• Developer not refunding money invested

I had booked a small commercial space (penthouse) on 4th floor with a developer almost 18 months back for personal use.
As per builder scheme, I had paid 10% advance payment including booking amount in Dec.18.
Builder took even stamp duty & registration charges hurriedly on their name saying they want to register for all the booking fast in one go.
As per builder tie-up with PNB bank, I applied for loan & got loan approval also. 
Developer was supposed to give possession in March 19.

when I started following with developer for registration then they started giving excuses. I realized that their is some issue with the project. 

I come to know from banker(PNB) that this project has some approval pending from authority & advised me to change my unit to another one on 2nd or 3rd floor. Banker informed me that though my loan is approved, bank may not disburse the amount against the unit I applied as it doesn't have proper RCC.

When I tried to check with the builder & get clarity, they stopped receiving calls & replying to emails. 

Looking at their response, I cancelled my booking & asked to refund my investment with interest.

As they were not responding, I complained to RERA court. During hearing in RERA, builder agreed to return money in 6 installments every month. 

I realized, RERA judge didn't comment on my complaint against builder for taking illegally stamp duty & registration on their name. His order was agreeing to builder request of paying money in 6 months installment without any interest & damage. It looked they were having hand in hand. There was no cross questioning to builder lawyer representative against my complaints.

Even after RERA order agreeing to builder terms of paying back in 6 installments without any interest & damage. They didn't pay a single installment till date. It is almost 4 months now.

Please advise.
Asked 10 days ago in Property Law from Mumbai, Maharashtra
Religion: Hindu

If you are not satisfied with me order issued by rera then you can appeal to rera tribunal against the order of the rera please be aware that you must provide the support of your payment to the builder as you have mentioned that the payment was made in the name of builder personally

Vimlesh Prasad Mishra
Advocate, Lucknow
6380 Answers
20 Consultations

4.9 on 5.0

File a complaint with the national consumer court 

Rahul Jatain
Advocate, Rohtak
2411 Answers
4 Consultations

4.9 on 5.0

Dear querist, 

1. Send a legal notice attaching the ReRa order and ask them to comply with the same. Give the 15 days time. 

2.  File a contempt petition as to the RERA orders against the builder. Failing to comply with the order of the Rera Appellate Tribunal is a punishable offence which can lead to imprisonment up to three years or fine which may extend up to ten per cent of the cost of the real estate project, as per section 64 of the Rera Act.

3. File a corresponding complaint of cheating and fraud against the builder. 

4. On the date of next hearing, show the legal notice to the court as well as state the delay occasioned due to the default of the builder and ask for compensation. 

 

In case you need my assisatance in the matter, You can contact me for consultation or on linkedin, https://www.linkedin.com/in/yuganshu-sharma-655091183/

 

Regards,

Yuganshu Sharma
Advocate, New Delhi
342 Answers
1 Consultation

5.0 on 5.0

On account of lock down period of making payment  would be extended by 6 months 

if he does not make payment execution proceedings can be taken       by you for recovery of dues 

Ajay Sethi
Advocate, Mumbai
74527 Answers
4458 Consultations

5.0 on 5.0

1. Well since RERA faults on many counts on the issue redressing several grievances of the buyer it was wrong forum selection for you. 

2. Had you filed the case in consumer forum you could have been refunded with full money with interest in addition to enough damages and compensation. 

3. Now since you have missed the bus your  further remedy lies in preferring an appeal before Rera appellate authority. 

Devajyoti Barman
Advocate, Kolkata
19571 Answers
278 Consultations

5.0 on 5.0

Dear Sir,

if a builder delays the project and the buyer decides to exit, he can cancel his unit and withdraw from the project and get a penalty if the project is delayed.

================================================================================================

The builder is also bound by law to return the money collected from buyers within 45 days, after deducting the booking amount

The new Real Estate Regulation Act (RERA) will enable homebuyers to exit real estate deals smoothly. The Act, which came into force on May 1, stipulates that homebuyers can cancel allotment of the apartment booked with a builder at any stage even if there is no default on the part of the developer. The builder is also bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.

“The allottee shall have the right to cancel/withdraw his allotment in the project as provided in the Act: Provided that where the allottee proposes to cancel/withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. The balance amount of money paid by the allottee shall be returned by the promoter to the allottee within 45 days of such cancellation,” says the rule.

What are the reasons under which homebuyers generally cancel a booking?

Some cancel it due to prevailing market conditions when the price of the housing unit does not appreciate or they are desperate to exit due to a family emergency. For some who decide to pull out because they do not like the unit, builders often offer an alternative site to choose from.

“Now it is clearly stated that the booking amount will be forfeited and specified that the builder will have to return the amount within 45 days. Earlier this amount was either never returned or delayed for years until the unit was sold to a new buyer,” says SK Pal, a Supreme Court lawyer.

“This provision will now ensure that the builder is bound by law to return the money within a fixed timeline. Earlier, getting back refund was a Herculean task,” says Abhay Upadhyay, national convenor, Fight for RERA.

A harsh clause for builders?

Builders term this provision under RERA as “impractical”. “What happens if there are multiple bookings by a buyer and he decides to pay installments for only one unit. Also, the provision to return the amount paid for by the buyer within 45 days after forfeiting the booking amount is not practical because much of the amount collected from buyers has already gone into the purchase of land or construction of a building,” says Navin Raheja, chairman and managing director of Raheja Developers.

Under the rules, an allottee can withdraw or cancel a unit at will irrespective of the builder’s default. “This is a harsh clause as the builder will now have to return the amount within 45 days but there is no provision for the builder to withdraw this amount from the escrow account. It allows buyers to cancel the booking at will,” says Sudip Mullick, partner, Khaitan and Co.

Also, if the real estate developer fails to give possession of the apartment or complete the project as per the stipulated time, the homebuyer can terminate the agreement and is entitled to refund of the amount paid with interest in 45 days of such termination.

As per RERA, if a homebuyer defaults by not paying to the developer on time and such a default persists for an agreed upon the number of months, the developer can terminate the agreement and cancel the allotment made to the buyer.

The provision on cancellation is fair, says Pal. “No buyer will want to give away 10 percent of the booking amount unless he is under pressure to exit. At present, there is no exit clause in the builder-buyer agreement, only a one-way entry for the buyer. A builder is allowed to return the amount in case he decides to discontinue the project,” says Pal.

Under the Uttar Pradesh Apartment (Promotion of construction, ownership and maintenance) Act, 2010, every promoter shall declare the conditions for cancellation or withdrawal of allotment and the extent of compensation either way in the event of violations of any of the conditions.

Also, if a builder delays the project and the buyer decides to exit, he can cancel his unit and withdraw from the project and get a penalty if the project is delayed.

Kishan Dutt Kalaskar
Advocate, Bengaluru
5283 Answers
171 Consultations

5.0 on 5.0

1. who was the RERA judge who heard your complaint? [plz let me know in the remarks section which only i can see]

2. you will have to apply for execution of the RERA order [which is a useless procedure that gives nothing to the complainant since the collector does not act!!]

3. you should have filed a review application to the RERA judge to consider your prayers for refund of stamp duty and registration fee [i dont know whether now you can do that. It depends on what exactly is stated in the order. Does the direction of refunding in 6 months also include the moneys collected towards SD and registration, is a matter of interpretation which can become clear after going through the order]

4. so once you file the execution application and nothing is done by the authority to recover your money from the builder, then you can file a writ petition in the high court where only you can see some action. Otherwise all the lower authorities are completely useless which have made RERA toothless!!

Yusuf Rampurawala
Advocate, Mumbai
5113 Answers
31 Consultations

5.0 on 5.0

You need to go for execution of the rera order. Reta had become a toothless tiger. It has been purposely done to favor builders in the same

Prashant Nayak
Advocate, Mumbai
18628 Answers
34 Consultations

4.6 on 5.0

Frankly you have to wait as period of payment would be extended on account of lock down conditions 

 

even if you file execution application builder would be granted further time 

Ajay Sethi
Advocate, Mumbai
74527 Answers
4458 Consultations

5.0 on 5.0

Go for further appeal as I advised.

Devajyoti Barman
Advocate, Kolkata
19571 Answers
278 Consultations

5.0 on 5.0

Media is no agency to order builder to refund.

Go with the procedure, file in National Consumer Forum

Rahul Jatain
Advocate, Rohtak
2411 Answers
4 Consultations

4.9 on 5.0

Hi, it is advisable to file an execution of the RERA order ..The execution petition has to be filed after an order is obtained..Moreover,you should also have filed criminal FIR u/s 420 ,406 IPC for cheating and criminal breach of trust ..

Hemant Chaudhary
Advocate, Gurgaon
4461 Answers
34 Consultations

4.9 on 5.0

there is no doubt that you will get a faster order when you file a RERA complaint

thats what you got

but problem is how to implement and execute that order?

what is the use of a paper order when what is directed in that order is not complied with by the builder

for compliance by builder you need to file execution application with RERA

and the execution application rarely yields results

thats why when there is inaction in execution of the order, the purchaser has to then approach the high court by filing a writ petition

Yusuf Rampurawala
Advocate, Mumbai
5113 Answers
31 Consultations

5.0 on 5.0

You have not properly proceeded your request before RERA. Consent order cannot pass without approval of parties. If you were unsatisfied, would have objected. 

Consumer complaint is simultaneously remedy. Better file FIR against builder for cheating. Fast recovery with interest. All three can proceed together. 

Yogendra Singh Rajawat
Advocate, Jaipur
18502 Answers
22 Consultations

4.6 on 5.0

For part of relief, which have not been granted by RERA, you can file appeal under the RERA Act.Since, limitation for filing appeal has expired, so, you can also file application for condonation of delay.

Rajinder Goyal
Advocate, Chandigarh
67 Answers

5.0 on 5.0

1. File appeal of RERA order for penalty and interest amount also if same is not granted to you vide the RERA order. 

Shubham Jhajharia
Advocate, Ahmedabad
24319 Answers
96 Consultations

5.0 on 5.0

No you can not file the case in all the courts together 

Anilesh Tewari
Advocate, New Delhi
17614 Answers
288 Consultations

5.0 on 5.0

Share the RERA order that has been passed, if the same is not at par with law then the appeal will have to be filed. 

If the remedy has been exhausted already then you can not approach the court again. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
17614 Answers
288 Consultations

5.0 on 5.0

See file appeal for enhancement of award as per the law including the interest , stamp duty amount . In appeal you may get further relief of the interest and other amount paid by you and wrongly collected by builder also you may pray penalty against builder also.

Shubham Jhajharia
Advocate, Ahmedabad
24319 Answers
96 Consultations

5.0 on 5.0

You were correctly advised 

 

you cannot file case in RERA as well as consumer forum 

 

your criminal complaint would not be entertained as on account of force  majeure conditions time for making payment is extended 

Ajay Sethi
Advocate, Mumbai
74527 Answers
4458 Consultations

5.0 on 5.0

Judge observation is wrong. AS per the RERA Act, builder is liable to refund the money of the buyer and pay a certain amount of interest for the period of delay.

Not HC but RERA, CC and FIR - simultaneous remedies. Also file execution petition before RERA. 

Yogendra Singh Rajawat
Advocate, Jaipur
18502 Answers
22 Consultations

4.6 on 5.0

I repeat file appeal and then go to high curt.

No criminal case of cheating will lie.

Devajyoti Barman
Advocate, Kolkata
19571 Answers
278 Consultations

5.0 on 5.0

As per section 38 of The Real Estate(Reg. & Development )Act,2016,The authority has the power to impose penalty, or interest in regard to contravention of obligations cast upon the promoters.

Appeal lies under section 43(5) of the Act,2016

Section 40 of the Act,2016 provides for the execution power to the authority.

You can seek remedy only in one forum, 

Rajinder Goyal
Advocate, Chandigarh
67 Answers

5.0 on 5.0

You cant simultaneously go to rera and consumer court together. You can approach consumer court if you withdraw the same from one forum and approach other. 

Prashant Nayak
Advocate, Mumbai
18628 Answers
34 Consultations

4.6 on 5.0

Can I file criminal FIR u/s 420 ,406 IPC for cheating and criminal breach of trust, contempt of RERA court for fast recovery of my investment with interest & expenses incurred.
Ddo this

Rahul Jatain
Advocate, Rohtak
2411 Answers
4 Consultations

4.9 on 5.0

If you are aggrieved by the orders of RERA then you can prefer an appeal before appellate authority of RERA.

If you do not want not pursue the matter legally through appeal, then you can file an execution petition  for executing the orders passed by RERA as per provisions of  law for recovery of amount as per the orders.

.

 

 

T Kalaiselvan
Advocate, Vellore
64506 Answers
835 Consultations

5.0 on 5.0

1. You can issue a legal notice to the builder demanding the return of the amount he had taken from your vide the said cheque for the purpose of registration and stamp duty which actually did not happen till this date.

2. No doubt the consumer court cases will stretch bit too long, but since you have already lost lot of time in the bargain, you should not worry about the time taken in the courts because you may not get an effective result through RERA 

3. There is nothing wrong in approaching media to expose such corrupt builders so that the people will become aware of such unscrupulous people

 

T Kalaiselvan
Advocate, Vellore
64506 Answers
835 Consultations

5.0 on 5.0

1. You can choose any one option.

However please note that you cannot file a case directly before high court, but you can approach consumer court if you are not satisfied with the performance of RERA.

2. After having approached RERA and also got an order in your favor you may not be able to lodge a criminal complaint against him.

T Kalaiselvan
Advocate, Vellore
64506 Answers
835 Consultations

5.0 on 5.0

you cannot file before Consumer court for the same subject matter when the matter is pending in Rera. If you do so, your matter will be put on hold till you withdraw the case from the Rera.

Mohammed Mujeeb
Advocate, Hyderabad
15553 Answers
7 Consultations

4.5 on 5.0

- As per law , the builder is bound to refund the entire paid amount with 10 percent interest. 

- Consumer court is legal platform to recover the amount & punish the builder for his deficiency of services within a short period. of time. 

- Your mentioned order/direction passed from the RERA is against the rule , and legally not sound.  

- Hence, under section 44 of the RERA , you should file your appeal against that order /officer before the 

State RERA Tribunal. 

- Yes, since the said builder has committed an offence for breach of trust and cheating , hence you can also lodge your complaint against him as well. 

Mohammed Shahzad
Advocate, Delhi
2540 Answers
35 Consultations

5.0 on 5.0

Dear Sir,

The last option chosen by you will be correct and you are suggested to file the separate cases for separate cause i.e. stamp duty, recovery etc. as well as the police complaint. 

Ganesh Singh
Advocate, NEW DELHI
4431 Answers
9 Consultations

4.5 on 5.0

1. You can file appeal in High court against order of RERA with application for condonation of delay as limitation period for filing appeal is over.

2. Appeal may not accepted as it was a compromise between you and builder to make payments so you should now file execution petition Against builder to claim the amount due. 

Mohit Kapoor
Advocate, Rohtak
7952 Answers
2 Consultations

5.0 on 5.0

1. You should not have gone to RERA in the first place.

2.You cannot invoke the jurisdiction of two forums simultaneously. The remedy is to file an appeal before the appellate authority.

3.Criminal complaint will not be maintainable after you invoked the jurisdiction of RERA.

Ashish Davessar
Advocate, Jaipur
28643 Answers
835 Consultations

5.0 on 5.0

you should have asked the Judge to record whatever he told you in his order

what he told you is preposterous

for non compliance with RERA order you can also file a contempt petition in high court

Yusuf Rampurawala
Advocate, Mumbai
5113 Answers
31 Consultations

5.0 on 5.0

A contempt application against the builder be filed for openly and willing flouting the orders of the RERA TRIBUNAL.

Rahul Mishra
Advocate, Lucknow
7955 Answers
15 Consultations

5.0 on 5.0

File a contempt application in the high court. It gets decided quickly.

Rahul Mishra
Advocate, Lucknow
7955 Answers
15 Consultations

5.0 on 5.0

A criminal complaint can always be filed as civil and criminal liabilities and penalties differ.

Rahul Mishra
Advocate, Lucknow
7955 Answers
15 Consultations

5.0 on 5.0

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