• Builder not starting construction even after 3 years

Sir,
 I had booked a flat three years back and entire booking amount of 5 lakhs was paid by cheque. Builder had given in writing that he had received the cheque (also mentioning the cheque numbers). In terms and conditions, it was mentioned that amount will be refunded fully (without interest) if due to any problem construction has been cancelled. But even after 3 years he had not started construction. Once I enquired in CIDCO, I came to know that the plot itself has not been completely acquired by builder as some dispute between him and local farmers is going on. So I cancelled the booking & informed to refund the money within 3 months. Even after 5 months, he has returned the money,citing the reason that he is in financial crisis and will refund the money as soon as possible. Can I claim interest for the amount for the past three years if I go to consumer court?
Asked 7 years ago in Property Law
Religion: Hindu

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8 Answers

1. Well, this is quite common with the real estate in india and the Developer often defraud the buyers on this ground.

2. Anyway send a final notice giving an ultimatum to him to give your money back.

3. If he still does not repay the money then you can file case in consumer forum.

4. The forum in the case will not only get you refunded with the money but also grant you the damages and compensation along with the refund money.

5. So prepare yourself to file the consumer forum on the line stated above.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

1) file complaint before consumer forum and seek refund of money paid by you with interest

2) also seek compensation for mental torture undergone by you and litigation costs

3) you would be entitled to interest on booking amount only from cancellation o f booking done by you

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1) cases before consumer forum take around 2 years to be disposed of

2) if builder fails to comply with court orders you can take out execution proceedings for attachment of his property

3) court can direct property to be sold to recover your dues

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

So I cancelled the booking & informed to refund the money within 3 months. Even after 5 months, he has returned the money,citing the reason that he is in financial crisis and will refund the money as soon as possible. Can I claim interest for the amount for the past three years if I go to consumer court?

How did you cancel the booking in writing or orally and whether the builder has acknowledged the same in writing?

There is nothing in law that you cannot claim interest for the refund of booking amount.

The one sided condition in the sale agreement is not maintainable.

You can very well issue a legal demand notice for refund of the booking amount along with the interest from the date of booking since the builder has not started the construction even after three years of entering into sale agreement.

You may drag him to consumer court if he refuses to pay interest citing some flimsy condition which are not maintainable in law.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

Thank you for your answer. I am worried about the time delay in settling if the matter goes to court, but I am left with no other option. Can the builder still delay the refund if the court orders refund with interest?

The disposal by consumer forums are much faster than the civil courts, hence you can rely upon consumer forums for refund.

Once you get an order in yor favor, you may follow the procedures laid down in law for recovery of the amount as per court order.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

Once the forum passes the order and te builder does not honour the same , the forum may even issue warrant of arrest to implement the order.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

1. What is the date of delivery of possession promised by the builder? If the date has already expired then issue a lawyer's notice to the builder to refund the money with interest, and if he does not do so then he can be sued for recovery of principal amount with interest in the consumer forum.

2. It takes time in the courts but you do get justice.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

A. Issue a legal notice to the builder to refund the entire amount with interest towards the delay or non started construction as promised by the builder.

B. Later, you can move consumer court to claim additional compensation under the deficiency in the Service or you can recover this amount with interest by initiating summary proceedings before the Civil Court. Moreover, you can claim damages for metal agony or harassment.

C. You can collect post dated cheque from the builder for additional security towards your amount. In case, no fund in the builder account, you can initiate criminal proceedings against him to punish under the law.

D. The Court will resolve you issue by following due process of law example summons, written statement/version, hearing, evidence etc.,once you approached the Court. However, if the both parties willing to settle the matter out of the court amicably then court may consider your interim application. Per contra, the Court may give direction to the defendant/builder to refund the amount with interest by specifying the time also in the event of non compromise.

B.T. Ravi
Advocate, Bangalore
943 Answers
96 Consultations

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