To get the advance amount back
Deepak Nair
(Querist) 16 October 2013
This query is : Resolved
Learned experts,
In this case, Mr. A paid Rs.5 lacs as advance for a house property. Entered into an agreement, whereby the balance amount of Rs.15 lacs to be given in 6 months time. The property is 1/3 of a bigger property which the vendor got through partition.
But, the deal cannot be concluded now, as the documents for clear title of the property is unavailable. Since the original document other than the registered partition deed is unavailable, the banks are not giving loans. Thus, the said Mr.A demanded the advance back. The agreement too says that, if the vendor fails to produce the necessary documents, the advance shall be returned in full. If the buyer walks out from the deal, then also the vendor shall return the amount after deduction of expenses incurred by him of any.
Now, the vendor says he is not in a position to refund the money and he needs time till March 2014. But, the agreement already entered for 6 months expires in November 2013.
in this circumstances, what can be done to safeguard the interest of Mr. A the purchaser?
Even though the vendor promises orally to return the money by march, is it advisable to make another agreement to that effect?? if yes then how??
Can I suggest them to make a deed of cancellation of the current agreement adding the points "vendor agrees to return money by march 2014" and "if he fails to refund, then purchaser can approach the court for recovery and attachment of the property"??
Kindly advise on the above.
Thanks
Guest
(Expert) 16 October 2013
Cancellation of the Agreement will be a good option. However, you must have couple of clauses to protect your money (i) charge on the property untill the money is repaid in full with interest and (ii) ROFR clause, should the seller is ready and willing to sell once again.
prabhakar singh
(Expert) 16 October 2013
Dear Deepak!
Your approach to the problem is very much correct and appreciable.
Go for a cancellation agreement as suggested with clauses by Mr. Deepak Thakkar with assigning reasons of cancellation as fault of vendor and for refund better get advance cheque(s) mentioning their post due dates and number and name of bank.Get the cheques filled by the drawer in his own hand writing.
Deepak Nair
(Querist) 16 October 2013
Dear Sirs,
Thanks a lot for your valuable advice.
I would like to confirm one more point here, that, if a clause for charge on the property is included, is it legally enforceable??
If he fails to pay, then can the purchaser file a suit for recovery demanding attachment of property?
Kindly advise.
Sudhir Kumar, Advocate
(Expert) 16 October 2013
Both Civil suit and criminal case can be filed even at this stage.
But agreed with the proposal of Mr Deepak.
Let the buyer create record that seller is violating the contract and the seller has no title of land while accepting part consideration.
R.K Nanda
(Expert) 16 October 2013
nothing to add more.
Deepak Nair
(Querist) 16 October 2013
Thanks a lot learned experts.
prabhakar singh
(Expert) 16 October 2013
I doubt that a legally enforceable charge could be created on immovable property without registration of the subsequent agreement discussed here and desired to be entered into.
Devajyoti Barman
(Expert) 17 October 2013
Please refer my reply in your first post.
Deepak Nair
(Querist) 17 October 2013
Thank you Prabhakar Sir.
The subsequent agreement will be registered with above discussed clauses for charge on the property.
