• Cancellation of sale deed

I had entered into a sale agreement deed with another party to sell my house to them. In the sale deed, it was mentioned that the purchase will be completed within 6 months of the sale. Nothing was mentioned about what would happen on failure of this period. However, the period has lapsed now. Can I proceed with the cancellation of this sale deed? What if the buying party has prepared a DD now after the period of 6 months is over? Can I cancel this deed even in with DD prepared after 6 months period stipulated in the sale deed agreement.
Asked 9 months ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1) it is necessary to peruse sale deed entered into by you with the purchaser to advice .

2) you have not mentioned whether sale deed is registered or not 

3) if buyer has failed to make full payment within period stipulated in the agreement send letter  to purchaser by regd post and cancel the agreement if sale deed is not regd 

4)  return advance money if any received from purchaser 
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
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1) the sale  deed entered into by you with purchaser should have contained a clause that in the event purchaser fails to make payment within period of 6 months the sale deed shall stand cancelled 

2) it should also have contained a clause that earnest money paid would be forfeited 

3) in your case payment is sought to be made after expiry of time stipulated in contract 

4) you can refuse to  accept payment and cancel the contract 

5)  you should take the plea that time was of the essence of the term regarding payment of sale price and that the agreement was cancelled as a consequence of default committed by purchaser  in paying the balance sale price in terms of the agreement

6) contact a local lawyer 
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
 Section 55 of Contract Act deals with the effect of failure to perform at a fixed time, in contract in which time is essential. Said Section is extracted below :

"Section 55. Effect of failure to perform at a fixed time, in contract in which time is essential.-- When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before a specified time, and fails to do such thing at or before a specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of essence of the contract.

Effect of such failure when time is not essential: If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Effect of acceptance of performance at time other than agreed upon: If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than agreed, the promisee cannot claim compensation of any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of acceptance, he give notice to the promisor of his intention to do so."
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
1. It appears that you have failed to mention ' time as essence of contract'.
2. So in absence of it the default clause of cancellation is strictly followed.
3. Anyway you can send a letter asking for payment for balance payment within a scheduled time frame failure of which you can cancel the agreement.
4. then you send the balance money and cancel the agreement.
Devajyoti Barman
Advocate, Kolkata
5131 Answers
54 Consultations
4.9 on 5.0
Was earnest money paid to you by the prospective buyer? If the sale deed is not executed within the time mentioned in the sale agreement then the agreement lapses. You should issue a lawyer's notice to the buyer for cancellation of the agreement and then look for another buyer. A DD prepared after 6 months will not revive the sale agreement unless you accept it. 
Ashish Davessar
Advocate, Jaipur
18049 Answers
444 Consultations
5.0 on 5.0
1. The clause of Breach of Contact on either side should have been incorporated in the Agreement of Sale, if this were to be in the Agreement of Sale you could have avoided the present situation. Not to worry as what has been done cannot be undone.
2. Send a legal notice stating that the Agreeme nt of sale is time barred and for that DD prepared cannot be honoured and the Agreement of Sale is hereby cancelled.
Shashidhar S. Sastry
Advocate, Bangalore
1231 Answers
59 Consultations
5.0 on 5.0
It is contigent contract and it is voidable after lapse of stipulated time period if it remains unfulfilled. you should file suit for cancellation of contract under section 64 of Indian contract act. 
Shivendra Pratap Singh
Advocate, Lucknow
2693 Answers
41 Consultations
4.9 on 5.0
Hi 
The sale agreeement will automatically lapse if the purchase is not completed in time. Send a notice of cancellation of sale agreement. If the sale deed has been registered at Sub-Registrar office, then you should file a suit in the court to get the sale deed cancelled. 
Rajgopalan Sripathi
Advocate, Hyderabad
868 Answers
43 Consultations
5.0 on 5.0
I had entered into a sale agreement deed with another party to sell my house to them. In the sale deed, it was mentioned that the purchase will be completed within 6 months of the sale. Nothing was mentioned about what would happen on failure of this period. However, the period has lapsed now. Can I proceed with the cancellation of this sale deed? What if the buying party has prepared a DD now after the period of 6 months is over? Can I cancel this deed even in with DD prepared after 6 months period stipulated in the sale deed agreement?

Whether the sale agreement was a registered document or unregistered?, If it was a registered document then the sale agreement shall be valid for a period of three year from the date of its execution. If it is an unregistered document, then this can be treated as a mere receipt of amount yo have received, he cannot enforce the same legally beyond the stipulated date, but you may have to refund the advance amount received if you issue notice to cancel it until there is any forfeiture clause. 
You can issue a legal notice to the  buyer stating that the sale agreement stands cancelled on the expiration of the period stipulated in the agreement. Let him come out with legal action, if any, you can challenge it accordingly.
T Kalaiselvan
Advocate, Vellore
13883 Answers
127 Consultations
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The DD mentioned is executed after the lapse of the 6 months period and I am not at all interested in selling the house now.
If the sale agreement deed is an unregistered document, you can very well refuse to sell the property beyond the date of expiration of the agreement, issue a legal notice and cancel the same. 
T Kalaiselvan
Advocate, Vellore
13883 Answers
127 Consultations
5.0 on 5.0

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