featured_mode: card | illustrationBayana is earnest money paid under an agreement to sell; it does not transfer ownership, and in June 2026 the Supreme Court enforced a forfeiture clause against a buyer who missed the deadline, so buyers should verify title first, pay by bank, and write clear deadlines and default terms.
Key takeaways
- Bayana is a deposit under an agreement to sell. It does not make you the owner.
- In June 2026 the Supreme Court upheld forfeiture of Rs800,000 earnest money where the buyer missed the agreed deadline and failed to show readiness to pay.
- Verify the fard or society record before paying anything, not after.
- Pay by cheque or bank transfer to the owner, never cash to a middleman.
- Write the deadline, the default terms and who pays which tax into the agreement.
Quick answer
The most expensive bayana mistakes happen before any money changes hands: paying without checking title, paying the wrong person, and signing an agreement that does not say what happens when something goes wrong. The courts will read your agreement literally, so its wording matters more than anything said at the dealer's office.
Lahore buyers often treat bayana as a formality. It is a contract, and when deals collapse it becomes the only evidence of what was agreed.
What bayana is legally
Bayana, or token money, is earnest money paid when buyer and seller sign an agreement to sell. It shows commitment and secures the deal while the balance is arranged.
It is not a transfer. In Punjab's revenue record, ownership moves through a registered deed and an attested mutation, or through an oral mutation recorded before the revenue officer with both parties and witnesses (PLRA FAQs). In a society, ownership moves through the society's transfer process. Until then, the seller remains owner on record.
What the agreement gives you is a contractual right. If the seller refuses to complete, you can sue for specific performance (an order forcing the sale) or for your money back. If you default, the seller may be entitled to keep the bayana if the agreement says so.
The June 2026 ruling
A Supreme Court bench of Justice Shakeel Ahmad and Justice Mian Gul Hassan Aurangzeb heard a case over 5 kanal 4 marla in Sialkot. The buyer paid Rs800,000 bayana in March 2014 with a balance of Rs6.48 million due by July 2014. The agreement allowed forfeiture if the balance was not paid. He did not pay, sought more time, and deposited the money about three and a half years later. The Court held that the deadline made time essential, that specific performance is only for a party who "continuously demonstrates readiness, willingness" and financial capacity, and upheld the dismissal of his suit (APP, 22 Jun 2026; Daily Times, 23 Jun 2026).
Daily Times reported the Court also said the old rule that time is generally not of the essence for immovable property cannot be applied automatically, especially when values rise quickly.
Five common mistakes
| # | Mistake | What it can cost | Fix |
|---|---|---|---|
| 1 | Paying before checking title | The whole bayana if the seller is not the owner | Fresh fard or society verification first |
| 2 | Cash to a dealer | No proof of payment; money may not reach owner | Cheque or transfer to the owner, with receipt |
| 3 | No firm deadline or default clause | Endless dispute, court time | Dated balance, forfeiture and refund terms |
| 4 | Ignoring your own readiness | Forfeiture under a clause like the Sialkot case | Arrange finance before signing |
| 5 | Unclear tax split | Surprise lakhs at transfer | Name who pays 236K, 236C, stamp duty |
1. Paying before checking title
PLRA advises getting a current fard before any land transaction because transfers and mutations change the details (PLRA FAQs). A standard fard costs Rs900 under the FY2026-27 schedule (APP). Since 1 July 2026 Punjab also requires a Green Property Certificate for property transactions, which checks for mortgages, unpaid taxes and court disputes (Pakistan Observer). A Rs900 fard is cheap insurance for a bayana of several lakhs.
2. Paying cash to a middleman
If your receipt is from a dealer, your contract is muddled. Pay the person named on the title, through a bank, and keep the instrument number in the agreement.
3. No deadline or default clause
An agreement that says "balance on transfer" with no date invites argument. Write the date, the grace period if any, and what happens on default by either side.
4. Not being ready yourself
The Sialkot buyer lost because he could not show he was ready to pay on time. If you need a bank loan, start the application before you sign. Bank legal and valuation checks take time; Standard Chartered quotes 21–25 working days for its home finance (Standard Chartered).
5. No tax split
Taxes are large enough to sink a deal. A filer buyer pays 1.25% under 236K and a filer seller 2.75% under 236C; for non-filers it is 10.5–18.5% and 11.5% (FBR rate card). Stamp duty is 1% (The News). Name the payer for each.
What the agreement must say
- Full names, CNIC numbers and addresses of both parties.
- Exact property description: society, phase, block, plot number, or khasra/khewat and mauza, with area and dimensions.
- Total price, bayana amount and how it was paid.
- Balance amount and the date it is due.
- What the seller must deliver: clear title, Green Property Certificate, society NOC or no-demand certificate, vacant possession.
- Who pays each tax and fee.
- Consequences of buyer default (forfeiture or partial refund) and seller default (refund plus any agreed compensation).
- Signatures of both parties and two witnesses.
Red flags
- Seller wants bayana before showing original documents.
- Seller's name on the fard does not match the CNIC.
- "Owner abroad, agent will sign" without a registered power of attorney you can verify.
- Pressure to pay today because "another buyer is waiting".
If the seller backs out
You have three practical routes. None is automatic.
- Negotiate a refund in writing. Many disputes end here. Get the refund schedule signed.
- Send a legal notice through a lawyer, stating your readiness to pay the balance.
- Sue for specific performance or recovery. You will need to show readiness and capacity throughout, as the Supreme Court stressed. Courts may ask you to deposit the balance.
Recovery can take time even when both sides agree. In a Karachi case settled by consent in November 2025, the High Court of Sindh recorded an undertaking that Rs11 million of earnest money would be repaid within 18 months (Sindh High Court).
Many buyers assume a seller who backs out must pay double. We found nothing that makes that automatic; it depends on what your agreement says and what a court decides.
Punjab's 2025 Protection of Ownership of Immovable Property Act set up deputy-commissioner-led committees to resolve property disputes within 90 days, but the Lahore High Court suspended its operation in December 2025 (Dawn). Check its current status with a lawyer.
Bottom line
Treat bayana as the moment your legal risk starts. Verify, pay through a bank, and write the deadlines and default terms as if you expect to read them out in court.
This guide is general information; confirm current rates with FBR/the bank/a lawyer before you pay.
Sources
- Buyer who failed to pay balance not entitled to transfer: SC — APP — June 2026 ruling
- Buyer who fails to pay balance not entitled to property transfer — Daily Times — time of essence reasoning
- FAQs — PLRA — fard, mutation process
- PLRA revised service charges — APP — fard fee
- Does GPC have an expiry date — Pakistan Observer — GPC checks
- Saadiq Home Finance — Standard Chartered — processing time
- FBR Withholding Tax Rate Card 2027 — 236K, 236C
- Governor signs stamp duty amendment ordinance — The News — stamp duty
- Razia Hameed vs Abdul Rauf, HCA 395/2023 — Sindh High Court — earnest money refund by consent
- Punjab CM argues against LHC's suspension of land protection law — Dawn — 2025 Act and suspension