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RajaRajachozhan (retired )     15 August 2020

Agreement to sell

Vendor 1 is the seller and Vendor 2 is the buyer.   In the agreement for sale Vendor 2 insists that on full consideration being paid by him, the Property has to be registered in his name (vendor 2) or in the name of any other person designated by him ( a third party).

According to Transfer of property Act  how can the property be registered in the name of third party ?  The third party is not  a party to the sale agreement and has not paid any consideration   

Can somebody clarify on this ? Please


 8 Replies

Dr J C Vashista (Advocate)     16 August 2020

Purchaser of property is termed as "Vendee" and not "Vendor 2" as mentioned by you.

Terms and conditions of Agreement has to be viewed.if it is agreed that consequent upon payment of consideration sale documents can be executed in the name of Vendee or any other person. 

RajaRajachozhan (retired )     16 August 2020

Sir, thank you for the reply.   As mentioned in the draft agreement I have mentioned as Vendor 2 instead of vendee.   Sorry for the same.   

However my question is not answered -i in that can the vendee ask the vendor to register the property in His (vendee's) name or in the name of a nominee or designated person.   How is it possible according to Transfer of Property Act and also when the nominated person is not a party to the agreement and when he has not paid any consideration how can the property be transfered/Registered in his name ?

P. Venu (Advocate)     16 August 2020

Who this third party?

RajaRajachozhan (retired )     16 August 2020

The third party is not specified particularly.   It is a general ststement that on payment of full consideration the property has to be registered in vendee's name or in the name of his designated or nominated person.   This designated/nominated person is the third party (unknown at the time of entering into the sale agreement..)   How can the property registered in his name (third party) - probably a Binami also.   I seek your advice. please.


N.K.Assumi (Advocate)     17 August 2020

Contract against the provisions of law is void, and the agreement is against the provisions of law, under the Prohibition of Benami Property Transactions Act, 1988. Section 3 of the 2016 amendment) is an Act of the Parliament of India, that prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for consideration paid by another person. Such transactions were a feature of the Indian economy, usually relating to the purchase of property (real estate), and were thought to contribute to the Indian Black Money problem. The act bans all benami transactions and gives the government the right to recover property held benami without paying any compensation

RajaRajachozhan (retired )     17 August 2020

Sir, Thank you very much for the clarification I sought for.   Thank you once again.

bhagwat patil (Property due diligence 9422773303)     18 August 2020

This legal one, provided the purchaser party in agreement for sale should sign sale deed .

It should be clearly mentioned in sale deed about the clause of third party.

RajaRajachozhan (retired )     18 August 2020

I am addressing this  to all who have given their valuable opinions.

This is for further discussions about (insertion or not including)  of the clause, in the SALE AGREEMENT,  reading as under.

 that on payment of full consideration by the vendee the property has to be registered in vendee's name or in the name of his designated or nominated person”

(I mark it as A).

Mr.Assumi Sir,has given a clear cut opinion about this saying that it will attract the provisions of  Prohibition of Benami Property Transactions Act, 1988. Section 3 of the 2016 amendment)  and confiscation of the property without compensation is possible.

When I enquired with 2, 3 Bankers who sanctions Loan, they use the standard format that includes this clause for the contingency of the vendee’s (purchaser of the property) incapacitation – may be sudden illness, death, unexpected inability to sign the Registration (having paid the consideration in full).

To meet this contingency, the Force majeure clause -  “ inability to endorse the SALE DEED due to reasons, beyond his (Vendor and Vendees) control,  such as, happening of or occurrence of events (ACTS OF GOD),   Flood, Earth Quake, Fire, Terrorism, Law and Order situation and also the physical and or mental incapacitation of the Vendor and Vendee will rescind the agreement ab initio “,. can be part of the SALE AGREEMENT..

 ( I mark it as B)

What I mean to say that in the general format of Agreement for Sale , Part A mentioned above may be removed and Part B mentioned above can be included.

I am placing this before the learned legal luminaries inviting their opinions for the benefit of the community including myself.

Thank you and expecting.  Response please.

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