• Cancellation of agreement

In 2009, I enquired to buy a flat for personal use and informed by a reputed builder through mail that possession will be given end of December 2010.
I booked the flat in Haryana and paid 10% booking amount and got provisional allotment letter and I was send builder buyer agreement and I raised few queries like copy of plan approval from government and site plan and title of the property etc. and builder told me they are looking into these matters and pretty soon they will send me revised hard copy of builder buyer agreement. Subsequently paid down payment and signed builder buyer agreement 2010 and up to now flat is not ready
Now I want to cancel the agreement and claim interest from the builder from the date of booking) according to New law (RERA) penalty charges will start when you have paid 10% amount of property) and in my case date of booking regardless when you sign the builder buyer agreement.
By the way, I came to know through RTI   enquiry builder license was expired in late 2009 and again renewed in 2011. Technically builder didn’t have licence when we signed builder buyer agreement on 2010  and I was not aware of it.
These are the facts.

I need your wise suggestions, what is the best option for me. Shall I legally peruse now or wait for the possession? And if I go legally now and how to arrange retainer ship with a lawyer and not to be taken for a ride. Please don’t feel offended. I am being honest.


Thanks and Regards,

Pradeep Kumar .
Asked 6 months ago in Property Law from United Kingdom
Religion: Other
1) since builder has failed to complete construction by 2010 ir period mentioned in agreement you can cancel the agreement and seek refund of money paid by you with interest as stipulated in agreement 

2) if builder fails to refund money file complaint before consumer forum and seek refund with interest , litigation costs , compensation for mental torture undergone by you 

3)pay lawyer for drafting and filing complaint 

4) per dates charges as mutually agreed 
Ajay Sethi
Advocate, Mumbai
23383 Answers
1228 Consultations
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1. To cancel the agreement you should issue a lawyer's notice for cancellation to him without delay. Delay in initiating the process cancellation can be seen as condonation of the violation of contractual terms made by the builder.

2. If you do not see possession getting delivered anytime soon then cancellation of agreement will be a wise move. 

3. You may engage a lawyer on retainership basis subject to his terms of fee. The retainership terms vary from a lawyer to another. 
Ashish Davessar
Advocate, Jaipur
18257 Answers
450 Consultations
5.0 on 5.0
Hi, As you have entered into Agreement with Builder on 2010, now it is all most 6 years and the Builder has not paid the amount so you have two option you have to approach Consumer Court for deficiency of services or file a suit in the Court for claiming amount which is paid by you as down payment.

2. First you have to issue legal notice and cancel the agreement and ask the builder to refund the amount. If he failed to pay the amount then you have to go legally as stated above.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
I need your wise suggestions, what is the best option for me. Shall I legally peruse now or wait for the possession? And if I go legally now and how to arrange retainer ship with a lawyer and not to be taken for a ride. Please don’t feel offended. I am being honest.

You can pursue the matter by first cancelling the booking and communicating the same to the builder while demanding the refund owing to the inordinate delay and also demand the interest for the amount received by him so far.
For following it subsequently through court of law you may have to take the help of an advocate.  About retainer issues you have to use your prudence, nobody can give any suggestion on that aspect.
T Kalaiselvan
Advocate, Vellore
14158 Answers
128 Consultations
5.0 on 5.0
Do i have to pay tax on interest earned because of the cancellation.

First you get the refund and the claimed interest after which you can think about paying tax to the interest portion. It may not be so easy to get refund and the interest on it from the builder. 
The applicable taxes wherever it is, has to be paid an individual as per rules.
T Kalaiselvan
Advocate, Vellore
14158 Answers
128 Consultations
5.0 on 5.0
as far as your tax liability is concerned consult a local chartered accountant 
Ajay Sethi
Advocate, Mumbai
23383 Answers
1228 Consultations
5.0 on 5.0
No as it is compensatory in nature.
Ashish Davessar
Advocate, Jaipur
18257 Answers
450 Consultations
5.0 on 5.0
1. File a complaint case before the local District Consumer Dispute Redressal Forum alleging defficincy in service and unfair business practice claiming refund of the amount already paid with interest, damage and cost,

2. The earning in any way is taxable. So, you shall have to pay for the earnings in the form of interest you gain through Court order from the builder.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0

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