Banakhat (Agreement to Sell) for Property in Gujarat
What you need to know
A Banakhat (also called Agreement to Sell or Karar Nama) is a preliminary written agreement between a buyer and seller before the final sale deed (Vech Patra) is executed for a property. Under the Transfer of Property Act, 1882 and the Specific Relief Act, 1963, a registered or even unregistered Banakhat creates legally enforceable rights โ the buyer can demand the seller complete the sale or seek compensation if the seller backs out. In Gujarat, it is strongly advisable to register the Banakhat at the Sub-Registrar office and pay stamp duty to protect your interests. If either party defaults, the aggrieved party can file a suit for Specific Performance in a Civil Court to enforce the agreement.
Your rights
As a buyer, you have the right to demand execution of the final sale deed if the seller refuses after accepting advance (token) amount
You can claim refund of advance amount plus damages if the seller cancels the agreement without valid reason
A registered Banakhat gives you priority rights against third-party claims on the property
You have the right to inspect all property documents (title deed, NOC, encumbrance certificate) before signing
What you should do now
Action firstDraft a complete Banakhat
- Include full property description, agreed sale price, advance amount paid, timeline for final sale deed, and penalty clauses for default
- Mention conditions such as clear title, pending dues clearance, and handover date
Verify property documents before signing
- Obtain 7/12 Utara (for land), title deed, encumbrance certificate, and latest property tax receipts
- Confirm no existing mortgage, loan, or legal dispute on the property via Sub-Registrar office search
Register the Banakhat
- Visit your local Sub-Registrar office with both parties, two witnesses, and pay applicable stamp duty
- Registration gives the agreement legal sanctity and protects against seller backing out or selling to another buyer
If the seller defaults or refuses to execute sale deed
- Send a legal notice via advocate demanding specific performance within 30 days
- File a Specific Performance suit in Civil Court or approach a property dispute lawyer; keep all payment receipts and the Banakhat copy as evidence
Acts applicable
Transfer of Property Act, 1882
centralSection 54 โ Agreement to Sell vs. Sale
Specific Relief Act, 1963
centralSection 10 โ Specific Performance of Contract
Indian Stamp Act / Gujarat Stamp Act
gujaratStamp duty on agreement to sell