Builder refusing to refund booking amount after cancellation


I had booked a home in a scheme of one builder in Bhubaneswar. But due to some personal financial urgency’s, i had requested builder to cancel the booking and refund the money paid to them. They are saying that the money will not be refunded and as per the cancellation clause in application form, hence it will be forefieted. Moreover I have not signed any agreement to Sale deed. Is the money paid to the builder (about 20 lakhs) will really be forefieted due to the clause mentioned by the builder or is there a way to get it back? please advise the course of action ?

Answers (2)


312 votes

Dear client,
You did not share the connecting documents with us,its difficult to give any appropriate suggetion as the case is civil in nature. so you first complained before the police station then through police your matter can be setteled amicable. if you want to proceed further then you can contact and meet me physically to discuss elaborately in this matter before taking any step against the builder.


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125 votes

No, the builder cannot forfeit INR 20 lakhs, despite the existence of a forfeiture clause in the application form. Law is well settled that even if a buyer decides to not proceed with the transaction of purchasing the property for any reason, and until and unless the builder/seller proves it that he suffered loss (one of which case is if the value of the property declines) on account of such breach of contract (in case of signing of Agreement to Sell). then the builder cannot forfeit or appropriate the money paid by the buyer.

In your case, neither there is an agreement to sell executed between you and the builder and nor there is a clause stipulating forfeiture of earnest money deposit (in which case the Builder could at the most have been entitled to appropriate/retain/forfeit a nominal amount only). Moreover, the builder shall/would not incur any loss, whatsoever, as there have been no substantial steps taken for the conveyance of the property as of now (given the fact that even an agreement to sell has not been executed till now).

You can file a money recovery suit and get your money back. You are absolutely entitled to refund of the amount and the builder cannot forfeit the said amount under law.

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