Telangana RERA Orders Refund To Homebuyers And Imposes Penalty On Builder For Selling Unregistered Project

Telangana RERA Orders Refund To Homebuyers And Imposes Penalty On Builder For Selling Unregistered Project

The Telangana Real Estate Regulatory Authority (RERA) bench led by Chairperson Justice Dr. N. Satyanarayana, with members K. Srinivasa Rao and Laxmi Narayana Jannu, instructed the builder to reimburse the sum paid by the purchasers for the flat. Furthermore, RERA levied a penalty on the builder for promoting, advertising, and vending the unregistered project to buyers.

As to the facts of the case, the Chairman, Managing Director, and Director of Parijatha Homes and Developments Pvt. Ltd (Builder) proposed a flat in the Parijitha Pride II project to Homebuyer 1 (Complainant no. 1) for Rs. 20,43,000/-. Homebuyer 1 agreed to the purchase, signing a sale agreement on 10.10.2020 and paying Rs. 20,10,000/. According to the agreement, the flat was to be delivered within 36 months from the execution date.

However, from April 2021 onwards, Homebuyer 1 noted that construction did not progress at the designated site. Upon inquiry, the builder cited ongoing litigation regarding the land as the cause of the delay. The builder then proposed that Homebuyer 1 accept another flat in the Parijitha ICON 2 project for Rs. 27,90,000/-. Homebuyer 1 agreed and signed a new sale agreement on 08.04.2021, with the same 36-month possession timeline. However, Homebuyer 1 discovered no construction activities at this new site either.

Likewise, the builder presented Homebuyer 2 (Complainant no 2) with a flat in the Parijitha ICON 2 project for Rs. 29,45,000/-. Homebuyer 2 signed a sale agreement on 08.04.2021, with possession promised within 36 months. The Homebuyer 2 too witnessed no construction developments at the site. Dissatisfied with the delays, both homebuyers lodged a complaint with TSRERA, seeking a refund of the amounts paid with interest.

Observation and Direction by RERA

The RERA observed that the builder's project, Parijatha ICON 2 was not registered under Section 3 of RERA, 2016. Despite this, the Builder Marketed, Sold, Advertised, and Entered into agreements of sale with homebuyers for an unregistered project in violation of Section 3 of RERA, 2016.

The RERA referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors, affirming that if a promoter fails to provide possession of the apartment, plot, or building within the agreed timeframe, the allottee has an unequivocal right under the Act to demand a refund or claim interest for the delay, irrespective of unforeseen circumstances or court/tribunal orders.

As a result, RERA instructed the builder to reimburse Homebuyer 1 with payment of Rs. 5,10,000/- and Homebuyer 2 with payment of Rs. 20,10,000/-, along with 10.20% interest within 60 days. Moreover, the the RERA imposed a penalty of Rs. 4,47,930/- on the builder for promoting and selling villas in the project without registering it under RERA.