Legal Question in Real Estate Law in India

My wife owns a residential plot at Bengaluru. We have entered into a agreement for sale with a buyer and received a cheque for Rs.5 lakhs, Rs.10 lakhs cash, and Rs.15 lakhs DD. Rs.5 lakhs cheque and Rs.10 lakhs are entered in the agreement for sale in which due to backing out from the deal either party to pay 25% of the advance as penalty. I corrected as per the oral agreement with the buyer that the 25% penalty is payable only on Rs.5 lakhs cheque given on 20th Dec 2012 (i.e.Rs.1.25 lakhs). The agreement of sale is executed on a stamp paper for Rs.500 only. The correction has been signed by both the buyer and seller and witnessed by the brother of the buyer and self from this side.

Now we want to cancel the agreement for sale due to some family sentiments. Can we settle the issue by paying the buyer penalty of 25% of the advance for which we dont mind.

How to tackle the issue in the event of any arguments etc. Kindly advise.


Asked on 1/08/13, 2:06 am

3 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

08.01.2013

Dear Sir,

To back out of the Agreement for Sale, your wife is liable to return to the buyer Rs. 30 lakhs plus 25% of the token amount and the cash component put together - Rs. 15 lakhs i.e Rs. 3,75,000 towards penalty & interest loss working out to a total refund of Rs 33,75,000/- (Rupees Thirty Three Lakhs Seventy-Five Thousand Only) for the undue inconvenience and mental agony she has caused to the buyer of her plot in Bengaluru. Since the buyer has already incurred Stamp Duty on the Agreement for Sale and got it registered, the sale deal is completed and closed.

Regards,

FCA Prashant Chavan

Mumbai

(You can also mail me for any further on-line advice at [email protected])

Read more
Answered on 1/08/13, 4:56 am
Shrichand Nahar S.V.Nahar, Advocate

May be.

Read more
Answered on 1/12/13, 10:51 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in India