One Sided Brochure Clause: What the Allahabad High Court's LDA Ruling Means for Buyers

On January 31, 2012, a buyer paid Rs 1,85,000 to book a flat in a development authority housing scheme in Lucknow. The allotment letter for Flat C-401 came in July 2014. The scheme was estimated to take 24 months. The completion certificate came in February 2020, eight years after the booking. When the buyer sought the money back, the authority pointed to its brochure: withdraw after allotment, and it keeps 20 percent and returns the rest without interest. On October 6, 2026, the Allahabad High Court called that clause one sided and unfair.

The High Court's order in Lucknow Development Authority v. Shivaji Singh, RERA Appeal No. 118 of 2026, is a Uttar Pradesh case. But Bengaluru buyers also book homes from public bodies, including the development authority and the housing board, and our guide to RERA and development authority projects explains how such projects fit within the law. This order shows how a court treated a brochure term that let a public developer keep a buyer's money without interest after years of delay.

The short answer. The Allahabad High Court dismissed the Lucknow Development Authority's appeal against a tribunal order directing it to refund the booking amount after a 20 percent deduction, with interest at MCLR plus 1 percent until payment. It held that the brochure clause allowing a 20 percent deduction and refund without interest was ex facie one sided, unfair and unreasonable, that the project was not completed within a reasonable period, and that keeping the money would be unjust enrichment. The trade-off: the buyer got interest, but the 20 percent deduction ordered by the tribunal still stood, and the dispute ran from a regulator complaint numbered in 2019 to a High Court order in October 2026.

What happened with Flat C-401 in Sopan Enclave?

According to the order, the buyer deposited the booking amount of Rs 1,85,000 on January 31, 2012 for a flat in Sopan Enclave, Priyadarshini Yojana, Sitapur Road, Lucknow. The authority allotted Flat No. C-401 by a letter dated July 11, 2014. The scheme was to be completed within an estimated 24 months. Before the completion certificate issued on February 17, 2020, the authority wrote on August 4, 2019 asking the buyer to pay pending dues and take possession; the order records that the buyer did not reply.

The order also records that, because the allotted flat was not provided within a reasonable period, the buyer's wife bought a different flat in another authority scheme by a registered sale deed dated September 6, 2014. The buyer then approached the Uttar Pradesh real estate regulator seeking a refund of Rs 1,85,000.

How did the case reach the High Court?

Through two rounds. The regulator dismissed the buyer's claim on February 24, 2020. The buyer appealed to the Uttar Pradesh Real Estate Appellate Tribunal in Appeal No. 911 of 2021, and on August 12, 2026 the tribunal allowed it. It directed the authority to refund the booking amount after deducting 20 percent, with interest at MCLR plus 1 percent till the date of payment, within 45 days of the order being uploaded.

The tribunal had noted that the authority admitted it never cancelled the allotment, never invoked clause 8.2, and never refunded any money despite receiving nothing further for the unit. The authority appealed to the High Court, relying on clause 8.2 of its brochure, which provides that on withdrawal of money after allotment, a 20 percent deduction on the registration amount will be made and the balance refunded without interest.

What else did the tribunal find about the authority's conduct?

A good deal, as extracted in the High Court's order. The tribunal recorded that, on a specific query, the authority's counsel admitted none of the allotments was cancelled and that clause 8.2 was never invoked, even though no further money was deposited for the Sopan Enclave unit. It said the authority, at best, could have processed a refund after a 20 percent deduction, but failed to refund a single penny and instead used the booking money.

The tribunal's order also dealt with a plot the buyer had been allotted in another authority scheme, Panchsheel. The authority had relied on a brochure clause barring applicants who already owned a plot or unit in a government scheme. The tribunal held that the authority bore the burden of proving such ownership on the date of application or allotment and failed to do so, that it could not plead cancellation in an affidavit without an actual cancellation order, and that by accepting deposits it had waived the condition. It held the buyer entitled to possession of that plot with delay interest under Section 18 of the RERA Act. It also rejected the argument that buying a flat later on resale from a private party in a government scheme barred the allotment, saying the authority could not show any such prohibition.

Why did the High Court call the brochure clause unfair?

Because it was one sided and imposed on a buyer with no bargaining power. The Court relied on the Supreme Court's ruling in Pioneer Urban Land and Infrastructure v. Govindan Raghavan, extracting its discussion of unfair trade practices and of contracts signed on the dotted line in a prescribed or standard form, however unfair, unreasonable or unconscionable a clause may be. It also quoted Chitty on Contracts on standard form contracts, where freedom of contract is of little value when one party has no alternative but to accept the terms proposed by the other.

Applying this, the Court held that clause 8.2 is not in consonance with the basic principles of the law of contract and is ex facie one sided, unfair and an unreasonable term, so the authority was not entitled to its benefit. Our explainer on unfair contract terms in builder agreements covers the same principle under consumer law.

What other reasons did the Court give?

Delay and unjust enrichment. The Court found the project was not completed within a reasonable period, comparing the booking date of January 31, 2012 with the completion certificate of February 17, 2020, against an estimated 24 months. It said 80 percent of the booking amount was used by the authority and should have been returned after cancelling the allotment for default or any other available ground, and noted that the authority never cancelled the allotment.

It added that unjust enrichment occurs when a person retains money or benefits which, in justice, equity and good conscience, belong to someone else. Finding no substantial question of law, it dismissed the appeal.

What does this mean for Bengaluru buyers of public authority homes?

Do not assume a brochure's refund and forfeiture terms are the last word. Development authorities often sell through brochures and allotment letters rather than negotiated agreements, so the terms are fixed in advance. This order is from Uttar Pradesh, but the reasoning it relies on comes from the Supreme Court's decision on one sided contract terms. If a Bengaluru allotment's terms let the seller keep your money without interest after a long delay, the question of fairness is worth raising.

It helps to be clear about the outcome. Because the authority's appeal was dismissed, the tribunal's order stands as passed: a refund of the booking amount after the 20 percent deduction, with interest at MCLR plus 1 percent until payment. The authority's appeal rested on clause 8.2, whose terms provide for a refund without interest, and the High Court held it was not entitled to the benefit of that clause.

The order also shows the value of timing. The authority wrote in 2019 asking the buyer to pay dues and take possession, and the buyer did not reply. Answering such letters in writing, and recording why you are not taking possession, keeps your position clear and documented.

1. Read the brochure's withdrawal, refund and forfeiture clauses before paying a booking amount.
2. Note the estimated completion period stated in the brochure or allotment letter.
3. Keep the booking receipt, allotment letter and every demand or possession letter.
4. Reply in writing to any demand or possession letter, even if you plan to exit.
5. If the project runs years late, put your refund request in writing with dates.
6. Check whether the authority has formally cancelled your allotment, and on what ground.
7. Take advice on whether a forfeiture clause is one sided before accepting a reduced refund.

Frequently asked questions

What did the Allahabad High Court decide in Lucknow Development Authority v. Shivaji Singh?

On October 6, 2026, it dismissed the authority's appeal and upheld a tribunal order to refund the booking amount after a 20 percent deduction, with interest at MCLR plus 1 percent. It held the brochure clause allowing a 20 percent deduction and refund without interest to be ex facie one sided and unfair.

Can a development authority refund a booking amount without interest?

Not on the facts of this case. The High Court held that clause 8.2, which provided a refund without interest after a 20 percent deduction, was an unreasonable term, that the project was not completed within a reasonable period, and that retaining the money would amount to unjust enrichment.

Which earlier ruling did the High Court rely on?

It relied on the Supreme Court's decision in Pioneer Urban Land and Infrastructure v. Govindan Raghavan on unfair trade practices and one sided standard form terms, along with a passage from Chitty on Contracts on contracts where one party has no meaningful choice but to accept terms set by the other.

Does this ruling apply in Karnataka?

It is an Allahabad High Court order about an Uttar Pradesh development authority, decided under that state's real estate framework. Its reasoning, however, draws on the Supreme Court's ruling on one sided contract terms, which Bengaluru buyers can point to when questioning similar refund or forfeiture clauses.

Last updated 2026-10-29. PropNewz Team.