Order Complaint No. 115 OF 2024

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.115 OF 2024
30th Day of December 2024
Quorum:

Dr. N. Satyanarayana, IAS (Retd.), Hon’ble Chairperson
Sri K. Srinivasa Rao, Hon’ble Member
Sri Laxmi Narayana Jannu, Hon’ble Member

Sri Katchala Nanaji

…Complainant
Versus

M/s Krithika Infra Developers Pvt. Ltd.
Represented through its Authorised Representatives,
Sri D. Srikanth & Sri D. Shashikanth

…Respondent

The present matter filed by the Complainant herein came up for hearing on
08.08.2024, 29.08.2024 and 1.10.2024 before this Authority and Complainant in
person, virtually appeared and Counsel for Respondent, Sri E. Vishwaprasad, Sri S.
Srinivas Nayak, and Smt. N. Suvarna appeared on behalf of the Respondent
Company and after hearing the arguments, this Authority passes the following
ORDER:

2.

The present Complaint has been filed by the Complainant under Section 31

of the Real Estate (Regulation & Development) Act, 2016 (hereinafter referred to as
the “Act”) read with Rule 34(1) of the Telangana Real Estate (Regulation and
Development) Rules, 2017 (hereinafter referred to as the “Rules”) seeking appropriate
relief(s) against the Respondent.

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Brief facts of the case:
3.

The Complainant submitted that he entered into an agreement with the

Respondent Company in October 2021 for the purchase of a flat located in
Beeramguda, Hyderabad. An advance payment at the rate of Rs. 2,500/- per square
foot was made by the complainant, along with an additional sum amounting to
Rs.33,84,200/- (Rupees Thirty-Three Lakhs Eighty-Four Thousand and Two
Hundred Only).

4.

The Complainant further submitted that despite repeated assurances from

the Managing Director and CEO of the Respondent Company, the flat was not handed
over by the promised date of March 2024. The complainant has repeatedly sought
updates regarding the construction, but no satisfactory progress was made.

5.

The Complainant further submitted that the Respondent had not initiated the

necessary construction work and has also failed to secure requisite approvals,
including RERA registration and loan clearances, which are essential for completing
the project as per the agreement.

6.

The Complainant also submitted that despite multiple follow-ups and

meetings with the representatives of the Respondent Company, there has been no
concrete response regarding the completion timeline of the flat. And that the
Respondent Company has repeatedly failed to meet their obligations, causing undue
hardship and uncertainty to the Complainant.

7.

Owing to the undue delay and lack of transparency from the Respondent, the

Complainant sought to cancel the booking and requested a refund of the payments
made. However, despite the request for cancellation, the Respondent has failed to

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initiate the refund process, and the Complainant is now constrained to approach this
Authority seeking the refund of the amount paid along with appropriate
compensation for the delay, harassment, and inconvenience caused.

Relief Sought:
8.

Accordingly, the Complainant sought for the following reliefs:
i.

Immediate release of the invested amount with compound interest @ 2rs.
Interest per month.

ii.

Take stringent action on the company as per the RERA norms as project started
without RERA registration.

iii.

Legal criminal action on the company M/s Krithika Infra Developers and its
Directors CEO and MD.

Counter on behalf of the Respondent:
9.

Vide Counter affidavit dated 29.08.2024, the Respondent submitted that the

Complainant, attracted by the good reputation of the Respondent's business in the
construction sector, voluntarily entered into an Agreement of Sale dated 05.02.2022
to purchase Flat No. A-108, Block A, situated on the 5th floor with a built-up area of
1594 sq. ft., exclusive of common areas, along with an undivided share of land
measuring 35.4 sq. yards, located at Sheshadri's Silver Oak, Boduppal Village,
Medipally Mandal, Medchal Malkajgiri District. That the Complainant entered into
this Agreement after due satisfaction with the Respondent's completed construction
work.

10.

The Respondent submitted that, subsequently, the Complainant, citing

financial distress, approached the Respondent with a request to cancel the
Agreement of Sale dated 05.02.2022 and refund the amounts paid. In response, the

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Respondent, considering the Complainant’s request on humanitarian grounds,
refunded the amounts via cheque No.002111 dated 30.08.2024 of Rs.16,05,938/(Rupees Sixteen Lakhs Five Thousand Nine Hundred and Thirty-Eight Only), cheque
No.002112 dated 30.09.2024 of Rs.16,05,938/- (Rupees Sixteen Lakhs Five
Thousand Nine Hundred and Thirty-Eight Only), and cheque No.002113 dated
30.10.2024 of Rs.16,54,603/- (Rupees Sixteen Lakhs Fifty-Four Thousand Six
Hundred and Three Only), drawn on Kotak Mahindra Bank, Hyderabad. After
receiving these cheques, the Complainant executed a cancellation of the Agreement
of Sale in favor of the Respondent.

11.

The Respondent contended that, despite receiving the entire amount, the

Complainant has filed this case prematurely, allegedly suppressing the above
material facts, with the intention of making wrongful gains and to malign the
Respondent’s reputation in society. Therefore, it was prayed on behalf of the
Respondent to dismiss the complaint.

Points for consideration:
12.

After due deliberation of the contentions of both the parties and the

documents filed in support of their contentions, following questions arise for
consideration by the Authority:
I.

Whether the Respondent violated Sections 3 & 4 of the Act, 2016, by not
registering the project, Sheshadri's Silver Oak?

II.

Whether the Respondent violated Section 13(1) of the Act, 2016 by accepting
advance payments exceeding the statutory limit of 10% of the total sale
consideration?

III.

Whether the Complainant is entitled to its relief? If yes, to what extent?

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Observation by the Authority:
Point I
13.

The Agreement of Sale dated produced by the Complainant and admitted by

the Respondent herein clearly stipulates as under:
“Whereas, the Developer/Builder herein agreed and offered to sell away
Proposed Residential Flat No.A-108, Block -A, in 5th Floor, built up area 1594
sq.fts (exclusive of common areas), with one car parking area, in Complex
known as SHESHADRI’S SILVER OAK, along with undivided share of land 35.4
sq.yds, in Survey No.15 admeasuring 13658 sq.yds or 11418 sq.mtrs situated
at Bodduppal Village, Under Boduppal Municipality, Medipally Mandal,
Medchal – Malkajgiri District, Telangana State, to the Vendee (hereinafter called
the “THE SCHEDULE PROPERTY”).”

14.

A bare perusal of the said Agreement clearly shows that development is being

done in Survey No.15 admeasuring 13658 sq.yds or 11418 sq.mtrs situated at
Bodduppal Village, Under Boduppal Municipality, Medipally Mandal, Medchal –
Malkajgiri District, Telangana State, out of which, the Complainant was allotted Flat
No.A-108, Block -A, in 5th Floor of 1594 sq.fts built up area. This means the land is
exceeding 500 sq. mtrs., and also has more than 8 units and therefore, project titled
“Seshadri’s Silver Oak” requires RERA registration in accordance with Section 3(2)
which stipulates as under:
“(2) Notwithstanding anything contained in sub-section (1), no registration of the
real estate project shall be required— (a) where the area of land proposed to be
developed does not exceed five hundred square meters or the number of
apartments proposed to be developed does not exceed eight inclusive of all
phases.”

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15.

Further, Section 4 mandates that an application for registration has to be filed

by the promoter in such form and manner as prescribed but no such application was
admittedly filed by the Respondent, thereby failing to comply with Section 4 of the
Act, 2016.

15.

Therefore, as Section 3 mandates registration prior to offering for sale of any

units in a project that falls well within the jurisdiction of the Authority, but the
Respondent, admittedly and apparently violated such provision by executing
Agreement of Sale dated 05.02.2022 with the Complainant herein, the Respondent
is liable for penalty under Section 59 of the Act, 2016. Further, as the Respondent
admittedly has not filed any application for registration under Section 4, he is liable
for penalty under Section 60 of the Act, 2016. On 08.08.2024, this Authority issued
a Show Cause Notice to the Respondent under Sections 3 & 4 of the Act, 2016 of
which they did not provide any reply despite being in receipt of the same.

16.

Therefore, Point I is answered in affirmative, and the Respondent is liable for

penalty under Sections 59 and 60 for violation of Sections 3 and 4 respectively.

Point II
17.

Admittedly, the Complainant paid and the Respondent received total

consideration of Rs.33,84,200/- (Rupees Thirty-Three Lakhs Eighty-Four Thousand
and Two Hundred Only) before the date of execution of the Agreement of Sale dated
05.02.2022. Upon examination of the financial transactions between the parties, it
has come to the notice of the Authority that prior to the execution of the Agreement
for Sale dated 05.02.2022, the Respondent had accepted substantial sums of money
from the Complainant as follows:
i.

₹50,000 on 12.12.2021;

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ii.
iii.
iv.
v.
18.

₹5,00,000 on 01.01.2022;
₹1,50,000 on 20.01.2022;
₹16,00,000 on 29.01.2022;
₹5,00,000 on 03.02.2022.
The aggregate of these amounts totals ₹28,00,000, which significantly exceeds

the permissible limit stipulated under Section 13(1) of the Act, 2016, which stipulates
as under:
“(1) A promoter shall not accept a sum more than ten per cent. of the cost of the
apartment, plot, or building as the case may be, as an advance payment or an
application fee, from a person without first entering into a written agreement for
sale with such person and register the said agreement for sale, under any law
for the time being in force.”

19.

Thus, as per Section 13, a promoter is prohibited from accepting a sum more

than ten percent of the cost of the apartment as an advance payment or application
fee without first entering into a written agreement for sale and the admitted fact that
the Respondent accepted amounts surpassing this limit prior to formalizing the
agreement constitutes a clear violation of the above statutory provision which is
intended to protect the interests of consumers. Therefore, the Respondent is also
liable for penalty in this regard under Section 61 of the Act, 2016.

20.

Therefore, Point II is answered in affirmative, and the Respondent is liable for

penalty under Section 61 for violation of Section 13(1) of the Act, 2016.

Point III
21.

The relief claimed by the Complainant is two-fold, one, the Complainant seeks

refund and second, the Complainant seeks appropriate action be taken against the
Respondent for violation of provisions of the Act, 2016.

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22.

In the counter of the Respondent dated 29.08.2024, the Respondent

vehemently asserts that the Complainant being in receipt of the amounts, cannot
raise any grievance before this Authority. To substantiate this, the Respondent filed
copies

of

the

cheques

bearing

cheque

No.002111

dated

30.08.2024

of

Rs.16,05,938/- (Rupees Sixteen Lakhs Five Thousand Nine Hundred and ThirtyEight Only), cheque No.002112 dated 30.09.2024 of Rs.16,05,938/- (Rupees Sixteen
Lakhs Five Thousand Nine Hundred and Thirty-Eight Only), and cheque No.002113
dated 30.10.2024 of Rs.16,54,603/- (Rupees Sixteen Lakhs Fifty-Four Thousand Six
Hundred and Three Only), drawn on Kotak Mahindra Bank, Hyderabad. This
Authority fails to understand how the Complainant will be in receipt of such amounts
on 29.08.2024 itself, when the cheques are dated 30.08.2024, 30.09.2024 and
30.10.2024.

23.

Without any valid proof of receipt of amounts by the Complainant, the

Respondent categorically submitted that the Complainant has received the amounts.
Upon verification by this Authority as to whether the Complainant received the
amounts on 30.08.2024 vide cheque No.002111 of Rs.16,05,938/- (Rupees Sixteen
Lakhs Five Thousand Nine Hundred and Thirty-Eight Only), the Complainant
submitted that the cheque was dishonored for insufficient funds, and he did not
receive any amounts.

24.

Furthermore, the Respondent was absent on the last date of hearing despite

being well acquainted that the matter was to be finally heard on the said day. The
Respondent also failed to provide any justification to substantiate their claims or to
refute the allegations made by the Complainant. Their non-appearance impedes the
proceedings and suggests a lack of diligence in addressing the seriousness of

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allegations made against them. Therefore, the Complainant is liable for full refund of
the amounts paid by him along with interest as per Rules, 2017.

25.

As regards, violations are concerned, this Authority in Paras 13 to 20 has

already concluded the violations committed on part of the Respondent for which he
is liable for penalty. Therefore, Point III is answered in affirmative, and the
Complainant is entitled to a full refund of Rs.33,84,200/- (Rupees Thirty-Three
Lakhs Eighty-Four Thousand and Two Hundred Only) along with interest as per
Rules, 2017.

Directions of the Authority:
26.

In accordance with the discussions made above, this Authority, vide its powers

under Sections 37 and 38, issues the following directions to the Respondent:
i.

For violation of Sections 3, 4 and 13(1), the Respondent is liable for
penalty under Sections 59, 60 and 61 respectively, therefore, the
Respondent is directed to pay penalty of Rs. 9,96,050/- (Rupees Nine
Lakhs Ninety-Six Thousand and Fifty Only) payable within 30 days in
favour of TGRERA FUND through a Demand Draft or online payment to
A/c No. 50100595798191, HDFC Bank, IFSC Code: HDFC0007036;

ii.

The Respondent is directed to refund the entire amount of Rs.33,84,200/(Rupees Thirty-Three Lakhs Eighty-Four Thousand and Two Hundred
Only) along with interest at the rate of 11.05% per annum (SBI MCLR of
9.05% + 2%) from the date of the agreement of sale (February 5th, 2022)
till the date of actual refund in accordance with Rule 15 of the Rules,
2017 within 30 (thirty) days;

iii.

The Respondent hereby is also directed to file an application for
registration of the Project “SHESHADRI’S SILVER OAK” before this

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Authority in accordance with Section 4 of the Act, 2016 and the Rules
thereunder with immediate effect and till the registration is granted by
this Authority, the Respondent shall, strictly, not advertise, market, book,
sell or offer for sale, or invite persons to purchase in any manner any
units of the project, SHESHADRI’S SILVER OAK.
iv.

Failing to comply with above said directions by the Respondent shall
attract penalty in accordance with Section 63 of the Act, 2016.

27.

As a result, the complaint is disposed of. No order as to costs.

Sd/Sri K. Srinivasa Rao,
Hon'ble Member,
TG RERA

Sd/Sri Laxmi Narayana Jannu,
Hon'ble Member,
TG RERA

Sd/Dr. N. Satyanarayana, IAS (Retd.),
Hon'ble Chairperson,
TG RERA

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