HP RERA Orders Refund of Booking Amount with Interest, Holds Builder Liable for Taking Advance Without Agreement

June 6, 2026 : A significant ruling by the Himachal Pradesh Real Estate Regulatory Authority (HP RERA) has reinforced the rights of homebuyers by directing a real estate developer to refund a booking amount collected without executing a mandatory agreement for sale or issuing an allotment letter. The Authority held that a promoter cannot retain money collected from a prospective purchaser after cancellation of a booking when no contractual document authorizing forfeiture exists.

The dispute arose from a complaint filed by Shimla resident Vimal Sana against Rajdeep & Company Infrastructure Private Limited, the developer of the “Mashobra Hills” residential project in Shimla. The complainant alleged that she was persuaded to book a studio apartment in the project after being assured that all approvals, amenities, legal formalities, and documentation relating to the project were in place.

According to the complaint, the proposed unit was Flat No. 203 in Tower-A of the Mashobra Hills project. The total basic sale price of the apartment was stated to be Rs. 58 lakh. Acting on the representations made by the developer, the complainant paid Rs. 1,01,000 as a booking amount on November 6, 2023. However, within approximately one month, she decided to withdraw from the transaction and sought cancellation of the booking. Despite repeated requests, the amount was not refunded, prompting her to approach HP RERA seeking refund along with interest.

The developer opposed the complaint on several grounds. It argued that the complainant had voluntarily withdrawn from the proposed purchase due to personal financial constraints and that there was no promoter default. The company also contended that no agreement for sale had been executed and therefore the provisions relating to refund under Sections 18 and 19 of the Real Estate (Regulation and Development) Act, 2016 (RERA) were not attracted. The respondent further claimed that the booking amount constituted less than ten percent of the apartment cost and therefore there was no obligation to execute an agreement for sale.

The complainant, on the other hand, maintained that the promoter had accepted advance money without complying with statutory requirements under RERA. She argued that no agreement for sale was executed, no allotment letter was issued, and no sanctioned documentation was provided despite collection of the booking amount. She relied upon Section 13 of the RERA Act, which regulates acceptance of advance payments from prospective allottees.

After examining the pleadings and submissions of both parties, HP RERA framed key issues including the maintainability of the complaint, whether the promoter had violated Section 13 of the RERA Act by accepting money without executing an agreement for sale, whether the promoter violated obligations relating to issuance of allotment letters, and whether the complainant was entitled to refund and interest.

Rejecting the developer’s objections regarding maintainability and misdescription of parties, the Authority observed that regulatory proceedings under RERA are intended to protect homebuyers and cannot be defeated by technical objections. Referring to the Supreme Court’s judgment in Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh, HP RERA emphasized that the legislation is consumer-beneficial and must receive a purposive interpretation.

The Authority found that the promoter had admittedly accepted Rs. 1,01,000 from the complainant and retained the amount even after cancellation of the booking. Importantly, no agreement for sale had been executed between the parties. HP RERA held that the respondent’s argument that Section 13 applies only when the amount exceeds ten percent of the sale consideration was legally unsustainable.

Interpreting Section 13 of the RERA Act, the Authority stated that the legislative objective is to prevent arbitrary collection of money from prospective purchasers without formalizing rights and obligations through proper documentation. The Authority observed, “If the promoter receives advance/booking amount and proceeds with allotment process, the promoter cannot avoid execution of documentation and simultaneously deny accountability.”

The Authority further noted that no agreement containing forfeiture clauses, cancellation charges, lock-in provisions, or non-refundable conditions had been produced before it. In the absence of such contractual terms, the promoter could not retain the booking amount merely because the complainant chose not to proceed with the purchase.

Relying on the Supreme Court’s decisions in Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan, Imperia Structures Ltd. v. Anil Patni, and Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor, HP RERA reiterated that builders cannot impose unfair conditions upon homebuyers and that transparency and accountability are central objectives of the RERA framework.

The Authority also examined compliance with Section 11(3) of the RERA Act, which requires promoters to provide prescribed information and documentation, including allotment letters. It found that no allotment letter had been issued despite acceptance of the booking amount. Referring to the Himachal Pradesh Real Estate Regulatory Authority (Allotment Letter) Regulations, 2023, the Authority concluded that the promoter had violated statutory obligations and was liable under Section 61 of the RERA Act.

Addressing the issue of refund, HP RERA rejected the developer’s contention that the complainant’s withdrawal due to financial difficulties disentitled her from claiming repayment. The Authority held that while a prospective buyer may withdraw from a proposed transaction, the promoter cannot retain deposited funds in the absence of any agreement authorizing forfeiture.

The order records that the complainant consistently demanded refund and that the respondent failed to establish any contractual basis for withholding the money. The Authority observed that retaining the amount after cancellation, without any supporting agreement or statutory justification, amounted to unjust enrichment.

On the question of interest, HP RERA noted that although the matter did not involve delayed possession, equitable principles under the RERA framework required compensation for the complainant’s loss of use of her money. At the same time, considering that no formal agreement for sale had been executed and that the complainant herself withdrew from the proposed transaction, the Authority deemed it appropriate to award reasonable rather than penal interest.

Accordingly, HP RERA allowed the complaint and directed Rajdeep & Company Infrastructure Pvt. Ltd. to refund Rs. 1,01,000 to the complainant along with interest calculated under Rule 15 of the Himachal Pradesh Real Estate (Regulation and Development) Rules, 2017. The Authority noted that the applicable State Bank of India highest Marginal Cost of Lending Rate (MCLR) was 8.80 percent and, after adding two percent as prescribed by the Rules, the effective interest rate worked out to 10.80 percent per annum. The refund and interest are required to be paid within sixty days from the date of the order.

The ruling is significant for homebuyers across India because it clarifies that even relatively small booking amounts cannot be retained by developers when collected without statutory documentation and in the absence of contractual provisions permitting forfeiture. The decision also underscores the strict compliance obligations imposed on promoters under Sections 11 and 13 of the RERA Act and reinforces the consumer-protection objectives of India’s real estate regulatory framework.

Case Reference: Vimal Sana v. Rajdeep & Company Infrastructure Pvt. Ltd., Complaint No. HPRERA2025021/C