No Retention of Flat Booking Amount On Buyer's Voluntary Exit From Purchase Without Forfeiture Clause: HP RERA

The Himachal Pradesh Real Estate Regulatory Authority (HP RERA) has recently held that a prospective homebuyer's voluntary withdrawal from a proposed flat purchase did not justify retention of the booking amount in the facts of the case, and directed a developer to refund ₹1.01 lakh paid towards booking of a flat.

The order was passed by Chairperson R.D. Dhiman and Member Vidur Mehta while allowing a complaint filed by Shimla resident Vimal Sana against Rajdeep and Company Infrastructure Private Limited, the developer of the "Mashobra Hills" project.

"The principal defence of the respondent is that the complainant herself withdrew from the transaction due to financial inability and therefore refund is not payable. This contention cannot be accepted in the facts of the present case," the Authority observed.

The Authority further observed, "As per regulation person may choose to withdraw from a proposed booking for personal reasons. However, in absence of a contractual clause authorizing forfeiture, the promoter cannot retain the money deposited by the prospective allottee."

The dispute arose after Sana came across a listing for the Mashobra Hills project on 99acres and agreed to purchase Flat No. 203 in Tower-A for ₹58 lakh.

She paid a booking amount of ₹1,01,000 on November 6, 2023.

According to the complaint, she withdrew from the proposed purchase on December 2, 2023, citing financial constraints. She subsequently sought a refund through WhatsApp messages and emails.

When the amount was not refunded, she approached HP RERA seeking a refund of the booking amount along with interest.

Sana contended that the developer could not retain the booking amount when no agreement for sale or allotment letter had been executed and there was no contractual basis authorising forfeiture.

Opposing the complaint, the developer argued that Sana had voluntarily withdrawn from the transaction. It contended that since the booking amount was below 10% of the sale consideration, execution of an agreement for sale was not required at that stage.

The developer additionally questioned the maintainability of the complaint and the evidentiary value of the WhatsApp communications relied upon by the complainant.

Rejecting the developer's interpretation, the Authority observed that Section 13 was intended to prevent collection of money from prospective purchasers without formalising the rights and obligations of the parties.

"This Authority is unable to accept such interpretation. The legislative intent behind Section 13 is to prevent arbitrary collection of money from prospective purchasers without formalizing the rights and obligations of parties," the Authority observed.

The Authority further held, "The provision places an upper ceiling upon the promoter from receiving more than 10% without agreement however, once the promoter receives advance/booking amount and proceeds with allotment process, the promoter cannot avoid execution of documentation and simultaneously deny accountability."

The Authority held that the developer could not accept a booking amount and simultaneously deny accountability by failing to execute documentation governing the transaction.

It observed that there was no booking application, allotment letter, forfeiture clause, cancellation policy, lock-in condition or other document authorising retention of the amount.

On the objection regarding WhatsApp communications, the Authority observed, "Proceedings under the RERD Act are summary and regulatory in nature. Technical rules of evidence are not to be applied with rigidity."

The Authority noted that the developer had not specifically denied the communications. It also noted that the developer had not disputed the association of the concerned representative with the project.

While granting relief, the Authority observed that Sana herself had withdrawn from the proposed transaction and that no formal agreement for sale or allotment letter had been executed.

In those circumstances, it held that "ends of justice would be met by awarding reasonable interest and not penal interest."

Accordingly, by an order dated June 6, 2026, the Authority directed Rajdeep and Company Infrastructure Private Limited to refund ₹1,01,000 with interest at SBI's highest MCLR plus 2% (10.80% per annum) from the date of filing of the complaint until realisation. The refund has been directed to be made within sixty days.

For Respondent (Rajdeep and Company Infrastructure Private Limited): Advocates Ajay Sipahiya, Dhruv Sharma and Pankaj Thakur.