Order Complaint No. 1205 Of 2023

BEFORE TELANGANA STATE REAL ESTATE REGULATORY
AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.1205 OF 2023
03rd January, 2024
Corum:

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

Mr. Venkanna Gattu
Mrs. Rajini Gattu

…Complainant

Versus
M/s Krishnaiah Projects Pvt Ltd
…Respondent
The present matter filed by the Complainant herein came up for hearing
on 27.12.2023 before this Authority in the presence of Complainant present
in person along with Counsel Shyamprasad, Counsel Chakarvathi Guntla on
behalf of the Respondent and upon hearing the arguments of the party, this
Authority passes the following ORDER:
2.

The present Complaint has been filed under Section 31 of the Real

Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the
“RE(R&D) Act”) read with Rule 34(1) of the Telangana Real Estate (Regulation
and Development) Rules, 2017 (hereinafter referred to as the “Rules”) seeking
directions from this Authority to take action against the Respondent.
A. Facts of the Case as Stated in the Complaint Filed by the
Complainant:
3.

The complainants were introduced to the project "Bollineni Boin," an

under-construction site. They engaged with the sales team, scrutinized the
title deeds, and confirmed the project's registration certificate granted by TS
RERA, bearing registration number P0240000967. The promoters of Bollineni
Boin expressed willingness to sell any selected flat to the complainants.
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Subsequently, the complainants independently verified Bollineni Boin's RERA
application online, including the Promoter Project Details page on the TS
RERA website. The promoters updated their RERA account on 15th November
2022, aligning with clause (b) of sub-section (1) under section 11 of the
RE(R&D) Act. As of the latest update in February 2023, none of the flats were
booked. Convinced of the project's integrity, the complainants expressed
interest in purchasing Flat A-2001, spanning 1840 sq. feet, with common
area rights and a single covered car parking. The promoters assured the
complainants that Flat A-2001 was free from encumbrances and offered it for
sale at Rs. 1,78,83,633/-.
4.

Having been convinced, the complainants made an initial payment of

Rs. 10, 00,000/- as a token advance on 6th Feb 2023, followed by an
additional payment of Rs. 8,00,000/- on 15th Feb 2023. The complainants
awaited the issuance of the allotment letter and agreement for sale. Upon
revisiting the Promoter's RERA account, the system responded that the sale
had not yet commenced, and no allotment had been made to the customer.
Nevertheless, on 25th February 2023, the complainants entered into a sale
agreement with the promoter for Flat A-2001, concurrently signing a
Construction Agreement and a Tripartite Agreement with the Promoter and
State Bank of India for a housing bank loan.
5.

As per the Construction Agreement, possession was to be delivered by

the end of March 2023, with a final delivery deadline of September 2023,
accounting for an agreed-upon grace period. The complainants, responding to
payment demands from the Promoter, paid Rs. 15,00,000/- on 24th March
2023 and Rs. 41,00,000/- on 10th April 2023. The cumulative payment made
to the Promoter amounted to Rs. 74, 00,000/-. The balance payment was
anticipated to be covered by the housing loan from SBI, which was sanctioned
in principle but awaited disbursement.
6.

On 20th July 2023, the complainants received a demand for payment

amounting to Rs. 1, 04, 83,632/- from the Promoters. Attempting to process
the housing loan, the complainants discovered that the subject property, A2001, had already been hypothecated to HDFC Limited in the name of two
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borrowers since 7th November 2022, predating the complainants' agreement
of sale. Despite multiple attempts to address this issue with the Respondent,
no resolution has been provided.

B. Relief(s) Sought:
7.
i.

The complainant have sought following relief(s)
Issue an order directing the Respondents to complete all necessary
procedures for executing the Agreement of Sale dated 25th February
2023 for Flat A-2001 at the Project, cancel any registration with third
parties, and declare any third-party rights on the flat as null and voidab-initio. Cancel the existing hypothecation with HDFC Ltd or any other
financial institutions, enabling the complainants to process the bank
loan

on

the

subject

property,

and

deliver

possession

without

encumbrances or penalties.
ii.

Pass

orders

directing

fraudulent,

unfair,

Respondent

in

the

and

cheating

appropriate

deceptive

authority

practices

prospective

buyers

to

investigate

committed
and

by

the

impose

legal

50,00,000/-

as

consequences.
iii.

Pass

orders

for

the

Respondent

to

pay

Rs.

compensation, along with applicable interest from the date of the
agreement of sale, for causing mental anguish and disrupting the family
vacation plans of the complainants and their overseas-residing children.
iv.

Pass orders for the revocation of the registration granted to the
promoter under section 5 of the RERA Act, citing grounds under clause
(a) of subsection (1) and clause (d) of subsection (1) under section 7.

C. Interim Order:
8.
i.

The complainants request interim orders:
Stay all transactions across the project, maintaining the status quo
until TSRERA concludes its inquiry into all sale transactions and until
the promoter achieves compliance with the Act.

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ii.

Freeze the Respondent's bank accounts to the maximum extent possible
for penalty until the case is disposed of or deposit an amount equivalent
to the maximum possible penalty before filing their response to this
authority.

iii.

Stop all registrations to prevent double bookings and subsequent
disputes.

iv.

Issue any other orders deemed fit and proper by this Hon’ble Authority
in the circumstances of the case, in the best interest of justice, and to
protect the interests of allottees.

D. Reply by the Respondent:
9.

The contentions presented by the Complainant are inaccurate and are

hereby denied. No statement, allegation, contention, or submission contained
in the complaint should be construed as admitted by the complainant, except
to the extent specifically admitted by the Respondent in this counter.
10.

At the outset, apart from matters of record and specific admissions of

truth, every allegation, submission, or averment made by the complainant is
categorically denied by the Respondent. Each claim is refuted as if expressly
detailed and traversed in this response.
11.

The Respondent, acting pursuant to the Joint Development Agreement

via document no. 8049 of 2016 (registered on 22.06.2016) and document no.
8759 of 2019 (registered on 16.05.2019), has undertaken the development of
the Residential Area known as "Bollineni Boin," a project comprising 5 blocks.
The GHMC approved the construction of 5 Blocks via old permit no:
1/C20/09164/2019

dated:

14.06.2019,

and

new

permit

no.

1/C20/00435/2022 dated: 14.09.2022. The construction completion date, as
per the new permit, is 13.06.2025.
12.

The Respondent obtained a TS RERA registration vide: P02400000967

dated: 27.06.2019, for project "Bolelineni Boin" situated at Serlingampally,
Ranga Reddy District. The valid TS RERA registration certificate is effective
until 13.06.2025.
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13.

The complainant entered into an unregistered Agreement of Sale dated

25.02.2023 for the purchase of Apartment A-2001, covering 1840 sq. yards,
with the Respondent, for a total sale consideration of Rs.1,82,32,267/-. The
Respondent acknowledges receiving Rs. 74, 00,000/-.
14.

The complainant received a demand note for the balance sale

consideration of Rs.1, 04, 83,632/- on 20.07.2023. The complainant, having
mandated their banker for a home loan facility and executed a Tripartite
Agreement, faced a loan disbursement issue due to the unit A-2001 being
hypothecated to HDFC Bank.
15.

The

Respondent

disputes

the

allegation,

claiming

that

the

hypothecation has been rectified, and the mistake in records has been
corrected. The Respondent emphasizes that, considering the COVID force
majeure timelines permitted by TS RERA, possession can be handed over
until 30th November 2023.
16.

The

Respondent

maintains

that

the

complainant

prematurely

approached TS RERA for relief, bypassing written notice to the Respondent.
The Respondent asserts that the allegations of systematically siphoning
money are baseless and refuted. The Respondent clarifies that the mistake in
records has been rectified.
17.

Responding to the legal aspects, the Respondent cites Section 10 of the

Indian Contract Act, 1872, and Section 22, stating that a contract is not
voidable merely due to a mistake of fact by one party.
18.

The Respondent contends that the allegations could result from

misunderstandings or misinterpretations. Contextual factors, personal biases,
or prejudices influencing perceptions should be considered before passing
judgment.
19.

To disprove the allegations, the Respondent offers testimonials from

other purchasers, highlighting its commitment to honesty and hard work.
20.

Regarding the reliefs sought, the Respondent admits to the first relief

and is willing to complete the registration of the sale deed upon receiving the
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balance amount. All other reliefs sought are deemed untenable, as the
Respondent does not violate the TS RERA Act and Rules. The Respondent
argues that these reliefs could cause irreparable loss to the developer and
other purchasers already residing in the Residential block.

E. Hearing Conducted:
21.

The hearing convened on 27.12.2023, during which the Complainant

reiterated the contentions previously submitted in the original complaint. The
Complainant highlighted that despite approaching the Respondent regarding
the issue, no concrete solution was presented, compelling them to lodge a
formal

complaint.

Additionally,

the

Complainant

asserted

that

the

Respondent's actions contravened various provisions of the RERA Act, raising
concerns about potential misuse of the complainant’s unit. The Complainant
appealed to this Authority for directives instructing the Respondent to
complete all necessary procedures for executing the Sale Deed, declaring any
existing

agreements

investigation

into

with
the

third

Builder's

parties

null

construction

and

void,

initiating

an

activities,

imposing

a

compensation penalty of Rs. 50 lakhs, and revoking the RERA registration.
22.

Contrarily, the Respondent presented to this Authority that the

hypothecation on the concerned property was removed by the Respondent
Company well before the execution of the sale agreement with the
Complainant. The discrepancies arose due to the merger transaction of HDFC
Investment and HDFC Holdings have been amalgamated with and into HDFC
limited, and the Respondent clarified the matter with HDFC Bank, obtaining a
clearance letter affirming that Unit 2001 in the project is free from any
hypothecation, with no objection to releasing its charge. The said letter, dated
26.11.2023, bearing reference H/0P/L/679497951, was submitted and
recorded by this Authority.
23.

The Respondent emphasized that the error originated on the part of the

bank, asserting that they did not sell the unit to any third party but rather
hypothecated it. The Respondent expressed their willingness to execute the
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sale deed, contingent upon the Complainant fulfilling the remaining balance
of the sale consideration. It was clarified that the Complainant had impeded
the release of funds from the bank.
24.

In response to queries from the Authority, the Complainant affirmed

their willingness to register the said unit in their name. The Authority duly
recorded this consent during the proceedings.

F. Observations of the Authority:
25.

In its written reply submission, the Respondent asserted its intention to

register the unit identified as A2001 in the name of the complainant. This
willingness was reiterated during the hearing, where the Respondent also
expressed a commitment to execute a sale deed for the aforementioned unit. It
was further clarified that, although the hypothecation of the unit had been
settled prior to June 2023, complications arose during the bank merger,
leading to an inaccurate indication of pending hypothecation. However, this
issue was subsequently addressed and resolved by October, as evidenced by
the issuance of a non-objection letter from the bank bearing reference
H/OP/679497951 dated 26.11.2023, which was presented before this
Authority.
26.

Consequently, the Authority holds the opinion that, given the clearance

of hypothecation and the issuance of a no-objection letter by the bank,
coupled with the Respondent's expressed willingness to register the unit in
question in the complainant's name with the complainant's explicit consent,
the prayer in question is deemed resolved.
27.

Authority observes that the complainant is seeking compensation in

the present relief. It is essential to understand that the Act clearly
distinguishes between interest and compensation, providing them as distinct
entitlements available to allottees. This Authority does not possess the
jurisdiction or authority to grant compensation as specifically sought by the
complainant. Also, it is pertinent to note that as per RE(R&D) Rules, Rule 38
Annexure, the agreement of sale, term 1.10, clearly states that the Promoter
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shall pay all the outgoings, including mortgage loan and interest on
mortgages, before transferring physical possession of the apartment to the
allottees. However, since the parties have only entered into an agreement of
sale and have not executed a sale deed, the Respondent is only liable in case
he did not pay the mortgage amount while executing the sale deed or handing
over possession of the unit.
28.

The observation and findings of this Authority so far as the relief (d) in

the complaint filed by the complainant is concerned, though sub section 1 of
section 7 of the Act encourages revocation of Registration in certain
circumstances and also considering the deviations( with respect to Functions
and duties of the Promoter) stated by the complainant, this authority keeping
in view the interest of larger allottees in the entire project, is not inclined
towards the said revocation as the primary object is to protect the Rights and
Interests of the allottees with stipulated timelines. Hence, the Revocation may
be inappropriate at this stage, the relief sought for at this juncture does not
arise.
29.

So far as the Interim reliefs sought for by the complainant is concerned,

in view of the order passed by this Authority the issue of interim relief does
not arise.
30.

This Authority observed that the Respondent has failed to comply with

section 11(1) of the RE(R&D) Act, which dictates to upload quarterly update.
Respondent shall adhere to upload project status reports on the RERA
website on quarterly basis as required under section 11.
G. Direction of the Authority:
31.

In light of the aforementioned observations and discussions, this

Hon’ble Authority hereby issues the following orders and directives pursuant
to Sections 37 and 38 of the RE(R&D) Act.
i.

The Complainant is hereby directed to remit the remaining balance
amount to the Respondent for the execution of the sale deed. This
transaction must be completed within 45 days from the date of receipt
of this order.
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ii.

The Respondent is instructed to proceed with the execution of the
Agreement of Sale and to register Unit A-2001 in the concerned project
immediately in the name of the complainant, following the receipt of the
balance sale consideration amount.

iii.

The Respondent is specifically directed to diligently upload project
status reports on the RERA website on a quarterly basis, as mandated
by Section 11(1) of the Real Estate (Regulation and Development) Act of
2016. This obligation must be fulfilled within 10 days from the date of
receipt of this order.

32.

In lieu of above findings and directions, the present complaint stands

disposed off. The parties shall bear their own cost. The parties are hereby
informed that failure to comply with this Order shall attract section 63 of the
Act.
33.

If aggrieved by this Order, the parties may approach the TS Real Estate

Appellate Tribunal (vide G.O.Ms.No.8, Dt.11-01-2018, the Telangana State
Value Added Tax Appellate Tribunal has been designated as TS Real Estate
Appellate Tribunal to manage the affairs under the Act till the regular
Tribunal is established) within 60 days from the date of receipt of this Order.

Sd/Sri. K. Srinivas Rao,
Hon’ble Member
TS RERA

Sd/Sri. Laxmi NaryanaJannu,
Hon’ble Member
TS RERA

Sd/-

Dr. N. Satyanarayana, IAS (Retd.),
Hon’ble Chairperson
TS RERA

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