Telangana RERA Imposes ₹3.69 Lakh Penalty on Unregistered Real Estate Agents for Unauthorized Brokerage Activities
Pranav B Prem
The Telangana Real Estate Regulatory Authority (TG RERA) bench comprising Justice Dr. N. Satyanarayana (Chairperson), K. Srinivasa Rao (Member), and Laxmi Narayana Jannu (Member) has imposed a penalty of Rs. 3,69,600 on Mr. Sikha Balaraju and his two companies—M/s Infy Projects and M/s Bell Square Pvt. Ltd.—for acting as real estate agents without obtaining the mandatory registration under Section 9 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act). The order was passed while adjudicating a complaint filed by M/s Viana Homes Pvt. Ltd., the promoter of a commercial project named "Poojitha Tech Park" situated in Ranga Reddy District, Telangana.
As per the complaint, the Complainant is the owner and promoter of the "Poojitha Tech Park," a RERA-registered commercial complex bearing Registration No. P02400002546, valid up to January 27, 2027. The Complainant claimed exclusive rights over the project along with two other stakeholders and alleged that no third party was authorized to facilitate the sale or transfer of any part of the property.
In 2022, Mr. Sikha Balaraju, representing himself and his companies, approached the Complainant and expressed an interest in mediating sales by claiming to have prospective buyers. Despite initial discussions regarding terms, no formal agency agreement was signed between the parties. Subsequently, Mr. Sikha Balaraju introduced potential buyers, and the Complainant executed sale agreements with some of them. However, the Complainant contended that the Respondents falsely represented themselves as RERA-registered agents of the Complainant without any such authorization.
The Complainant further alleged that the Respondents, acting jointly, misled buyers by quoting inflated prices and misappropriated the excess amounts. One such buyer reported that the Respondents falsely projected themselves as official representatives of the Complainant. Despite repeated attempts to contact Mr. Sikha Balaraju, there was no response. It was also highlighted that one of the buyers subsequently filed a complaint against the Complainant itself, which the Complainant claimed was a result of the Respondents’ fraudulent actions. The Complainant also accused the Respondents of forging signatures and documents to facilitate unauthorized transactions.
The Complainant sought strict penal action under Section 62 of the RERA Act, cancellation of any licenses or certificates issued in the name of the Respondents, a ban on their future operations, and a refund of all misappropriated amounts.
The Authority issued notices to all Respondents. Respondent Nos. 1 and 2 entered appearance through their counsel but failed to submit any written reply or make any arguments. Respondent No. 3 remained absent despite receiving the notice. Consequently, the Authority proceeded ex-parte against all three Respondents. Respondent No. 4, a purchaser, appeared in person and submitted that Mr. Sikha Balaraju had indeed acted as an unregistered agent and had entered into a transaction on behalf of the Complainant.
While deciding the case, the Authority examined whether the Respondents fell within the definition of "real estate agent" under Section 2(zm) of the Act. The provision broadly defines a real estate agent as any person who introduces buyers and sellers and earns a fee or commission for such services. Referring to this, the Authority concluded that Mr. Sikha Balaraju and his companies met this definition as they facilitated transactions and received monetary consideration without having the requisite registration under Section 9 of the Act.
Observing that the Respondents had indulged in the business of real estate brokerage services without the mandatory registration, the Authority held them jointly and severally liable for contravening Section 9 of the RERA Act. It directed the Respondents to pay a penalty of Rs. 3,69,600 within thirty days in favour of the TG RERA Fund.
Further, the Authority warned the Respondents against facilitating any future sale or purchase of properties in any registered real estate project without securing prior registration as mandated by the Act. It was expressly stated that any continued violation would invite strict action under Section 65 of the Act, which prescribes a daily penalty that may extend up to 5% of the project cost.
Ultimately, the Authority partially accepted the relief sought by the Complainant by imposing the penalty but declined the other prayers seeking cancellation of licenses (since no license was granted to the Respondents) and refund of amounts (due to lack of conclusive evidence regarding the sums allegedly misappropriated). Accordingly, the complaint was disposed of with these directions, and no order was passed regarding costs.
Cause Title: M/s Viana Homes Pvt. Ltd. V. Sri Sikha Balaraju & others
Case No: Complaint No.117 of 2024
Coram: Dr. N. Satyanarayana, IAS (Retd.) [Hon’ble Chairperson], Sri K. Srinivasa Rao [Hon’ble Member], Sri Laxmi Narayana Jannu [Hon’ble Member]
[Read/Download order]
