Specific performance and assignment of rights in agreement.

Nagesh (Querist) 06 September 2025 This query is : Resolved
Dear Learned Counsels,

Namaste

1.) In an unregistered Sale Agreement (done on Rs.500/- stamp paper), 3 months time was stipulated as the period for completing the Sale transaction. Buyer fails to pay the balance amount and the Seller as per the terms of the Agreement deducts certain amount and refunds the balance to buyer.

My specific query is that, whether buyer has any right in the property post 3 months and can he prevent the Seller from selling the property to any other prospective purchaser by filing suit under Specific Performance, which is usually available for both the parties for 3 years.

2.) Can a Seller prevent the intending purchaser from assigning his rights under a Sale Agreement to third parties without the permission and consent of the Sellers, by including a clause to that effect in the Sale Agreement?

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Quick Summary

This discussion clarifies rights in an unregistered sale agreement where the buyer failed to complete the purchase within the stipulated time. Generally, if time is of the essence and the buyer hasn't shown readiness to complete, they lose the right to sue for specific performance after the deadline. The seller can usually proceed to sell to another party. Regarding assignment, a seller can include a clause to prevent the buyer from assigning their rights without consent, although the enforceability of this in an unregistered agreement may vary.

T. Kalaiselvan, Advocate (Expert) 06 September 2025
This is basically an unregistered sale agreement.
Secondly the buyer has not expressed his willingness and readiness to purchase the property before the expiry of the stipulated time in the sale agreement.
The time is essence here in this contract.
In a suit for specific performance, the buyer (plaintiff) must plead and prove that they were always ready and willing to perform their part of the contract (e.g., paying the balance consideration) within the time stipulated or within a reasonable period.
If the buyer fails to express or prove such readiness and willingness during the contractual period, the court generally will not enforce the agreement.
If time is of the essence (expressly stated in the agreement), strict compliance is expected.
A buyer cannot successfully enforce the sale agreement by filing a suit for specific performance if he failed to demonstrate readiness and willingness within the contract time.
Only if time was not expressly essential and the buyer can prove that he was genuinely ready (e.g., had money arranged, sent communications) might the court still grant relief. Otherwise, the suit will likely fail.
In any case you cannot prevent a buyer from purchasing the property, you can confine to your case alone however a temporary injunction petition can be filed against the seller to restrain him from selling or alienating the property in any manner till the disposal of the suit provided the sale agreement was executed by a registered document

kavksatyanarayana (Expert) 06 September 2025
An unregistered document with a stamp of Rs.500/- is not valid. However, the buyer has failed to come forward before the agreement date, and hence, he cannot prevent the seller from selling his property to others.

Nagesh (Querist) 08 September 2025
Thank you
Sri.Kalaiselvan T. for your valuable inputs.
Sri.KAVKSatyanarayan, I thank you too.

regards
Nages

Dr. J C Vashista (Expert) 14 September 2025
Answer to your query:
Q 1 whether buyer has any right in the property post 3 months and can he prevent the Seller from selling the property to any other prospective purchaser by filing suit under Specific Performance, which is usually available for both the parties for 3 years.
A. Of course, strictly legal buyer cannot compel the seller for subsequent agreement to sell to third party after expiry of time.
However, the buyer has an interest and claim in the property even if specified time is over (although time is essence) if the buyer has intended and requested for mututal extension of time.

Q 2.) Can a Seller prevent the intending purchaser from assigning his rights under a Sale Agreement to third parties without the permission and consent of the Sellers, by including a clause to that effect in the Sale Agreement
A. No, buyer cannot stop to sell the property to a third person, even then it is better for seller to issue a notice to buyer qua subsequent agreement, with the sole aim to avoid any litigation at a later date.

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