• Advance payment to builder

sir, i have made a payment of Rs. 1 lakh to a builder for buying a independent house at Rs. 13.25 lakhs. the present status is a plain site (plot). builder and property at hyderabad. am at Mumbai. n 14-9-14 we made an agreement of sale  in which no mention was made about the refund terms in case of failure to make the balance payment of Rs. 12 lakhs.  we also mutually agreed to do the bhoomi pooja (ground breaking) & start the construction work after 26-7-14 as period was inauspicious. on 19-4-14 i sent a mail to them to refund the advance payment made as i wanted to buy a cheaper house available at Rs. 7 lakh.  now builder is refusing to return the amount given as advance.  the builder is saying that they will deduct 30% of the advance as cancellation charges and they will return the balance Rs. 70000 as and when the particular site is bought by next buyer. i urgently need money to advance to Rs. 7 lakh house.  i want to file a case. kindly advice me whether i can file a case at mumbai and what kind of case it will be. whether civil or criminal?
Asked 2 years ago in Property Law from Mumbai, Maharashtra
1) generally in case you fail to pay balance amount builders tend to deduct 10%of earnest money paid . 

2) in your case agreement for sale is silent on said aspect . 

3) since builder is willing to pay you Rs 70,000 accept it . 

4) litigation costs for recovery of rs 30,000 would be more than amount  sought to be recovered by you

5) in case you so desire you can file complaint before consumer forum in Hyderabad for refund of money with interest . agreement has been signed in Hyderabad. property is situated in hyderabad . case before consumer forum take around 2 years to be disposed of
Ajay Sethi
Advocate, Mumbai
23090 Answers
1212 Consultations
5.0 on 5.0
Best to file a consumer complaint. In the complaint tell that builder delayed construction hence you are seeking for cancellation and hence seeking complete refund . 
The entire process takes about 4 to 5 months.
Kiran N. Murthy
Advocate, Bangalore
765 Answers
50 Consultations
5.0 on 5.0
Issue a legal notice for getting back the amount if he is not willing to give the house as your agreement does not says to deduct a percent if you didn't pay correctly. Then file a complaint in the consumer court for getting back the amount and damages. Lodge a police complaint for threatening and harassment and fr getting back the amount
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
A. You can issue legal notice to the builder to pay paid amount.

B. Once entered the sale agreement, you have to give proper reasons to cancel the agreement Ex: title is not clear etc.,

C. The Builder can file suit against you with respect to execution of agreement under specific performance of the contract

D.  Generally, Builder can confiscate the 10% amount on the total price. Hence, you can approach the consumer forum against the builder's irrational decision. The Court will determine the matter clearly.
B.T. Ravi
Advocate, Bangalore
733 Answers
29 Consultations
5.0 on 5.0
Send a Legal Notice to the builder calling him to refund the entire amount with interest,if he would not comply as per  notice then file a case u/sec.12 of the Consumer Protection Act in District Consumer Forum for deficiency of service.You can also file a Criminal Case u/sec.420 and 406 IPC in Judicial Magistrate Court.
Minansu Bhadra
Advocate, Kolkata
266 Answers
23 Consultations
4.8 on 5.0
1. Since there is no mention about the deduction from the advance paid in case of refusing to buy the property at a later date, the builder can not deduct any amount legally,

2. Moreover, 30% deduction is too high in comparison to market standard,

3. You can file a complaint case before the local District Consumer Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming the entire advance amount bpaid, interest, damage and cost,

4. File the above Consumer Forum case only after collecting the 70% payment fro him towards refund of the advance.
Krishna Kishore Ganguly
Advocate, Kolkata
12027 Answers
227 Consultations
5.0 on 5.0
Hello,
Though there was no clear description about refund terms it is a common practice to deduct around 10% of the advance amount if you backed off from the deal..

Unfortunately there is no option available for an immediate resolution.

If you decide to settle for the 70% you will need to wait for a time until he gets a new buyer for the plot.
Therefore the best option is to send a legal notice demanding the entire amount back and if he does not comply file a case in the consumer forum alleging unfair trade practice.
The most practical solution to get the money back immediately would be to negotiate and settle it for the maximum you can get back.
S J Mathew
Advocate, Mumbai
1949 Answers
65 Consultations
5.0 on 5.0
Issue legal notice then file case in consumer court for refund of whole amount with interest and compensation for harassment etc.on the ground of delayed construction.
S.P. Srivastava
Advocate, New Delhi
703 Answers
13 Consultations
4.8 on 5.0
1. The builder is not legally authorized to deduct the amount from the earnest money if there is no clause tot his effect in the agreement. To deduct any amount from the advance paid there has to be a specific clause in the agreement. Since no such clause was incorporated in the agreement in your case the deduction of 30% by builder is illegal.

2. You may after accepting the 70% amount issue a lawyer's notice to builder demanding the refund of the 30% amount deducted by him. If he refuses to remit the deducted amount then move to court and file a case for refund of amount deducted along with compensation and also the amount spent by you on pursuing litigation i.e your lawyer's fee.
Ashish Davessar
Advocate, Jaipur
18055 Answers
445 Consultations
5.0 on 5.0
Hi,
 You can file the consumer  case in Hyderabad as the jurisdiction of the court in this matter is in hyderabad. Since you need the money urgently , send the notice and file the consumer complaint
Thresiamma G. Mathew
Advocate, Mumbai
1315 Answers
85 Consultations
5.0 on 5.0

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