• Refund of EMD deposited in auction in case of discrepancy in area of property

Sir, I have deposited the EMD amount for property purchased in auction . before bidding it was told that area of property is 799 sqft carpet ,but in actual it is only 650 sq feet carpet. though I have inspected the property i could not ascertain the same in normal course . Moreover in advertisement it is not clearly mentioned about the area of property whether it is carpet or built up, advertisement mentions only area 799 sqft. I have deposited 19.75 lakhs. can I get it refunded on the basis of concealment of facts . please guide
Asked 4 years ago in Property Law
Religion: Hindu

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23 Answers

Advertisement does not mention carpet area of property

2) you ought to have verified area of premises before purchase of property

3) since area of premises is lower by 150 square feet issue legal notice to bank to refund excess money paid by you

Ajay Sethi
Advocate, Mumbai
87917 Answers
6207 Consultations

5.0 on 5.0

1. You were given right to inspect the flat to ascertain the carpet area details and other things.

2. You having chose not to take any steps in that regard, now you cannot challenge the same on the basis that the carpet area as stated in public notice is not the same on site.

3. On your taking inspection, it will be deemed that you have satisfied yourself as to the correctness of the details relating to the flat like carpet area, etc.

4. In most public auctions, the properties are sold on 'as is where is and what is there basis'.

5. So there are very slim chances of you claiming the entire refund of EMD paid by you on ground of concealment of facts.

6. If you do not wish to proceed with the auction purchase, you can notify the auctioneer and in that event you will be refunded your EMD after deduction of generally 10% value therefrom.

7. If the loss due to the difference in actual carpet area is greater than losing 10% of your money, its better to take refund of your EMD after deduction.

8. Pursuing the matter legally will entail you further costs with no guaranteed outcome.

9. So take your call accordingly.

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

Show advertisement. or any other document executed.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Yes u can

Hemadri Chandrakanth
Advocate, Vijayawada
98 Answers
10 Consultations

4.0 on 5.0

Hello,

Yes you can definitely claim the refund an account of the fact that the entire area has not been disclosed to you and for the fact that you have been cheated.

On the aforementioned grounds only you are advised to give a letter of cancellation to the concerned person.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

In this scenario you have right to cancel this deal on the basis of Exhibition of false information or non Exhibition of material information about the property. According to the rera act, builder is bound to mention only carpet area instead of super built up area. Therefore if only 799 square feet has been mentioned in the advertisement then the court shall presume that the area mentioned in the advertisement is about the carpet area only. You should give him a notice thereafter file the  complaint before the consumer forum, if the project is registered under rera then you should file complaint before the chairman of rera authority.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

Dear Sir,

The advertisement did not mention the whether it is carpet area or the built up area but you were given opportunity to inspect same which you did not carry out.

If you can prove that in normal course that is with due care and judgements in said field if inspection is carried out than also area cannot be ascertained than yes you can file a suit and get your refund amount back.

Otherwise in my opinion this will be unfruitful exercise going in court and wasting more money as the principle of Cavet Emptor " let the Buyer Beware " will be applied as the seller has given enough opportunity to ascertain the area and condition.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

On the one hand you say that the advertisement did not mention the type of area just the total area, and on the other you insist that the carpet area is less than promised. As you probably know, the carpet area is less than the built-up area and the latter in turn less than super built-up area. You did not mention how much is the built-up area of the property you bid for. Your question does say that you were told that the carpet area was 799 sqft. Who told you so and how was this communicated to you? Please answer these questions so that I—and I believe others here—can better assist you.

Pulkit Chandna
Advocate, New Delhi
191 Answers
5 Consultations

4.9 on 5.0

Hi,

You are suggested to send a legal notice for rectification of error and if the things are not solved, file the case for the same.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

If they have specifically mentioned that it's 799 sq.feet then you are entitled to recover the deposit paid by you on the ground of concealing true facts by auctioneer.

First of all send them legal notice seeking for repayment if they do not oblige file a suit for recovery of money in jurisdiction court and declare that the sale transactions are void.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

Yes, you can get it cancelled as the material important facts were not disclosed by them.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

Since the advertisement mentions area as 799 sqft. you have reason to believe that it is the genuine area.

You can do the following:

1. Issue legal notice to the Bank;

2. State that you have been deceived by the false area measurements on the advertisement;

3. Get the real outlay of the property which shows it is 650 Sq.Ft.;

4. Say that fraud has been committed on you;

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

First of all ascertain that whether the seller concealed the fat about the extent of carpet area.

If you had mistaken the fact then you may not be able to claim refund on that ground since it is your mistake to not verify before depositing the EMD.

You can quote some other reason for cancelling the auction bidden in your favor.

You may get refund after some statutory deductions.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

If anywhere they have claimed you the wrong facts you can seek refund on that basis.

Prashant Nayak
Advocate, Mumbai
27247 Answers
88 Consultations

4.4 on 5.0

1. Thanx for your feedback sir.

2. What I was trying to explain you was that once you take inspection of the property which is being sold in auction and pay the EMD, it is deemed that you have satisfied yourself as to the correctness of the details given in the newspaper notice.

3. Check whether the public notice states that the property is being sold to you on as is where is basis?

4. In your case you say that you did not take inspection and also paid the EMD. So the auctioneer will presume that you are satisfied with the property.

5. If you now cancel then they will obviously deduct some money from your EMD or forfeit the entire amount as informed in public notice.

6. You can bring the discrepancy in area to their notice and contend that the auction sale is vitiated or not proper and demand to pass over the property to next highest bidder since you will be unable to buy the flat as area details are not correct.

7. If they agree then well and good. If they don't then you will have to take legal steps.

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

whenever the secured creditor contemplates a sale of immovable property, they will have to follow Rule 8 of the Security Interest (Enforcement) Rules, 2002. Rule 8(6)(f) mandates the secured creditors to set out in the terms of sale notice any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property

2) if the area of property is mentioned as 799 square feet you would be refund of money paid by you if area of property is less than &99 square feet

3) file writ petition in HC to direct bank to refund your money with interest

Ajay Sethi
Advocate, Mumbai
87917 Answers
6207 Consultations

5.0 on 5.0

1. I will need to check the public notice cutting for a better advise

2. You should write to them about the discrepancy and call upon them to reply within the notice period stated in the letter. Better you get issued a legal notice drafted by a lawyer

3. If they don't reply within the notice period then you will have to file a Writ Petition in High Court

4. Ideally all due diligence like ascertaining the carpet area and taxes due should have been checked by you before depositing the EMD

5. The carpet area details can be obtained from sub registrar office

6. Similarly the tax dues details could be obtained from the tax authorities

7. You should never rely on something which is told to you orally without any written confirmation

8. Since you already paid the EMD it will be deemed that you exercised all due diligence and satisfied yourself about the correctness of the property details

9. Have u deposited the EMD under your covering letter? In that letter you could have said that the EMD is being paid subject to pending details from bank. You could have made a qualified or conditional offer

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

Was this a public document—the one that mentioned the carpet area? As for the taxes, they are calculated at pre-notified rates and things that have to be factored in—for instance the sale price—are prescribed statutorily. They aren’t something you cannot possibly not know or calculate beforehand. I think it would be salutary if you showed the releavant documents either here or locally so they could tell you what sort of a case you have. But feel free to ask further questions aside from answering my question at the beginning. Happy to help!

Pulkit Chandna
Advocate, New Delhi
191 Answers
5 Consultations

4.9 on 5.0

It must been disclose in the bidding documents, any taxes due on property, New purchaser is not liable to clear pre purchase dues unless not agreed.

Is this property in auctioned under sarfaesi act ?

Issue Notice for cancellation of deal sitting concealing of sales tax and refund with interest.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

You first ascertain the facts and details that were officially made know to you through their documents at the time of bidding and conditions of bidding as well as cancellation and forfeiture clauses.

The oral assurances or hearsay information will not be law and you cannot bank upon them to claim your genuineness.

You can visit the cancellation and refund clauses mentioned in the terms and conditions of the auction of the property.

If there is any breach then you can fight it out legally.

The bank cannot forfeit the entire EMD for whatever reason even if your cancellation is a step from your side for your own reasons.

You can send a legal notice venting out your grievances and demand for refund by cancelling the auction.

Let them give a reply after which you may plan to initiate appropriate legal action.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

1. In this they can take advantage as there had been previous cases like this and the bank has claimed they have given time for verification to the purchaser let be aware and ascertain. As they not mentioned anything wrong area can be built up or carpet due care by purchaser is required. then also issue them a legal notice for cancelling deal and refund of money if not they file a petition in HC.

2. That can be used if the bank document it can be used as persuasive value that the bank has misguided the buyers.

3 Seek copy of tax bills and call upon bank through legal notice to pay all tax liabilities on the property,

4.Yes you can also seek external help for measurement and match data with the registrar.

5.Sir obtain answer in writing id they deny further delay than file in court agaisnt the bank

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Hello,

send a legal notice to them to claim the EMD refund.

give them a notice and give them 2 weeks time to reply, if they do not reply then file the case before the apprpriate court of law.

regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

You claim the refund through legal notice if they don't pay you or give reply take legal steps and don't sleep over on your legal rights

Prashant Nayak
Advocate, Mumbai
27247 Answers
88 Consultations

4.4 on 5.0

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