LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Rajeev (owner)     24 February 2013

Is it compulsory to register an Earnest Receipt

Hi All,

          Is it compulsory to register an "Earnest Receipt" or "Visar Pavati" or "Agreement to Sale" in which possession is not transfered to the Purchaser. If yes, Plz provide me the case laws. Thanks.



Learning

 3 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     24 February 2013

 

An agreement to sell spells out the terms and conditions under which the seller is intending to sell the property, and the terms and conditions under which the buyer is intending to purchase it. This facilitates smooth culmination of transaction without disputes. An agreement to sell is an important document in the process of sale or purchase of property.

This agreement contains conditions by which the parties agree to perform certain acts. It binds them to the terms and conditions agreed upon. An agreement to sell precedes the execution of a sale deed. The subsequent sale deed is based on the agreement to sell. It is signed and executed by the seller and the buyer on a non-judicial stamp paper. As such, it has legal value and can be produced as evidence. Agreement to sell is the base document on which the conveyance or sale deed is drafted. Every document of transfer of property by way of sale would be preceded by an agreement to sell. In contrast, a sale deed is a document executed by the buyer and the seller.

It gives details on how the seller got the property, at what price he is selling the property, assurance to the purchaser that the property is free from any encumbrances , indemnity clauses etc. A sale deed is executed by both the seller and the purchaser, and is registered in the office of the registrar. It is executed subsequent to the agreement to sell, and is based on the terms and conditions contained in and agreed upon while entering into the agreement.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     24 February 2013

 

It gives details on how the seller got the property, at what price he is selling the property, assurance to the purchaser that the property is free from any encumbrances , indemnity clauses etc. A sale deed is executed by both the seller and the purchaser, and is registered in the office of the registrar. It is executed subsequent to the agreement to sell, and is based on the terms and conditions contained in and agreed upon while entering into the agreement.

An agreement to sell must contain names of the parties, their residential addresses, age, date and place of execution of the agreement, competence of the parties to enter into an agreement , rights and liabilities of the parties , brief narration with particulars of documents and how the seller got the property, exact location and descripttion of the property. An agreement to sell records the understanding reached between the parties , which is binding on both. This agreement protects the interests of both parties.

anitha Gutti (Advocate)     24 February 2013

Sir,

the above query was well answered by Mr. Ramacharry, as well as by Mr. R.Ramachandran one of our lawyersclubindia's expert previously which I have taken the extracts and produced it below.  Kindly refer this.

" Section 17(1A) of the Registration Act, is against the interest of the buyer in the instant case since there is delivery of possession of the immovable property in favour of the buyer, which has all the trappings of the provisions of Section 53-A of the TPA Act, since the Agreement to Sell in those conditions is required to be Compulsorily Registrable.

Non-registration of the said document will definitely be hit by the provisions of Section 49 of the Registration Act, namely, the said Unregistered Agreement to sell will be not be admitted in evidence and therefore the buyer will not be able to succeed in suit for specific performance.

Also,

Section 17(2)(v) provides that a document, not in itself creating a right in immovable property of the value of Rs.100/- and upwards, but merely creating a right to obtain another document which will, when executed, create any such right, need not be registered. An agreement for sale in the usual form acknowledging receipt of earnest and providing for the execution of a regular sale-deed on payment of the balance purchase-money, is a document of this kind.

If it was simple Agreement to sell without delivery of possession, Sec. 17(2)(v) would have been applicable and consequently there would have been need for registration."

Hope these answers given by Mr.  R.Ramachandran would be sufficient to clear your doubt. 

   


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Recent Topics


View More

Related Threads


Loading
Start a New Discussion Unreplied Threads


Popular Discussion


view more »




Post a Suggestion for LCI Team
Post a Legal Query