Unregistered agreement of sale


My friend has made an unregistered agreement of sale on rs 100 stamp paper. He wanted to get benefit from my condition because my property was disputed at that time. After five years from the date of such agreement, I sold that property to another person. My friend is giving threats to file a civil suit for cancellation of that sale deed and performance of unregistered sale agreement. Please guide.

Question asked on 11/04/2016

Answered by: Advocate Shivendra

It was a notorised but unregistered agreement to sell. According to section 53 & 54 of the Transfer of Property Act, that agreement would not vest any legal right in his favour [Sadashiv Prasad Singh v. Harendar Singh, (2015) 5 SCC 574].

Registration of sale agreement is mandatory if the value of the immovable property is more that one hundred rupees. Section 17 of the Registration Act also explicitly mandates the registration of the sale agreement (sale deed).  

In your case, the subsequent transfer of property through a duly registered sale deed is perfectly valid. The buyer shall get an absolute right in the property. He is the bonafide purchaser, and the law will protect his right [Ramesh Vajabhai Rabari v. Pratiksha Real Estate (P) Ltd., (2014) 12 SCC 190].

He will not succeed if he files a suit for specific performance of the contract based on unregistered agreement. According to section 34 and 41 of the Specific Relief Act, he must prove that prima facie he has a legal right in the suit property. An unregistered agreement does not give any right, so his petition will fail.

In T.G. Ashok Kumar v. Govindammal, (2010) 14 SCC 370 the Supreme Court held that the buyer will not get any legal right in the property unless it is duly registered and attested by the witness. A valid sale deed is necessary for the transfer of immovable property from the seller to the buyer.

The court further opined that the unregistered sale agreement shall increase unnecessary litigations. Unscrupulous property owners enter into contracts of sale and take huge earnest money deposits/advances, and then sell the property to others, thereby plunging the original agreement-holder and the subsequent purchaser into litigation.

Registration of agreements of sale will reduce such litigation. It will also assist in putting an end to the prevalent practice of entering into agreements of sale showing the real consideration and then registering the sale deed for only a part of the actual consideration.

Therefore, an unregistered sale agreement has not legal effect and also does not vest any legal right in his favour. You should not be afraid and let him file a civil suit. It would be best if you contested the prospective civil suit at the stage of admission. The court will dismiss the suit in limine (at the threshold).

Send your question

Shivendra Pratap Singh

Advocate, Lucknow

Advice: 16825

Consultation: 3309

My sisters want to partition in the ancestral property

My father received some ancestral property from my grandfather.  The property is purely ancestral because my grandfather got it from his father. My father died in 1997 by leaving four sons and three daughters. I am the elder son of my father. I am an engineer and...

Construction of house

You are the legal heir of your mother; hence, you have the right to mutate the property in your name. However, your name is entered in the revenue record as a legal heir of the deceased. So there will be no dispute towards heirship. After the construction of the house you will be the owner and no one will interfere in your right.

Builder is not returning my booking amount

Hello sir, I have booked a flat in Lucknow, the builder said that the time of booking that the project will accomplish in the year 2017. After taking faith upon him, I paid one lakh rupees as booking amount in the year 2015. When I visited the site in the year July...

Wife is threatening to take my flat

I am the owner of a flat purchased it before the marriage. My father is the co-owner in that property, and he also paid some amount in the purchase of the flat. The instalments of the EMI is about to complete. My father has relinquished his share in the property by...

Claim refund of money against the builder under RERA

Section 18 of the Real Estate (Regulation And Development) Act, 2016 (RERA) entitles the flat buyer to claim a refund of money and compensation for any loss from the builder. If the builder did not complete the project within time he shall be liable to refund the money with interest.

Land record shows my land as inalienable

The land revenue record shows the land as inalienable when the tenure holder or owner of the land has no right to transfer the land. Generally, government land or patta land is made inalienable because actual right vested in the government. The tenure holder has the right to cultivate the land and enjoy the usufruct.

Daughter has the right in ancestral property

My mother was eligible for her father's ancestral property accordingly to THE HINDU SUCCESSION (ANDHRA PRADESH AMENDMENT) ACT 1985. She got married after the amended Act. She didn't fight for her rights when her brothers sold the property after my grandfather's death...

Can a person claim ownership on the basis of mutation

Father purchased a plot out of his own income but the plot was registered in the name of my mother. The said plot is muted in my mother's name, therefore, my mother claims that she is the absolute owner of the plot. I have one brother and one sister all are married I...

Step mother sold joint family property

My father has made a gift in favour of his second wife who is my stepmother thereupon she took possession over the property. She sold that property to his son-in-law thereafter my step-sister erected a house thereon. The property gifted was probably our joint family...

Correction in land record kept under the uttar pradesh land revenue code

I seek your advice in respect of correction of my name in UP land revenue records. When my father accrued right in the ancestral land after the death of my grandfather, he was very young when his father dies so that he could not pursue his case correctly. Hence...

quick Advice

Get A Quick Advice

Book an appointment for 15 minutes and consult with an expert over the phone within minutes

Talk to Advocate Shivendra

Book a phone consultation for 30 minutes and get solid advice on the phone

Book it Now
Share via