Cancelling unregistered sale agreement.

Hello Sirs/Madams, We've made a sale agreement to buy an already built house which is 7 years old. We've given him 7 Lakh rupees in cash. Total property cost is 35 lakhs, I've asked bank loan for 28 lakhs rupees. But seller wants to have 18 lakhs in cash and 10 lakhs through the account. Literally, he's asking me black money for 18 lakhs. I told him whatever comes in the loan which will be directly credited to your account. But he didn't agree and past two weeks the discussions are going on. Now, he's ready to take all the money in his bank account but we're not interested in buying that property. Can we cancel the agreement.? Since the agreement is not registered will there be any issue in getting my money back.? In Sale Agreement, 1. He mentioned that, if he's unable to sell the property in 3 months, we can approach the court and pay the money and buy. 2. But he didn't mention anything about the cancellation from our side(Buyer). 3. Also, we have not signed the sale agreement, only seller signed in the agreement. In case, if he rudely says he'll not give us our money back. Can we file a case against him.?