LegalClue
LegalClue
Back to all issues
AI076🏠 Housing & PropertyReply draft

Is a Notarized Banakhat (Agreement to Sell) Valid?

What you need to know

A Banakhat (Agreement to Sell) is a preliminary contract between a buyer and seller agreeing to transfer property at a future date upon fulfillment of certain conditions. In India, a notarized Banakhat is legally valid as a contract under the Indian Contract Act, 1872, meaning it is enforceable in court and both parties are bound by its terms. However, it does NOT transfer ownership of the property — only a registered Sale Deed executed before the Sub-Registrar under the Registration Act, 1908 actually transfers title. If the seller refuses to honor the Banakhat, you can file a suit for Specific Performance under the Specific Relief Act to compel the sale.

Your rights

1

A notarized Banakhat is a legally binding contract enforceable under Indian Contract Act, 1872

2

It does NOT confer ownership or title — property title transfers only via registered Sale Deed

3

You can sue for Specific Performance if the other party refuses to complete the sale

4

Advance/token money paid is recoverable with interest if the seller defaults

What you should do now

Action first
1

Confirm what your Banakhat covers

  • Check that it mentions property details, agreed price, advance paid, and deadline for Sale Deed
  • Ensure both parties signed it and two witnesses are present on the notarized document
2

Proceed to registered Sale Deed promptly

  • A Banakhat alone does not give you ownership — get a registered Sale Deed executed before the Sub-Registrar
  • Pay applicable stamp duty and registration charges in your state to complete the transfer
3

If the other party is defaulting or disputing

  • Send a formal legal notice via a lawyer demanding performance of the Banakhat within 30 days
  • If ignored, file a Suit for Specific Performance in the Civil Court having jurisdiction over the property

Acts applicable

Indian Contract Act

central

Section 10 — valid contracts

Specific Relief Act, 1963

central

Section 10 — Specific Performance of contract

Registration Act, 1908

central

Section 17 — compulsory registration of sale deeds

Consumer complaint portal: e-jagriti.gov.in (replaced edaakhil.nic.in as of Jan 2025). Labour complaints: col.gujarat.gov.in. All links verified June 2026 via web search against official government sources.