Hi , I wanted to take a franchise of a pilates business So during the initial calls it was mentioned that the security deposit will be refunded in case we don’t move ahead with the franchise. It was mentioned in the inital pitch deck that the security deposit is 1 lakh and will be adjusted in the franchise fee Now when I don’t want to move ahead with the franchise they are telling me that deposit won’t be refunded They are also telling it was mentioned in the pitch deck But clearly in the pitch deck it wasn’t mentioned that it won’t be refundable and they are also telling it was mentioned on the calls earlier but clearly it wasn’t Now legally am I eligible for a refund or not?
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
oral assurances have no value
if you have any communication in writing wherein they agree it would be refunded then you are enttiled for refund
issue legal notice to refund your SD
4)If they fail to refund file police complaint against the fraudsters
I don’t have any communication in writing for a refund And also it wasn’t mentioned anywhere that the sd is non refundable Can I still proceed with legal notice
you can issue legal notice
Now they are telling since we spent time and resources on the franchise discussion we will not be refunding the amount
Just a last question Even if there’s no communication in written for non refundability am I eligible for a refund?
Issue legal notice to refund your security deposit
If agreement is silent you can seek refund
If there is no written agreement or clear communication stating the security deposit is non-refundable, you are legally entitled to a refund. Verbal assurances must be backed by evidence, and since the pitch deck does not mention non-refundability, their claim is weak. You can send a legal notice demanding the refund, citing lack of any terms making the deposit non-refundable.
Send a legal notice to recover your security deposit from the Company.
Yes you can seek refund you can take a telephonic consultation through kaanoon
You are legally entitled to a refund. Since there is no written clause stating the security deposit is non-refundable, and since the pitch deck does not mention non-refundability, the company cannot legally retain your money. Under Indian contract law, the burden lies entirely on them to prove that the deposit was meant to be non-refundable. In the absence of any written term to that effect, the default rule is that all advance payments are refundable if the contract is not finalized.
Your situation is strengthened by the fact that no franchise agreement has been executed. Until a formal contract is signed, there is no concluded contract between you and them, and any money taken must be returned under Section 65 of the Indian Contract Act (benefit received without a valid contract must be restored). Their claim that they “spent time and resources” has no legal value, because no written agreement exists which authorizes them to charge you for consultations or discussions. Preliminary franchise conversations do not give them the right to retain a deposit.
You can absolutely send a legal notice demanding a refund. A legal notice is fully justified and in fact recommended, because their refusal constitutes both misrepresentation and an unfair trade practice under the Consumer Protection Act. Even if there is no written promise of refund, the key point is that there is no written clause of non-refundability, and the company cannot impose such a term retrospectively. In similar franchise disputes, consumer courts consistently order companies to refund the entire deposit along with interest and compensation.
There is nothing stopping you from sending a legal notice even today. If they still refuse, you can file an online consumer complaint and seek a refund, interest, and compensation for harassment. You have a strong case for recovery.
If you want, I can draft the legal notice for you.If you wish to contact us, you may do so on https://qrco.de/syslaw
Under Indian law (Contract Act, Sec. 18, 19), if a party makes a representation and you act based on it, the representation is binding, especially when you paid money relying on their statement and no written clause clearly stating “non-refundable” was given to you.
So the refund becomes legally claimable. If their document does not explicitly contain the phrase:
“Security deposit is non-refundable”, or “Under no circumstances will it be returned” then legally the clause does NOT exist.
Therefore you can take legal action by first issuing a legal notice demanding the security deposit and later on pursue the same by filing a suit for money recovery.
As per the provisions of Indian Contract Act, a clause must be clear, written, unambiguous. Any ambiguity is interpreted against the party who drafted the clause.
If the contractual agreement document does not explicitly contain the phrase: viz., “Security deposit is non-refundable”, or “Under no circumstances will it be returned” then legally the clause does NOT exist.
Therefore the absence of such wording strengthens your refund claim.
Their new excuse has no legal validity at all, you can strongly challenge it.
As per Indian Contract Act: A deposit can be retained only if the terms are clear, written, and accepted by both parties.
Their unilateral claim namely 'we spent time and resources is not enforceable in law when you initiate legal action for recovery.
The written agreement signed by you says that “Security deposit is non-refundable,” OR “Company can retain deposit toward administrative costs”.
If neither of these exists, they cannot keep your deposit.
You may please be aware that a security deposit has a specific legal purpose, i.e., to secure future performance, to be adjusted toward franchise fee or to be refunded if agreement does not materialize.
The agreement never meant to compensate them for meetings, calls, or “resource spending.”
Unless a contract says so explicitly, such a claim is invalid.
Therefore you can very well proceed withe suggested legal action for recovery of security deposit amount through civil court.
- If you have refused to go further in the beginning , then the said company is bound to refund the entire amount paid by you.
- As per Supreme Court , one cannot refuse to refund the deposited security amount if no services has provided.
- You can send a legal notice for getting refund as you are entitled to get refund even if there is a clause for not refund in the agreement.
