I stay in Bangalore . Have a flat in Pune which a person paid 1 lakh advance , we registered an agreement to sale . As per the agreement , the purchaser has agreed to pay the full amount within 1 month . There is no cancellation clause as such . Now 2 months have passed and the buyer keeps giving excuses about home loan , family issues etc . Finally I told him let’s cancel the deal and he agreed to it . He said he will go to his lawyer , get the cancellation. Deed drafted and call Me to Pune when the deed is ready . He keeps postponing and lying about this and I have another buyer who is waiting to buy the property. What course of action do I have ? 1. Does him not paying within 1 month breach the contract and make the agreement to sale void? 2. Will it be illlegal to go ahead with another buyer without cacncelling the 1st registered agreement to sale void? 3. What other action do you suggest ?
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Agreement is badly drafted
there should be clause that if buyer fails to pay within one month agreement shall stand cancelled and advance forfeited
issue buyer legal notice that since he has failed to pay balance amount agreement stands cancelled and to execute deed of cancellation
1. The registered sale agreement is valid for three years from the date of its execution even though time is essence for this contract.
however nothing prevents you from issuing a legal notice communicating your decision to cancel the sale agreement .
2. It will not only by illegal but also invalid, besides it is an offence of cheating and fraud.
3. You cancel the sale agreement by issuing a legal notice and demand the buyer to execute a cancellation deed jointly.
Dear Client,
In the Present Scenario, you may consider the Indian Contract Act, 1872, under which, the failure of the purchaser to pay the full amount within one month, as agreed in the registered Agreement to Sale, constitutes a breach of contract. While this breach makes the purchaser liable, the agreement remains valid until formally cancelled or declared void. Furthermore, according to the Transfer of Property Act, 1882, an Agreement to Sale does not transfer ownership but creates a contractual obligation, meaning selling the property to another buyer without cancelling the first agreement could expose you to a legal action. However, to proceed further with this, you may send a legal notice to the first buyer citing the breach, and demanding cancellation of the agreement. However, if he continues to delay, you can take the initiative to draft a cancellation deed, clearly stating whether you intend to refund or forfeit the advance payment of ₹1. In case of non-compliance or not co-operating to any of your actions, you may file a suit under the Specific Relief Act, 1963, seeking a declaration that the agreement is void due to non-performance.
Hope you find this answer beneficial for resolving the dispute.
1. If there is no clause in the agreement for the cancellation or execution of sale deed in the name of buyer , then you cannot cancel the agreement
- However, as there was oral agreement for the payment of full amount within one month, then you can send a legal notice to cancel the agreement on this ground.
2. Since, there is one registered agreement with the said buyer , then without cancelling the same you cannot sell the property to another
3. Send a legal notice and if he cannot come forward then cancel the agreement, and also inform that if he cannot come forward for the cancellation of the agreement then the paid amount will not be returned.
