It will be advisable if he pays before execution of sale deed, however CHEQUE BOUNCING laws are strong enough to make him pay you if the cheque bounces, one thing you can do is ask him make DD for the whole amount and you bear the cost of DD to safeguard yourself. 

It is also advisable to keep the photocopy of complete papers with yourself. 

However, I should tell you that you hold his 2 lakhs and house, so you should be having the upper edge to negotiate, else he will not be able to claim his cash from you. 

Handing over the property after the registration process when only 2 lakh has been paid is not done. 

How do we know he even has the money. What will happen if he declines/refuses/promises to pay at a later date. You only have a legal remedy while he may be enjoying the property.

Therefore take the DD immediately before the purchase.  There are no 2 ways about it.

There is no trend in such matters. If both the parties are distrustful of each other as nobody else is between them then it is better to err on the side of caution and take the amount at the time of registration.

There is no guarantor therefore act accordingly.

If you do not trust or have faith in the buyer then you can insist him to purchase a DD for the said sale consideration amount  or refuse to sell the property and return the advance amount given by him.

If there was no sale agreement entered between you and the buyer then there is no question of cancelling the sale agreement also.

alternately you can add a clause that registration of sale deed is liable to cancelled if the  payment paid by the cheque towards the balance of sale consideration is not realised  or if the cheque is bounced and the buyer do not make any attempt to pay the same by DD immediately within three days from the date of the cheque dishonoured. 

The cheque if dishonoured and the buyer is not complying with the demands made to pay the cheque amount, it would attract the provisions of section 138 NI act for taking action against the buyer   because it is legally liable debt.

You can decide further course of action based on the circumstances prevailing at your end.

No only after sake consideration is paid through agreement to sale then registration can be done

1) insist on DD for balance amount 

2) offer to pay DD charges 

3) don’t accept cheque as it can be dishonoured 

4) generally  at time of registration DDIs made or funds transferred through RTGS 

No one accepts cheques for balance payment 

no guarantee it would be honoured 

1. This is against usual practice and betrays prudence.

2. If he gives a cheque on the date of execution of sale deed and it subsequently gets dishonoured then what will you do?

3. Either the sum should be credited to your account through any mode

before the execution of sale deed or he should deliver a DD to you on the date of execution of sale deed.

Dear Sir,

1) You should not do registry unless payment received.

2) Mostly trend is the that people pay advance amount, enter into agreement to sale and pay major amount, and at time of registry remaining small amount is paid at time of registry.

3) You should seek DD or transfer of money in your account by some mode of transfer. Cheques can be dishonored.

Thank you