Seller want to cancel sale agreement

773 votes

If a notarized agreement to sell has been executed and it contains a clause that in case of seller’s default double the token amount will be returned, then the buyer has two possible remedies under law: 1. To file a suit for specific performance seeking a court order directing execution of the sale deed, or 2. To claim refund of double the token amount as per the agreed clause. The final outcome will depend on the terms of the agreement, whether your father (being the actual owner) signed the agreement, his mental/medical capacity at the time of signing, and whether time was made the essence of the contract. If your father is medically unfit and did not voluntarily consent, this can be a valid defence, but it must be supported by proper medical records and evidence. However, if the agreement is validly executed, courts generally enforce such contracts or award compensation. You may explore settlement by offering refund (including double token if contractually agreed) to avoid prolonged litigation.

Advocate Sumegh Garg LawRato

640 votes

Since the property admittedly stands in the exclusive ownership of your father, you were not legally competent to enter into a binding agreement to sell in absence of a registered Power of Attorney or authority. Under Section 7 of the Transfer of Property Act read with Section 54 TPA, only the owner can transfer property and an agreement to sell by a non-owner does not create any right or interest in favour of the purchaser. Therefore, the buyer cannot obtain a decree of specific performance against your father. Further, under Sections 10, 14 and 20 of the Specific Relief Act, specific performance is discretionary and cannot be granted where the executant had no title or where performance has become impossible. At best, the suit converts into recovery of earnest money/compensation. The clause of double token amount is a penalty clause and as per Section 74 of the Indian Contract Act, the Court grants only reasonable compensation, not automatic double payment. Moreover, refusal of the true owner and his medical incapacity renders the contract void under Section 56 Contract Act. Accordingly, the probable outcome is dismissal of relief of sale and passing of a money decree only. You should immediately tender refund through bank draft and place it before the Court to show bonafide conduct, which also negates criminal intention.

Advocate Neha Gupta LawRato