Cheating by a Builder Is a Criminal Offence, Not Just a Civil Dispute
When a redevelopment builder dishonestly cheats your society, it can be criminal cheating under the BNS, not only a civil or RERA dispute. Here is when, and how, your Mumbai society can act.
If a redevelopment builder dishonestly deceives your society — taking money on promises it never meant to keep, forging members’ consent, selling the same flat twice, or diverting redevelopment funds — that conduct can be a criminal offence, not merely a civil or RERA dispute. What decides it is an ingredient the statute itself demands. Section 318(1) of the Bharatiya Nyaya Sanhita, 2023 (BNS) makes it cheating only where the builder deceived you dishonestly and thereby induced you to part with property. An honest project that later runs into a funding gap or an approval delay does not satisfy that ingredient and stays a civil and MahaRERA matter. A scheme that was dishonest from the very start does, and can attract an FIR, arrest and prosecution — running in parallel with your claim for a refund or completion.
The section numbers Mumbai members still use are gone. “420” is now BNS Section 318(4) — cheating and dishonestly inducing delivery of property. “406” is now BNS Section 316(2) — criminal breach of trust. A complaint filed today that cites IPC 420 or IPC 406 is citing a repealed statute. This page gives you the exact sub-section to cite, the ingredients your FIR must state paragraph by paragraph, how to get it registered under BNSS Section 173(1), what to do under Section 173(4) and Section 175(3) if the police refuse, when the Economic Offences Wing is the right door, and the documents to preserve with the office that issues each one.
When a broken promise becomes a crime: the intention test
Not every failure by a builder is a crime. A delay, a cost overrun, or even the collapse of a project is, by itself, a breach of contract. What converts that breach into cheating is the builder’s state of mind at the moment the promise was made.
Read Section 318(1) BNS closely and you can see why. It requires two things together: that the builder deceived a person, and that he thereby fraudulently or dishonestly induced that person to deliver property. The word “dishonestly” is doing the work. If the deception existed from the start — the builder collected booking amounts, corpus, or rent deposits while knowing it could not or would not deliver — the ingredient is made out the moment you hand over the money. If instead the builder genuinely intended to perform and the project later failed because of a funding gap, a market downturn, or delayed municipal approvals, the inducement was honest when it was made, and the section is simply not answered, however large your loss. That is the statutory reason a pure recovery dispute cannot be turned into a criminal case by re-describing it, and the reason a genuine fraud can be prosecuted even though a civil claim also exists.
So the question for your committee is narrow and evidentiary: what could the builder be shown to have known on the date it took your money? That is not a matter of feeling cheated. It is proved from dated documents — whether the project was registered with MahaRERA on that date, whether the IOD or commencement certificate existed, whether the developer held any title or development right in the land, whether its own filed accounts showed it could fund the work. Those documents are listed further down, with the office that issues each one.
From the IPC to the Bharatiya Nyaya Sanhita, 2023
For generations these offences lived in the Indian Penal Code, 1860. Cheating was defined in Section 415 and punished under Sections 417, 418 and 420; criminal breach of trust sat in Sections 405, 406 and 409. Most members still say “file a 420” out of habit. The BNS did not merge those into one section each — it folded them into sub-sections. Getting the sub-section right matters, because the sub-section is what fixes the punishment, and the punishment is what fixes whether the police can register an FIR at all.
Use this table to convert an old number to the one your complaint must now carry.
| Old IPC | Now BNS | What it covers | Maximum punishment |
|---|---|---|---|
| 415 | 318(1) | Definition of cheating: deception, plus fraudulent or dishonest inducement to deliver property or to do or omit an act causing harm | Definition only — carries no punishment by itself |
| 417 | 318(2) | Cheating simpliciter, where no property was delivered | Up to 3 years, or fine, or both |
| 418 | 318(3) | Cheating with knowledge that wrongful loss is likely to a person whose interest the accused was bound to protect | Up to 5 years, or fine, or both |
| 420 | 318(4) | Cheating and dishonestly inducing delivery of property — the section for corpus, rent, booking money or a flat obtained by deception | Up to 7 years, and fine |
| 405 | 316(1) | Definition of criminal breach of trust: entrustment with property or dominion over it, then dishonest misappropriation, conversion, or use in violation of a direction of law or of a legal contract | Definition only |
| 406 | 316(2) | Criminal breach of trust — the section for corpus, rent or project money entrusted lawfully and then diverted | Up to 5 years, or fine, or both |
| 409 | 316(5) | Criminal breach of trust by a public servant, or by a banker, merchant, factor, broker, attorney or agent | Imprisonment for life, or up to 10 years, and fine |
| 468 | 336(3) | Forgery for the purpose of cheating — fabricated consent letters, altered agreements | Up to 7 years, and fine |
| 467 | 338 | Forgery of a valuable security, a will, or an authority to make or transfer a valuable security — covers a forged power of attorney | Imprisonment for life, or up to 10 years, and fine |
| 471 | 340(2) | Fraudulently using as genuine a document known to be forged | Punished as if the accused had forged it himself |
| 120B | 61(2) | Criminal conspiracy — where committee members and the developer act together | Punished as an abettor of the offence conspired at |
Source: Bharatiya Nyaya Sanhita, 2023, ss. 61, 316, 318, 336, 338, 340; Indian Penal Code, 1860 (repealed), ss. 120B, 405–409, 415–420, 467, 468, 471.
Why the sub-section decides whether you get an FIR at all
Whether an offence is cognizable — that is, whether the police may register an FIR and investigate without a Magistrate’s prior order — is set out in the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), not in the BNS itself. Two consequences matter to a society:
- Section 318(4) and Section 316(2) are cognizable and non-bailable. A complaint that discloses either of them must be registered as an FIR. This is the ground on which you ask the duty officer to register, and it is worth saying in those words at the counter.
- Section 318(2) — plain cheating with no property delivered — is non-cognizable. The police cannot investigate a non-cognizable case without an order of the Magistrate (BNSS Section 174). So a complaint that describes only a broken promise, without pleading the money or property that actually changed hands, invites a refusal that is legally correct. Always plead the delivery: the amount, the date and the instrument.
Before you go, check the First Schedule entry against the exact sub-section your complaint cites. It is a short entry and it tells you, in one line, cognizable or not, bailable or not, and which court will try it.
Why cheating and breach of trust cannot be alleged on the same facts
This is a subtle point that decides many complaints, so it is worth understanding before you go to the police station. The two offences exclude each other on the same act, and you can see why from the definitions themselves rather than from anyone’s opinion about them.
Section 316(1) BNS opens with the words “entrusted with property, or with any dominion over property”. Entrustment means the builder received it lawfully, with your consent, for a stated purpose. Section 318(1) BNS requires the opposite starting point: that the builder obtained it by deception. The same rupee cannot at the same moment have been entrusted lawfully and obtained by trickery. So one act cannot satisfy both definitions — not because of any rule of practice, but because the two definitions describe incompatible facts.
What this means in drafting is precise and useful. Do not allege both sections against one payment. Instead, split the transactions. The corpus you paid over after being shown a sanctioned plan that never existed is a Section 318(4) fact. The rent deposit you handed over honestly under a registered agreement, which the builder then spent on another site, is a Section 316(2) fact. One FIR can carry both, provided each section is pinned to its own set of payments and dates.
| Feature | Cheating — BNS Section 318 | Criminal breach of trust — BNS Section 316 |
|---|---|---|
| When the dishonesty begins | From the very start — you were deceived into parting with money or property | Later — the money or property was entrusted honestly, then misused |
| How the builder got the property | By trickery; possession was never honest | Lawfully and with your consent, for a stated purpose |
| Typical example | Collecting corpus and rent for a project the builder never meant to build | Taking funds meant for your building and diverting them to another project |
| The words in the section that must be pleaded | “deceives any person” and “fraudulently or dishonestly induces” that person to deliver property | “entrusted with property, or with any dominion over property”, then dishonest misappropriation or conversion |
| Old IPC equivalent | s.415 defined it; s.420 punished cheating with delivery of property — now BNS ss. 318(1) and 318(4) | s.405 defined it; s.406 punished it — now BNS ss. 316(1) and 316(2) |
| Maximum punishment | Up to 7 years and fine (s.318(4)) | Up to 5 years (s.316(2)); life or up to 10 years where the entrustment was to an agent (s.316(5)) |
| Cognizable? Bailable? | Cognizable, non-bailable | Cognizable, non-bailable |
Source: Bharatiya Nyaya Sanhita, 2023, ss. 316 and 318; cognizability and bailability per the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023.
Because the two cannot overlap on one act, work through each payment and each promise separately — some facts will amount to cheating, others to breach of trust — and pin each section to its own payment. Getting the classification right is what keeps the complaint from being challenged and quashed on a technicality before the facts are ever examined.
What builder conduct can cross the line into crime
Where genuine dishonesty is present, the conduct below answers the ingredients of a specific BNS section. Cite the section that fits the facts — not every section you can think of. The third column is the single fact the investigating officer will look for, so build the complaint around it.
| What the builder did | Section to cite | The one fact your FIR must establish |
|---|---|---|
| Collected booking amounts, corpus, or hardship and rent compensation with no intention or ability to deliver | BNS 318(4) | That on the date it took the money, the builder held no title or development right, no IOD or commencement certificate, or no MahaRERA registration — proved by dated records, not by the failure that followed |
| Diverted money meant for your building into another project or to personal use | BNS 316(2); consider 316(5) where the money was received as your agent | The document that created the entrustment (the development agreement clause, or the escrow or corpus arrangement), and the withdrawal that breached it |
| Withdrew from the RERA designated project account beyond the certified percentage of completion | BNS 316(2), on the limb covering use “in violation of any direction of law prescribing the mode in which such trust is to be discharged” | RERA Section 4(2)(l)(D) is that direction of law. Prove it from the promoter’s own Form 3 (CA) certificate against the completion percentage in its quarterly progress report |
| Sold the same flat, or the same extra carpet area, twice | BNS 318(4) | Two registered instruments covering the same unit, taken from the Sub-Registrar’s index |
| Forged or fabricated members’ consent, the agreement, or bank documents | BNS 336(3); 338 if a power of attorney or valuable security was forged; 340(2) for using it as genuine | The genuine signature specimen held by the society or the bank, set against the disputed one. Preserve the original — a photocopy cannot be examined |
| Mortgaged the society’s land or the members’ flats without disclosure and kept the loan | BNS 318(4), with 316(2) on the loan proceeds | The charge registered under Section 77 of the Companies Act, 2013, visible on the MCA21 portal, and the mortgage deed in the Sub-Registrar’s index — both dated before the disclosure you were given |
| Induced members to sign by promising sanctioned area or FSI that was never approved | BNS 318(4) | The written or presented promise, set against the actually sanctioned plan obtained from MCGM Building Proposals for that CTS number |
| Committee members acted together with the developer | Add BNS 61(2) (criminal conspiracy). Separately, MCS Act, 1960, Section 88 before the Registrar | That an office-bearer or a relative had an interest in the developer — barred by the Section 79A directive dated 4 July 2019. Section 88 lets the Registrar assess damages against your own delinquent office-bearers, which the police cannot do |
Source: Bharatiya Nyaya Sanhita, 2023, ss. 61, 316, 318, 336, 338, 340; Real Estate (Regulation and Development) Act, 2016, s. 4(2)(l)(D); Companies Act, 2013, s. 77; Maharashtra Co-operative Societies Act, 1960, s. 88; Section 79A directive dated 4 July 2019.
Many of these are precisely the warning signs set out in our guide to the red flags in a development agreement, and several overlap with the committee-developer nexus that quietly enables such frauds. Catching them before you sign is far cheaper than proving them afterwards.
Criminal action runs alongside your RERA and civil remedies
Filing an FIR does not cancel your right to recover money, and pursuing a refund does not stop a prosecution. The remedies answer different questions and can run at the same time:
- MahaRERA. Under Section 18 of RERA, if the builder fails to hand over possession on time, an allottee can withdraw and demand a refund with interest, or choose to stay in the project and claim interest for every month of delay. Complaints are filed with the Authority under Section 31. If your real problem is a stalled but honest project, this is usually the right first step — our guide on what to do about a builder delay walks through it.
- Consumer forum. The Consumer Protection Act, 2019 lets members claim for deficiency in service and compensation before the consumer commission.
- Co-operative Court. A dispute between the society and its members touching the business of the society is, under Section 91 of the Maharashtra Co-operative Societies Act, 1960, decided by the Co-operative Court rather than an ordinary civil court.
- Criminal court. The FIR and prosecution address the dishonesty itself and can lead to investigation, arrest and trial.
That the tracks can run together is not a matter of practice or of anyone’s opinion — it is written into the statutes themselves. Section 88 of RERA says the Act’s provisions are “in addition to, and not in derogation of, the provisions of any other law”, and Section 100 of the Consumer Protection Act, 2019 says the same of that Act. So a MahaRERA complaint under Section 31 does not bar the FIR, and the FIR does not bar your refund claim under Section 18. Your society does not have to choose only one.
What your FIR must state, paragraph by paragraph
A complaint gets registered when it reads as dated facts with documents behind them. It gets refused when it reads as a grievance. Draft it in the order below, and number the paragraphs — the investigating officer will refer to them by number, and so will the Magistrate if you later have to move under BNSS Section 175(3).
- Who is complaining, and on whose authority. The society’s name exactly as registered, its registration number, and the number and date of the managing-committee resolution authorising the complaint. Management of a society vests in its committee under Section 73(1) of the Maharashtra Co-operative Societies Act, 1960, so that resolution is what gives your signatory standing. Attach it as Annexure 1.
- Who is accused. The developer’s full registered name, its CIN or LLPIN, its registered office address, and the names of the directors or partners as they stand on the MCA21 portal. Name the individuals as well as the firm; an FIR against a company alone slows everything down.
- The document that created the relationship. The registered development agreement and the PAAA — the sub-registrar’s office, the document serial number, and the date of registration. This is the paragraph that establishes entrustment if you are pleading Section 316(2).
- Every payment and every item of property you parted with. Date, amount, mode, cheque or UTR number, and what was handed over. This is the paragraph most complaints omit, and it is the one that decides whether the police can act at all — see the worked example below.
- The representation, and why it was false on the date it was made. Not “the builder failed to deliver”, but “on [date] the developer represented X; on that date the sanctioned plan for CTS No. ___ recorded Y; the MahaRERA registration for the project was granted only on [date]”. Dishonesty under Section 318(1) BNS is proved by what the record showed on the date of the promise.
- The section, with its sub-section, pinned to specific paragraphs. For example: “The payments at paragraphs 4(a) to 4(f) constitute an offence under Section 318(4) BNS. The corpus received under clause ___ of the development agreement and applied elsewhere constitutes an offence under Section 316(2) BNS.” Never allege both sections on the same rupee.
- The prayer. Ask, in those words, that the information be registered as a first information report under Section 173(1) BNSS and investigated, and that a copy be furnished to you under Section 173(2) BNSS.
- A numbered annexure list matching the document table further down. Give the police certified copies. Every original stays in the society’s custody.
Worked example
The paragraph that makes the complaint cognizable. Say fourteen members bought additional carpet area from the developer, at the rate written into their own agreements.
Additional carpet area agreed per member: 75 sq ft
Rate under the agreement: Rs 22,000 per sq ft
Per member: 75 × 22,000 = Rs 16,50,000
Fourteen members: 16,50,000 × 14 = Rs 2,31,00,000
Plus: vacant possession of 40 flats handed over under the registered PAAA
Property delivered, as pleaded: Rs 2,31,00,000 in money, and possession of 40 flats
That paragraph is what makes it Section 318(4) — cheating and dishonestly inducing delivery of property — which is cognizable. Describe only the broken promise and you have pleaded Section 318(2), which is non-cognizable, and the police cannot investigate it at all without a Magistrate’s order under BNSS Section 174. The figures above are an illustration; use your own agreements, receipts and bank entries.
Getting it registered: BNSS Section 173, and the ladder if the police refuse
The Criminal Procedure Code is repealed, and the route a Mumbai society now follows runs through the Bharatiya Nagarik Suraksha Sanhita, 2023. One step in it is new, and skipping it is now the commonest way a society loses months.
| Step | Provision | What you actually do | What you keep |
|---|---|---|---|
| 1. Register the FIR | BNSS s.173(1) | Hand in the written complaint at the police station. Section 173(1) requires registration of information about a cognizable offence “irrespective of the area where the offence is committed” — the Zero FIR, now written into the statute. A station cannot turn you away on territorial grounds; it registers and transfers. | The FIR / CR number and the date |
| 2. Take your copy | BNSS s.173(2) | A copy of the information must be given to you forthwith and free of cost. Ask for it at the counter before you leave the station. | The stamped copy |
| 3. If the station officer refuses | BNSS s.173(4) | Send the substance of the information in writing and by post to the Superintendent of Police concerned — in Greater Mumbai, address it to the Deputy Commissioner of Police for the zone and copy the Commissioner of Police. Posting it is not a formality; it is the precondition for step 4. | The postal receipt and the tracking record |
| 4. Move the Magistrate | BNSS s.175(3) | Apply to a Magistrate empowered under Section 210, supported by an affidavit proving the Section 173(4) application. The Magistrate may make such enquiry as he thinks necessary and must consider the police officer’s submissions before ordering an investigation. | The affidavit and the order |
| 5. Or file a private complaint | BNSS s.223 | The Magistrate examines you and your witnesses on oath. Note the proviso to Section 223(1): no cognizance may be taken without giving the accused an opportunity of being heard, so the developer is on notice earlier than under the old law. | The sworn statement |
Source: Bharatiya Nagarik Suraksha Sanhita, 2023, ss. 173, 174, 175, 210 and 223.
Under the old Section 156(3) of the Criminal Procedure Code you could go straight to the Magistrate. You no longer can. Section 175(3) BNSS lets the Magistrate act only on an application supported by an affidavit made under Section 173(4) — that is, only after you have already written to the Superintendent of Police. A society that walks into the Magistrate’s court without that posted letter and its receipt fails on the threshold, before the facts are ever looked at. Post the Section 173(4) letter on the day of the refusal.
The fourteen-day preliminary enquiry, and how the sub-section you plead decides it
Section 173(3) BNSS is new and has no equivalent in the old Code. For a cognizable offence “punishable for three years or more but less than seven years”, the station officer may, with the prior permission of an officer not below the rank of Deputy Superintendent of Police, first conduct a preliminary enquiry within fourteen days to see whether a prima facie case exists, instead of registering at once.
- Section 316(2) carries up to five years, so it sits inside that band. A complaint resting only on criminal breach of trust can lawfully be met with a fourteen-day enquiry.
- Section 318(4) carries up to seven years. Seven is not “less than seven”, so it falls outside the band, and Section 173(3) does not reach it.
The practical consequence is worth stating plainly. Plead Section 318(4) properly — with the delivery of property set out as in the worked example — and the preliminary-enquiry route does not arise for that limb. If the police do take the enquiry route on the Section 316(2) limb, diarise the fourteenth day and ask in writing for the outcome on that date.
When the Economic Offences Wing is the right door
The Economic Offences Wing (EOW) is a specialised unit of the Mumbai Police, headed by a Joint Commissioner of Police (Economic Offences), which investigates large-value financial fraud including housing and land matters. Two things about it are commonly misunderstood by committees.
First, the EOW is not an alternative to an FIR. There is only one kind of first information report, registered under BNSS Section 173(1); what the EOW changes is who investigates it. A society approaches it by a written complaint addressed to the Joint Commissioner of Police (Economic Offences), Mumbai, annexing the same numbered paragraphs and annexures described above, and asking that the case be registered with, or transferred to, that Wing.
Second, the EOW earns its place where the fraud is large in value, spread across several buildings or several sets of purchasers, or routed through company accounts — because it has the accountancy and company-records capability a local station does not. Where one society has been cheated of a modest sum, the jurisdictional station is faster. Either way, do not let the choice cost you time: register at the station first under Section 173(1), then write to the EOW seeking transfer, so that the date of the FIR is secured.
Where the developer is a company, chase the charge on the property. Charges are registered under Section 77 of the Companies Act, 2013 and are visible to anyone on the MCA21 portal. A mortgage registered before the date the developer told your society the land was unencumbered is among the cleanest pieces of documentary dishonesty a housing society can put in front of an investigating officer.
What to obtain and preserve, and the office that issues it
Every item below can be obtained by the society or by a member as of right, from a named office. Start collecting before you file. The strength of a criminal complaint against a developer is almost entirely documentary.
| Document | Where to get it | Under which provision | What it proves |
|---|---|---|---|
| Registered development agreement, PAAA, any mortgage deed or conveyance | The Sub-Registrar of Assurances for the area — certified copy | Registration Act, 1908, s.57 — Book No. 1 and its Index are open to inspection by any person on payment of the fee, and copies of entries must be given; the copy is signed and sealed and is admissible to prove the contents of the original | The promise, the entrustment and the dates — and a second registered instrument over the same flat if it was sold twice |
| Minute book, committee and general-body resolutions, register of members | The society’s own office | MCS Act, 1960, s.32 — a member may inspect free of cost, and the society must furnish a copy within one month of the prescribed fee being paid | What was actually placed before the members, what was resolved, and on which date |
| MahaRERA registration certificate, Form 3 (CA) certificate, quarterly progress reports | The project page on the MahaRERA portal | RERA, 2016, s.11(1) for the quarterly updates; s.4(2)(l)(D) for the separate account and withdrawal only in proportion to completion | Whether the project was even registered on the date you paid, and whether withdrawals ran ahead of certified completion |
| IOD, commencement certificate and approved plans for your CTS number | MCGM Building Proposals office for the ward | Development permission under the MRTP Act, 1966; building commencement under the Mumbai Municipal Corporation Act, 1888 | Whether the carpet area or the FSI the developer promised was ever sanctioned at all |
| Company master data, directors, and charges registered on the property | MCA21 portal | Companies Act, 2013, s.77 — registration of charges | Whom to name as accused, and any undisclosed mortgage, with its date |
| Bank statements and the instruments by which you paid | Your own bank, on written request | Bankers’ Books Evidence Act, 1891 — a certified copy of an entry in a banker’s book is admissible in evidence | Each delivery of property: date, amount and instrument, exactly as pleaded in paragraph 4 |
| Originals of any signature, consent letter or agreement said to be forged | Keep in the society’s custody; hand the police a certified photocopy only | Produce the original to the Forensic Science Laboratory on the investigating officer’s requisition, and ask the officer to obtain the accused’s specimen signatures through the Magistrate for comparison | Forgery cannot be examined from a photocopy. Once the original leaves your hands it may not come back in time for the comparison |
Source: Registration Act, 1908, s. 57; Maharashtra Co-operative Societies Act, 1960, s. 32; Real Estate (Regulation and Development) Act, 2016, ss. 4 and 11; Companies Act, 2013, s. 77; Bankers’ Books Evidence Act, 1891.
Dates to put in the society’s diary
| What | Provision | Time |
|---|---|---|
| Free copy of the FIR to the informant | BNSS s.173(2) | Forthwith — ask for it at the counter |
| Preliminary enquiry, if the police take that route on the s.316(2) limb | BNSS s.173(3) | 14 days, and only with prior permission of an officer not below the rank of Deputy Superintendent of Police |
| Copy of society records after the prescribed fee is paid | MCS Act s.32 | One month |
| Written update on the progress of the investigation, to the informant or victim | BNSS s.193(3)(ii) | 90 days — if it does not come, ask for it in writing and keep the copy |
| Police report (chargesheet) before the accused becomes entitled to default bail | BNSS s.187(3) | 60 days where the case rests on s.318(4) and s.316(2); 90 days if you have also made out s.316(5) or s.338, which carry imprisonment for life |
| Limitation on the court taking cognizance | BNSS s.514 | None for s.318(4) (7 years) or s.316(2) (5 years). The bar runs only where the maximum is three years or less — so it catches s.318(2), at three years |
| Where that three-year clock does apply, when it starts | BNSS s.515 | From the date of the offence, or the first day the offence — or the identity of the offender — came to the knowledge of the aggrieved person or the police, whichever is earlier |
| Defect liability after handover, on the civil side | RERA s.14(3) | Five years from possession to raise the defect; the promoter must rectify within 30 days of your notice |
Source: Bharatiya Nagarik Suraksha Sanhita, 2023, ss. 173, 187, 193, 514 and 515; Maharashtra Co-operative Societies Act, 1960, s. 32; Real Estate (Regulation and Development) Act, 2016, s. 14(3).
The limitation line is the one that surprises committees most. Because both sections a defrauded society will normally cite carry more than three years, there is no limitation bar on prosecuting them. A fraud from several years ago can still be taken to the police. Delay weakens the evidence, but it does not extinguish the offence.
What the society must minute, and when
- Before anyone goes to the police station. A managing-committee resolution — management vests in the committee under MCS Act Section 73(1) — naming the authorised signatory, the sections to be cited, and the payments relied on. Number it and date it. The duty officer will ask for it, and it becomes Annexure 1.
- In the same meeting. A resolution that all original documents remain in the society’s custody and that only certified copies are given to any authority. Record where the originals are kept and who holds the key.
- At the next general body meeting. Place the committee’s resolution for ratification, and record the FIR or CR number, the police station and the date in the minutes. A society speaking as one body is far harder to pick off than scattered individual complainants.
- If an office-bearer is implicated. Record the disclosure of interest in the minutes. The Section 79A directive dated 4 July 2019 bars an office-bearer or a relative from holding an interest in the appointed developer. Beyond the criminal case, the society has two co-operative remedies the police cannot give it: an inquiry by the Registrar under Section 83 of the MCS Act, 1960, and assessment of damages against a delinquent office-bearer under Section 88. Both are moved before the District Deputy Registrar of Co-operative Societies for your ward.
- Every follow-up, in writing. Letters to the investigating officer, to the Deputy Commissioner of Police under Section 173(4), and to the Economic Offences Wing go out on the society’s letterhead with an outward number, and the acknowledgement is filed. On the day you have to swear the affidavit under Section 175(3), that file is your evidence.
Our step-by-step guide on filing an FIR against a builder sets out the practical detail at the counter. A criminal lawyer should settle the framing of the ingredients — dishonest inducement and property parted with for cheating, entrustment and misuse for breach of trust — before anything is filed.
The bottom line for members
Keep a clean paper trail from day one, use RERA and the delay remedies for an ordinary hold-up, and reserve the criminal complaint for real deception — forged consent, diverted money, double-selling, or promises of area that was never sanctioned. The strongest protection, though, remains never signing with a dishonest builder in the first place: screen candidates using our guide on how to choose a developer, have the tender and agreement professionally checked through our tender review service, and register your society for ongoing support. Act as a society, not as scattered individuals.
This article is general legal information for Mumbai housing-society members, not legal advice for your particular dispute. The distinction between an honest delay and criminal cheating turns on the facts, and the law is applied case by case, so please consult a qualified criminal or property lawyer before you file anything.
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Common questions
Is a builder's failure to deliver always a criminal offence?
No. An ordinary delay or breach of contract is usually a civil or RERA matter, not a crime. Section 318(1) of the BNS needs two things together: that you were deceived, and that you were fraudulently or dishonestly induced to part with property. So what is tested is what the builder knew on the date it took your money — proved from dated records such as the sanctioned plan, the IOD and the MahaRERA registration date, not from the failure that followed.
What is the difference between cheating and criminal breach of trust?
Cheating (BNS Section 318) is where the dishonesty exists from the start and you are tricked into parting with money or property. Criminal breach of trust (BNS Section 316) is where the builder receives money or property lawfully, for example funds entrusted for your redevelopment, and then dishonestly misuses it. The two cannot be alleged on the same facts, so the complaint must be framed to fit what actually happened.
Which law now covers cheating by a builder, is it still Section 420?
No, the section numbers have changed. When the Bharatiya Nyaya Sanhita, 2023 replaced the Indian Penal Code, cheating moved from IPC Sections 415, 417 and 420 to BNS Section 318, and criminal breach of trust from IPC 405 and 406 to BNS Section 316. The ideas are the same, but a complaint drafted today should cite the BNS sections.
Can a housing society file an FIR against its redevelopment builder?
Yes. Pass a managing-committee resolution first — management of a society vests in its committee under Section 73(1) of the MCS Act, 1960, so that resolution is what gives your signatory standing, and the duty officer will ask for it. Then file the written complaint at the police station; under BNSS Section 173(1) any station must register information about a cognizable offence irrespective of where the offence was committed, so you cannot be turned away on territorial grounds. For large financial frauds, write in addition to the Joint Commissioner of Police (Economic Offences), Mumbai, asking for the case to be transferred to the EOW — but register the FIR first, so the date is secured.
Can we pursue a MahaRERA case and a criminal case at the same time?
Yes, and the statutes say so expressly. Section 88 of RERA provides that its provisions are in addition to, and not in derogation of, any other law, and Section 100 of the Consumer Protection Act, 2019 says the same of that Act. So a MahaRERA complaint under Section 31, a refund claim under Section 18, and an FIR under BNSS Section 173(1) can all run together. MahaRERA and the consumer commission recover money and enforce delivery; the criminal case addresses the dishonesty itself.
What evidence do we need to show cheating rather than mere delay?
You need dated documents showing that the representation was already false when it was made. Get a certified copy of the development agreement and PAAA from the Sub-Registrar under Section 57 of the Registration Act, 1908; the sanctioned plan, IOD and commencement certificate from MCGM Building Proposals for your CTS number; the MahaRERA registration date, the Form 3 (CA) certificate and the quarterly progress reports from the MahaRERA project page; and any charge on the land registered under Section 77 of the Companies Act, 2013 from the MCA21 portal. Add your bank statements for every payment. Keep all originals with the society and give the police certified copies only — a forged signature cannot be examined from a photocopy.
What if the police refuse to register our FIR?
Follow the ladder the BNSS now lays down, in order. First send the substance of your complaint in writing and by post to the Superintendent of Police concerned under Section 173(4) BNSS — in Greater Mumbai, address it to the Deputy Commissioner of Police for the zone — and keep the postal receipt. Only then can you apply to the Magistrate under Section 175(3) BNSS, and that application must be supported by an affidavit proving the Section 173(4) step; the Magistrate will also hear the police officer before ordering an investigation. This is the change from the old Section 156(3) of the Criminal Procedure Code, where you could go straight to court. You may instead file a private complaint under Section 223 BNSS, where the Magistrate examines you on oath — but under the proviso to Section 223(1) he cannot take cognizance without first giving the accused an opportunity of being heard.
The police say they will do a 14-day enquiry before registering. Can they?
It depends on the sub-section your complaint pleads. Section 173(3) BNSS lets the station officer, with prior permission of an officer not below the rank of Deputy Superintendent of Police, hold a preliminary enquiry within fourteen days where the offence is punishable with three years or more but less than seven years. Section 316(2) carries up to five years, so it falls inside that band. Section 318(4) carries up to seven years — seven is not less than seven — so it falls outside it. Plead Section 318(4) properly, setting out the money and property actually delivered, and the preliminary-enquiry route does not arise for that limb. If an enquiry is taken up on the Section 316(2) limb, diarise the fourteenth day and ask in writing for the outcome.
Is it too late? Is there a time limit for filing a criminal case against a builder?
For these offences, no. Section 514 BNSS bars a court from taking cognizance after the limitation period, but that bar applies only where the maximum punishment is three years or less. Section 318(4) carries up to seven years and Section 316(2) up to five, so neither is time-barred and an old fraud can still be taken to the police. The bar does catch Section 318(2), plain cheating with no property delivered, at three years. Where a limitation period does apply, Section 515 BNSS starts the clock on the date of the offence, or on the first day the offence or the identity of the offender came to your knowledge or the police's, whichever is earlier. Delay still weakens your evidence, so do not treat this as a reason to wait.
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