One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: A real estate company cannot arbitrarily hold your booking amount for 90 days without paying any interest — especially when you cancel the very next morning. That one‑sided clause is challengeable under RERA and consumer law. You can demand immediate refund with interest and approach the Consumer Forum or RERA Authority if they refuse.
Priya Verma, a marketing professional from Indore, visited a preview launch of Brigade Skyline, a new high‑rise by Brigade Group in Pune, in early March 2025. The sales pitch was intense. The salesman, Rohit Deshmukh, created a sense of scarcity and FOMO. Convinced, she paid a booking amount of Rs. 4,20,000 on the spot. No formal agreement was signed — only a pre‑printed booking form. The next morning, after a family discussion, she realised the financial stretch was too great. She called Deshmukh to cancel. His response was brisk: “The refund will take 90 days as per company policy, and no interest is payable.” Emails and follow‑up calls went unanswered. For weeks, the money stayed stuck. Frustrated and sensing that a non‑specialist approach hadn’t worked, the client approached the office of Advocate Sudhir Rao. Advocate Sudhir Rao and his team scrutinised the booking form. That 90‑day‑no‑interest clause was precisely the kind of unilateral term that consumer laws frown upon. The project, though registered under RERA, was using a standard template designed to deter cancellations. A sharply worded legal notice demanding refund with 12% interest within seven days was dispatched. Within two weeks, the builder’s legal team sought a settlement. The entire Rs. 4,20,000 was returned, with a reasonable compensation component, and the matter closed without litigation. The expertise Advocate Sudhir Rao brought to this specific domain — real estate refund disputes — turned a long, uncertain wait into a swift resolution.Key Facts of the Case
- The client paid Rs. 4,20,000 as booking amount on 7 March 2025 for an under‑construction apartment in Pune.
- She cancelled the booking the very next morning, before any allotment letter or sale agreement was executed.
- The builder’s booking form contained a clause stating refunds would take 90 days with no interest.
- No formal agreement for sale was ever drawn; the project was registered under RERA (Maharashtra).
- The builder suffered no demonstrable loss — the unit wasn’t blocked or listed in her name in any statutory records.
- The legal notice sent by the office of Advocate Sudhir Rao highlighted the unfair trade practice and deficiency in service.
- The matter settled within two weeks; the full amount was refunded along with a goodwill compensation.
The Direct Legal Answer
No, it isn’t legal for a real estate company to hold your booking amount for 90 days without paying any interest — especially when you cancel immediately and no sale agreement has been signed. That arbitrary retention is an unfair trade practice and a deficiency in service.
Can a company, in the name of process, hold such a big amount for three months and not pay any interest?
Absolutely not. Holding onto lakhs of rupees for three months without a valid justification and pocketing the float amounts to unjust enrichment. Under the Consumer Protection Act, 2019, such one‑sided, oppressive clauses can be struck down. And the Real Estate (Regulation and Development) Act, 2016 (RERA) requires promoters to refund amounts with interest when an allottee withdraws. Interest isn’t optional — it’s a statutory right.
What actions can I take for immediate refund?
First, send a written legal notice demanding refund with interest within a short deadline (say 7–10 days). If that fails, you can approach the RERA Authority of the state where the project is registered, or file a complaint before the Consumer District Commission. RERA complaints typically move faster, and the authority can direct refund with interest and even impose penalties on the builder.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Don’t waste time on repeated phone calls. Document every communication. The moment you sense delay, get a professional on your side. These matters involve specific tricks — like unconditional refund rights under RERA or piercing unfair contract terms under consumer law — that a general practitioner may overlook. An advocate who regularly handles real estate disputes knows exactly which provisions to invoke and how to pressurise the builder into settlement before litigation drags on.
Also, never sign any cancellation letter that waives your right to interest. Builders often ask for that. Stand firm.
Applicable Sections of Law
- Section 18 of the Real Estate (Regulation and Development) Act, 2016: If the allottee wishes to withdraw from the project, the promoter must return the amount with interest and compensation in the manner prescribed.
- Section 2(47) of the Consumer Protection Act, 2019: Defines unfair trade practices, including unilateral, unreasonable conditions that cause disadvantage to the consumer.
- Section 73 of the Indian Contract Act, 1872: Entitles the aggrieved party to reasonable compensation for loss caused by breach — here, loss of use of money for 90 days.
- Section 35 of the Consumer Protection Act, 2019: Empowers the District Commission to hear complaints and direct refund, compensation, and removal of unfair clauses.
Jurisdiction — Where to File the Case
You have two main options. One is the RERA Authority of the state where the project is located — for a Pune project, that’s MahaRERA. File a complaint under the RERA Act. The authority can dispose of refund matters in just a few months.
The other is the Consumer District Disputes Redressal Commission, which has jurisdiction if the value of the service (here, the refund claim) does not exceed Rs. 1 crore. Pecuniary jurisdiction matters because filing in the wrong forum causes delays. Territorial jurisdiction lies where the builder operates from or where the cause of action arose — in this case, Pune.
Limitation Period
For consumer complaints, the limitation period is two years from the date the cause of action arose — i.e., the date the builder first refused the refund or the 90‑day window expired. Under the general law of limitation (Article 54 of the Limitation Act, 1963), a suit for recovery of money must be filed within three years. Missing the deadline can be fatal, though a condonation of delay application can be attempted if you have sufficient reasons.
Interim Reliefs Available
Even while your consumer complaint or RERA proceeding is pending, you aren’t helpless. You can apply for an interim order directing the builder to deposit the disputed amount with the forum or restraining the builder from alienating or encumbering the project in a manner that frustrates your refund claim. The Consumer District Commission has inherent power under Order 39 of the Civil Procedure Code to grant such temporary injunctions. In RERA, the authority can pass interim directions to protect your interest. Obtaining a “deposit order” early can create immense pressure on the builder to settle.
If You Are the Victim
- Don’t accept verbal assurances. Demand a written confirmation of cancellation and refund timeline, with interest.
- Send a legal notice through an advocate immediately. This shows you are serious and often triggers settlement.
- Gather all documents — booking form, payment receipt, email trail, SMS, and WhatsApp messages.
- File a complaint with the RERA Authority if the project is registered, or the Consumer Commission if not.
- Do not sign any cancellation or settlement letter that waives your right to interest without consulting your advocate.
Documents You Must Keep Ready
- Booking application form with all terms and conditions
- Payment receipt (cheque, NEFT, UPI transaction proof)
- Bank statement showing the debit of Rs. 4,20,000
- Copies of emails, text messages, or WhatsApp chats with the salesman or builder
- Copy of Aadhaar and PAN card for identification
- Any promotional brochure or advertisement that led to the booking
- Details of the project’s RERA registration number (if available)
What Evidence Is Required?
- The original booking form — the very document that contains the 90‑day clause (your best evidence).
- Proof of payment and the exact amount (bank statement, UPI screenshot).
- Communication records: emails and WhatsApp chats where the salesman confirms the 90‑day refund policy and refuses interest.
- A voice recording of the call (if legal in your jurisdiction) can be strong secondary evidence.
- Photographs or screenshots of the builder’s website stating refund timelines, if any.
- Statement of account from your bank that shows the money hasn’t been refunded.
How Courts Typically Approach Such Cases
Consumer forums and RERA authorities take a dim view of builders who sit on hard‑earned money for months without a legitimate reason. When a booking is cancelled before any agreement is signed, the consumer has no obligation to wait 90 days. Courts routinely hold that a clause permitting a 90‑day hold without interest is an unfair contract term, and they direct refund with interest from the date of cancellation. The builder’s standard argument — “it’s company policy” — rarely survives scrutiny. So, if your facts are clean, expect a favourable order; the builder usually settles once a notice points out the weak legal stance.
Timeline of Legal Process
- Legal Notice (Day 1–15): Draft and dispatch notice, allow 7–15 days for compliance.
- RERA Complaint (Week 3–4): File online, hearing within 30–45 days; first order often within 2–3 months.
- Consumer Complaint (Week 3–6): Admission, notice to opposite party; may take 6–12 months for final disposal if contested.
- Execution (Post‑order): If builder doesn’t comply, execution proceedings can take 1–2 months.
- Total realistic timeline: With a strong legal notice and settlement, the matter can close in 3–4 weeks. If litigation is needed, 4–8 months in RERA, up to a year in consumer forum.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes, and it often is. Builders know the weakness of a 90‑day‑no‑interest clause and prefer a quiet settlement. A well‑drafted legal notice often brings the builder to the table. You can negotiate a lump‑sum refund with a reasonable interest component and sign a compromise deed. If the complaint has already been filed, the consumer forum or RERA authority can refer the matter to mediation or Lok Adalat. A settlement saves time, litigation costs, and emotional stress. But never agree to a settlement that waives your entire interest claim without proper advice.
Common Mistakes People Make
- Waiting too long to cancel and then panicking — the earlier you act, the stronger your claim for no deduction.
- Accepting oral promises without any written proof. Get every refund commitment in writing.
- Signing a cancellation form that contains a blanket waiver of interest or compensation.
- Not keeping screenshots and backup of WhatsApp chats or call recordings — digital evidence vanishes.
- Engaging a lawyer who doesn’t regularly handle real estate or consumer disputes. This category of case involves fast‑moving RERA procedures and specific consumer forum strategies that a general practitioner may be completely unaware of, leading to blunted demands and prolonged delays.
- Assuming the builder will automatically refund after 90 days — they often invent cancellation charges afterwards.
FAQs People Normally Have
Q. The booking form says “no refund if cancelled”. Is that valid?
No. A flat refusal to refund regardless of circumstances is an unfair contract term and not enforceable. RERA and consumer law override such clauses.
Q. Can I claim interest even if the form says no interest?
Yes, you can. When a builder withholds your money without justification, you are entitled to compensation for the time value of money. Courts typically award interest at 9–12% per annum from the date of cancellation.
Q. What if the project isn’t registered under RERA?
If the project required RERA registration and didn’t have it, the builder has committed a violation. You can approach the consumer forum, and the lack of registration can strengthen your case.
Q. Do I need to go to court, or is a legal notice enough?
Often, a stern legal notice from an advocate who cites the right sections is enough to secure a prompt refund. Litigation is a backup, not the first step.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India