Dear Team My father agreed to sell a plot that he had for 10 years or so. He agreed to sell at a mutually agreed price and there was some agreement signed. The whole selling price was about 1 crore. The buyer has already paid about 25% of the amount. After few days, my father realised the buyer (and the commission agent/Dalal) did not give him the right information. The actual price of the land is much higher (almost 20% higher) and my father could be at a loss of 20lakh or so. After doing further enquiries, the prospective buyer has already agreed to sale it to another person for much higher price. I understand that he did not pressurize my father in agreeing to sell it and to some extent, it was my father's ignorance not knowing the land price in that area. So my questions are: - are there any legal grounds to cancel the deal and return the money the buyer has paid to my father - or there is no point in pursuing it as it was my father who agreed for a price under no pressure - since the registry or the deed has not been yet transferred and the buyer has already agreed to sell it further, can we talk to him and say that we would not sell it for the agreed price since he cheated us in not giving the correct information (including the agent). - he can not sell it further until he is the owner of this land which he is not yet as the sale is not yet registered. I will be grateful for your kind advice in this matter. Sincerely SG
The price issue cannot be made the basis for cancellation of the deal as you yourself should have made all the enquiries. He wasn't under any pressure and what he did is done by everyone ie make the seller take the least amount of money in exchange for the deal. Therefore this cannot be a ground.
If you cancel the deal and propose to return the money then they may file a suit for performance of contract ie agreement to sell.
You may have to pay interest and some fine or you have to go ahead.
If the agreement was not executed by a registered deed then your father can issue a legal notice to the buyer communicating his decision to cancel the unregistered sale agreement and may inform the buyer to collect the advance amount for the reasons that your father do not want to sell the property now and he intends to preserve it for his children.
Let the buyer go to court with a suit for specific performance of contract, the court would not entertain his claim based on the unregistered sale agreement and may direct your father to return his advance amount with interest.
Your father cannot cancel agreement for sale unilaterally
2) it can only be done by mutual consent
3) request buyer to offer higher price
4) if he refuses honour the transaction
5) buyer can always file suit for specific performance if you fail to sell
A prospective buyer is not required to inform the seller about the market value of the property at which it can be sold
So it cannot be said that the buyer cheated your father
The seller was required to be vigilant and made his own independent inquiries regarding the value of the property rather than depending on the agent or his buyer
Seller has entered into an agreement with the buyer and also received 25% sale price
Now the seller cannot be heard to say that there was some foul play
It was the seller's mistake negligence and ignorance for which the buyer cannot be faulted
Hence there is no ground for rescinding the contract
The only option would be to talk with the buyer and renegotiate on the price
The buyer by entering into some agreement with a third party would not mean that he is selling your property
An agreement to sell does not create any legal title or ownership right in favour of the buyer unless a sale deed is registered
However in the event the buyer defaults in his obligations towards the third party then the latter can sue the buyer and may even go for an injunctive suit against him thereby affecting your property. Since if the third party succeeds and an injunction is granted against your property when it's not even finally sold to the buyer, your property would be locked in dispute. So you can use this as a tool and ground for terminating the contract with the buyer and on that pretext try to renegotiate on the sale price on its higher side
Your father entered into an agreement based on certain facts represented. If all the relevant facts were not disclosed to him at that time, he can very well wriggle out of the agreement now by returning the advance amount received from the buyer and he will be at liberty to sell the property to someone else.
- Since , your father has entered into the sale transaction mutually after accepting the price of the plot , then legally he cannot cancel the agreement due to escalation of the price
- Further, the said purchaser has his right to approach the court for the performance of the contract within the period of 3 years from the date of agreement.
- Further , if the said agreement is not registered from the office of the registrar , then the said case may not be maintainable in the court.
- Hence, you can send a legal notice to the purchaser to cancel the agreement and send the advance payment dully received by the father.
If the agreement is based on fraud, it can be cancelled after giving notice and after getting order from Competent Court of Law.
G.RAJAGANAPATHY
High Court of Madras
Dear Client,
- Yes the sale can be cancelled if one of the party want to cancel then they can file a petition in the court for cancellation of sale and tell the reason thereof.
-If the sale deed is unregistered then you can issue a revocation notice for cancelling the sale deed.
An unregistered sale deed which is valid under the Registration Act, cannot give title on the purchaser under Section 54 of Indian Registration Act.
Thank You.
He can cancel it but if buyer incorrect any loss due to his act to cancellation he needs to make good the loss. If he is cancelling it due to buyers fault then he can do it without nay compensation
1. Your father has already agreed to sell his said land and the difference in price is not abnormally low. He can cancel the agreement if the other side has filed to comply with the terms of the agreement.
2. Yo can talk to the buyer for increasing the price. However, it will be difficult to establish that he has cheated your father since it is not the responsibility of the buyer to inform the prevailing price.
3. The buyer can not sell the property which he has not yet owned.
Small greed causes big losses.
Since the buyer wanted to sell it at higher price, he chose not to register the agreement to save small amount.
Now for this small amount of registering the agreement, he will loose all the profit he was trying to make.
Your father can send legal notice to cancel the agreement and have to return the 25% advance.
Have to verify terms and conditions for any fine etc.
The legal notice for cancellation should be by proper lawyer to not to make any mistake else it will cost your father 20 lakh.
