What to do if builder canceled flat but didn’t repay?

I bought a flat from a builder in January 2017 under a subvention scheme. The terms stated that the builder would pay the EMI/interest charged on the loan until possession. The builder inflated the flat cost from ₹32 lakhs to ₹44 lakhs. As per BBA terms, possession was after 36+6 months. The builder delayed paying the interest multiple times and, after 26 months, stopped paying altogether and denied further payment. Finally, after multiple meetings with the builder and the banker, it was decided that I would send an email to the builder for cancellation of the flat, and the builder would pay the entire loan of ₹33 lakhs. In November 2019, the builder cancelled my ownership, but the loan was not paid to the banker. I repaid the entire loan in May 2020, but the builder denied favoring me in any way. I filed a case with UPRERA in November 2020, and a decision was made in May 2021. An execution was filed under Section 63, and the final decision under conciliation in March 2022 favored the builder, ordering me to pay ₹8 lakhs to the builder. Now, the builder is asking for ₹1.72 lakhs as a penalty for registry charges because his OC was received in November 2017. Please suggest what I should do.

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Advocate By LEAD INDIA Answered: 29 May 2025

Since the builder canceled ownership but didn’t pay the loan, and UPRERA ruled partly in builder’s favor, you should follow the conciliation order and pay the amount decided. For the penalty demand, ask the builder for documents proving the registry penalty. Consult a lawyer to challenge any unfair charges and ensure fair closure. For further legal assistance contact us on our helpline number.

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