Subsequently, Sharma had refused to comply with the agreement on the grounds that no concluded, definitive, legal and binding sales contract had been registered by the parties and that the existing contract could not be obtained as proof of the alleged contract. Signing a sales contract becomes important given several factors. First, it is legal proof of the conclusion of an agreement between the buyer and the seller on the basis of which, in the event of a dispute, the future action will be decided. Even if you apply for a home loan, the bank would not accept your application until you sign a sales contract. India and its metropolises are a booming real estate market. Anyone with a decent return wants to invest in an asset that ensures high returns. In general, the most important and important document with regard to the property is the contract of sale. Such a contract of sale must be registered at a particular seat of the city. Today we will discuss the validity of an unregistered sales contract and whether it is considered a valid document without registration. Once you enter into a sales agreement, whether registered or not, you are bound by it. The contract becomes the Charter of Rights and Liabilities of the signatories, i.e.
the seller and the potential buyer. Where one party violates this rule, the other party may remedy it by filing an appeal with the civil court for certain benefits. If the buyer does not agree to give you more time after 90 days, you are obliged to execute the deed of sale in his favor, otherwise he may sue you for a specific service. This question arises because the registration of documents is usually carried out in order to guarantee the buyer a clear right and ownership over the property. A sales agreement as such does not clearly determine the ownership of the property. In Durgawati Devi v Union of India2, the Supreme Court ruled that the performance of the contract of sale does not transfer ownership/title to the property and ownership/ownership is only transferred by a transfer instrument. It is also specified that documents that were exported on the day or after the entry into force of the Registration Act and other related laws, such as the Amending Act 2001, must be registered compulsorily. Under the Transfer of Ownership Act, a contract of sale, with or without ownership, is not a transfer. Section 54 of the Transfer of Ownership Act provides that the sale of immovable property may only be made by registered instrument and that a contract of sale does not generate interest or costs for its property. .