Legal Question in Civil Litigation in India

Can a builder unilaterally terminate an agreement for sale when all the amount of consideration has been duly paid but VAT remains unpaid since the matter is pending in the Supreme Court of India?


Asked on 7/03/13, 1:01 am

2 Answers from Attorneys

Fca Prashant Chavan Expert Edge LLP

03.07.2013

Dear Sir / Madam,

VAT is a negligible amount of the agreed consideration between the builder and the purchaser and is basically payable by the purchaser of the property. It is clearly evident from your query that the purchaser waiting for a fictitious Supreme Court verdict (which has already been passed in 2010) on the issue is clearly an excuse to postpone his commitment and liability to pay the VAT and close the deal. So, if the builder pays the VAT on behalf of the purchaser to the Government and is requesting reimbursement of VAT from the purchaser and the purchase fails to pay, the builder has every right to unilaterally terminate the agreement for sale and refund the amount paid by the purchaser, net of recoveries to the purchaser. A word of caution here is that the builder may be reluctant to return the consideration and for which the purchaser will have to take Court recourse.

Regards,

Read more
Answered on 7/03/13, 3:32 am
muhamed mustaque mk associates

builder has to perform his part unless it becomes impossible due to intervening circumstances , your remedy against such is to seek specific performance of the contract through court or through arbitration

Read more
Answered on 7/03/13, 5:29 am


Related Questions & Answers

More General Civil Litigation questions and answers in India