It depends on how you put terms of sale in your agreement it’s a discretionary matter
Can part payment of cheque and DD be accepted during Sale
Hi All, I hope you all are doing well. I am writing this on behalf of my father. Please help. So my father is selling his house and has signed into Agreement to Sale with a buyer for 71 lacs(1 lacs already paid as token) consideration. The buyer requested to make remaining consideration of 70 lacs in cheques (which he will give us a week before registry date) and DD and agreement has been signed. This is an extract of the ATS - “ The Balance payment of Rs. 90,00,000/- (Rupees Ninety Lakhs Only) less 1% TDS deduction, to be deposited by buyer in income tax department within 20 days before registry of said property, shall be paid by D.D/ CHEQUE/RTGS E, second party to first party on or before 2/08/2023 at the time handing over the vacant possession of said property and execution transfer documents in favour of second party or his / her nominee.” Question - I wanted to know if 70lacs can be accepted in cheque and DD? Considering we will deposit the cheque before and cheque amount will be deposited in our account and as per my knowledge DD needs to be filed for registry, so remaining amount would be in DD at the date of registry. Please help :)
Asked 11 months ago in Property Law
Religion: Hindu
11 Answers
Please note, the property is of Delhi.
Asked 11 months ago
What is amount of cheque and demand draft .?
2) there is risk of accepting payment by cheque as it can be dishonoured on presentation
3) if cheque is deposited at time of execution and registration of sale deed it is risky proposition
4) no doubt buyer is giving you cheque before registry date but your query is not clear whether cheque is to be deposited for clearance before registry date
Better accept money by DD or by RTGS
As such there is no issue in receiving the payment of consideration in cheque or DD. In case cheque the same should be honored or encashed before registration and handing over of possession of property. DD is as good as cash. The stated amount is already shown and mentioned in sale deed. However, the relevant clause as given in query, is vague and confusing which have given edge to buyer. It should be clarified that in case of payment through cheque or DD then the same should be cleared and be encashed before registry and handing over of possession. Insist for DD payment.
- Legally, you can accept the cheque for the said amount ,however you should fix the date of execution of sale deed after clearing the cheque from the bank.
- Once, you will execute the sale deed in ;favour of purchaser , then even on bouncing of the cheque , the sale deed cannot be cancelled.
- Payment thorough DD or online is a better option
- Further, as per Section 54EC of the IT Act, any capital gains arising from the transfer of a long-term capital asset/ property, would be exempt if the gains are invested within a period of six months in specified investments, and these investments are three-year bonds of National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC). However, there is a restriction in this investment: the amount invested cannot exceed Rs 50 lakh in any financial year.
- Sale of immovable property is completed only full sale consideration is paid by buyer to seller in agreed mode, cash, dd, cheque before or on the date to execution of sale deed.
- If a part of consideration is agreed to paid after registration of sale deed, there should be a clause in the sale deed and such sale deed will be completed only on receipt of such differed consideration.
- Transaction contemplated by you is perfectly valid and safe.
DD AND CHEQUE TAKE TIME IN CLEARING. PREFER RTGS.
There is no legal infirmity in accepting the sale consideration amount by both the cheque and the DD.
The only precaution you have to take is that you wait for the chequye to be realised/honored before executing the sale deed.
If the cheque is dishonored then you can stop the process of execution of sale deed and its registration.
Whatever, you may exercise abundant caution to make sure that the entire sale consideration amount has been received/realised before handing over the possession of the property to the buyer.
It is not important hat where the property is located, it is important that you exercise abundant caution as advised by everyone in this forum
Yes.
as per my knowledge DD needs to be filed for registry- No, only stamp duty will be paid.
Dear client,
Accepting payment in the form of cheques and demand drafts (DDs) is a common practice in real estate transactions. However, it's important to ensure that you follow the applicable laws and regulations in your jurisdiction.
Regarding the acceptance of 70 lakhs in cheque and DD, it seems permissible based on the clause you provided from the Agreement to Sale (ATS). The ATS states that the balance payment can be made by D.D/ CHEQUE/RTGS.
In such cases, it is generally advisable to follow these steps:
Deposit the cheque into your bank account and ensure that it is cleared before proceeding with the transaction. This helps ensure that the funds are available and reduces the risk of bounced or dishonored cheques.
Verify the authenticity and validity of the demand draft before accepting it. Ensure that it is issued by a reputable bank and contains accurate information.
Retain records of the cheque deposit, clearance, and the demand draft for your reference and documentation purposes.
To be certain about the legal requirements and procedures specific to your jurisdiction, it's important to consult with a qualified legal professional who specializes in real estate law. They will be able to review the terms of the agreement, provide guidance on accepting payments, and ensure compliance with local laws and regulations.
Note that real estate laws and regulations can vary depending on your jurisdiction, so it's essential to seek specific legal advice tailored to your situation.
