• Stop cheque and sale agreement cancellation

I am from Chennai and have entered into sale agreement with owner with advance payment as cheque however due to the extent issue  identified a day later in the patta&title i went and issued stop cheque. also i want to cancel the agreement. please  let me know if there is any legal challenges and how to proceed for the cancellation.
Below are the only 4 conditions in the agreement.  

1) purchaser accept to purchase at the rate x
2) purchase has paid. x amount as advance and agree to pay the balance y amount at the time of execution of sale

3)time is the essence of contract
4)sale transaction has to be completed within 30 days from the date of this agreement.
Asked 2 years ago in Civil Law from Chennai, Tamil Nadu


By the very act of you issuing stop payment instructions to your bank, you have demonstrated that you did not accept the terms of agreement. Hence you have revoked the proposal(agreement of sale) by your act of stop payment of cheque (sec 6 (3) of Indian Contract Act)

Kindly also issue notices to builder that you are not interested to purchase the property and hence the agreement for sale is deemed to be cancelled.

If the seller sends you a return legal notice, you can always revert by pointing to the legal defects in his title.

No issues are likely to arise as you have prevented yourself from being cheated and you have complied with the provisions of Indian Contract Act for revocation of agreement of sale (i.e stop payment of cheque and also issuing notices).

Hope this information is useful

Rajgopalan Sripathi
Advocate, Hyderabad
1615 Answers
254 Consultations

5.0 on 5.0

1) the terms of contract are sacrosanct

2) since you have signed agreement you have to complete transaction within period of 30 days

3) if you have stopped payment of cheque seller can file suit fur specific performance of contract

4) better to cancel agreement by mutual consent

Ajay Sethi
Advocate, Mumbai
61304 Answers
3720 Consultations

5.0 on 5.0

You are free to issue a lawyer's notice to the seller to cancel the agreement to sell. The clauses extracted by you do not preclude you from cancelling the agreement.

Ashish Davessar
Advocate, Jaipur
25875 Answers
741 Consultations

5.0 on 5.0

You have to send notice of cancellation to your vendor immediately by stating reasons of defect in title / patta etc., and stopped the cheque payment. Intimate him not to present the cheque in bank and return it to you. As title is not clear all conditions are deemed to be cancels and not biding. The sale agreement is sham and invalid.

Lakshmi Kanth
Advocate, Hyderabad
424 Answers
15 Consultations

4.7 on 5.0

If you would like to cancel the sale agreement, you can issue notice stating that you are cancelling the same and hence the cheque issued for sale consideration (advance) may be returned, you may also include that yo have already instructed the bankers to not to honor the cheque on presentation hence the bearer to return the same immediately.

T Kalaiselvan
Advocate, Vellore
51403 Answers
612 Consultations

5.0 on 5.0

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