Telangana RERA Penalises Builder for Unregistered Project and Delays, Orders Refund with Interest

The Telangana Real Estate Regulatory Authority (TSRERA) recently delivered a significant ruling, penalising a builder ₹1.03 crore and directing a refund of ₹79 lakh, along with interest, to a homebuyer. The order, delivered ex-parte by Hon'ble Members Srinivasa Rao and Laxmi Narayana Jannu, addresses multiple violations by the builder.

Case Background and Homebuyer's Grievance

Ms. Kumari, the complainant, had booked Villa No. 85 in a project located in Pasumamula Village, Abdullapurmet Mandal, Ranga Reddy, for ₹2.14 crore. An advance payment of ₹79 lakh was made on February 5, 2024, with a promise of possession within six months. However, as of August 2026, construction remained unfinished, prompting Ms. Kumari to approach the TSRERA, naming both the builder and the real estate agent as parties.

TSRERA's Findings and Rationale

The Authority noted that neither the builder nor the agent appeared to defend the claims despite notices, leading to an ex-parte proceeding. The TSRERA's decision was primarily based on three critical failures by the builder:

• Non-Registration under RERA: The builder failed to acquire a mandatory RERA registration for the project, a direct contravention of the Real Estate (Regulation and Development) Act 2016.
• Unauthorised Marketing: The project was marketed and advertised without obtaining the requisite statutory permissions.
• Failure to Complete Construction: There was a significant failure to complete the construction within the promised timelines. Crucially, the builder provided no evidence or progress report to the Authority indicating the status of construction, despite having collected substantial funds.

The TSRERA highlighted that while the agreement of sale was silent on the exact date of possession, a homebuyer cannot be left in indefinite suspense, especially when the builder shows no demonstrable progress. The Authority concluded that retaining the homebuyer's funds without corresponding construction progress was untenable.

Relief Granted and Penalties Imposed

Consequently, the TSRERA ordered:

• A full refund of ₹79 lakh to Ms. Kumari.
• Interest at a rate of 10.7% per annum (SBI MCLR + 2%) on the refunded amount, calculated from the date of the Agreement of Sale (February 5, 2024) until the date of actual repayment. This interest component amounted to approximately ₹21.7 lakh.
• A penalty of ₹1.03 crore on the builder for the combined violations, particularly the non-registration of the project under RERA.

This ruling underscores the stringent enforcement of the RERA Act 2016 by regulatory authorities to safeguard homebuyer interests against malpractices such as unregistered projects, unauthorised marketing, and construction delays. It also serves as a strong reminder for developers to adhere strictly to statutory obligations.