Return of advance in case of failed property transaction

I had finalized a deal for my house in May 2017 with a relative. He had made a payment of 1L as token amount and another 6L after few days as advance for the house. The deal was to be completed in 3 months time frame. However, he did not make any payment after that citing one reason or another and neither did he say no to the house deal directly to me or asked for his money back in return. Last communication I had with him in early 2019 he still told me that he is trying to arrange the funds.

Finally fed up I sold my house to another party for much lower amount in Dec 2019.

Now the person is asking me for his money back and threatening me if I don't return money, he will go to court and say that he had loaned me the money and I'm not repaying him back.

Since deal was within the family, there is no contract of any sort or any signed papers except bank statement for the payment he made through cheque

Does he have a case here? The loss he caused me is much greater than 7L I owe him, since house remained unsold for long time and finally I have to settle for much lesser amount due to real estate going negative. But I don't want a legal battle also, as I stay in different state and the house was located in my home town.


you have no other option but to return his money.


Originally posted by : Suri.Sravan Kumar
you have no other option but to return his money.

Thanks Sir for replying. What about applicability of limitation act

Wouldn't this apply to me as well, as all transaction were > 3yrs old


Limitation Act will certainly apply in your case .It is correct that your relative can't legally recover the amount which was advanced to you for the deal of your house but it is your moral duty to return him the received amount.


As per the supreme court judgement on extension of limitation during Covid-19 the period may be extended.

So its better to return his money to have friendly relations with your relative.




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