Builder can forfeit booking amount or 10% of total value of flat if booking cancelled by allottee without builder fault. So, cancel the booking but impose reason of cancellation on builder for full refund.

- There is no guidelines laid down by the government to forfeit the booking amount for the cancellation, and the deduction is done at the builder’s discretion.

- Hence, legally, the builder cannot deduct any money out of the advance payment you have made for the booking till the time; a builder-buyer agreement is made and registered with the sub-registrar.

- Further, A builder-buyer agreement is not created until the buyer pays at least 10 per cent of the property value.

- Further, as per Real Estate Regulation Act (RERA), home-buyers 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 bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.

- Hence, if you have already paid 10 percent of the flat value, and the said agreement signed by you , is not registered in the office of the Registrar , then you are liable to get full amount refund paid by you ,even there is a clause present in the agreement for not refunding  , and if the said agreement is registered , then builder has right to deduct booking amount from the paid amount. 

- You should send a demand legal notice to the said builder , and if refuse , then lodge your complaint before the Consumer court , and thereby prayed for the refund of paid amount with interest.

Builder can forfeit 10 per cent of booking amount in case of cancellation of booking 

file complaint against builder before RERA or consumer forum and seek orders to direct builder to refund your money 

File complaint against builder before consumer forum or RERA 

Take the plea that allotment letter did not contain any such clause 

subsequently you received cancellation policy which was not signed by you  

Builder can receive up to 10% in advance without executing agreement to sell. Cancellation policy is not valid and contrary to RERA rules.

Is the project of Builder registered under Maharera Project?

If answer is affirmative, Please issue legal notice via Email and demand your advance payment of Rupees one Lakhs mentioning the reason for the same.

If not move application with payment receipts and other correspondence before MAHARERA for refund of deposit. 

Yes if the said flat is cancelled without any fault of builder then booking amount will be forfeited. But a new judgement of rera says that if the flat is cancelled due to illegal one side clauses 

1. Builder has to return entire booking amount, if you cancel the booking. This has been upheld in various court judgments.

2. You also have an positive option to file a grievance petition against the Builder /Developer, in the local Consumer Court, for their illegal trade practice, negligence, deficiency, harassment, intimidation, cheating etc.... with proper documentary evidences and you can claim damages /compensation & interest on your investment, and for your physical & mental trauma.

1. This is the often the cheating tactics if many crooked builder to usurp money of gullible buyers. 

2. Don't worry as this claim of the builder I'd neither legal nor sustainable on any counts.

3. So send him a legal notice seeking refund of this money. 

4. If he refuses to return full amount then file a case before the consumer forum wherein you would get back your whole amount apart from interest and damages. 

Dear Sir,

There are the cancellation clauses in the agreement and the same should be made aware at the time of the agreement. You may also charge for the mental agony. 

So as per the cancellation clause he is deducting 2% legally..

You can serve him with a legal notice and later file a complaint against him in the consumer court 

- Since, no agreement was done and also registered , hence this cancellation policy clause will not work , as i mentioned above . 

- You are eligible to get refund from the builder. 

Dont forget to rating Positively. 

From examining all the facts of your query I want to say that-
These cases are very common in various Courts of India and Supreme Court of India. I can understand your problem in this regard. Please understand that it is not necessary that property deals will always culminate into the execution and registration of an agreement. The deal may be halfway canceled by either the seller or the buyer for any reason. Earlier cancelling an apartment booking was a tedious task to do. However, after the introduction of the new RERA (Real Estate Regulation and Development) Act, 2016 it will enable the homebuyers to exit real estate deals smoothly.
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 Real Estate (Regulation & Development) Act, 2016. I have dealt with some of such cases in Supreme Court.

So this in a way means that if you leave the contract because of a personal emergency or to invest your money elsewhere, you stand to lose about 10 per cent of the property cost. You know there are a lot of costs involved in construction and a buyer exiting a contract midway means the developer much harm. So, checks and balances are in place to avoid a situation that upsets the economy as a whole.

I feel homebuyers are unable to continue with their flat booking due to Covid-19 pandemic and want to cancel it.

You know the RERA Act is a welfare legislation enacted primarily to safeguard the interests of allottees and thus Developer cannot be allowed to act contrary to the spirit of RERA Act by devising formats (Booking form, Allotment Letter, etc) which are ambiguous, unreasonable and inequitable. To my mind such arbitrary and one-sided interpretations making the contractual transactions unfair and inequitable put the Allottee in a disadvantageous position and thus cannot be accepted. Developer cannot be allowed to act disadvantageously to the interests of the Allottee who was not made aware of interpretations and implications of ex-facie ambiguous, one-sided and inequitable terms used by the Developer in Application form/Allotment letter which Allottee has no choice but to sign on dotted line in a prescribed or standard form. Forfeiture of amount by the Developer is erroneous and against the object and purpose of the RERA Act which is enacted as beneficial legislation to abate hardship of flat purchasers. Recently in June 2020 Maharashtra Real Estate Appellate Tribunal (MREAT) passed an order, where the developer was asked to refund entire booking amount.

No Agreement was done. You only paid the booking amount and signed booking form. You paid 1 lakh. Value of property was 89 Lakhs. Cancellation policy terms was given in writing on 16 June way after 45 days of booking. This is unethical and not according to established principle of law. You are surely entitled for full refund as per Supreme Court judgements. In the Pioneer Urban Land & Infrastructure Ltd v Govindan Raghavan case, the Supreme Court held that a contract that is one-sided and against the interests of buyers cannot be final and binding if it is shown that buyers had no option but to sign on the dotted line.
It constitutes an unfair trade practice as per section 2(r) of the Consumer Protection Act.

To take legal action you can send a legal notice through Advocate. I have recently issued some legal notices under my signature to such delinquent builders and many have come forward to settle the issues with the Consumers. All legal action can only be taken once notice has been served upon the entity or individual you wish to take to court. It is only this process that legalises bringing a matter to court. The intimation sent is known as a legal notice. A legal notice is, therefore, a formal communication to a person or an entity, informing the other party of your intention to undertake legal proceedings against them. This notice, when sent, conveys your intention before the legal proceedings and thus, makes the party aware of your grievance. Many times, a legal notice served will bring the other party on heels, and the problem can get resolved out of court too, with fruitful discussions on both sides. And, if the other party is still not heeding to the grievance, one can always start the court proceedings after a particular interval, as stated by the law. Although a legal notice can serve as a purpose of negotiations between the parties and save time, effort and money that are usually spent in court cases.

You may contact my secretary to connect with me for clarification.
I hope you and your family are safe and healthy. Stay home and be safe during Covid-19.

Gopal Verma,
Advocate on Record & Amicus Curiae,
Supreme Court of India

When there was no agreement at the time of giving the money then he cannot deduct anything as the money was given in good faith. File a complaint in the RERA TRIBUNAL.

That was mailed after the money was given and after the period expired.

You first issue a legal notice to the builder communicating your decision to cancel the booking  for the reasons you may rely upon and demand return of the booking amount.

If he is not responding or not complying with the demand made, you can resort to legal action by either approaching the RERA or consumer forum for relief and remedy to this.

Since you have not yet entered into any sale agreement so fr, you can claim refund since you are not bound by the terms and conditions that may be existing.

Since you have not entered into a sale agreement and also this clause was not informed to you at the time of booking or signing the booking form nor the booking form had this contents printed on it to which you have signed, you have a good case to recover your booking amount through court.

You may consult a local advocate and issue a legal notice in this regard and then resort to further legal action.

1. You must have signed the booking form. If cancellation clause is mentioned on the booking form then builder can invoke it.

2. If there was no booking form signed by you or it was signed but did not include the cancellation clause then builder is liable to refund the entire amount.

3. Serve a lawyer's notice initially to the builder to refund the amount, and if he still does not refund then you may go to civil court with a suit for recovery of money.

builder cannot deduct any money out of the advance payment you have made for the booking till the time a builder-buyer agreement is made and registered with the sub-registrar. issue a legal notice through an advocate and file complaint before Consumer forum. 

Usually, the builder would deduct 10% of the booking amount and refund the balance if you signed agreement. 

 If you have booked the flat then builder have right to deduct the cancellation charges at time of cancellation of booking by buyer after a prescribed period of booking.