Cancellation Concern: ₹1 Lakh Booking Amount at Risk Even Though Advance Not Paid

Question

► On 24th November, we booked an under-construction apartment and paid ₹1,00,000 as the booking amount, along with a 10% advance cheque (approximately ₹15 lakhs). As per the agreement, it was mentioned that if the buyer cancels after paying the 10% advance, the builder would deduct 10% of the advance amount as cancellation charges. On 28th November, the builder returned our advance cheque because the linked bank account did not have sufficient funds. We were planning to issue a new cheque. However, on 29th November, after reviewing the project details more carefully, we realized that the project completion timeline is close to five years, which does not align with our expectations and current requirements. Therefore, we decided not to move ahead with the purchase. My concern now is that since the 10% advance was never actually paid or realized, I am worried that I may lose the ₹1 lakh booking amount. The builder had informed us earlier that the booking amount would be fully refundable within 10 days if only the booking was done and the advance amount was not paid. Given that the advance cheque was never encashed, is there anything I can do to ensure I receive a full refund of the ₹1 lakh booking amount? This situation is causing me a lot of stress, and I want to understand my options clearly.

Answer 1

Based on your situation, here is my legal advice:

1. Contractual Analysis: Since the 10% advance cheque bounced and was never encashed, you technically did not complete the payment condition that triggers the cancellation penalty clause. The builder's own statement that the booking amount is "fully refundable within 10 days if only booking is done and advance amount is not paid" works strongly in your favor.

2. Legal Position: Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders must follow fair practices. The booking amount should be refundable if the advance payment was not realized.

3. Immediate Action:
- Send a formal written notice/email to the builder requesting full refund of ₹1,00,000
- Clearly state that since the advance payment was never realized, cancellation charges do not apply
- Reference the builder's own statement about refundability
- Keep all communications documented

4. Legal Remedies if Builder Refuses:
- File complaint with State RERA Authority
- Approach Consumer Forum under Consumer Protection Act, 2019 for unfair trade practice
- Send legal notice through advocate

5. Timeline: As per builder's commitment, demand refund within 10 days. If not received, escalate immediately.

6. Documentation: Preserve all documents including booking receipt, bounced cheque, agreement copy, and all communications with builder.

Disclaimer: This is general legal advice and does not create an attorney-client relationship. Consult a local real estate lawyer for specific guidance on your case.

Cancellation Concern: ₹1 Lakh Booking Amount at Risk Even Though Advance Not Paid

1 Answer