Recourse for Non-Refund of Flat-Booking Advance

When and how the refund will be done, if it is done at all, entirely depends on the initial agreement

Recourse for Non-Refund of Flat-Booking Advance
Recourse for Non-Refund of Flat-Booking Advance
Deposit Photos
11 June 2021

P Kumar, Kolkata

I booked a flat at a completed project in Chennai (not RERA registered) in December 2019. Out of the total agreed purchase value of Rs 62 lakh, I paid 41 lakhs within January 2020 against an agreement signed with the promotor.

Subsequently, my employers assigned me work-from-home. I thus moved out of Chennai to my hometown permanently. As I was not required to own a residential flat in Chennai anymore, I requested the promotor to cancel the booking and refund the amount paid by me. I mention here that that the relevant sale deed was/is not registered with the Sub Registrar to date.

The promotor replied that a 10 per cent penalty would be deducted and a refund would be made after the flat is sold. Relevant sale deed, however, mentions a 10 per cent penalty if the sale deed is registered. On this, I requested the promotor to initiate a refund as stipulated in the agreement. I have received no refund until date as the promotor states that the flat is still unsold!

Kindly clarify if the stand taken by the promotor is valid. If not, what action may be taken by me to obtain a refund expeditiously?

In this case, when and how the refund will be done (if it is done at all) entirely depends on the initial agreement done by the person with the promoter, and if there are any specific clauses in the agreement pertaining to cancellation and refunds has been incorporated. If there are one or more clauses on refund/cancellation present, then the buyer has strong evidence to take it to the court in order to initiate the process of refund. However, if it has not been mentioned, then both parties need to come to a mutual agreement for the refund process.

As per our observation, in certain instances, either a 10% deduction as a penalty or after the sale of the property on the refund amount is usually provided by the developer or promoter, though both the two things are never done/implemented for one single case.

Sparsh Malhotra is Co-Founder, OwnersTown

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