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.

Mr.X had rented a PG accommodation from ABC.company, which operates co-living properties across multiple cities in City A and City B. As per standard practice, Mr.X paid two months’ rent as security deposit. The rental agreement clearly stated that this deposit would be refunded within 45 days of vacating the premises. After Mr.X moved out, the refund was due on DD/MM/YYYY. However, despite multiple reminders via email and phone calls, ABC.company neither refunded the amount nor provided any response regarding the delay. Upon investigation, Mr.X discovered this was a common practice by the company, affecting numerous tenants who had faced similar issues with security deposit refunds.

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.

Document everything meticulously including rental agreement, payment receipts, email communications, and WhatsApp messages. Send a formal legal notice demanding refund within 15 days before initiating legal proceedings. Consider filing complaints with consumer court as this falls under unfair trade practices, which often provides faster resolution than civil courts.

Applicable Sections of Law

This case involves multiple legal provisions under BNS and BNSS. Section 318 of BNS covers cheating and dishonestly inducing delivery of property, applicable when companies deliberately retain deposits. Section 316 of BNS addresses criminal breach of trust, relevant when entrusted money isn’t returned as per agreement. Under BNSS, Section 173 governs investigation procedures for such complaints. Consumer Protection Act 2019 also applies for unfair trade practices and deficiency in services, providing additional remedies through consumer forums.

If You Are the Complainant

• Gather all documentation including rental agreement, deposit payment proof, and communication records
• Send legal notice through registered post demanding refund within specified timeframe
• File complaint with District Consumer Disputes Redressal Forum for amounts up to Rs. 1 crore
• Consider filing FIR under BNS Sections 316 and 318 if company shows criminal intent
• Initiate civil suit for breach of contract if other remedies fail to yield results

If You Are the Victim

• Immediately stop all further payments and document every communication with the PG provider
• Contact other affected tenants to build a collective case for stronger legal action
• File complaint with consumer forum within two years of cause of action arising
• Report to local police station if you suspect systematic fraud affecting multiple victims
• Seek interim relief through consumer court to prevent company from disposing assets

How the Police Behave in Such Cases

Police typically treat security deposit disputes as civil matters initially, often suggesting tenants approach civil courts. However, when systematic cheating is established affecting multiple victims, they register FIR under appropriate BNS sections. Police investigation focuses on company’s financial records, bank statements, and pattern of similar complaints. They may require substantial evidence proving criminal intent rather than mere breach of contract before taking action.

FAQs People Normally Have

Can I file criminal case for non-refund of security deposit? Yes, if there’s evidence of deliberate cheating or criminal breach of trust under BNS Sections 316 and 318.

Is consumer court better than civil court? Consumer court is faster, less expensive, and specifically handles service deficiencies and unfair trade practices.

What if the company has shut down operations? You can still pursue legal action against directors personally and attachment of company assets through court orders.

Can I claim interest on delayed refund? Yes, rental agreements often specify interest rates, and consumer courts can award compensation for mental agony and litigation costs.

What Evidence Is Required?

• Original rental agreement with security deposit refund clause clearly mentioned
• Payment receipts, bank statements, and transaction records for deposit amount
• Email communications, WhatsApp messages, and call recordings with company representatives
• Photographs of property condition during handover and any damage assessment reports
• Witness statements from other tenants facing similar issues with the company
• Company registration documents and director details for legal proceedings
• Timeline documentation showing repeated follow-ups and company’s non-responsiveness

How Long Will the Investigation Take?

Consumer court proceedings typically take 3-6 months for disposal if uncontested. Civil court cases may extend 1-2 years depending on court backlog and case complexity. Police investigation for criminal complaints usually takes 2-3 months, though this can vary based on evidence availability and cooperation from accused parties. Multiple legal remedies can be pursued simultaneously to expedite resolution.

Advocate Sudhir Rao, Supreme Court of India