Specific Performance of an Agreement to Sell (Bayana): When the Seller Backs Out

By Justify.pk Editorial Team | Reviewed by Zeshan Haider Advocate | WhatsApp: 0300-0779014

You paid bayana (earnest money) under an agreement to sell, and now the seller refuses to execute the sale deed, often because prices rose. Pakistani law gives the buyer a remedy: a suit for specific performance forcing completion of the sale. It is a discretionary remedy with strict conditions, explained below.

Watch: Specific Performance Suit Explained (Video in Urdu)

Quick Answer

Under the Specific Relief Act, 1877, the court can order a party to perform a contract, including a contract to sell immovable property, when damages would not be an adequate remedy and the contract is valid and enforceable. The buyer must plead and prove that he was and is ready and willing to perform his part, usually including payment of the balance price. The court has discretion and may refuse relief if the buyer is at fault or if enforcing it would be inequitable.

Agreement to Sell Versus Sale

An agreement to sell does not itself transfer ownership. Under section 54 of the Transfer of Property Act, 1882, a sale of immovable property above the prescribed value is completed by a registered sale deed. The agreement only creates a contractual right to demand that the sale be completed. For land records, see our guide on mutation in Punjab.

Essential Elements

• A valid, certain agreement identifying the property, price, parties and time or conditions for completion.
• Proof of execution: stamp paper, signatures, attesting witnesses (the law requires evidence of financial or future obligations to be proved with the number of witnesses the Qanun-e-Shahadat prescribes), and proof of payment by receipt or bank record.
• The seller’s lawful title to sell. Check the fard and ownership documents.
• The buyer’s readiness and willingness: financial capacity and conduct showing he intended to complete.

Steps if the Seller Backs Out

1. Send a legal notice calling on the seller to complete by a date, and offer to pay the balance.
2. Be present with money or a pay order at the registrar’s office on the date fixed, and keep proof of attendance.
3. File a civil suit for specific performance within limitation, together with a prayer for a temporary injunction restraining sale to anyone else (see stay orders and injunctions).
4. Deposit the balance sale price if the court directs; courts often expect the buyer to show the money is available.
5. If the decree is passed and the seller does not sign, the court can execute the sale deed through its officer.

Limitation

The Limitation Act, 1908 prescribes a three-year period to sue for specific performance: from the date fixed for performance, or, if no date is fixed, from when the plaintiff has notice that performance is refused. Because a mistake on the starting date can defeat the suit, take advice early.

When the Court May Refuse

• The buyer was not ready or did not perform his own obligations.
• The seller lacks title or the property is subject to rights of third parties without notice.
• The agreement is vague, forged or unfair, or was procured by fraud.
• The buyer delayed unreasonably or acted inconsistently.

Alternative Remedies

If specific performance is not suitable, the buyer can sue for refund of the advance and compensation for breach under the Contract Act, 1872. A clause fixing a sum payable on breach is interpreted according to section 74 of that Act; a forfeiture of bayana is not always automatic and depends on the agreement and the circumstances. For money recovery, see our guide to a civil suit for recovery of money.

FAQs

Can I recover double the bayana?

Only if the contract and law support it; there is no automatic double-return rule.

Is a stamp-paper agreement enough?

It is a good start but must be proved with witnesses and payment evidence.

Can the seller sell to someone else?

A pending suit with an injunction, and notice of your agreement, make that risky for the buyer and may bind him.

Should I pay the entire price into court?

The court decides; keep the funds ready.

Legal disclaimer: General information on Pakistani law only. Verify statutes and limitation periods and consult a qualified advocate.