Sale agreement- home loan raised with forged documents

you got the consideration through cash or cheque? sale agreement must be having time limits and termination clauses. i feel give him a chance to default. nevertheless show the agreement to an able counsel who will read it in context and in toto and give you a thorough opinion.

Thanks! The sale agreement is a registered one. The last date of the sale agreement was May 31, 2016. Howver, he has been involved in this scam which is now in the news big time started in November last year and the earnest money was paid by him in January.

Also, he had raised a home loan from SBI to show genuineness to the outside world. Now bank has also informed that he had submmitted forged documents and concealed information.

 

So my question is is a seller bound to honour a Sale Agreement if it is proved that the buyer has got the consideration money through dishonest means? Is there any SC case law like this?

Thanks for your help!

 

 

So my question is is a seller bound to honour a Sale Agreement if it is proved that the buyer has got the consideration money through dishonest means? Is there any SC case law like this?

Thanks for your help!

 

 

specific performance is a discretionary remedy. granting it in this case may be against the public policy of India. don't have a direct case law.

As long as you have accepted the sale consideration or Advance for sale of house in good faith, you shall not come to harm as you are not supposed to know the source from which he has paid the sum.

 

Is he related to you closely? Is he a colleague of yours? No information on this.If you are not one them, most probably you will not come to trouble. However, if it can be proved that just to stash away ill gotten money this agreement/sale deed is created, you will be in trouble.  This is to say that if you are not involved at all and you entered into the agreement and received the money in good faith, without any least possibility of your knowing the source of the money being paid to you, you will not come to harm legally.  But the investigative agencies may call you for giving your statement and may grill you. 

Thanks Mr Kappagantu! I am no way connected to him. My question is in a situation like this am I bound to execute the Sale Deed? I know for sure that if we execute the Sale Deed now (as the scam now is public knowledge) then the money that we will get will be the scam money. Can we bypass specific performance by citing this reason that we might get into trouble if we execute the Deed>

 

Well no . Since the fact that the consideration being paid to you was from illegal money , was kept away from you and concealed , the agreement to sell shall be squarely hit by section 17 of the Indian contracf act . Hence the same shall be voidable at your instance , it shall be u enforceable at his instance . And it would rather be you who could seek Damages from him

Its risky now to insist upon specific performance for the sale to go ahead. However, if the investigation has come to final stages and the monies are separated-as illgotten and his own money- you may go through the sale provided he is paying from the funds identified as untainted. Better the investigative agency is informed officially with an acknowledgement obtained.

But over all its better to avoid the transaction so that you shall not be embroiled into it may be at a later date.

Thanks to all the experts here! The answers clarify a lot of questions in my mind. I am the seller but after all these scam issues am not very keen to go ahead with the sale deed. My only fear was that if the court orders that the sale deed is to be executed (under specific performance) then it will be detrimental to my interest. The buyer has filed a case for specific performance as said earlier.

I understand that not executing a Sale Deed because the source of consideration money to be paid by the buyer is questionable, is a valid ground.

 

If you are wary of proceedng with the sale, you may withdraw from the agreement and return the advance. The onus rests with him to approach the Court and seek specific performance.