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Validity of Sale Agreement and When it Gets Expired
14-Jun-2024 (In Civil Law)
If the sale agreement has lapsed and the seller refuses to execute the sale deed or return the advance, the buyer should send a legal notice and file a civil suit seeking either specific performance or, if specific performance is inappropriate or inequitable, refund of the earnest money with interest and damages; remedies arise under Section 73 of the Indian Contract Act, 1872 (compensation for breach) [https://indiankanoon.org/doc/339747/], and the court can grant refund/alternative relief under Section 22 of the Specific Relief Act, 1963 when specific performance is refused [https://indiankanoon.org/doc/151288005/]. Supreme Court authority shows courts will refuse specific performance where time or readiness to pay was of the essence and instead award refund/damages (Chand Rani v. Kamal Rani, SC) [https://indiankanoon.org/doc/1757550/], the discretionary grant of monetary relief instead of specific performance has been affirmed (Kanshi Ram v. Om Prakash Jawal) [https://indiankanoon.org/doc/737936/], and courts have directed refund with interest where specific performance was denied (Hemanta Mondal v. Ganesh Chandra Naskar) [https://indiankanoon.org/doc/15514780/].
A registered sale agreement in India is generally valid for three years from the date of execution. This period is based on Article 54 of the Limitation Act, 1963, which specifies a three-year limit to file for specific performance of a contract.
If the seller is not refunding payment in case of breach of an agreement to sale of land, the buyer may take the following steps:
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Send a legal notice: The buyer may send a legal notice to the seller, stating that they are entitled to a refund of the payment and demanding that the payment be refunded within a certain period of time. The legal notice should be drafted by a lawyer and sent via registered post with acknowledgement due.
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File a suit for specific performance: If the buyer has fulfilled their obligations under the agreement to sell and the seller has breached the agreement, the buyer may file a suit for specific performance in the civil court. The court may order the seller to fulfil their obligations under the agreement, which could include delivering the property and transferring the title to the buyer, or alternatively, may order the seller to refund the payment made by the buyer.
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File a suit for recovery of money: If the seller fails to refund the payment, the buyer may file a suit for recovery of money in the civil court. The buyer may also seek an injunction to prevent the seller from selling the property to a third party.
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File a criminal complaint: If the seller has committed fraud or cheated the buyer, the buyer may file a criminal complaint under the Indian Penal Code, 1860. The police may investigate the matter and file a charge sheet in criminal court.
It's important to note that the specific steps available to the buyer may depend on the terms of the agreement to sell, the applicable laws in the jurisdiction where the transaction is taking place, and the specific details of the case. It's always advisable to consult a lawyer for advice on the legal options available in a particular situation.
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