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: When a property portal takes an advance to block a flat and later you discover the project has no approved plan or is stuck in litigation, that’s a clear deficiency in service. You can move the consumer forum for refund of the advance, compensation for mental agony, and litigation costs — often without needing to file a full-blown civil suit.
Anjali Deshmukh had been saving for a flat in Pune since her first job. Every bonus, every freelance gig, every skipped vacation went into that fund. She’d even postponed maternity leave plans, working right up to the week her daughter was born, because the deposit meant security. In April 2025, she found a second-hand flat listed on a well-known property platform — Square Yards. The photos looked good. The price was within range. She paid Rs. 1,80,000 as a retention advance directly through the portal, relying on what the relationship manager told her: “Fully verified property, madam. No issues.” That was the last trouble-free conversation she had with them. Within ten days, a neighbour casually mentioned that the building’s plan wasn’t approved and that at least two cases were pending before the Pune civil court — one filed by the municipal corporation, another by a group of earlier buyers. Anjali dug up the online case status herself. It was all true. The entire building stood on disputed compliance. She spent the next three weeks on calls and chats with Square Yards. Every executive passed the buck. The “dedicated support” mail ID sent automated replies. A lawyer friend drafted a crisp legal notice, which was emailed — but that got a templated response promising a refund in 45 working days. 45 days passed. Nothing. That’s when Anjali approached the Chamber of Advocate Sudhir Rao. She was juggling a six-month-old, work deadlines, and the hollow fear that the money was gone. The previous notice had just exhausted her — it felt like shouting into a well. Advocate Sudhir Rao’s deep experience with consumer disputes involving tech platforms and property transactions helped realign the strategy: stop chasing internal grievance cells and move the consumer forum directly. The case was filed, notices were served, and within the first hearing, the platform’s counsel signalled willingness to settle. The matter concluded with a full refund, compensation, and costs — without dragging through a civil trial.Key Facts of the Case
- The client paid an advance of Rs. 1,80,000 to retain a flat listed on Square Yards in Pune.
- The building did not have an approved plan, and multiple civil suits were pending regarding the property.
- Square Yards’ representative had explicitly assured the flat was “fully verified” with no encumbrances.
- After discovering the issues, the client made repeated follow-ups; the platform’s internal redressal did nothing.
- A lawyer’s notice elicited a written promise of refund in 45 working days, which was never honoured.
- Advocate Sudhir Rao filed a consumer complaint before the District Consumer Disputes Redressal Commission alleging deficiency in service.
- The platform opted to settle rather than contest, refunding the full advance plus compensation and litigation costs.
The Direct Legal Answer
Can she get her advance back from a property portal that didn't verify the plan?
Yes. The portal’s failure to verify basic legal clearances before promoting and taking money for a property amounts to deficiency in service under the Consumer Protection Act, 2019. The advance isn’t forfeited just because it’s called a “retention amount.” The consumer forum can order a refund along with interest, compensation for harassment, and litigation expenses.
Does she need to file a civil suit to recover the money?
Not necessarily. A consumer complaint is simpler, faster, and far less expensive. Civil suits involve court fees proportionate to the claim, procedural delays, and longer timelines. Consumer forums are designed for exactly this — where a service provider fails in its duty. Unless the amount exceeds Rs. 2 crore (for the District forum), the District Commission is the appropriate first court.
What if the portal says the money goes to the seller, not them?
That’s a common defence. But when the portal collects payment directly — especially through its own payment gateway — it’s a “service provider” under the Act. The contract between the portal and the user includes an implied duty to exercise reasonable care in vetting listings. Collecting an advance on a property with no approved plan and pending court cases is a breach. The portal can’t escape liability by blaming the seller. It can, of course, later claim indemnity from the seller, but that doesn’t affect the consumer’s remedy.
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.
Keep a record of every interaction. Screenshots of chats, call recordings (with intimation), emails, the payment receipt — all of it. And don’t wait. The internal grievance mechanism of these platforms is often a black hole. If they don’t respond meaningfully within 15–20 days, start legal action.
Also, these matters require advocates who regularly handle consumer disputes involving digital intermediaries. Procedural shortcuts like wrong party impleadment or a badly drafted prayer clause can delay relief by months. Domain-specific experience makes a tangible difference.
Applicable Sections of Law
- Section 2(11) of the Consumer Protection Act, 2019: Defines “deficiency” — any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of a service.
- Section 2(42) read with Section 2(7) of the CPA, 2019: The portal is a “service provider” because it facilitates property transactions for consideration.
- Section 35 of the CPA, 2019: Consumer can file a complaint where the service provider’s registered office is situated, or where the cause of action arose, which includes where the consumer resides.
- Section 18 of the Indian Contract Act, 1872: Misrepresentation — when a party causes the other to enter into a contract by representing something that isn’t true, the contract is voidable at the option of the aggrieved party.
Jurisdiction — Where to File the Case
The consumer complaint goes to the District Consumer Disputes Redressal Commission if the value of goods or services paid as consideration, along with compensation claimed, is up to Rs. 2 crore. Above that, the State Commission (up to Rs. 10 crore) or National Commission.
Territorial jurisdiction is flexible under the 2019 Act: you can file where the opposite party (Square Yards) has its registered office, or where the cause of action arose. That can include the city where the property is situated (Pune, in this case), or even where the consumer resides, so long as the service provider has a branch office or carries on business there through an electronic means. This is a critical advantage — no need to travel to the opposite party’s headquarters.
Limitation Period
A consumer complaint must be filed within two years from the date on which the cause of action arises. The cause of action here arose when Anjali discovered the true state of the property and the portal’s refusal to refund. Even after that, each subsequent interaction where the portal acknowledges its liability can extend the limitation, but don’t count on it. Missing the two-year window is fatal unless you can make out a strong case for condonation of delay, which courts rarely grant without compelling reasons.
Interim Reliefs Available
The consumer commission can pass interim orders under Section 38 read with Section 37 of the CPA, 2019. In a case like this, you can apply for a direction to the portal to deposit the disputed amount or secure the claim while the complaint is pending. While attachment before judgment (Order 38 CPC) isn’t directly available in consumer forums, the commission’s inherent powers to grant interim protection are broad enough to seek a restraint on the portal from transferring or dissipating the amount.
This matters because many online platforms have minimal physical assets outside their registered office. An early interim application can prevent them from simply winding up the entity or moving funds out of reach.
How Courts Typically Approach Such Cases
Consumer forums are increasingly uncompromising with digital platforms that act as intermediaries but make affirmative representations about due diligence. If the portal’s own website or representative claimed “verified” or “approved” status, the forum will likely draw an adverse inference if the platform cannot produce the actual verification report. The commission will also look at the platform’s terms of service — but standard disclaimers don’t immunise a service provider from statutory liability when they’ve collected money and held out a property as safe.
Timeline of Legal Process
- Legal notice: 15–30 days from drafting to response. Optional but advisable before filing.
- Filing of complaint: 1–2 weeks once documents are compiled and affidavit is sworn.
- Admission and issue of notice: Usually within 2–4 weeks. Opposite party gets 30 days to file a written version.
- Evidence and arguments: 2–6 hearings spanning 3–8 months, depending on case complexity and forum workload.
- Order: Typically within 3–6 months of final arguments.
- Execution (if necessary): A further 1–3 months if the order isn’t complied with voluntarily.
If the opposite party opts to settle early — as happened here — the matter can resolve within 60–90 days from filing.
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. These disputes settle often. Property portals are sensitive to consumer forum orders because repeated adverse orders can invite regulatory scrutiny and damage their market reputation. A well-drafted legal notice itself may trigger settlement. If the platform offers a full refund plus reasonable compensation, taking it may save months of litigation. However, never accept a settlement that simply promises to refund “within 90 days” without an enforceable undertaking. Get it in writing, ideally before the forum, with a clear default clause.
Mediation is also open under the Consumer Protection Act. The commission may refer the matter to mediation at the first hearing if both sides consent. Settlement agreements reached through mediation are enforceable as an order of the commission.
Common Mistakes People Make
- Delaying too long, waiting for the platform’s “next update,” until limitation runs out.
- Trusting verbal assurances from relationship managers and not verifying the property’s legal status independently before paying a single rupee.
- Filing a complaint without impleading the correct legal entity — many portals operate through multiple subsidiaries.
- Posting detailed grievances on social media before filing; this can weaken leverage and alert the opposite party to destroy internal records.
- Accepting a settlement that lacks an enforcement mechanism, leaving you to start from scratch if the promised cheque bounces.
- Engaging a lawyer who doesn’t regularly handle consumer forum litigation. The procedural rhythm, the kind of evidence that persuades a consumer commission, and the drafting of the prayer clause are different from civil court practice. An advocate unfamiliar with these nuances may frame the case poorly, leading to unnecessary dismissals or delays.
If You Are the Victim
- Stop all further payments immediately.
- Preserve every message, email, payment receipt, and call recording.
- Send a legal notice through an advocate — this isn’t just a formality; it often brings the other side to the table.
- File a consumer complaint within two years of the refusal to refund.
- Don’t sign any release or settlement without your advocate reviewing it first.
Documents You Must Keep Ready
- Aadhaar card and PAN card for identity.
- Payment receipt, bank statement, or UPI transaction ID for the advance.
- Screenshots of the property listing showing “verified” or similar claims.
- Chats and emails with the portal’s representatives, especially any promises or timelines given.
- Copy of the legal notice sent, along with delivery proof.
- Any response received (or the thread that shows no meaningful reply).
- Court case details of the property (if you accessed them) — prove the litigation existed at the time of listing.
- Affidavit narrating the sequence of events with dates, notarised.
What Evidence Is Required?
- Contractual documents: booking form, terms and conditions accepted on the portal.
- Communication records: emails, WhatsApp chats, call recordings with the relationship manager.
- Payment proof: bank statement or UPI log linking the transaction to the portal.
- Representation evidence: screenshot or email where the property was described as “fully verified,” “legally clear,” or similar.
- Public records: RERA status of the project, municipal plan approval status, pending litigation details from the e-court website.
- Testimony: your own affidavit, and if possible, an affidavit from the neighbour or another buyer who tipped you off.
- Expert evidence: if needed, a report from a local advocate or architect confirming the plan wasn’t approved.
FAQs People Normally Have
Is the advance forfeited if I back out after discovering this?
No. When the service provider concealed material facts — no approved plan, pending court cases — the agreement is voidable. You can walk away and demand a full refund plus compensation. No cancellation penalty applies.
Can I file a police complaint for cheating?
You could, under Section 318 of the Bharatiya Nyaya Sanhita, 2023, if the facts suggest fraudulent intent from the start. But the police may treat it as a civil dispute and not register the FIR. The consumer forum is a more certain and faster route for refunds unless there’s clear criminal conspiracy.
What if the portal says it’s just an intermediary?
The Consumer Protection Act covers intermediaries when they fail to exercise due diligence and expressly represent a property as verified. Section 79 of the IT Act doesn’t give blanket immunity from consumer claims. The forum will see through that defence quickly.
How much compensation can I claim?
Compensation for mental agony, harassment, and litigation costs is at the forum’s discretion. For an advance of a few lakhs, a compensation amount of Rs. 50,000–2,00,000 is common, but there’s no fixed formula.
Do I need to go to the city where the flat is located?
No. You can file the complaint from the city where you received the service, where the portal has a branch, or even where you reside if the portal operates electronically there. That’s the beauty of Section 35 of the 2019 Act.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India