Legal Remedies for Post-Transaction Property Fraud in India

Property fraud in India has seen a growing rise in recent years, with thousands of unsuspecting buyers losing their hard-earned money to fraudulent sellers. In 2025, the Ministry of Home Affairs reported over 15,000 cases of property-related fraud across various states. It is clear that there is a growing need for awareness of legal remedies. Victims often face complicated legal procedures, which make it hard to get their property or money back due to a lack of legal awareness.

Post-transaction property fraud is where a buyer has already paid the money but later discovers irregularities in ownership, title or documentation. The law in India provides several solutions for victims, but timely action is an important factor in preventing further losses. Knowing these remedies can determine how to recover your property or money to prevent yourself from becoming a victim again in the growing list of defrauded buyers.

The 24-Hour Victim Checklist

Quick action can secure evidence, prevent further loss and improve your chances of recovering your money or property. Follow the steps given below:

1. Stop Communication: Avoid WhatsApp chats or calls with the seller to prevent them from moving money.
2. Certify Evidence: Get a Bharatiya Sakshya Adhiniyam (BSA) Section 63 certificate for all chats and documents.
3. Freeze Accounts: File a complaint under Bharatiya Nagarik Suraksha Sanhita (BNSS) Section 107 to block scammer accounts.
4. Execute Orders: If you have prior RERA rulings, file for Circular 51 Execution immediately.

The Golden Hour Strategy: BNSS Section 107

BNSS Section 107 empowers the police to freeze a fraudster’s assets during the investigation itself, which makes the first few days after discovering property fraud critical for recovery.

• Previous Legal Position: Victims had to wait for years until trial or conviction before any bank account or asset of the accused could be touched, by which time the money had usually vanished. 
• Current Legal Position: Section 107 now allows police, with Magistrate approval, to immediately freeze bank accounts, digital wallets, company funds and movable assets. This will prevent funds from being moved through multiple accounts. The effectiveness of this shift was evident in a case of Hyderabad in 2025, where 2500 buyers lost close to ₹3,000 crore, but early account freeze helped to prevent the complete loss of money. 

Criminal Offences That Break the Corporate Veil

In many post-transaction property fraud cases, fraudsters function through private companies or shell entities to mask their personal liability. As a result, even after complaints are filed, accountability often rests only with the company. The individuals who actually made decisions remain protected behind the corporate structure.

• Previous Legal Position: Courts were earlier unable to hold directors or promoters liable for corporate fraud. Unless there was direct and specific proof of individual wrong doing, criminal liability was rarely extended beyond the company, making recovery of money and effective prosecution difficult for victims.
• Current Legal Position: The judicial approach has evolved. Indian courts are now more inclined to pierce the corporate veil in fraud-related matters. If a company is found to be merely a front to deceive buyers, directors, promoters, and other key decision-makers can be held personally accountable. They may be prosecuted for offences such as cheating (IPC 420), criminal breach of trust (IPC 406), and criminal conspiracy (IPC 120B). In simple terms, individuals can no longer hide behind a company’s name to escape liability for fraud. 

Seizure & Auction: The Collector Steps In

When developers ignore RERA orders or fail to refund buyers, simply winning in court is not enough. This is where the District Collector, the senior revenue officer in a district, plays a crucial role in turning a legal judgment into actual money for the victims. This procedure ensures that a court or RERA order does not remain only on paper.

• Previous Legal Position: Even after getting a favourable order, buyers often struggled to recover money because enforcement was slow. Civil execution procedures were lengthy, and developers could delay refunds by exploiting procedural gaps. Buyers were left waiting while builders shifted funds or stopped construction.
• Current Legal Position: Now, RERA execution and revenue recovery laws empower the District Collector to take direct action once a recovery certificate is issued. The Collector can attach and seize the developer’s movable and immovable assets, including unsold flats, land parcels, offices and other properties and then auction them in the open market. The amount realised from the auction is used to settle the dues owed to buyers. 

The Digital Evidence Safeguard

In modern property frauds, key evidence like WhatsApp messages, emails, payment receipts and digital contracts is electronic. Courts previously often rejected such evidence due to tampering concerns. Now, victims can certify these digital records, making them legally valid and harder for fraudsters to dispute.

Fast-Track Action Under Real Estate Regulatory Authority(RERA)

Winning a RERA order is just the first step of the process. The real challenge is to get the scammer to comply. Earlier, buyers faced long delays as builders often ignored orders. RERA mandates action within 60 days. This includes attaching accounts, seizing property or involving authorities to enforce refunds or possession.

Quick Action is your Strongest Defence

Property fraud can devastate buyers financially and emotionally, but the legalities in India have become far more supportive for victims. With tools like certified digital evidence, immediate asset freezes, piercing the corporate veil, and fast-track RERA execution, buyers now have effective ways to recover their money or property. The key is acting quickly, documenting thoroughly  and using the available legal solutions. Awareness and quick actions can turn a potential loss into a successful recovery. This ensures that fraudsters cannot easily escape accountability.

(Note: All information in this Article has been verified by a practising lawyer from Haryana and is for general awareness only, not legal advice.)

Frequently Asked Questions