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Jayanti Devi (Student)     20 December 2024

Cancellation of flat sale agreement

Buyer has executed sale agreement  for purchaing a flat and paid 30% advance in a partial payment plan schedule. now, sale agreement has a cancellation clause where in on cancellation notice seller is supposed to refund after deducting  4% as liquidated damages. no other deduction is mentioned in the cancellation clause.

a) does seller have the right to deduct anything beyond 4% by showing any other losses ?

b) how many days seller can delay in refunding after receiving cancellation notice?



 13 Replies

Dr. J C Vashista (Advocate )     20 December 2024

Q 1 No.

Q 2 Can not be predicted as to how much the builder intend to delay refund.

T. Kalaiselvan, Advocate (Advocate)     20 December 2024

1. Even though the clause is clear if the vendor decides to deduct more amount he may unnecessarily delay refund forcing you to negotiate for a higher deduction in order to return the amount expeditiously.

However if the sale agreement was by a registered document you can enforce it through law if in case the seller plays mischief.

2. If a particular time is not stipulated then you may have to put pressure on the vendor for refund.

Jayanti Devi (Student)     20 December 2024

even if a particular timeframe is not mentioned, the clause clearly says that the vendor is "liable" to refund which means that refund is the vendors liability..

now, since agreement is notarized, it is enforceable by law.

in such a situation question is

a) who decides the timeframe and who has the final authority on the timeframe??

T. Kalaiselvan, Advocate (Advocate)     20 December 2024

The unregistered sale agreement is not enforceable in law even if it was attested by a Notary public.

However that can be a documentary evidence for the receipt of sale consideration amount received by the vendor.

You can issue a legal notice communicating your decision to cancel the sale agreement and stipulate time period for return of advance amount and if the vendor is not complying with the demand made you may file the suit for recovery of your amount.

1 Like

Jayanti Devi (Student)     21 December 2024

a) is there any rule that suit has to be filed within 45 days of legal notice?

b) does court have the power to enforce the cancellation clause?

T. Kalaiselvan, Advocate (Advocate)     22 December 2024

No, there's no such provision in law.

The law suit is to be filed on time based on the nature of suit.

Since it is an unregistered agreement the court will not entertain the enforcement of the conditions of agreement.

Jayanti Devi (Student)     22 December 2024

if court cannot enforce cancellation then can developer not refund any money at all ??

on what basis, court can enforce refund? or is refund legally impossible ??

T. Kalaiselvan, Advocate (Advocate)     24 December 2024

This is not a class room to explain you the law everytime, if it is a real problem by now you would have taken action as per law, whereas you are posting the queries to update your academic knoewledge alone, hence all other related questions may be asked from your class tutor. 

Dr. J C Vashista (Advocate )     25 December 2024

I endorse the opinion and advise of learned expert Mr. T Kalaiselvan.

Being a student you should prefer to seek clarification(s) from your professor/ tutor / guide as they are being engaged and paid for the purpose.

However it is abuse of this platform, which is likely to take toll of actual and needy litigant(s) as per rules of this site. 

P. Venu (Advocate)     27 December 2024

What is the context for this query?

To my knoledge, every agreement is enforceable unless there is the mandate for it to be registered.

ekta mahyavanshi   02 January 2025

If it's an agreement with developer, then as per rera developer cannot accept more than 10% of the total consideration without executing a rera agreement. 

If it's with an individual flat owner than money can be recovered based on the other collaberative evidence a/w unregistered agreement such as cheque/bank statement, act of parties etc. In case of an unregistered agreement no cancellation deed is required to cancel the transaction. 

Jayanti Devi (Student)     03 January 2025

good point but seller has no RERA id since it is a pre covid project when RERA was not mandatory

question is

a) instead of civil moneysuit, can buyer go to RERA complaint for order and get order executed in ciivil in case builder does not comply with RERA order?

b) can buyer go to consumer since buyer initiated cancellation?

c) which is the fastest way to get an order?

ekta mahyavanshi   03 January 2025

Even if the project was ongoing and full occupation certificate was not obtained, developer/promoter become liable to registered the project with rera. 

In such a case if the abovementioned condition apply, builder is in violation of rera for which an action can be taken against him by filing source complaint. 

For recovery of money you can either approach consumer forum or civil court but not rera. 


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