The appeal was dismissed on 3 September 2026. Costs of ₹25,000 were awarded to the allottee. Money deposited by the promoter in the Tribunal registry is to be released to him.

For readers, the order is a warning: if a builder later calls your pre-agreement payment “earnest money” and refuses a refund, that label is not automatic under RERA.

How the booking began

Mr. Joy Salve booked Flat 903 on the 9th floor of Tower B5 in Godrej Park Greens, Mamurdi, Pune. Carpet area was about 52.88 sq m. Total price: ₹40,87,968.

He signed an application form on 16 March 2019. He paid ₹4,27,173.50, including GST of about ₹31,643 — roughly 9.67% of the price. An allotment letter followed on 30 April 2019.

No Agreement for Sale was ever executed or registered.

Cancellation, reminders, termination

In June 2019 he first spoke of upgrading the flat. On 31 July 2019 he asked to cancel and take a refund, citing unavoidable circumstances.

Godrej sent reminders to execute and register the Agreement for Sale. A pre-termination letter went on 18 November 2019. A termination letter followed on 12 December 2019.

He disputed the termination and asked the builder not to sell the flat to anyone else without his consent. On 15 May 2020 he again sought cancellation and refund of the ₹4.27 lakh, saying he could not pay further. Godrej refused. The allotment, it said, had already been terminated for non-payment. No refund was due under the papers he had signed.

What MahaRERA first decided

He approached MahaRERA. On 27 October 2022, Member-1 did not allow the promoter to keep the entire amount. Godrej appealed to the Appellate Tribunal (Appeal No. AT005000000134212 of 2022).

Godrej’s case: this was earnest money

Advocate Abhijeet K. Mangade argued that the application form had clauses allowing cancellation and forfeiture of earnest money on default. The allottee had paid only 9.67% of the price and had not signed the Agreement for Sale despite notices. Cancellation, Godrej said, was the allottee’s default. The promoter was entitled to forfeit what had been paid.

It also argued that MahaRERA Order No. 35/2022 dated 12 August 2022 — which is often read as limiting deduction when a booking is cancelled before a registered Agreement for Sale — was prospective and could not govern a 2019 termination.

A long list of judgments on earnest money and forfeiture was cited, including Satish Batra vs Sudhir Rawal, Shree Hanuman Cotton Mills vs Tata Aircraft, and later consumer and Supreme Court rulings, including a Godrej Projects case.

Godrej added that cancellations cause real loss: capital, approvals, administration, infrastructure, brokerage and overheads.

The homebuyer’s case: no agreement, no full forfeiture

Advocate S. V. Darveshi said the parties were governed only by the application form and allotment letter. Because cancellation was sought before a registered Agreement for Sale, the promoter could not keep the entire part-consideration. The forfeiture clauses, he said, were arbitrary and against the object of RERA.

He also relied on the fairness idea in Order 35/2022: a small deduction, not the whole booking amount.

What the Tribunal asked itself

Justice S. S. Shinde (Chairperson) and Dr. Rajagopal Devara, Member (A), framed two questions: Was Godrej entitled to the reliefs sought? Did the 2022 MahaRERA order need to be interfered with?

Both answers were no.

The core holding: this money was consideration, not earnest

The Bench accepted that parties are bound by terms they sign. It refused to read those terms in isolation from RERA.

RERA, it said, is a beneficial law meant to protect allottees and keep the market fair and transparent.

On earnest money, the Tribunal was direct:

“Learned Adv. Mr. Abhijeet K. Mangade, appearing for the Appellant/Promoter, contended that the amount paid was earnest money deposited by the Respondent/Allottee. This contention is devoid of merit. We do not agree with the same.”

“Perusal of the Application Form and the Allotment Letter clearly establishes that the amount paid by the Respondent/Allottee was part of the consideration amount agreed between the parties.”

“The provisions of RERA Act, 2016 specifically refer to the consideration amount. However, there is no reference to any earnest deposit payable by the Respondent/Allottee.”

“In view of the above, we are of the opinion that the amount paid by the Respondent/Allottee was, in fact, part of the consideration amount paid towards the value of the subject flat.”

And later:

“As a matter of fact, the amount paid towards consideration cannot be treated or described as earnest money.”

That is the line homebuyers need. The Tribunal did not invent a new slogan that “earnest money does not exist anywhere in Indian law.” It held that in this RERA booking, the money paid before a registered Agreement for Sale was part consideration for the flat, not a forfeitable earnest deposit. GST paid to the government was part of that sum.

Why old earnest-money judgments did not save Godrej

The promoter’s case law, the Bench said, dealt with earnest deposits in other kinds of contracts.

“The decisions relied upon by the Appellant/Promoter relate to the earnest money deposited by the suppliers, whereas, in the present case, the amount paid by the Respondent/Allottee was towards part consideration and not the earnest money, as contended by the Appellant/Promoter. Therefore, the decisions relied upon by the Appellant/Promoter cannot be applied to a transaction governed by the provisions of RERA.”

In plain words: you cannot pick a Supreme Court earnest-money ruling from a different setting and use it to keep a homebuyer’s booking instalment in full under RERA.

Forfeiture clause is not a blank cheque

The allotment letter had forfeiture language. That was not enough.

A forfeiture clause, the Tribunal said, cannot be enforced mechanically when the deal has not ended in a registered Agreement for Sale. Godrej also did not prove loss matching the entire ₹4.27 lakh. There was no material to show the same flat could not be sold to someone else after termination.

The allottee’s later emails — including the May 2020 refund request after job loss and COVID — were not treated as a dishonest attempt to injure the promoter.

Order 35/2022: not applied as a statute, used as a fairness guide

Godrej was right that Order 35/2022 is prospective and came after the 2019 termination. The Tribunal still said the principle of proportionality in that order can be used while testing a claim of complete forfeiture before an Agreement for Sale.

The deduction already allowed in the 27 October 2022 MahaRERA order was held fair. Full forfeiture was not.

Final order

• Appeal dismissed.
• Godrej to pay ₹25,000 costs to the allottee.
• Amount deposited in the Tribunal registry to be released to the allottee.
• Copy to MahaRERA and both parties under Section 44(4) of RERA.

Reserved on 7 July 2026. Pronounced on 3 September 2026, through video conference.

What this means if you have paid before the agreement

Consideration is the price of the flat — money paid towards the value of that home.

Earnest money, in older contract law, is a smaller token deposit meant to bind the bargain. If the buyer defaults, the seller may keep it.

Godrej tried to put the ₹4.27 lakh in the second box. The Tribunal put it in the first.

If you have only an application form or allotment letter, and no registered Agreement for Sale, a builder’s clause that says “we will forfeit everything” is not the last word. RERA looks at fairness. Full forfeiture of part-consideration is hard to defend unless the promoter proves real, matching loss.

That is the warning in this Godrej order: the name on the receipt does not decide the refund. The nature of the payment does.

Also Read: Buyer Ghosts Builder After Paying ₹49k: MahaRERA Orders Agreement Cancellation

The post Your Booking Money Isn’t Earnest Money: MahaREAT Rejects Full Forfeiture appeared first on Square Feat India.