Seller Refusing to Register After an Agreement of Sale in Hyderabad: Specific Performance and Refund of Advance

This guide is for buyers in Hyderabad and Telangana who paid an advance under an agreement of sale for a flat, plot or house, where the seller now refuses to execute the sale deed or asks for more money, and for sellers whose buyer has not paid the balance. It explains what the Specific Relief Act, 1963 says about a suit for specific performance since the 2018 amendment, readiness and willingness, delay, refund of the advance, registration and stamp duty of agreements in Telangana, which court hears the suit, and what happens after a decree.

The agreement of sale · Registration and stamp duty · Specific performance after 2018 · Readiness and willingness · Time and delay · Refund of the advance · Later buyers and pending suits · Court and court fee · After the decree · For sellers · Checklist

What an agreement of sale does and does not do

• A promise to sell, not a sale: “A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property” (Transfer of Property Act, 1882, section 54). Our guide on GPA and agreement of sale explains why such documents do not pass title.
• What it gives the buyer: the right to ask a civil court to enforce the contract by a suit for specific performance under the Specific Relief Act, 1963, or, where that is refused, other relief such as refund of the earnest money or deposit, if claimed in the suit (section 22).
• A buyer’s charge for money paid: in the absence of a contract to the contrary, and unless the buyer has improperly declined to accept delivery, the buyer is entitled to “a charge on the property, as against the seller and all persons claiming under him”, to the extent of the seller’s interest, “for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount” (Transfer of Property Act, section 55, opening words and sub-section (6)(b)).

Registration and stamp duty of agreements in Telangana

• Registration is compulsory in Telangana: the Registration Act, 1908, as amended by A.P. Act 4 of 1999 and continued in Telangana, lists among compulsorily registrable documents an “agreement of sale of immovable property of the value of one hundred rupees and upwards” (section 17(1)(g)). This covers agreements with or without possession.
• Part performance needs a registered agreement: a contract relied on for section 53A of the Transfer of Property Act (protection of a buyer who has taken possession in part performance) “shall have no effect for the purposes of the said Section 53A” unless registered, if executed after the 2001 amendment (Registration Act, section 17(1A)).
• An unregistered agreement in a specific performance suit: under the proviso to section 49 of the Registration Act, an unregistered document required to be registered “may be received as evidence of a contract in a suit for specific performance”. In R. Hemalatha v Kashthuri (10 April 2023), dealing with a similar Tamil Nadu clause, the Supreme Court said such a document may be received as evidence of a contract in a suit for specific performance, “subject to Section 17(1A) of the Registration Act”.
• Stamp duty: G.O.Ms.No.59 of 20 July 2021, with effect from 22 July 2021, lists a sale agreement without possession at 0.5% (not adjustable), a sale agreement with possession at 5.5% (adjustable), and a sale agreement cum GPA at 6.5% (5.5% adjustable and 1% not adjustable). Check the current rate before execution.
• An under-stamped agreement: no instrument chargeable with duty “shall be admitted in evidence for any purpose … unless such instrument is duly stamped”, though it may be admitted on payment of the duty and a penalty (Indian Stamp Act, 1899, section 35). In a 2023 order (C.R.P. No. 1769 of 2023), the Telangana High Court upheld the impounding of an agreement of sale that evidenced delivery of possession, with liberty to mark it on paying the deficit duty and penalty.

Specific performance after the 2018 amendment

• The present wording: since 1 October 2018, section 10 reads: “The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of section 11, section 14 and section 16.” Before the Specific Relief (Amendment) Act, 2018, the relief was discretionary.
• Contracts that cannot be enforced (section 14): where a party has obtained substituted performance under section 20; a contract involving “a continuous duty which the court cannot supervise”; a contract “so dependent on the personal qualifications of the parties” that its material terms cannot be enforced; and a contract “which is in its nature determinable”.
• Personal bars (section 16): specific performance cannot be enforced in favour of a person who has obtained substituted performance, who “has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract”, or who fails to prove readiness and willingness (below).
• Agreements made before 1 October 2018: in Katta Sujatha Reddy v Siddamsetty Infra Projects (25 August 2022), the Supreme Court held the 2018 amendment “prospective”. On review, on 8 November 2024, the Court recalled that judgment and restored the High Court’s decree, saying it would not disturb a finding without an error apparent and deciding “even assuming” that the relief remained discretionary for a suit filed before the amendment. How the amendment applies to an older agreement is a question to take advice on.
• A named sum for breach: a contract may be enforced “though a sum be named in it as the amount to be paid in case of its breach”, if the sum was named “only for the purpose of securing performance of the contract and not for the purpose of giving to the party in default an option of paying money in lieu of specific performance” (section 23(1)).

Readiness and willingness

• The statutory bar: specific performance cannot be enforced in favour of a person “who fails to prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant” (section 16(c)). Since 2018 the words are “fails to prove”, in place of “fails to aver and prove”.
• No deposit unless directed: where the contract involves payment of money, “it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court” (Explanation to section 16(c)).
• Two separate elements: in P. Daivasigamani v S. Sambandan (12 October 2022), the Supreme Court said: “Readiness means the capacity of the plaintiff to perform the contract, which would include the financial position to pay the purchase price. Willingness refers to the intention of the plaintiff as a purchaser to perform his part of the contract.” It said continuous readiness and willingness “from the date the balance sale consideration was payable in terms of the agreement to sell, till the decision of the suit, is a condition precedent”, and that the buyer need not have “ready cash”, it being “sufficient for the respondents to establish that they had the capacity to pay”.
• Accepting a refund: in Sangita Sinha v Bhawana Bhardwaj (2025), the seller sent back the advance by demand drafts and the buyer encashed them. The Supreme Court said the encashment “establishes beyond doubt” that the buyer “was not willing to perform her part of the Agreement to Sell”, and that it was “acceptance of such repudiation”.

Time and delay

• Limitation: a suit “For specific performance of a contract” has three years from “The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused” (Limitation Act, 1963, Article 54).
• Time in property sales: in Saradamani Kandappan v S. Rajalakshmi (4 July 2011), the Supreme Court quoted its earlier statement that “in the case of sale of immovable property, time is never regarded as the essence of the contract”, and that an intention to make time essential “must be expressed in unequivocal language”. It also said there was “an urgent need to revisit” that principle given inflation and rising prices, but did not undertake that exercise in the case.
• Delay in filing: the same judgment, under the law before the 2018 amendment, said that “Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement”, that courts “will also ‘frown’ upon suits which are not filed immediately after the breach/refusal”, and that a time or period fixed by the parties “cannot be ignored”.
• Time for disposal: “a suit filed under the provisions of this Act shall be disposed of by the court within a period of twelve months from the date of service of summons to the defendant”, extendable by up to six months for recorded reasons (section 20C). That is the period the Act sets; it is not a promise about any particular case.
• Time is essential only if intended: under section 55 of the Indian Contract Act, 1872, failure to perform by a fixed time makes the contract voidable “if the intention of the parties was that time should be of the essence of the contract”; otherwise, the other party “is entitled to compensation” for loss caused by the delay.

Refund of the advance and earnest money

• Must be asked for: in a suit for specific performance of a contract for transfer of immovable property, the buyer may ask for “the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused”, but “No relief … shall be granted by the court unless it has been specifically claimed”; the court “shall, at any stage of the proceeding, allow him to amend the plaint” for this (section 22).
• Compensation must also be claimed: “No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint” (section 21(5)), though the court shall allow the plaint to be amended at any stage to include it. Since 2018, section 21(1) allows compensation “in addition to such performance”. Under section 21(2), if the court decides that specific performance “ought not to be granted”, but that there is a contract which “has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly”.
• A dismissed suit and later claims: dismissal of a suit for specific performance “shall bar the plaintiff’s right to sue for compensation for the breach of such contract”, but not “his right to sue for any other relief to which he may be entitled” (section 24).
• Forfeiture of earnest money: two Supreme Court rulings. In Satish Batra v Sudhir Rawal (18 October 2012), the Court said that “to justify the forfeiture of advance money being part of ‘earnest money’ the terms of the contract should be clear and explicit”, that “part payment of purchase price cannot be forfeited unless it is a guarantee for the due performance of the contract”, and on the clause before it held the seller entitled to forfeit the earnest. In Kailash Nath Associates v Delhi Development Authority (9 January 2015), a case about a DDA auction, the Court said that “Section 74 will apply to cases of forfeiture of earnest money under a contract”, that “damage or loss caused is a sine qua non” for that section, and that “If damage or loss is not suffered, the law does not provide for a windfall.” How much of an advance may be kept turns on the agreement and the facts.
• Payments must be proved: in R. Radhakrishna Prasad v Swaminathan (8 July 2024), the courts refused specific performance and ordered refund of the advance, and the Supreme Court upheld the finding that a further Rs 15 lakh claimed to have been paid was “not established by positive evidence”.

Later buyers and property under a pending suit

• A later buyer from the seller: specific performance may be enforced against “any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract” (section 19(b)).
• Lis pendens: while a suit in which a right to immovable property is directly and specifically in question is pending, “the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court” (Transfer of Property Act, section 52). Pendency runs “from the date of the presentation of the plaint” until the decree is fully satisfied.

Which court, and the court fee

• Which district: for Hyderabad district, the City Civil Court has jurisdiction over “all suits and proceedings of a civil nature arising in the district of Hyderabad” (Telangana Civil Courts Act, 1972, section 3(1)). Properties in parts of the wider city may fall in Ranga Reddy or Medchal-Malkajgiri district, which have their own district courts. See our guides to the City Civil Court, Hyderabad and the Ranga Reddy District Court at L.B. Nagar.
• Value limits in the City Civil Court: the published text of section 5 gives the Junior Civil Judge suits “which does not exceed rupees twenty lakhs”, the Senior Civil Judge those “which exceeds rupees twenty lakhs but does not exceed rupees fifty lakhs”, and the Chief Judge and Additional Chief Judges those “which exceeds rupees fifty lakhs”. A 2024 amending Act provides different limits from a date to be notified; confirm the limits in force before filing.
• Court fee: “In a suit for specific performance, with or without possession, fee shall be payable … in the case of a contract of sale, computed on the amount of the consideration” (Telangana Court-fees and Suits Valuation Act, 1956, section 39). In a suit for money, including damages or compensation, “fee shall be computed on the amount claimed” (section 20). The rates are in Schedule I to that Act.

After the decree

• Buyer pays within time: the court may award “the execution of a proper conveyance or lease by the vendor or lessor” and “the delivery of possession, or partition and separate possession” in the same suit (section 28(3)). Possession must have been claimed (section 22).
• Buyer does not pay within time: where the purchaser “does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money”, the seller “may apply in the same suit in which the decree is made, to have the contract rescinded” (section 28(1)). “No separate suit” lies for relief under this section (section 28(4)). On rescission, the court may also, “if the justice of the case so requires”, direct refund of earnest money or deposit (section 28(2)).
• Extension of time: in P. Shyamala v Gundlur Masthan (24 February 2023), the Supreme Court said “the Court cannot as a matter of course, allow extension of time for making payment of balance amount of consideration in terms of a decree”, and held that a delay of 853 days without sufficient explanation ought not to have been condoned. In a March 2026 order (C.R.P. No. 345 of 2025), the Telangana High Court, describing extension under section 28 as “the discretion of the Court”, condoned a delay of 3358 days on the facts before it.

For sellers

• Seller’s own claim for unpaid price: a suit “By a vendor of immovable property for personal payment of unpaid purchase-money” has three years from “The time fixed for completing the sale” (Limitation Act, Article 53).
• Defences: the person against whom specific performance is claimed “may plead by way of defence any ground which is available to him under any law relating to contracts” (section 9), including the bars in sections 14 and 16.
• Police complaints over a sale: in Mala Choudhary v State of Telangana (18 July 2025), concerning an FIR registered at Gachibowli police station, the Supreme Court quashed the case, saying “a plain and simple dispute involving non-execution of a registered sale deed in terms of so-called oral agreement to sell has been given the cloak of a criminal case”, that the complainant “should have been instructed to avail the appropriate remedy by approaching the civil Court”, and imposed costs of Rs 10,00,000 on the complainant. That was the holding on those allegations.

Checklist

• The agreement of sale: whether it is registered, how it is stamped, and whether it records delivery of possession.
• The date fixed for completion, if any, and the date you received notice that the seller refused to perform, for Article 54.
• Proof of every payment made, by bank transfer or receipt.
• Proof of capacity to pay the balance (bank statements, loan sanction), and letters or notices showing willingness to complete.
• Whether any refund has been offered; the effect of accepting it (see Sangita Sinha).
• An encumbrance certificate to see whether the seller has sold or mortgaged the property to someone else.
• In the plaint: specific performance, and, if wanted, possession, refund of the advance in the alternative, and compensation, each specifically claimed.

Related guides: GPA and agreement of sale, property document verification checklist, encumbrance certificate, forged sale deed and filing a civil case.

For a discussion about an agreement of sale, a specific performance suit or a refund of advance with Musab Hashmi & Associates, call +91 89771 24916 or send an enquiry. Do not include identity numbers or bank details in the first message.

General legal information, not legal advice. Checked on 30 October 2026 against the Specific Relief Act, 1963 as amended by the Specific Relief (Amendment) Act, 2018, the Transfer of Property Act, 1882, the Indian Contract Act, 1872, the Limitation Act, 1963, the Registration Act, 1908 and the Indian Stamp Act, 1899 as in force in Telangana, G.O.Ms.No.59 of 20 July 2021, the Telangana Civil Courts Act, 1972, the Telangana Court-fees and Suits Valuation Act, 1956, the Supreme Court’s judgments in Saradamani Kandappan (2011), Satish Batra (2012), Kailash Nath Associates (2015), Katta Sujatha Reddy (2022) and the review order of 8 November 2024, P. Daivasigamani (2022), R. Hemalatha (2023), P. Shyamala (2023), R. Radhakrishna Prasad (2024), Sangita Sinha (2025) and Mala Choudhary (2025), and Telangana High Court orders in C.R.P. No. 1769 of 2023 and C.R.P. No. 345 of 2025.