume there is no clause of forfeiture of advance money
If the amount paid was as earnest money in first case, and there is breach of agreement by the buyer in not performing his part of contract then you can forfeit the same. In second case also same law shall be applicable if the amount paid was by way of earnest money. if however this was termed as advance then seller would be justified in forfeiting a reasonable amount as damages.
Advocate, New Delhi
There is no need to panic. Both the agreements are unregistered hence not enforceable in law even if you file a suit for specific performance of contract in either issue.
It is suggested that you write to the buyer intimating that since he has not honored the agreement, the same stands cancelled and thus you're refunding the advance amount by cheque payment and similarly you may write to your vendor stating that due to the circumstances prevailing you are cancelling the agreement and request him to refund the advance paid by you.
1. The advance amount paid by the buyer, in the absence of a clause to the contrary, has to forfeit to you.
2. You can file a lawsuit against the buyer to seek court's directions to him to make the balance payment whereupon you will have to execute the sale deed in his favour.
3. Being unable to pay the amount is no ground to evade performance of the promise made in the agreement.
4. Issue a lawyer's notice forthwith to the prospective buyer to bind him to honour the agreement.
As the agreement is not registered , you are not legally bound to pay the money. However a case of cheating can still be made on you. It is suggested to send a letter to the prospective buyer through registered post, saying the date of the agreement has passed and hence the money i forfeited (should have been mentioned in the agreement too). In the second case check the dates of the agreement you have done for the flat, even if the date has passed, speak with the seller to return your money. If he does not return file a criminal complaint of cheating (grounds need to be made) or send a legal notice to be followed by recovery suit.