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.

Mrs. X approached me with a real estate advance payment dispute involving ABC Developers Ltd in City A. She had paid an advance of ₹50 lakhs against a plot worth ₹1.8 crores in DD/MM/2025. The developer provided a written agreement stating that if Mrs. X decided not to proceed, the advance would be refunded within 90 days. However, when Mrs. X exercised this option due to documentation issues, the developer refused to honor the refund clause. Despite multiple notices and the clear written agreement, ABC Developers has been avoiding refund for over 12 months. The company cited various excuses including project delays, financial constraints, and even questioned the validity of their own written commitment. This case highlights how developers often use advance payments as interest-free loans while ignoring contractual obligations when refund situations arise.

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.

• Preserve all original documents including advance payment receipts, written agreements, and communication records with the developer
• Send a formal legal notice demanding refund within specified timeframe before initiating legal proceedings
• Consider filing complaints with RERA authorities if the project falls under their jurisdiction for additional pressure on developer

Applicable Sections of Law

This type of real estate advance payment dispute involves multiple legal provisions under BNS and BNSS. Section 316 of BNS deals with criminal breach of trust which applies when developers misappropriate advance payments. Section 318 of BNS covers cheating by dishonestly inducing delivery of property. Section 420 of BNS addresses cheating and dishonestly inducing delivery of property. Under BNSS, Section 173 governs investigation procedures while Section 200 deals with complaint filing procedures. Additionally, the Real Estate Regulation and Development Act (RERA) provides specific remedies for real estate disputes, and the Contract Act governs the refund agreement terms.

If You Are the Complainant

• File a detailed complaint with local police station including all documentary evidence and payment proofs
• Approach RERA authority if applicable, as they have specific jurisdiction over real estate disputes and can order refunds
• Send legal notice to developer demanding refund with interest for delayed payment and breach of contract
• Maintain detailed records of all interactions, phone calls, emails, and meetings with the developer
• Consider filing civil suit for recovery of money along with damages and interest for wrongful retention

If You Are the Victim

• Document all financial transactions and maintain bank statements showing advance payment to developer account
• Gather witness statements from family members or agents present during agreement signing and payment
• Collect evidence of developer’s pattern of similar disputes with other customers through online forums or local inquiries
• Preserve all marketing materials, brochures, and advertisements that may contain misleading representations about the project
• Keep records of any verbal promises or commitments made by developer representatives during negotiations

How the Police Behave in Such Cases

Police typically treat real estate advance payment disputes as civil matters initially and may be reluctant to register FIR immediately. They often suggest mediation or civil remedies first. However, when criminal elements like cheating or criminal breach of trust are clearly established with documentary evidence, they register cases under appropriate BNS sections. Police investigation usually involves examining financial records, questioning both parties, and verifying the authenticity of agreements and payment documents.

FAQs People Normally Have

Can I get interest on delayed refund? Yes, you can claim interest for wrongful retention of money along with damages for breach of contract.

Is written refund agreement legally binding? Absolutely, written agreements are legally enforceable contracts and developers cannot unilaterally ignore refund clauses.

What if developer claims financial crisis? Developer’s financial situation does not absolve them of contractual obligations, and they remain liable for refund as agreed.

Should I approach RERA or police first? RERA for regulatory relief and recovery, police for criminal aspects like cheating or breach of trust – both can be pursued simultaneously.

What Evidence Is Required?

• Original advance payment receipt and bank transaction records
• Written refund agreement with developer’s signature and company seal
• All correspondence including emails, messages, and letters between parties
• Marketing materials and project brochures showing original representations
• Witness statements from people present during agreement signing
• Documentation showing developer’s acknowledgment of refund obligation
• Records of attempts made to contact developer for refund

How Long Will the Investigation Take?

Police investigation in real estate advance payment disputes typically takes 3-6 months depending on complexity and developer cooperation. RERA proceedings may conclude within 6-12 months. Civil court proceedings can extend from 1-3 years. However, with strong documentary evidence and proper legal representation, settlements can often be achieved within 6-9 months through negotiation or mediation before final adjudication.

Advocate Sudhir Rao, Supreme Court of India