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

Aryan Raj

10 Jun 2024 2:30 AM GMT

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

    While hearing the complaint of two homebuyers related to the same real estate project, Telangana Real Estate Regulatory Authority (Authority) bench, comprising Justice Dr. N. Satyanarayana (Chairperson), K. Srinivasa Rao (Member), and Laxmi Narayana Jannu (Member), directed the builder to refund the amount paid by the homebuyers to purchase the flat. Additionally, the Authority...

    While hearing the complaint of two homebuyers related to the same real estate project, Telangana Real Estate Regulatory Authority (Authority) bench, comprising Justice Dr. N. Satyanarayana (Chairperson), K. Srinivasa Rao (Member), and Laxmi Narayana Jannu (Member), directed the builder to refund the amount paid by the homebuyers to purchase the flat. Additionally, the Authority imposed a penalty on the builder for marketing, advertising, and selling the unregistered project to homebuyers.

    Background Facts

    The Chairman, Managing Director, and Director of Parijatha Homes and Developments Pvt. Ltd (Builder) offered Homebuyer 1 (Complainant no 1) a flat in the Parijitha Pride II project for Rs. 20,43,000/-. Homebuyer 1 agreed to purchase the flat and signed a sale agreement on 10.10.2020, paying Rs. 20,10,000/. The agreement stipulated that the flat would be handed over within 36 months from the execution date.

    However, since April 2021, Homebuyer 1 observed no construction activity at the proposed site. Upon inquiry, the builder cited pending litigation on the land as the cause for the delay. The builder then urged Homebuyer 1 to 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 found no construction activity at this new site either.

    Similarly, the builder offered Homebuyer 2 (Complainant no 2) 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. Like Homebuyer 1, Homebuyer 2 also observed no construction activity at the site. Aggrieved by the delays, both homebuyers filed a complaint before TSRERA seeking a refund of the amounts paid with interest.

    Observation and Direction by Authority

    The Authority noted that the builder's project, Parijatha ICON 2 is 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, violating Section 3 of RERA, 2016.

    The Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors, wherein it was held that if the promoter fails to deliver possession of the apartment, plot, or building within the stipulated time under the terms of the agreement, the allottee's right under the Act to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

    Consequently, the Authority directed the builder to refund the amount paid by Homebuyer 1, which is Rs. 5,10,000/-, and the amount paid by Homebuyer 2, which is Rs. 20,10,000/-, with 10.20% interest within 60 days. Additionally, the Authority imposed a penalty of Rs. 4,47,930/- on the builder for marketing and selling villas in the project without registering it under RERA.

    Case – Sri Chowki Ramesh and another Versus M/s Parijatha Homes and Developments Pvt Ltd

    Citation - COMPLAINT NO.395 & 396 OF 2023


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