Pranav B Prem

In a significant move to protect the rights of aggrieved homebuyers, the Telangana Real Estate Regulatory Authority (TG RERA), comprising Justice Dr. N. Satyanarayana (Chairperson), K. Srinivasa Rao (Member), and Laxmi Narayana Jannu (Member), imposed a penalty of ₹14.91 lakh on M/s Bhuvanteza Infrastructures LLP and its partners for failing to register their project "Aura Velimala Phase–1" and for delay in handing over possession to 62 allottees. The Authority also directed the builders to refund the amounts paid by the complainants along with 11% annual interest within 30 days.

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Background of the Case

The complainants, totaling 62 in number across multiple petitions, had entered into unregistered sale agreements with M/s Bhuvanteza Infrastructures LLP and its promoters for purchasing flats in a residential project named “Aura (Velimala)” located in Velimala Village, Ramachandrapuram Mandal, Sangareddy District, Telangana. The possession was contractually promised by December 2023.

However, as of June 2024, only about 20% of the project had been completed. Multiple site visits revealed that construction in some blocks had not commenced beyond foundational work, with slab and side walls missing. Despite several follow-ups, the respondents failed to offer any definitive timeline or explanation for the delay. The complainants stated they were under severe financial stress, having to pay both rent and EMIs, while no visible construction progress was made.

The complainants also alleged that the respondents might be diverting funds collected from allottees to other projects, and expressed concerns that the project land had not been registered in their names, leaving room for fraudulent resales. It was further contended that although the builder had committed to pay rent starting from January 2024 in case of delay, no such payments were made.

Observations by the Authority

The Authority noted that the total project area exceeded 7,300 square meters, which is well above the 500 sq. meter threshold under Section 3(2) of the Real Estate (Regulation and Development) Act, 2016. Consequently, the project mandatorily required registration before any advertisement, sale, or booking could occur. Despite this, the builders executed agreements of sale with buyers and accepted substantial payments without ever registering the project under Section 3 or filing the necessary application under Section 4.

TG RERA categorically held that this amounted to a direct violation of Sections 3 and 4 of the Act. It also rejected the respondents’ justification that certain approvals were pending and that registration was “in process,” clarifying that the statute permits no such provisional transactions.

The Authority remarked: “The repetitive and conscious pattern of non-compliance evinces deliberate disregard for the statutory mandate and regulatory framework, and undermines the rights and entitlements of homebuyers.” Further, the Authority noted that despite nearly three years having passed since the agreements were signed, no substantial progress was made and the respondents had failed to submit any credible roadmap for project completion.

Reliefs and Directions Issued

Invoking Section 18(1) of the Act, the Authority held that the homebuyers were entitled to a refund with interest due to the builder’s inability to complete construction and offer possession by the promised date. The complainants had explicitly stated that the builder was facing multiple criminal proceedings for alleged fund misappropriation and was unavailable to complete the project, reinforcing the need for refund rather than possession.

Accordingly, TG RERA passed the following directions:

1. Penalty for Non-Registration:Respondents Nos. 1 and 2 were directed to pay ₹14,91,958/- as penalty for violations of Sections 3 and 4. This amount must be deposited within 30 days into the designated TG RERA fund.

2. Refund to Complainants:The builders were directed to jointly and severally refund the amounts paid by each of the 62 complainants, along with 11% interest per annum (based on SBI MCLR + 2%) from the date of agreement until the date of actual refund. Refunds must be completed within 30 days.

3. Mandatory Registration of Project:The Authority directed the builders to immediately apply for project registration under Section 4 of the Act. Until registration is granted, the builders are prohibited from marketing, booking, or selling any unit in the project.

4. Consequences of Non-Compliance:The Authority warned that failure to comply with the above directions would attract further penalties under Section 63 of the Act.

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In conclusion, TG RERA took strong action against the errant builder for contravening the fundamental provisions of the Real Estate Act. By ordering refund with interest and imposing a penalty for non-registration, the Authority reaffirmed the statutory protection afforded to allottees and the mandatory nature of project registration. The order ensures immediate financial relief for the 62 complainants who had waited years without clarity or possession and reinforces accountability in the real estate sector.

Cause Title: Sri M. Prem Kumar & others V. M/s Bhuvanteza Infrastructures LLP & others [Along with other 8 connected matters]

Case No: Complaint No.105 OF 2024 & 8 Ors.

Coram: Dr. N. Satyanarayana, IAS (Retd.) [Hon'ble Chairperson, TG RERA], Sri Laxmi Narayana Jannu [Hon'ble Member ,TG RERA], Sri K. Srinivasa Rao [Hon'ble Member, TG RERA] 

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