Legal Advice

Seller is not refunding earnest money even though he has less area of land

Shivendra Pratap Singh


High Court Lucknow


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Question asked on: 27 Apr, 2022

Question : The measurement of land mentioned in the sale agreement is 3000sq feet. Out of which the seller has made an agreement to sell 500 sq feet of land. Seller is not refunding earnest money even though he has less area of land. With another seller and out of the remaining 2500 sq.feet of land ,the seller has occupied 200sq.feet of land without any documents. What to do if after the unregistered sale of the agreement the  buyer wants  back the earnest money because a portion of the land mentioned in the agreement to sale does not belong to the seller and the seller refuses to return the token money?

Asked from: Karnataka

The seller has breached the agreement to sell. He has less area of land in his ownership than the area mentioned in the agreement. Therefore, he is not in position to transfer the area of land as agreed between the parties. 

Hence, this agreement is not enforceable. Seller has committed fraud and this agreement is void. In this situation the seller will not only refund the earnest money but he has to compensate you. 

You should send a legal notice to the seller and demand the refund of earnest money with 18% interest. If he refuses to comply with the notice then you should file a civil suit for the:

  • Recovery of earnest money, 
  • Interest thereupon, 
  • Compensation for mental agony 
  • Cost of the litigation 

The seller has no right to hold the earnest money. If the agreement is enforceable and the buyer is not ready to purchase then the seller can forfeit the earnest money. When the seller makes a false promise in the agreement he loses his rights under the agreement.