Is registration of property with Post dated cheque safe

502 votes

I wouldn't recommend sale and registration of sale deed when the purchaser is paying through post dated cheques.

A sale deed is a document wherein the right, title, and interest, along with possession is transferred to a purchaser.

You will transfer your interest without receiving your complete sale consideration, that you wouldn't be wise. Think of a scenario when the cheque gets bounced.

Advocate Vijay Belavadi LawRato

835 votes

What he says is true, but you better engage a lawyer to draft the sale deed incorporating the matter of cheques in it, and on the date of execution of sale deed. The suggestions here may not cover all the situations which may arise at the last minute there.

LawRato LawRato

586 votes

Respected

From the facts of your case, it can be say that better you go for Agreement of Sale as you told there is still due balence and mention all the amount and cheque details in the said agreement of Sale.

Don't registered until you receive the full amount. The Cheque is valid. If the cheque is dishonored, it may become the route cause for another legal problem. The whole registration may become null and voide.

As you informed that the buyer is ready to give post dated cheques, in case if it bounce it give raise to another cause of action. From your fact itself seen there is some error of legality in the communication between yourand the buyer.

Please contact us or contact any advocate before proceed to register the Sale Deed.

Advocate M Lakshmikanth Arya LawRato

266 votes

1. Property Registration with Post-Dated Cheque:
   • Property transactions often involve a significant amount of money. In some cases, buyers and sellers may agree to use a post-dated cheque as a method of payment during the property registration process.
   • A post-dated cheque is a cheque with a future date, meaning it can't be cashed until that date arrives.
2. Risks Associated with Post-Dated Cheques:
   • Cheque Bounce: If the post-dated cheque bounces due to insufficient funds or any other reason, it can lead to legal consequences, including penalties and legal action.
   • Delayed Payment: The delay in receiving the payment can impact the seller's financial plans and commitments.
   • Fraudulent Intentions: There's a risk that the buyer might have fraudulent intentions, such as giving a post-dated cheque with no intention of honoring it.
3. Mitigating Risks:
   • To mitigate the risks associated with post-dated cheques in property transactions:
     • Ensure that you have a legally binding agreement in place that clearly outlines the terms and conditions of the transaction.
     • Verify the buyer's financial capability and credibility.
     • Consider using alternate payment methods, such as bank drafts or electronic funds transfers, that provide more security.
4. Legal Recourse:
   • In case of a cheque bounce, the aggrieved party can take legal action against the defaulter, including filing a complaint under Section 138 of the Negotiable Instruments Act, which deals with dishonored cheques.
   • Legal proceedings can be time-consuming, so it's essential to have a strong case and legal representation.
5. Consult Legal Experts: When dealing with property transactions involving post-dated cheques, it is advisable to consult legal experts who specialize in property law and financial matters. They can provide guidance on the legal aspects of the transaction and help protect your interests.

In summary, registering a property with a post-dated cheque carries risks, including the possibility of a cheque bounce and delayed payment. To mitigate these risks, it's essential to have a clear legal agreement, verify the credibility of the other party, and consider alternative payment methods. In case of a dispute, legal recourse is available, but it's advisable to seek legal counsel to navigate such situations effectively.

Advocate Chikirsha Mohanty LawRato