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M. Kannan (Consultant)     21 December 2009

Legal remedy after agreement of sale date is over

My friend (Purchaser) entered into agreement of sale of property with the seller. As per the agreement, the time for registering the property is 4 months. If the purchaser fails to register the property within that time, he has to lose the advance paid amount. If the seller fails, he has to pay double the advance amount. The problem is my friend has applied for loan which is on process. The agreement time is over. He needs extention of time of registering the property for which the seller is not agreeing. What is the legal remedy available to my friend?


 4 Replies

Elamaran Perumal (Law Officer)     21 December 2009

Hi Kannan,

I think your friend's case is a very justifiable one. He can very well justify the delay because, the delay is caused by the loan sanctioning bank. Otherwise, he can bring up a suit for specific performance of the contract of sale against the Seller.


The intention of the parties concerned and the reasonable steps taken prudently assumes significance for the performance of agreement by both the parties. It is no doubt true that the agreement holder does not hold any rights to the property until the sale deed is registered. But however, as soon as an agreement is entered, the purchaser's interest (as third party) created in the property. In case he fails to pay balance consideration to the seller in pursuance of the sale agreement due to the reasons beyond his control, the purchaser shall send a letter (a written communication by RPAD) expressing his inability to pay the seller and seek extension of time and mark a copy to the banker who processes the loan application in order to bring knowledge to all concerned. The purchaser has to demonstrate clearly why he is not honouring the date of payment and that he is not intentionally delaying the payment or playing dilatory tactics. Further, in the said letter, it should be clearly mentioned that the seller already knows that the purchaser is not buying the property with his own money and he buys it only with the loan money. Then only it will carry evidentiary value. It is better to send this kind of letter through a lawyer to be more effective. If it is possible, some more amount by way of advance can also be paid through the letter to show the bonafides. If the seller still adamant of not yielding to the request for extension of time, then the purchaser may get an ad-interim injunction from the jurisdictional Court against the seller not to alienate the property to anyone except to the purchaser for such an extended period.


I beg to differ with Mr.Perumal as regards bringing up suit for specific performance. Suit for Specific performance can be filed only when the other party i.e., the seller is not ready to perform his side of agreement/contract when the purchaser is ready to perform his side. But here the other party i.e., the seller is ready and the purchaser is on the weaker side and is unable to perform his obligation. Hence the suit for specific performance is not applicable in this case.

Dr.Anjani Kumar Vaidyasen,09431271130,Patna (Corporate affairs Taxation and Law Consultants Advocate)     28 December 2009

It will be better for you to arrange the rest money by secondary method of loan and registered your property with kind request to seller,otherwise it will be very difficult for you to recover the paid money from the seller.

Thanking you.

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