CancellingIn the previous segment of this sequence titled Non-Legal Options When Cancelling Your Booking, we spoke of the non legal options through which you can cancel a booking. Here we will talk on how you can cancel your booking and get a full refund.

Naveen Thomas recently booked an apartment in the city after securing a home loan from a well-recognized bank. However, circumstances were not really in his favour and he found himself in a financial quandary. He requested his builder to cancel his booking and refund his money but was soon faced with several obstacles. As a friend in need of sound advice, he came to me and we discussed his options extensively.

Our first step was to look through his sale agreement to read clearly the clause related to cancellation. In his case, a cancellation meant that he would have to forfeit Earnest Money which was 10% of the total value of the property booked. Besides this, his builder went on to say that the money would be refunded only when he found another buyer for the apartment. The wait for Naveen was an indefinite one.

If you, as Naveen did, decide to take legal recourse, here are some things you need to be aware of:

  • Your lawyer will first issue a notice to the builder to make the refund within the stipulated time in the sale agreement. If this period is crossed, your lawyer will file a suit for the recovery of your money.
  • You can file for the recovery of money with a civil suit or file a consumer case for recovery of money with interest. A civil court case is time consuming and you are liable to pay a court fee. A consumer court may get your redressal quicker.
  • Besides this, in a consumer court case, you are also eligible to file for interest on your booking amount as well as monetary compensation for the distress you have undergone.
  • If you have paid stamp duty, registration charges, VAT and service taxes during the course of your transaction, you will not be able
    to claim a refund on this.
  • Ensure that all correspondence between the builder and you in relation to a refund is completely vetted by a lawyer.

You have to understand that legal recourse can take a long while and even then you will receive your money only after deductions have been made. To avoid getting into a sticky situation as far as cancellation and refunds are concerned, you will need to keep some pointers in mind:

  • Read the sale agreement multiple times and have it vetted by your lawyer. Make sure that you understand the cancellation clause clearly.
  • Consider your decision to cancel your booking thoroughly. You will need a good reason to file for a refund if the builder has maintained his part of the deal. Financial trouble is an understandable reason.
  • Do try and consider all non-legal methods of recovering your money.
  • Speak with other others of apartments to see how they fare and where they stand.
  • Always ask for a clearly defined cancellation clause.
  • Never pay by cash and always ask for a receipt for the complete money paid.

Consider going the legal way only if you have exhausted all other means of securing a refund. Always have a good lawyer by your side.



  • You may file a civil suit or a consumer case against your builder.
  • The case may be long drawn and you may still have to absorb some deductions.
  • Financial distress is an understandable reason when asking to cancel a booking and securing a refund.