• Validity of agreement

Sir we have purchase a house from a party X on 31-05-16. The party X has an agreement with another party Y for selling house which expires on 02-05-16. After the time of agreement over the party X sent a legal notice by registered AD to Y on 05-05-16 that if they want to purchase the property then pay rest amount within 7 days otherwise they are free to sell it to other party. The party Y does not make any reply to that notice. On 16-05-16, We made an agreement with party X to purchase the house. On 20-05-16 we publish a news in news paper about purchasing of that house specifying that we are going to purchase this house if anybody have objection then contact our advocate but nobody comes to our advocate and on 31-05-16 we purchase it and got registry of that house. After that on 02-06-16 the party Y put a lock on that house and claiming that the house is under their agreement and no one have right to purchase it. Sir please suggest us whether the party Y is right or wrong. we have made purchasing by right way or wrong. The case is presented in front of SDM. suggest us your valuable suggestions.
Asked 6 months ago in Property Law from Vidisha, Madhya Pradesh
Religion: Hindu
1) under agreement between party X and Y time was essence of the contract 

2)agreement provided that payment would be made by Y by 2nd may 2016 .

3) since Y did not make payment legal notice was issued by X to Y to make payment failing which agreement would stand cancelled 

4) since Y failed to make payment X has sold house to you by registered sale deed

5)Y cannot claim any rights on said house .

6)since case is presently before SDM wait for his orders

7)the act of Y in putting his lock on the house is illegal 

Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
Under no circumstances Y can lock the property as the title thereto has not transferred to him. So X should break open the lock and go ahead with the transaction with you. You seem to have adopted the proper legal procedure to purchase the property,
Ashish Davessar
Advocate, Jaipur
18049 Answers
445 Consultations
5.0 on 5.0
1) it is necessary to peruse agreement between x and y to advise .

2) i had opined that time was essence of contract as you mentioned that balance payment was to be made by 2nd may 2016 

3) if there was no time mentioned in agreement then payment could have been made by Y within period of 3 years 

4) further no reply was given to legal notice by Y nor did he raise any objection pursuant to public notice issued 

5) you  have good case on merits 
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
The fact remains that X had issued a legal notice to Y asking him to take the necessary steps to honour the agreement within 7 days, but Y did not comply with it. So X was at liberty to sell the property to anyone he desired.
Ashish Davessar
Advocate, Jaipur
18049 Answers
445 Consultations
5.0 on 5.0
 1. Party Y has no right to lock the house which you have rightfully purchased since the agreement party Y had with  party X has already expired,

2. Moreover, agreement to sell does not pass the title of the property, registered sale deed does,

3. Party Y can challenge your sale deed before the Court but can not take law in his hand and lock some one's property,

4. Inform the matter to the police and ask party X to handover possession of the  house to you by breaking open the lock of the house. 
Krishna Kishore Ganguly
Advocate, Kolkata
12027 Answers
226 Consultations
5.0 on 5.0
1. Both the parties being X and Y should have complied with the terms of the agreement which includes payment terms,

2. Party Y has not complied with the payment terms despite receiving notice making the agreement legally unenforceable on party X for want of compliance of terms by party Y,

3. So, your purchase of the house under the given circumstances is perfectly legal.
Krishna Kishore Ganguly
Advocate, Kolkata
12027 Answers
226 Consultations
5.0 on 5.0
Purchasing an immovable property or even entering into a sale agreement while there exists a registered sale agreement on the same property is not correct and valid.  The previous sale agreement had to be cancelled or at least the three years limitation period should have  been completed from the date of execution of the sale agreement.
This is an encumbrance which should have been cleared by the vendor before selling the property to you.
Now you have no option than to file a suit for mandatory injunction restraining the previous buyer from interfering into your possession and enjoyment as well as for declaration of your title.  
You can implead the vendor also as necessary party to the suit.
T Kalaiselvan
Advocate, Vellore
13902 Answers
127 Consultations
5.0 on 5.0
Sir i want to mention that in the agreement between X and Y there is no any specification of auto cancellation of agreement after the time of agreement over....and somebody told me that the agreement in this condition is valid for 3 years..  In this condition our deal becomes weak or the y is rightly claiming on property. and what about the legal notice sent by the party X to Y .

Mere legal notice by X to Y shall not have a binding effect or cancel the agreement. 
This should have been properly cancelled in the registrar's office by executing a cancellation deed.
The sale agreement has a limitation of three years period.
T Kalaiselvan
Advocate, Vellore
13902 Answers
127 Consultations
5.0 on 5.0

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