Abhi (None) 06 March 2012

Steps to void sale of property

I entered into a contract to purchase about 50 acres of land (with a transaction value of about 1 crore). Upon the insistence of the seller I paid about 50% of the total amount as advance and got the sale agreement registered. A couple of documents were missing at the time of sale and the seller assured me he would get all the documents in place before finalizing the transaction. It has been close to 5 years now and despite his best efforts he has not been able to procure the documents. As such there was no time limit specified in the contract.

So far, I had given him the benefit of the doubt, but now I would like to get the advance money returned and the get the sale agreement cancelled. Upon my demanding the return of the advance, the seller is requesting about 1 year time to return the money (most likely he has spent it all) or the same time to fulfil his sale obligations. How can I get my money back? Also, can I demand interest to be paid on it? Under what conditions can I demand interest payment on the substantial sum of advance I have paid? Please help.

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2 Replies

Adv.R.P.Chugh (Advocate/Legal Consultant (rpchughadvocatesupremecourt@hotmail.com)) 06 March 2012

Dear Abhi,

Since time was never of the essence of the contract - you would not able able to rescind/avoid the contract and thereby ask restitution, however the other party has clearly committed a breach of contract for which you can seek damages. I hope the payment is documented, Consult a Lawyer fast - and serve him with a legal notice, if he fails to comply then file a suit for recovery/damages. and please be swift you are already running too late on time, lest your case may get barred by limitation which is 3 years.

If the documents that he fails to procure were so important that without them the very transaction falls to the ground or is rendered unlawful and the transaction impossible. He can also be held liable to pay U/s 56 of Indian Contract ACt, 1872 para - 3 which envisages compensation for loss through non performance of act known to be impossible or unlawful.

Abhi (None) 06 March 2012

Dear Bharat Sir,

I welcome and appreciate your timely advice. Thank you. I would like to emphasise that the key document which the seller has so far failed to obtain for finalizing the transaction is the R-T-C documents for the lands. Without the same we will not be able to finalize the transaction. Almost all other documents were in place at the time of signing the contract and I have originals of the same. Please shed some light on whether I can sue to get additional amount over and above the advance I have already paid (it has been 5 years since). Can I appeal to get annual interest equal to an FD in bank? Or would I have to settle for just the original amount advance paid. Please guide sir.