karthik (Program manager) 15 May 2011

Unregistered Sale Agreement

Hi all

It would be really helpful if some of the experts in this forum can throw some light on the issue that i am facing.

My case in detail

6 months back , we decided to sell my mother's property but before we could find a buyer my mother left to US. So we arranged a lawyer in US and made a power of attorny on my name but that power was not registered in the indian embassy nor in any of the indian register offices.

So i believe it is not a valid power document ??

With this power i entered into an unregistered sale agreement with a buyer on a Rs 50 stamp paper with Jan 31,2011 as the last date of the agreement period. However, the buyer could not arrange the agreed money by 31st Jan 2011, so he turned up on 31st and paid another installment and asked for extension. I singed on the agreement saying " received sum of ____on 31st Jan 2011" but did not mention anything related to extension of the agreement. Now the buyer claims he has time till 2013 to pay the remaining amount and i cannot sell the property to anybody else. Is this true? Will i not be able to sell my property to anybody until 2013?

Please help me as i am totally confused and shocked. We are in urgent need of money

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advocate rajan pandurang joshi (Proprietor) 15 May 2011

Under the provisions of Contract Act even if a date has been mentioned in your agreement, that per se would not be considered that time was of the essence of the contract. Hence, merely last date is mentioned, I donot think it automatically put an end. Any how, contrary to the term of completing the transaction on 30/1, you have accepted the payment on 31/1 without mentioning that the payment was received by you "wthout prejudice". Under the circumstance, even if by any strech of imagination the earlier contract came to an end, it would amount to novation and as such, the purchaser's right to seek specific performance would get extended. As regards registration of the Power of Attorney is concerned, under Section 32 & 34 of Registration Act, only in the circumstance that the Principle has signed the document and the same is to be registered under the Registration Act, then and in such circumstance only the Power of Attorney is required to be registered. Regarding registration of sale agreement, mere agreement does not create any interest in favour of the Purchaser but it confers only a right to purchase and as long as the transaction has not resulted in delivery of possession, in my view, the agreement would not suffer under Registration Act.

R.P. Joshi Advocate