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Harish (PARTNER)     03 March 2010

Validity of Sale agreement on Rs. 100 Stamp Paper

I entered into an agreement to sell 4 acres of land to a person @ Rs. 30000 per acre (totalling Rs. 120000 for 4 acres). I received Rs. 25000 as advance. In agreement its mentioned that registration should be completed within six (6) months after paying the balance of Rs. 95000. Its been almost 1 year and 7 months now. Inspite of my repeated asking the purchaser didnt made balance paid within 6 months. Now after 1 year and 7 months he came to ask me for register the land and he is ready to pay the balance.  I totally disagreed and told that I wont sell my land. After few days he has sent Legal Notice stating that its me who has not turned up to register in his name and he is asking me to register the land in his name within 15 days.

I want to know the validity of the sale agreement made on Rs. 100 stamp paper and also let me know how i can defend my land.

So please advice me in this regard.



Learning

 21 Replies

adv. rajeev ( rajoo ) (practicing advocate)     03 March 2010

the validity of the stamp paper is 3 years from the date of issuance of the stamp paper.  In your case within 3 years he has to file a suit for specific performance of contract.  He has already issued a notice to you so from the date of receipt of the notice by you he will get 3 years time to file the suit against you.

Harish (PARTNER)     03 March 2010

well rajeev....thanks a lot for early response. I want further clarification that....wat is the validity of the agreement ? as its mentioned that it must be registered within 6 months.

and wat bindings i have got as more than 1 year since the expiry of the first 6 months.

Please do reply rajeev...
 

R.R. KRISHNAA (Legal Manager)     03 March 2010

Mr. Harish

 

The agreement is valid in 100 Rs stamp paper and even if not made on stamp paper it is valid.  In fact even a oral agreement to sell is enforceable in law.

 

As regards your query of 6 months validity, I would say that there should be a negative covenant in your agreement that "if the purchaser does not complete the sale within 6 months, the agreement shall stand cancelled". If there is no negative covenant and it is merely stated that the sale should be completed within 6 months then the purchaser gets a valuable right to seek specific performance i.e., he possess the right to get the sale registered even after lapse of time.  IPlease look into your agreement for the presence of any negative covenant.  If there is no negative covenant as I said supra, the purchaser gets a right to claim the property. This issue is covered under the legal phenomenon "Time is the essence of contract" under specific relief act.

2 Like

k.chandrasekharan (advocate)     12 March 2010

I differ with Mr. Rajeev S Vadrali's opinion partially:

Any legal action, original suit or arbitration, if there is such a clause in the agreement, has to be initiated within three years from the date of agreement. If a time for performance is stipulated say as 1/2/3... months/---days, then the limitation gets extended by such period.

(As for stamp paper, it is perpetually valid;in your case the issue is academic, as the same hasbeen utilised for drawing the agreement in question)

If there is no automatic cancellation of agreement clause after a specified period, in the agreement, then the agreement is still valid upto the date of aforesaid limitation.

If you have issued notice of revocation and cancellation of agreement, with intimation of forefeiture of advance received, if permissible under the agreement, or expressing readiness to refund the whole/part of the advance amount, if such a case is warranted as per the agreement, then the notice by the 'purchaser' is subsequent and loses its value. Lest the said notice is valid, in spiteof thefact that the prescribed period for conclusion is exceeded.

Since you are not interested to sell, as evident from your query, you need not take any legal action. Let there be a reply to the notice, denying the contentions of the 'purchaser' and also repudiating the agreement on grounds of effulux of time, as well as mentioning forfeiture/refund as stated above.

The person who files the suit has to pay the court fee and also prove his case.If there is any deficit in the stamp duty, (since most states have made the stamp duty on agreement to sell ad-valorem = according to value), then you can raise a preliminarey issue of admissibility of the document in evidence, impounding of the document etc, during trial.

With so many gaps in information, more specific guidance is not possible.

Manish (AM)     06 October 2010

What are the negative consequences if  agreements are not executed on stamp paper.

Tereza (Personal Assistant)     28 October 2010

Dear sir,

I have made an agreement for purchase of land during Oct.2004. On the Stamp paper sellers party, Husband wife and son all three signatures are on the stamp paper including one of witness and the purchasers signature. Seller agreed and a token of acceptance we paid Rs.10000/- as advance to complete the procedure. I have sent a notice through advocate during 2008 but no reply. Again we have sent legal notice through advocate and the seller approached to Lawer for refunding the money which advance was taken by them. But I as purchaser did not agree since I want to purchase the land and use for house purpose as shelter. Again I have sent legal notice in January, 2010 but so far there is no reply. The seller wants increase in the amount for which I am ready since rates are gone up.

I want to know that under Specific Performance can I file a suit against Seller?  What is the remedy?

I am ready for settlement for increasing the amount for purchase but I have loss and the seller is gaining? What should I do? Please encourage

Thankingyou

Vipin Kumra (partner)     19 October 2011

any case laws that are available to prove that if a negative covenant is in the deed then it will stand automaticlly cancelled after the expiration of the said period..

dk (owner)     03 November 2011

Dear Mr. krishna, 

After reading your views in the case, I request you to kindly clarify as in my case there was a verbal agreement in the presence of 2 witnesses(broker and other person)  to purchase the tenanted premises and a token advance of Rs. 50000 was paid. Landlord asked to get paperss prepared. When I sent him the docum,ents for approval, he refused to sell the property. Even  denied having received the amount of Rs. 50000.  

 

Kindly advise, what is possible regards 

udaya kumar (Manager)     11 March 2012

Dear Rajeev & Krishna,

As mentioned by chandrashakran, I have a case where purchaser has made an agreement for Sale with the seller towards purchase of 15L property my making advance of Rs. 3L in march 2011. the agrement states that the purcharer will by the property by paying the balance within 3months and execute sale deed. seller has waited till Dec 2011 and sent a Notice through advocate stating that we have waitined for 6months post 90days of agreement time, as you have not executed the sale deed till now we are cancelling the agreement made kindly collect your advance made to us. the notice was returned stating that not received. now seller is in need of money can he go ahead and sale the property with another 3rd party.

RAJEN RAVI (nil)     11 March 2012

The 3 years period in law is the hole.

k.chandrasekharan (advocate)     12 March 2012

1. Mr. Harish's original query stands answered. In summary: If there is no clause in the agreement, for automatic cancellation after a certain period, agreement continues. If the purchaser has not fulfilled his obligations within the time stipulated, the seller has to take the initiative to issue notice of cancellation and offer of refund of whole/part advance/forfeiture of the advance as the case may be, as per relevant clause of the agreement. If seller does not issue notice, the agreement continues. If the purchaser issues notice for registering sale deed obtaining the balance consideration, and the seller does not respond positively, the purchaser gets a right to sue for specific performance or refund of advance, at his option. Limitation is three yearsfrom the date of the agreement+time stipulated for performace, if any.

Understamped instrument can be pointed out in the written statement, and suggested as an issue in the draft issues submitted to the court, and may be prayed to be dealt with as a preliminary issue. Written instructions to the advocate on this issue, be provided since practically 99% advocates in subordinate courts take marking of documents very casually.

2.The second para above, answers Mr.Manish's query, as understamped instrument can not be admitted into evidence. But is is a curable defect.

3. Regarding Tereza's query, it appears that the case of the purchaser is hit by limitation, in the absence of fullest details with dates of any and all correspondence from the date of the agreement till now, and also exact extract of the clause of the agreement relating to time limit prescribed, and also penalty/default/forfeiture/refund clause(s). Generalisations are grossly insufficient to carefully scrutinize limitation aspect. It also appears that it was not wise to have spurned the offer of refund of advance in 2008, since even that can not be agitated upon now, due to limitation.

4. Regarding DK's query, no dates are given. So, for the present, issue notice to the seller calling upon him to execute sale deed asserting readiness for payment of balance consideration, throughoout the interregnum and even now and clearly stating as to how the seller had been dodging. Repost query with full details when a response is received.

5. Regarding Udaya Kumar's query, if the seller had not received any notice, prior to the notice issued by him,from the purchaser, and as per agreement he had no more obligations to be fulfilled except receiving consideration and registering sale deed, he can issue a second notice quoting the first one, and enclosing a demand draft for the amount of advance admitted as refundable. This letter too is likely to be returned undelivered, if the Purchaser repeats his earlier act. In this second notice, the fact of the earlier notice, getting returned undelivered should be mentioned.

The second notice, alongwith a copy of the first notice, should also be sent by courier service, with proof of delivery arrangement with the courier. If email ID/FAX of the purchaser are known, notice shall be sent by these also.

Instead of Demand Draft, if the account number, bank and branch name of the purchaser are known, straightaway, the refund of advance can be made by funds transfer through RTGS. This will obviate the purchase of DD and lock up of money. The returned registered post envelopes should not be opened and preserved in the same condition.

Thereafter, if sale is effected to a third party, even if a litigation is foisted upon by the purchaser, it can be successfully defended.

1 Like

Sabarinathan (Manager)     27 February 2013

 

I entered into an sale agreement on Rs. 20 stamp paper to sell my 1 plot to a person @ Rs. 900000. I received Rs. 50000 as advance. In agreement its mentioned that registration should be completed within three (3) months after paying the balance of Rs. 850000. It has been almost 1 year and 3 months now. Inspite of my repeated asking the purchaser didnt made balance payment and registor the property his name. And also in the sale agrement mentioned clearely that he has to registor with in three month if not he is not liable to claim advance amount paid by him and if with in the period seller not agreed to registor to purchaser, purchaser to claim from court. Now after 1 year and 3 months he came to ask me for return the advance paid by him but he said original sale agrement stamp paper he missed. I totally disagreed and told that I need original sale agrement paper to return advance payment eventhough I had lost 150000 advnce amount based on this agreement same one year before plan to purchase plot in different palce and couldn't got refund my advance in different person due to this problem. Now he (purchaser) is threten me to file case in court.  

I want to know the validity of the sale agreement. 

So please advice me in this regard.

 

Radha Krishana (Team Leader)     11 April 2013

My Name is krishana,

I have land of 57 yard & One of person(purchaser) create a sell agreement(called "soda chhitthi") on plain paper and I(seller) have made signature on revenue ticket. My sun also have signed as witness only there are three signs on the paper (paper without stamp only plain paper). I & purchaser signed on revenue ticket of Rs. 1 while my son signed as witness. The purchaser paid me 1 lakhs as advance token.  The purchase wanted to buy the property in very low price and I don't have idea about the actual price of property. I tell purchaser to get refund and he was not ready to get refund as by mistake I have signed and property rate was very low. After 4 month the purchaser noticed me by advocate & suit within 3 days of notice. The purchaser presented two witness affridavit & The suit is for specific performance and issues on 2010. I don't ready to sell the propery so is the way to get solution or complete the suie quickly. He also get suit as per the transfer of property act 1882 col 52 but court rejected in 2011. The purchaser told me that he will go to high court. I don't have much salary to continue the suit longer any suggestion to have free/cheap advice.

Any idea plese.

Thanks

shaik fareed (Rretired)     03 April 2015

Hi sir

I want your valuable opinions regarding below. Please kindly read the below details with patience completely.....


Actually my father made an agreement with my uncle with 30L of property on house. The agreement terms are:

1.The agreement is made on 14.20.2011for total house with 30L by taking an advance of amount 8L. The time period for the registration is 7 months.

2.The seller should vacate the house where he given for rent and should handover the property to the seller on or before 7 months by taking the remaining amount and make registration.

3.If the seller fails to do so, he should return with interest of amount 16L to the buyer.

4.On the other hand if the purchaser could not paid the remaining amount within 7 months the agreement will made cancel and he will not get the advance amount.

Again my uncle approached to my father by asking some amount to vacate the house as he didn’t yet. Like that my unlce took again 4L and made an endorsement on the backside of the orginal agreement by extending the date of 28.6.2012. Totally he took 12L from my father. As my father reminded him again & again to vacate the house and handover it soon. He was just going to delaying. Later we got to know that my uncle again made an agreement to other person for 35L by taking advance amount from him. When we got to know, my father called him to ask on his deeds. He threatended my father that he will not return the advance amount or nothing and threatended by saying as do whatever you want, this is my property.

Then my uncle send us a notice by saying that the agreement time period is over & he will not refund the amount.

Then my dad reverted a notice that he is making a false allegations on him. As my dad was always ready to perform his conditions by holding the remaing amount in bank. So that he could come and vacate the property of house from the renter and handover the property, which he did not made and make a other agreement which is cheating(420).

Again we issued a notice to come and perform the conditions of the agreement to vacate the house and make a register by taking remaining amount.

But he didn’t responded yet. As my father is a retired government employee with 4 daughters. He has many responsibilities.

I want a suggestion that what to do.

Till yet we didn’t do anything because he is our relative. But now, its almost over he is not ready to return the amount nor vacating the house nor making a registration to us.

And now we don’t want the house because the renter is not vacating, what to do in this situation.

How to file a case on our amount?

Can we file a case with interest amount or not?

What is the time period of our agreement? As he taken amount and endorsed by extending the date of agreement to 28.06.2012.

Please kindly do suggest with your valuable opinions with Act No.

 

Thank you.


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