Pankaj Rathod 08 September 2018

Buyer back out of sale agreement and introduce new buyer

Seller A and Buyer B entered into Agreement for sale in July 2016 which is duly stamped, executed and registered. The buyer paid 20% advance amount. Soon the buyer realized that there was a common lien on the flat along with another property. The seller agreed to get the flat cleared until which balance payment was held by the Buyer. Seller has now got the property cleared of the lien and demanded the balance payment as per agreement. Buyer B now wants to back out of the deal and another buyer C is ready to take the property. Is it possible to enter into a tripartiate addendum agreement between Seller A, old Buyer B and new Buyer C for Buyer B to back out and get the advance payment back and Buyer C to pay directly to Seller A and sale deed to be executed between Seller A and buyer C. Its been 2 years since the original agreement but that terms are not fulfilled. Will the stamp duty need to be paid again?

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6 Replies

Adv Deepak Joshi +917017821512 (Advocate) 08 September 2018

Dear querist,

If all the three parties are ready then it can be done without knocking legal door.

Deepak Joshi & Associates

Djaa.legal@gmail.com

Mb/whatsapp +919456777600

Adv Ananya Choudhury (Advocate) 09 September 2018

It is best to register a cancelled deed of the previous Agreement to Sell between A & B, and enter into a fresh agreement between A and C, if the seller A is willing to adjust the advance payment taken from B to now new buyer C. You have to check whether there were any clauses in the previous agreement wrt cancellation or withdrawal procedure.

Since B does not have any role anymore in the new deal, there is no need for a tripartite agreement.

Pankaj Rathod 09 September 2018

Originally posted by : Deepak Joshi
	Dear querist, If all the three parties are ready then it can be done without knocking legal door. Deepak Joshi & Associates Djaa.legal@gmail.com Mb/whatsapp +919456777600

Thanks for the clarification.

In that case, will we need to pay stamp duty once again on the addendum agreement or we can mention in the agreement that stamp duty paid via so and so challan on the original agreement?

Pankaj Rathod 09 September 2018

@Ananya,

Thanks. In case we cancel the agreement between A and B, can we claim the refund for stamp duty even after 2 years, since the agreement terms are not fulfilled.

The property is registered in Mumbai.

Pankaj Rathod 15 September 2018

Are there more opinion on this?

Adv Ananya Choudhury (Advocate) 19 September 2018

Apologies for the delayed reply. No the stamp duty will not be refunded as this is for charged for the registration of the document and will not be defunded. That amount will have to be foregone.