If the agreement clause says so then you can. Otherwise he can go to court to recover his money after deduction of loss to you.
Property Advance
Hi, I have entered into an agreement of sale with a buyer who agreed to purchase my house for 45 lakhs and paid an advance of 10 lakhs. They agreed to pay the rest of the amount within 30 days but could not pay the amount. Post which, they did not proceed further due to some reasons. I asked them to wait until I sell my house to refund the amount since I used their amount for other purpose. I did not give this in writing and they waited till I sell the house meaning I entered into agreement of sale with other buyer. I did not gave anything in writing saying I would pay your amount after sale. Its been a year. Now, I do not want to refund their amount of 10 lakhs since I faced lots of damages of 6 lakhs due to their cancellation. Can i file a suit saying I would not refund their amount since they did not fulfill their agreement within 30 days. If yes, what could be the outcome. Please suggest Is the agreement valid after 30 days from execution.
Asked 4 years ago in Property Law
Religion: Hindu
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5 Answers
Dear Sir/ Mam
- The agreement contains cancellation clause where penalty in case of cancellation due to fault of purchaser is mentioned. You may accept the payment with delayed payment interest or cancel the agreement as per clause mentioned in the agreement , in such case a cancellation deed has to be registered along with refund of payment taken after deducting penalty amount. You can also take refund of stamp duty paid from Govt. authorities after cancellation.
- The Agreement For Sale is valid only if the commitments from both parties are fulfilled. However, as in a case described by you you must also register a "Deed of Cancellation". It is always advisable to mention eventualities and the consequences in the agreement for sale. Though your property is not registered on the prospective buyers name the agreement for sale is. Hence the title of sellers property does get defective. Only way you can be safe is by having strong specific performance clauses in the agreement. You can file against specific performance against buyer.
Thank you
It is necessary to peruse agreement for sale to advice
2) if there is no forfeiture clause in agreement you should refund advance money received by you
3)don’t file any suit
You took advance of 10L one year back from buyer. He could not complete transaction within agreed period of 30. Now you don’t want refund that amount. You want of file a suit claiming seeking order of Court not return advance as you suffered loss. That will not be agreeable to Court. Court is there to do justice, not injustice. I the buyer goes to Court will order to pay the amount with interest.
The agreement for sale is valid up to 3 years from the date of its execution.
If you approach the court or the buyer approaches the court, you only would be liable to pay the amount that too with interest from the date of paying the advance amount, hence do not take risk.
You cannot take law into your hand to refuse to return the booking amount.
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