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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.

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. A notification under Section 4(1) of the Land Acquisition Act was issued on January 2, 1982. The vendor contended 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. The Supreme Court held that the High Court committed a manifest error.

C.H. GOPINATHA RAO

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