• Builder not refunding the booking amount

Dear Respected Lawyers, 

I booked a flat in Dehradun (Uttrakhand) in March 2016 and paid a booking amount of 13.36 lakh (15 %). Later in mid May 2016 because of personal issues at home, I requested a cancellation (both verbally and in writing) and full refund of the booking amount - I was assured that total amount will be refunded - I have this in writing from them in my emails and text messages. 

As I live in Hyderabad, they posted us the contract/agreement after I paid them 13.36 lakh. 

I DID NOT sign anywhere in the contract/agreement and sent it back (by post) as I had cancelled my booking just after few days of booking and again requested a full refund as I had not signed anywhere. 

Now it has been almost 4 months, the builder is giving different answers ... like, they will deduct 10 % of the total base price + service tax, so a total of around 6.5 lakh ! 

Note: I have receipts of the bank transfers & Cheque. 

I want to know what are my rights ? 

1. Is it legal for them to deduct "10% + service tax" for something that i did not sign (i.e. no contract signed) ? 

2. Can I file a case from Hyderabad ? 

3. What are my chances of getting full refund and how long would it realistically take to get my money back if I do file a case on the builder? 

Many thanks in advance for your suggestions.

Kind Regards,
Asked 7 years ago in Property Law
Religion: Hindu

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7 Answers

1) builder cannot deduct 10 per cent of sale price of flat as you have not signed any contract authorising them to do so

2) you can file complaint before consumer forum in dehradun as building was to be constructed in dehradun . your allotment letter must be containing clause that in event of any disputes court at dehradun would have jurisdiction

3) complaints before consumer forum take around 2 years to be disposed of

4) seek refund of money paid by you with interest , compensation for mental torture undergone by you and litigation costs

Ajay Sethi
Advocate, Mumbai
94720 Answers
7532 Consultations

5.0 on 5.0

Hi

1) Since you have not signed any agreement, but have paid only the booking amount, you are entitled for a refund of the advance paid.

2) The Builder cannot deduct 10% of your booking amount as cancellation fee.

3) Need to see the contents of receipt issued by the builder to ascertain whether the receipts shows advance amount and service tax separately..

4) If the service tax is shown as separate item in the receipt, then builder is not liable to refund the service tax.

5) You can file a case at Hyderabad.

6) Chances of you getting the full refund is 100%.(Rs13.36 lakhs minus service tax).

7) Realistic time frame for you to get the refund of booking amount is 6 to 7 months.

Hope this helps

Rajgopalan Sripathi
Advocate, Hyderabad
2173 Answers
394 Consultations

5.0 on 5.0

Hi

you should first send him a legal notice and file a case against him in the consumer forum

Since you have not signed any agreement the forfeiting amount is not acceptable.

you can ask for the interest of the entire amount.

Service tax can not be charged, he can't deduct the charges under the heads as he claims.

No you can't file it in Hyderabad,engage a lawyer in Dehradun and file it in the district consumer forum for your claims.

Thresiamma G. Mathew
Advocate, Mumbai
1642 Answers
212 Consultations

5.0 on 5.0

1. In your case you are seeking cancellation without there being any breach of contract by the builder. So the cancellation would be covered by the cancellarion clause in the agreement. If there is a clause in it which permits the builder to deduct a part of the advance paid to him, he can invoke it.

2. Without perusal of the agreement it is not possible to say if you are entitled to full refund.

3. The contract came into existence the moment you paid the advance to the builder.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

Dear Querist

My opinion on your queries are as under:

1. Is it legal for them to deduct "10% + service tax" for something that i did not sign (i.e. no contract signed) ?

Opinion: At the time of booking, you signed any booking form or not? if yes, then what are the terms and conditions of the booking form? if not, then how do you know the actual price of the property and mode of payment?

2. Can I file a case from Hyderabad ?

Opinion: the civil case can be filed on Dehradun or where they have registered office. as per section 20 of C.P.C.

20. Other suits to be instituted where defendants reside or cause of action arises.

Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-

(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

1[* * *]

2[Explanation].-A corporation shall be deemed to carry on business at its sole or principal office in 3[India] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Illustrations

(a) A is a tradesman in Calcutta, B carries on business in Delhi. B, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen or in Delhi, where B carries on business.

(b) A resides at Simla, B at Calcutta and C at Delhi A, B and C being together at Benaras, B and C make a joint promissory note payable on demand, and deliver it to A. A may sue B and C at Benaras, where the cause of action arose. He may also sue them at Calcutta, where B resides, or at Delhi, where C resides; but in each of these cases, if the non-resident defendant object, the suit cannot proceed without the leave of the Court.

or you may file a complaint before consumer Forum and case can be filed as per section 11 of consumer protection Act

Jurisdiction of the District Forum.—(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed ''does not exceed rupees twenty lakhs.

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

3. What are my chances of getting full refund and how long would it realistically take to get my money back if I do file a case on the builder?

Opinion: Its depend on the booking form's terms and conditions if any, if there is no terms and conditions then you will get your amount, but legal fight is very lengthy proceedings may take more then two years.

Feel Free to Call

Nadeem Qureshi
Advocate, New Delhi
6307 Answers
302 Consultations

4.9 on 5.0

1. Was there any brochure published by the developer inviting bookings wherein it has been mentioned that any cancellation will attract penalty or cancellation charge of 10% of the price of the flat? If not, then the developer can not charge the said cancellation charge,

2. The email from him confirming that he will refund the full amount paid by you is a godd evidence in your support to proceed legally. File a consumer complaint case before your local District Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming full refund of the amount paid with interest, damage and cost,

3. You have very fare chance of winning the case and get the relief.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0

1. Is it legal for them to deduct "10% + service tax" for something that i did not sign (i.e. no contract signed) ?

Until there is no clause for this deduction in the registered sale agreement, the builder cannot deduct the amount as mentioned,

2. Can I file a case from Hyderabad ?

You can file a case in the place where the property situate

3. What are my chances of getting full refund and how long would it realistically take to get my money back if I do file a case on the builder?

You have to file the case to get full refund. The conditions for refund in the agreement are to be seen

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

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