• Cancellation charges

What can a builder charge as cancellation charges if he has mentioned to deduct 5% of total cost as cancellation charges in application form? We are not happy with certain conditions and hidden charges mentioned in BBA., so we want to cancel this deal? Even if we have to give 5%, how can we reclaim it and what would be the process?
Asked 1 year ago in Property Law from Greater Noida, Uttar Pradesh
Religion: Hindu
1) if you had agreed to pay 5%cancellation charges in application form signed by you it would be binding upon you 

2) inform the builder to cancel the booking made by you of the flat and seek refund of payments made by you 

3) builder would agree subject to deduction of cancellation charges

4) if builder fails to refund file complaint before consumer forum and seek refund of payment made with interest at 18%pa
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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1) terms and conditions of application for allotment of flat would be binding upon you once you duly accept them 

2) since you are located in greater noida you have to file case in consumer forum in your city 

3) contact a local lawyer for address of consumer forum in your city 
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
5.0 on 5.0
1. The cancellation has to take place within the four corners of the agreement. The builder is not entitled to charge anything over and beyond what has been provided in the agreement.  As such, if the agreement or the application form as the case may be, provides for 5% of booking amount towards cancellation charges, the builder will be within his right to do so.

2. You may refuse to pay the hidden charges.

3. You cannot 'reclaim' the cancellation charges after they are paid.
Ashish Davessar
Advocate, Jaipur
18275 Answers
451 Consultations
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Delhi High Court
M/S Haldiram Manufacturing ... vs M/S Dlf Commercial Complexes ... on 16 April, 2012
Author: Kailash Gambhir
*     IN THE HIGH COURT OF DELHI AT NEW DELHI


+                      IA No. 3363/2011 in CS(OS) 2288/2010

                                 Judgment delivered on: 16.4.2012



M/s Halidram Manufacturing Company Pvt. Ltd.         ..... Plaintiff
                          Through Mr. Anil Sapra, Sr. Adv. with
                                    Ms. Snigdha Sharma &
                                    Ms. Praneeta Vij, Advs.

                       versus



M/s DLF Commercial Complexes Limited           ..... Defendants
                         Through Mr. H.L. Tikku, Sr. Adv. with
                                     Ms. Yashmeet Kaur &
                                     Ms. Mandeep Kaur, Advs.

CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR:

( relevant extracts from said judgement) 

On a plain reading of the clause 34 contained in the application form and the legal position discussed herein above, this court is of the considered view that it cannot be said that the parties had not agreed to the terms and conditions of eth said Application Form. The said Application Form, in fact, has been issued and printed by the defendant itself and therefore, the plaintiff cannot be heard to say that the application form constituted a unilateral agreement and not a bilateral one. The application form is duly signed by the Chairman of the plaintiff and the said form has been duly attested by the defendant. In fact the payments were being made by the plaintiff in accordance with the terms contained in the application form. Moreover no dispute has even been raised by the plaintiff to challenge any of the terms and conditions contained in the application form. To this extent, therefore, this Court does not subscribe to the arguments advanced by the learned counsel for the plaintiff that the said Application Form constitutes a unilateral agreement and not bilateral one.
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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A. Generally, you are bound by the all terms and condition mentioned in the agreement. However, in the absence of the agreement that you have agreed the all the terms and conditions which is mentioned in the application form.

B. Generally any agreement must have stamp duty else it would not be allowed to adjudicate the matter. But in some cases, terms and conditions mentioned in the application form, bill, receipts would be treated as express contract. 

C. In my opinion, 5% of total cost as cancellation of charges is legally valid because in Karnataka 10% is existed. 
B.T. Ravi
Advocate, Bangalore
738 Answers
31 Consultations
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Hi, when you sign the application form then it is binding on you so that you are liable to pay the amount.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
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Besides deduction of 5% amount from the consideration amount or the advance amount, the builder may deduct the VAT or service charges/tax quoting to be borne by you, also the registration charges will be put on your head.
You may agree for registration charges as well as 5% general deduction from the consideration amount but not for  other charges.
You may approach consumer forum for relief and remedy.
T Kalaiselvan
Advocate, Vellore
14177 Answers
128 Consultations
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1. You should have examined all he terms before paying any amount,

2. If the said term has been clearly mention n the application filled up by you then you shall have to pay the same,

3.  However, if you can find any illegality in their terms in the BBA copy of which was not given to you earlier inspite of repeated requests, ten ou can file a complaint case before local District Consumer Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming refund ofnthe amount deducted, damage and cost.
Krishna Kishore Ganguly
Advocate, Kolkata
12144 Answers
234 Consultations
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1. 'Binding on you' refers to the terms of the agrement signed by you,

2. The terms agreed by you by signing the agreement has to be followed by you,

3. If the term of the agreement signed by you says that the amount will be deducted, then it will e deducted as per the agreement,

4.Yes, application signed by you is certainly a legal docment,

5. You can google search the address of local Consumer forum.
Krishna Kishore Ganguly
Advocate, Kolkata
12144 Answers
234 Consultations
5.0 on 5.0

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