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shivkumar (proprietor)     07 September 2010

Cancellation of agreement of sale of property

This is to submit that I have entered in to agreement for the sale(unregistered) on a Rs.100/- stamp paperfor the sale of my shop with a person X.The total consideration of the shop was fixed at Rs.6,30,000/-. and I have received the payment of Rs. 3,30,000/- by account payee cheque.The remaining Rs.3,00,000/- are supposed to be cash payment transaction which is not mentioned in the agreement.

Thus the agreement was for the value of Rs.3,30,000/- and the payment received by account payee cheque is also acknowledged in the agreement.The person X had promised to pay the remaining Rs.3,00,000/- by cash before sale deed.But now the person is not willing to pay the amount and is pressurising me to execute the sale deed.

How can i claim the remaining amount or cancell the agreement to sale.



Learning

 18 Replies

R.Ramachandran (Advocate)     07 September 2010

Dear Mr. Shivkumar,

Is it correct that the Agreement to sell mentions the total consideration as only Rs. 3,30,000/- and not 6,30,000/-.  If so, having received the entire consideration of Rs. 3,30,000/- by account payee cheque, it will be very difficult for you to wriggle out of the transaction.

However, it has been held by the High Courts and Apex Court that un-registered Agreement to Sell cannot be admitted as an evidence in a suit for specific performance.  Probably this may be the only gateway available for you.  Even this proposition will not hold good once the Agreement to Sell clearly mentions the number of the account payee cheque etc.

2 Like

shivkumar (proprietor)     07 September 2010

Yes it correct that the Agreement to sell mentions the total consideration as only Rs. 3,30,000/- and not 6,30,000/-.  

Furthur the Agreement to Sell clearly mentions the number of the account payee cheque, date of cheque,amount of cheque,bank on which the cheque is drawn etc.

Is there any way out to solve my problem.Please revert.


 

Mugundhan (Lawyer)     07 September 2010

Dear Ramachandran sir can u please give the citation for "un-registered Agreement to Sell cannot be admitted as an evidence in a suit for specific performance". I am in need of it for a case. Thank u.

R.Ramachandran (Advocate)     07 September 2010

Dear Sir,

Pl. see AIR 2010 (NOC) 744 (DEL)

AIR 2010 (NOC) 644 P&H

Also see AIR 2010 SC 1654 - where it has been held that if an unregistered sale deed is tendered in evidence not as evidence of completed sale, but as evidence of contract in suit for specific performance then the same is admissible. 

1 Like

Sri Vijayan.A (Legal Consultant)     12 September 2010

This decision shall not apply to the present case of Mr.Shiv Kumar, bcos, the agreement is only a contract, unexecuted, for sale.

R.Ramachandran (Advocate)     13 September 2010

Dear Mr. Vijayan,

I fully agree that AIR 2010 SC 1654 is in regard to unregistered sale deed (not an executed sale deed, or an agreement to sell) and as such would not apply to the case of Mr. Shiv Kumar.

But the citations I had given to Mr. Mugundan on his specific request, not in connection with Shivkumar's case.  Here again, while giving the two recent citations AIR 2010 (NOC) 744 (DEL), AIR 2010 (NOC) 644 P&H, I had cautioned Mr. Mugundan to also see the SC judgement.

R.Ranganathan (Director)     14 September 2010

The citations are not in anyway related to agreement to sell. Its relevance is different from the present query. In those citations, the parties wanted the agreements to be treated as either registered sale deeds and or as unregistered sale deeds that is why it was not admitted in evidence. But Agreement to sell need not be registered compulsorily. Further agreement to sell as such, is always admitted, as evidence in Specific Performance suits. Mostly all specific performance suits are only based on the agreements to sell and non performance of the terms and conditions of the agreement.   

Sri Vijayan.A (Legal Consultant)     14 September 2010

As such, Mr.Shiv Kumar has no other option than an out of court settlement.

In the agreement for sale he has clearly said the sale consideration is fully received. So he has to do the necessary formalities to get the sale deed executed and registered.

If he hesitates, one can say the agreement is (being) failed due to the non-performance by the vendor.

So there is a possibility of the buyer to move to the court to invoke the provisions of specific performance act.There in court, his oral agreement shall not have any effect. It is settled law that the oral agreement, particularly in sale consideration and its value, can not be admitted when a written agreement prevails.

In this circumstance, if what Mr.Shiv kumar said is correct, he has to approach the buyer for amicable settlement

shivkumar (proprietor)     14 September 2010

Respected all who have guided me.Finally the party has agreed to take some consideration amount and leave the property(due to some infleuntial person involvement).

Now kindly guide me whether we shall execute a cancellation deed or only taking the original agreement deed from the purchaser is enough.If a cancellation deed is required to be executed kindly mail the Deed Draft. 

Bharatkumar (ADVOCATE )     14 September 2010

Hello, Mr.SHIVKUMAR u  know the bank accounts details of person X, If yes u refund the amout by checque in X account.

Sri Vijayan.A (Legal Consultant)     14 September 2010

It is better to have a cancellation deed stating all the facts and discharging the lien.

1 Like

R.Ramachandran (Advocate)     14 September 2010

By following the sound advice of Mr. Vijayan, Shivakumar would be in a position to avoid any further tricky situations in future.

shivkumar (proprietor)     15 September 2010

Thanks for your guidance.I will be very much thankful if you can send a draft of the general deed for the cancellation of agreement of sale.(DEED OF CANCELLATION OF AGREEMENT OF SALE).

Advocate Garvit Vinayak (Advocate)     20 June 2012

After going through your above given reply, i feel like asking you one question/query, 

in absence of agreement to sell , can the proposed purchaser force the seller to execute sale....

when only one receipt is there of token money to show any sort of agreement...!!!!


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