Impact of seller's failure to obtain statutory permissions and property conversions

When an agreement to sell requires the seller to perform essential pre-requisites such as obtaining property mutation and converting the tenure from leasehold to freehold, non-compliance constitutes a material contractual default. A seller cannot insist on strict performance or demand balance payment from a buyer without first fulfilling these foundational obligations. Property transactions involving leasehold titles require formal administrative conversion to convey unencumbered, marketable title to the prospective buyer. The failure of sellers to secure required conversions within the stipulated period creates a legal obstacle in executing a valid conveyance deed. While such a failure by the seller may not automatically entitle an unready buyer to specific performance, it decisively bars the seller from claiming forfeiture of earnest money. Therefore, seller defaults play a critical role in shaping the equitable remedies granted by appellate courts. (Subhash Aggarwal v. Mahender Pal Chhabra & Anr. | 2026 INSC 11)