• Refund claim due to non capability of Builder to perform

I booked a flat (value 31lacs) in Amrapali Verona Heights, Noida extension (Gr. Noida West) in Sept 2012 (BBA signed on Nov 2012) under CLP scheme. After booking, no work was started till almost Feb 2014 when foundation work started.

The casting of lower basement roof demand requested & simultaneously paid on Nov 2014 (this was the 1st demand on basis of Construction so helpful to assume a date of start of construction which should be approx jan-feb 2014).

Although Builder never provided any date of start of construction of my tower.

Also, no clarity about 0 (zero) period for construction due to farmers agitation & then NGT restriction is made available to us by the builder.

Till now 47% of total sale price already paid to builder.

Next installment of 2.3lacs on casting of second podium roof was requested in Jan 2015 (within couples of months from last installment request) but after visiting the site I realised that the construction work is almost stopped in whole project. So fearing loss of hard earned money I stopped the payment.

Now it is evident that from last 2 years there is no construction at my tower (or as a matter of fact in whole project) & addition to this, the financial condition of Builder is not sound & I dont want to take risk of paying anything further.

Later in March 2016, I approached 1 Bank to finance my installments but after collecting all documents & completing application processing, bank advises against it due to news related to famous celebrity withdrawal of being a brand ambassador of Builder.

Now, as of today (Jan 2017) there is no construction started. Hence, I want complete refund as its a breach of trust & agreement from the part of builder. In addition to it, its Builder's non-capability of able to complete it.

Points as per BBA:

1. If the installment as per schedule is not paid then interest @ 24% p.a  shall be charged.
2. That 10% of total sale price shall be treated as earnest money. And in the event of termination of an agreement by the developer due to non-payment of installment, developer forfeit the earnest money together with interest on delay installment.
3. If a booking is canceled by applicant then 10% of total sale price of a flat will be forfeited with interest on any late payment. This refund will be without any interest.
4. Date of commencement of tower shall be reckoned as date of foundation of tower & builder shall complete the construction within 36 months + 6 months.
5. The completion date is subject to force majeure conditions. No claim shall lie against developer & Developer shall be entitled to a reasonable extension of time for the delivery of flat.
6. In case of delay other than force majeure, the developer shall pay Rs 5/- per sq ft of super area p.m. (that is approx 2% of total cost of flat). 
Please advise, 

1. If I am entitled to full refund on cancellation of flat booking?
2. What should be my course of action to make my case legally strong?
3. What are the option available to me?
Asked 7 years ago in Property Law
Religion: Hindu

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3 Answers

1) builder has failed to complete construction within stipulated period of 36 months .

2) you can cancel your booking and seek refund

3) you would not be entitled to full refund

4) issue legal notice to builder in case he fails to refund Rs 47 lakhs paid by you

5) mention that you did not pay for casting of second podium as no construction work was being carried on . take the plea that although more than 3 years have passed since booking of flat no construction is being carried on at the project site

6) file complaint against builder before consumer forum and seek refund with interest

Ajay Sethi
Advocate, Mumbai
95168 Answers
7604 Consultations

5.0 on 5.0

Dear Concerned,

As per your BBA 36 months have been given to you as for time of possession - if the time has passed then the developer has to pay you late delivery charges.

Secondly if the construction is not on schedule the developer can not put any late payment charges etc.

As a plan - it is advised that you should CANCEL the booking as only 45% is paid till now and the developer seem not to be completing the project in near future.

Cancellation is the first step. Send them letter by Speed post and email for cancellation. Followup after 15 days.

You might have to file a criminal complaint for cheating and can also file Consumer Case for recovery of money and a civil case of recovery as well.

Best of Luck

Atulay Nehra
Advocate, Noida
1309 Answers
58 Consultations

5.0 on 5.0

1. If I am entitled to full refund on cancellation of flat booking?

The builder has made the agreement with the conditions favoring almost him alone leaving aside the interests of the buyer. This is an arbitral decision or condition which can be challenged.

2. What should be my course of action to make my case legally strong?

You first issue a notice communicating your decision to cancel the agreement due to the inordinate delay in completion of construction and demand refund of the entire amount with interest from the date of booking, let him give a reply based on which you can initiate proper legal action as per law.

3. What are the option available to me?

You can drag the builder to consumer forum demanding refund of entire booking amount as well as interest and compensation for the mental tortures and agony you suffered.

T Kalaiselvan
Advocate, Vellore
85369 Answers
2231 Consultations

5.0 on 5.0

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