Telangana RERA Penalises Builder ₹1.03 Crore, Orders ₹79 Lakh Refund with Interest for Project Non-Registration and Delay

A recent ruling by the Telangana Real Estate Regulatory Authority (TSRERA) has found a builder liable for a substantial penalty and refund, highlighting the critical importance of RERA compliance and timely project delivery. The Authority directed the builder to refund ₹79 lakh, along with 10.7% interest, to a homebuyer and imposed an additional penalty of ₹1.03 crore for non-registration of the project and construction delays.

Background of the Case

The homebuyer, Ms. Kumari, had entered into a sale agreement on February 5, 2024, to purchase a villa for ₹2.14 crore in Pasumamula Village, Abdullapurmet Mandal, Ranga Reddy, making an advance payment of ₹79 lakh. The builder had promised delivery within six months. However, by August 2026, construction remained unfinished, prompting Ms. Kumari to file a complaint with TSRERA, naming both the builder and the real estate agent involved.

TSRERA's Findings and Directives

The TSRERA bench, comprising Hon'ble Members Srinivasa Rao and Laxmi Narayana Jannu, proceeded ex-parte as neither the builder nor the agent appeared to defend the case, despite receiving notices. The Authority made several key observations:

• Failure to Register Project: The builder failed to obtain RERA registration for the project, a mandatory requirement under the Real Estate (Regulation and Development) Act 2016.
• Unauthorised Marketing: The builder engaged in marketing and advertising activities without the requisite statutory permissions.
• Construction Delays: There was a clear failure to complete construction within the promised timelines, leaving the homebuyer in an uncertain position.
• Lack of Progress Evidence: The builder provided no material evidence regarding the current stage of construction or any progress report, leading TSRERA to conclude an adverse inference against them.
• Indefinite Delay: Despite the sale agreement being silent on a specific possession date, TSRERA held that the homebuyer could not be made to wait indefinitely, especially given the builder's non-responsiveness and lack of demonstrable construction progress.

Consequently, the Authority ordered the refund of ₹79 lakh to Ms. Kumari with interest calculated at 10.7% per annum (SBI MCLR + 2%) from the date of the agreement of sale until the actual refund. Additionally, a penalty of ₹1.03 crore was levied on the builder.

Implications for Builders and Buyers

This ruling reinforces the powers of RERA authorities in safeguarding homebuyers' interests. It serves as a stern reminder to real estate developers regarding:

• Mandatory project registration under RERA Act 2016 prior to marketing or selling units.
• Adherence to promised construction timelines and delivery dates.
• The consequences of non-compliance, which can include significant financial penalties and refund liabilities.

For homebuyers, the case underscores the importance of exercising due diligence, ensuring clear paperwork, and verifying the RERA registration status of a project before making any payments.