Question: Breach of agreement to sell : what action should be taken against the dealer. I entered into an agreement to sell with a land dealer to sell my land within one year from the date of registration of agreement. After the agreement the dealer has refused to perform his duty under the said agreement. In this kind of breach of agreement to sell, what action should be taken against the dealer? Can I sell this land to anyone despite this agreement to sell?
According to section 54 of the transfer of property act an agreement to sell is an executable contract. In Hyderabad Engg. Industries v. State of A.P., (2011) 4 SCC 705 the Supreme Court has explained the effect of agreement to sell as:
when the transfer is in presenti (immediate transfer), it is called a “sale”. But when the transfer is going to be completed at any future time and subject to fulfilment of some conditions subsequently, it will be an agreement to sell.
As per the terms of your agreement the dealer has to sell your land within one year from the date of signing the agreement. He failed to sell your land within the stipulated time. Hence, the agreement has been breached by the dealer.
In this situation, if there is any compensation regarding the breach of agreement mentioned in the agreement, he has to compensate you accordingly. After the breach of agreement both parties became free from the duties and obligation mentioned in the agreement to sell.
Now the dealer has no right to sue against you on the basis of that agreement. You are free to sell that land to anyone. If you want better security or avoid future litigation, you can file a suit for declaration against the dealer that the agreement is null and void.
In a declaratory suit, the plaintiff seeks a declaration from the court regarding the legal position or status of a particular matter. This can include disputes related to contracts, property rights, intellectual property, and other legal issues where a declaration of rights is sought.
After obtaining the decree in the declaratory suit the dealer shall be prohibited to claim any right in this property.
