Builder took your money and vanished? Five routes, and what each can and cannot get back

Rules as of 13 October 2026.

The calls stop, the site is silent, and your instalments are with a developer you can no longer reach. There is no single law that "gets the money back". Five different routes exist, they do different jobs, and courts have said several of them can run side by side. This explainer sets out what each can and cannot do. It is general information, not legal advice; an advocate should pick the order and the forums for your facts.

The five routes at a glance

Route	Who moves it	What it can do	What it cannot do
MahaRERA complaint (s.18, s.31)	You	Order refund with interest	Create money; an order must still be recovered
Police FIR	Police and criminal court	Prosecute cheating or breach of trust	Work as a refund process on its own
MPID Act	The State, through a Competent Authority	Attach property bought with deposits; punish fraudulent default	Apply to every builder; it needs a "deposit" and a "financial establishment"
Consumer commission	You	Refund claim, as a parallel remedy	Make an empty company solvent
IBC (insolvency)	A group of buyers	Start a resolution process in which buyers are financial creditors	Act as a debt-recovery tool for one buyer

1. MahaRERA: the most direct claim for a refund

Section 18(1) of the RERA Act says that if a promoter fails to give possession by the agreed date, he is liable, on demand, to return the amount received with interest at the prescribed rate, plus compensation, if the allottee wishes to withdraw. Section 19(4) gives the allottee the matching right. In Newtech Promoters (Supreme Court, 11 November 2021) the Court called this refund right unqualified and not dependent on contingencies. A refund claim goes to the Authority, and section 31 lets any aggrieved person file.

The limit is practical. Under section 40(1), unpaid interest or compensation ordered by the Authority is recoverable as arrears of land revenue. That is a recovery process, not a guarantee. If the company has nothing left, an order is a piece of paper.

One useful point: the Bombay High Court held on 26 February 2024 in Wadhwa Group v Vijay Choksi that a co-promoter registered for the project can be made to refund under section 18 even if the buyer paid only the other party. So read the MahaRERA project page for every name listed as promoter, not just the one on your receipts.

2. FIR: pressure and punishment, not a refund process

A police complaint for cheating and criminal breach of trust (the old IPC sections 420 and 406 numbers are still used in many judgments) can lead to arrest and prosecution. Its main purpose is punishment. Police may also treat a delay dispute as a civil matter, so the complaint should show the pattern: money taken, promises made, no work, no answers.

3. MPID Act: the route many buyers have not heard of

The Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 lets the State attach property when a "financial establishment" fails to repay a "deposit". The Supreme Court, on 15 May 2026 in Alka Agrawal v State of Maharashtra, set out the pieces: "deposit" in section 2(c) is receipt of money to be returned, with listed exclusions; "financial establishment" in section 2(d) is any person accepting deposits "under any scheme or arrangement or in any other manner"; section 3 punishes fraudulent default with up to six years' imprisonment and a fine up to Rs 1 lakh. The Court also said the name of the transaction does not matter, and that a complaint under section 3 is "an independent recourse" even if an IPC case fails.

Does it cover flat money? In Manohar Bhimraoji Mahalle v State of Maharashtra (Bombay High Court, Nagpur bench, 6 March 2020), the court held that payments by flat purchasers to a developer, who had sold flats to about 514 buyers, were a "deposit" and upheld attachment of the land. That is one bench's ruling on its facts, so do not assume every builder default qualifies.

The limits are real. Attachment is done by the State, not by you. In March 2023 the Supreme Court declined to widen attachment to every connected person's property, noting the test is a flow of deposit money. Also, a Bill introduced in the Maharashtra Assembly on 30 June 2026 would require a financial establishment to deposit 50% of its liability before appealing; I have not confirmed that it has become law.

4. Consumer commission: a parallel remedy

In Imperia Structures v Anil Patni (Supreme Court, 2 November 2020) the Court held that section 79 of RERA does not bar a consumer complaint, that section 88 saves other laws, and that remedies for allottees are concurrent. The choice between the commission and RERA is the buyer's. An advocate should check that you do not ask for the same relief twice.

5. IBC: last resort, and numbers matter

Homebuyers are financial creditors under the Insolvency and Bankruptcy Code, but an insolvency application by buyers must be filed jointly by not less than 100 allottees or 10% of the allottees of the same project, whichever is less. The Supreme Court records that this threshold was upheld in Manish Kumar v Union of India (19 January 2021). In Mansi Brar Fernandes v Shubha Sharma (12 September 2025) it added that the Code is "not a recovery mechanism", that RERA is the primary forum for homebuyer grievances, and that speculative investors, as against genuine homebuyers, cannot use it to recover money.

Flats in project	10% of allottees	Minimum buyers needed
120	12	12
600	60	60
1,500	150	100

Illustrative: assumes every flat is sold to a separate allottee.

A worked example

Suppose you paid Rs 25 lakh on 1 March 2022 and win a refund order on 1 March 2026. MahaRERA applies SBI's highest MCLR plus 2% in Maharashtra. If we assume 9% for the MCLR (check the current figure), the rate is 11%. Four years of simple interest on Rs 25 lakh is Rs 25,00,000 x 11% x 4 = Rs 11,00,000, so the order would read Rs 36 lakh. Whether you see it depends on what the builder, and any co-promoter, still owns.

Mistakes to avoid

• Waiting on a revival promise with no written demand on record.
• Filing only against one entity. Note every promoter on the project page.
• Treating the FIR as the refund. It is a separate track.
• Assuming the MPID Act applies. It depends on the facts and on the State acting.