What is the procedure to cancel unregistered property sale agreement?

We can cancel the unregistered sale agreement, let me share my experience of cancelling unregistered sale agreement

One of my NRI client has a 4BHK duplex house for sale in Bangalore. We found the buyer, the selling price is Rs.5.5 Cr

We wanted to register the sale agreement but seller is a NRI and living in USA, he was not available in India at this moment for sale agreement registration in sub-registrar office. Also, he is not interested in giving power of attorney to anyone in India to register on his behalf. He assured that he will come to India at the time of sale deed registration.

Meanwhile, buyer was curious to freeze the deal and proceed with loan processing. so we decided to execute unregistered AGREEMENT OF SALE in Rs.500 non-Judicial e-stamp paper. (the maximum stamp duty for AGREEMENT OF SALE is Rs.20,000 without possession but our buyer’s bank told us to execute in Rs.500 e-stamp paper so we proceeded accordingly. I think buyer had good credit score so bank was not bothered about stamp value)

Buyer paid the advance of Rs.50 lakh through online account transfer. Immediately after the advance payment, we executed AGREEMENT OF SALE in Rs.500 non judicial e-stamp paper and couriered to USA for seller’s signature. The seller signed the agreement and couriered back to buyer for buyer’s signature and loan processing.

(we could have avoided 2 way shipment cost to USA if we adjudicated the stamp duty in sub-registrar office instead e-stamp paper. For example: we could have followed below steps with just 1 way shipment cost

Step 1: Send the AGREEMENT OF SALE draft to seller through email

Step 2: Seller takes printout in A4 size paper and sign the agreement on all pages

Step 3: Courier the agreement to buyer for buyer signature and loan processing

Step 4: Buyer adjudicates the stamp duty in sub-registrar office

Since our buyer insisted to execute in e-stamp paper and ready to bare 2-way shipment cost, we chose e-stamp mode which costed the buyer Rs.8.4K for round trip from India - USA - India. We could expedited the cost and time if we followed adjudication mode)

Below is the image of agreement

After few days of executing the above AGREEMENT OF SALE, the buyer and seller renegotiated the price and disagreed in terms. Mutually the deal was called off. We followed below procedure to cancel our AGREEMENT OF SALE

In AGREEMENT OF SALE, we scratched in red pen and wrote CANCELLED. Like below image

We executed the below cancellation agreement in Rs.500 e-stamp paper, we received the signature from buyer and two witnesses. Seller refunded the advance amount of Rs.50 lakh to buyer through online account transfer.

We couriered the cancellation agreement to USA for seller signature and retention of original copy. Refer to below cancellation agreement (shared only 1st and last page for your reference)

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