(1) If an allottee, -
(a) fails to accept the tenement offered to him, and to pay the required amount; or
(b) fails to take possession of the tenement so offered within the period specified in the allotment order; or
(c) having taken possession of the tenement, refuses or fails to join [co-operative society or a company or an association] as the case may be, the Authorised Officer may cancel the allotment, remove his name from the approved list, and evict him under the provisions of the Act and retain towards administrative expenses such part of the earnest money paid by the applicant not exceeding one per cent, of the sale price of tenement as the Board may decide, regard being had to the circumstances in which his name is being removed, and the balance shall be refunded to the allottee without any interest due to him after deducting from the balance and from the initial instalments or the security deposit the amount of compensation for occupation for the tenement and the amount of damages to the premises, if any. When the amount of initial instalment and security deposit falls short of the amount of compensation together with the amount of damages, the amount shall be recoverable from the allottee as arrears of land revenue, if the said amount is not paid within a reasonable time.
Explanation. - The Board, may assess the amount of damages, having regard to the period of his stay in the tenement, the condition of the tenement, and such other relevant factors as the Authorised Officer for reasons to be recorded in writing, may think fit.
(2) The retention of the earnest money shall in no way affect the right of the Board to take action for eviction under the provisions of Chapter VI of the Act.
(3) In case of tenements allotted on rental basis, the earnest money paid-by an allottee may be retained towards administrative expenses under the following circumstances, that is to say, -
(a) if the allottee fails to accept the tenement allotted to him within the time specified in the allotment order; or
(b) if it is found that the allottee does not satisfy any of the conditions of allotment.