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Sale deed for land under acquisition
Imagine that you have paid an advance for a piece of land and signed a sale agreement. You are yet to pay the balance and during such time, the land has been acquired or notification for acquisition has been issued. You decide not to pay and demand that the advance be returned and the agreement cancelled.
How strong is your case and will you get back the advance. According to the Supreme Court, you can.
Refer a judgment dated February 20, 2007, in the Thiriveedhi Channaiah vs. Gudipud Venkata Subba Rao case. The sale agreement was entered into by and between the parties on July 19, 1981.
The vendor offered to sell the property measuring 2.9 acres for a consideration of Rs. 44,000 an acre and the buyer paid an advance of Rs. 50,000.
Under the agreement, the balance had to be paid before February 25, 1982 whereupon a regular sale deed was to be executed. It was agreed that on default of payment, the advance shall be forfeited.
A notification under Section 4(1) of the Land Acquisition Act was issued on January 2, 1982. The purchaser was of the view that the vendor was aware of the intention of the State to acquire the property, but despite this knowledge he executed the agreement for sale.
A notice was issued on behalf of the purchaser on March 4, 1983 that the vendor did not have any transferable title and hence the advance amount of Rs. 50,000 with 18 per cent interest should be refunded because the agreement could not be enforced.
The vendor contended that as the buyer has failed to pay the balance amount, the advance stands forfeited. The suit filed by the vendor was allowed by the High Court holding that the vendor was justified in forfeiting the amount.
Appeal
On appeal, the Supreme Court held that the High Court committed a manifest error and directed the vendor to refund the amount of advance paid within a period of four weeks from the date failing which the same would carry interest at the rate of 12 per cent from the said date till the date of actual payment.
C.H. GOPINATHA RAO
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