Order Complaint No. 177 of 2024

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
Complaint No. 177 of 2024
Dated: 19th July, 2025
Quorum:

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

Madikonda Mallesh
R/o-H. nO. 3-1-109/1, Mallapur Kpara
Hyderabad, Ranaga reddy, Telangana-500076

…Complainant

Versus
M/s Roy All Diamond Infra Developers
Rep. by Kethavath Nagesh Nayak
R/o-H. No. 17-1-391/ST/I/B/75
Singareni Colony, Saidabad,
Hyderabad-500059

…Respondent

The present matters filed by the Complainant hereinabove came up for hearing before
this Authority in the presence of Complainant, and none for Respondent despite service of
notice who was set ex-parte vide Order dated 21.01.2025, and upon hearing the arguments,
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 “Act”) read with Rule 34(1) of the
Telangana Real Estate (Regulation and Development) Rules, 2017 (hereinafter referred to as
the “Rules”) seeking appropriate action against the Respondent.
A. Brief facts of the case:
3.

The Complainant submitted that he is Madikonda Mallesh, S/o M. Narsimha, aged

about 40 years, presently working as a government employee and residing at H.No. 3-1109/1, Mallapur, Kapra, Hyderabad, Rangareddy District, Telangana – 500076. He stated that
one person by the name of Kethavath Nagesh Nayak, S/o Kethavath Bichya Nayak, aged
about 38 years, introduced himself as a venture owner and partner of M/s. Roy All Diamond
Infra Developers, having its office at Plot No.147, H.No. 3-2-357, SBH Colony-2,
Shatavahana Nagar, above Union Bank, L.B. Nagar, Hyderabad – 500074, with residential
address at H.No.17-1-391/ST/I/B/75, Singareni Colony, Saidabad, Hyderabad – 500059.

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The Complainant submitted that the said Nagesh Nayak claimed to be the absolute

owner and possessor of a vacant land being Plot No. 43, admeasuring 150 square yards
(equivalent to 125.42 sq. meters), situated in Survey Nos. 7/P, 8/P, 9/P, 10/P, 11/P, 8/1/P,
92/P of the venture titled “Kaasvi E-City,” located in Ferozguda village, Ibrahimpatnam
Revenue Mandal, Ranga Reddy District, Telangana. He offered the said plot for a total sale
consideration of Rs. 36,00,000/- (Rupees Thirty-Six Lakhs only) at the rate of Rs. 24,000/per square yard. The Complainant stated that he was shown the physical boundaries of the
property and believing the representations made, he agreed to purchase the same.
5.

The Complainant submitted that based on this representation, he paid a total advance

amount of Rs. 9,00,000/- (Rupees Nine Lakhs only) to Mr. Nagesh Nayak through various
transactions. The payment details are as follows:
1. Rs. 11,000/- on 08.03.2024
2. Rs. 89,000/- on 21.03.2024 via PhonePe
3. Rs. 5,00,000/- on 22.03.2024 via NEFT
4. Rs. 1,00,000/- on 29.03.2024 via PhonePe
5. Rs. 2,00,000/- on 30.03.2024 via NEFT

6.

The Complainant submitted that despite receiving this substantial advance, Mr.

Kethavath Nagesh Nayak did not show interest in executing a sale agreement. After several
reminders and personal visits to his office and residence, he finally executed a Sale
Agreement on 07.06.2024 in favour of the Complainant. As per the second covenant of the
said agreement, the Complainant was required to pay the balance amount of Rs. 27,00,000/(Rupees Twenty-Seven Lakhs only) within 40 days from the date of the agreement.
7.

The Complainant submitted that after this execution, Mr. Nagesh Nayak became

completely unresponsive and unreachable. He neither answered phone calls nor was available
at his office or residence. Upon a friend’s suggestion, the Complainant obtained an
Encumbrance Certificate (EC) for the said property and was shocked to discover that the plot
in question actually belongs to “SUVARNALAKSHMI DEVELOPERS,” represented by one
Bachireddy.
8.

The Complainant submitted that the sale agreement and brochure handed over to him

by Mr. Kethavath Nagesh Nayak falsely stated that the venture is approved under RERA
Registration No. P02400007405, which, upon verification, turned out to be incorrect. This
confirms that the Complainant was intentionally misled and cheated under the false pretence
of ownership by misusing the name of Suvarnalakshmi Developers.
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In light of the above, aggrieved by the actions of the Respondents, Complainant

sought for the following reliefs:
a. Requesting to kindly handover the plot as mentioned in the Agreement of Sale.
C. Observations of the Authority:
10.

Before embarking upon the substantive merits of the dispute, it is imperative to

address the procedural compliance with respect to service of notice. The record reflects that
statutory notice was duly issued by this Authority and served upon the Respondent via
registered post, with proof of delivery on file. Despite the service of such notice, the
Respondent failed to appear before this Authority, either in person or through an authorized
representative. In the interest of upholding the principles of natural justice, the Complainant
was directed to effect personal service of notice. A Memo evidencing personal service was
thereafter filed by the Complainant. Despite this, the Respondent’s authorized representative,
one J.N. Prakash Rao, appeared only once without filing any reply or subsequent appearance.
The Respondent's persistent non-cooperation and disregard for the Authority's directions led
to the matter being set ex parte vide order dated 21.01.2025. Consequently, the present
adjudication proceeds based on the unrebutted pleadings, documents, and submissions made
by the Complainant.
11.

The Complainant’s case is that the Respondent represented himself as the absolute

owner and lawful possessor of Plot No. 43, admeasuring 150 square yards, within a venture
styled “Kaasvi E-City.” The Respondent further claimed to be a partner in M/s Roy All
Diamond Infra Developers, and furnished a project brochure claiming RERA registration.
Based on these representations and promises, the Complainant was induced to invest a sum of
Rs. 9,00,000/- in instalments and entered into an Agreement of Sale dated 07.06.2024.
12.

The Agreement of Sale categorically records that the Respondent is “the sole and

absolute owner and peaceful possessor” of the said plot and affirms his “legal, subsisting,
valid and marketable title to sell” the same. It also prescribes that the balance consideration of
Rs. 27,00,000/- was to be paid within 40 days of execution, after which the Respondent was
obligated to register the sale deed in favour of the Complainant.

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However, upon subsequent verification, the Complainant discovered that the subject

land is not registered in the name of the Respondent. The Encumbrance Certificate, as well as
the RERA registration details, indicate that the property belongs to “Suvarna Lakshmi
Developers and Others,” and not the Respondent. The Complainant has not placed on record
any Memorandum of Understanding or Power of Attorney which would indicate that the
Respondent had any legal authority to deal with the said property.
14.

From a plain reading of the executed Agreement and conduct of the Respondent, it

becomes evident that the Respondent projected himself as the developer or owner of the
subject land. In this regard, the Authority relies upon Section 2(zk) of the Real Estate
(Regulation and Development) Act, 2016, which defines a “promoter” to include:
“..any other person who acts himself as a builder, coloniser, contractor,
developer, estate developer or by any other name or claims to be acting
as the holder of a power of attorney from the owner of the land on which
the building or apartment is constructed or plot is developed for sale..”
15.

The legal character of the Respondent squarely falls within this definition. By

representing himself as the developer and entering into an agreement for sale, collecting
substantial sums from the Complainant, and issuing a brochure with purported RERA
credentials, the Respondent acted as a promoter. All statutory responsibilities, obligations,
and liabilities applicable to a promoter under the RE(R&D) Act must necessarily attach to the
Respondent.
16.

The Complainant seeks registration and handover of the allotted plot. However, the

record establishes beyond doubt that the Respondent neither holds ownership nor has been
authorized by the actual landowners. There is no documentary evidence to support even a
facilitative role. On the contrary, the documents filed by the Complainant establish a case of
inducement by misrepresentation. In such circumstances, this Authority is unable to grant
relief for registration of the plot, as the Respondent has no legal title over the same.
17.

However, keeping in mind the object and purpose of the RE(R&D) Act to protect

allottees and impose accountability on promoters for misconduct this Authority holds that the
Complainant is entitled to refund of the entire amount paid, along with applicable interest.

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Since the Respondent is held to be a promoter under Section 2(zk), Section 11(4)(a)

of the RE(R&D) Act, 2016 applies, which provides:
“The promoter shall be responsible for all obligations, responsibilities
and functions under the provisions of this Act or the rules and
regulations made thereunder or to the allottees as per the agreement
for sale, or to the association of allottees, as the case may be, till the
conveyance of all the apartments, plots or buildings, as the case may
be, to the allottees, or the common areas to the association of allottees
or the competent authority, as the case may be
19.

Here, the Respondent has failed to fulfil his obligation under the agreement to transfer

the plot, thereby triggering Section 18(1)(b), which states:
1) If the promoter fails to complete or is unable to give possession of an
apartment, plot or building,—
(a) in accordance with the terms of the agreement for sale or, as the case may
be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of
suspension or revocation of the registration under this Act or for any other
reason,
he shall be liable on demand to the allottees, in case the allottee wishes to
withdraw from the project, without prejudice to any other remedy available, to
return the amount received by him in respect of that apartment, plot, building,
as the case may be, with interest at such rate as may be prescribed in this
behalf including compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to withdraw from the project,
he shall be paid, by the promoter, interest for every month of delay, till the
handing over of the possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any loss caused to
him due to defective title of the land, on which the project is being developed
or has been developed, in the manner as provided under this Act, and the
claim for compensation under this subsection shall not be barred by limitation
provided under any law for the time being in force.

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20.

The phrase “or for any other reason” in Section 18(1)(b) is broad and encompasses

situations such as the present, where the promoter lacks legal title and is incapable of
delivering possession. Thus, the Respondent’s failure to perform his obligation renders the
agreement void ab initio. The Complainant is entitled to refund with interest, even in the
absence of an express prayer for withdrawal.
21.

Moreover, the Respondent’s conduct also attracts the provisions of Section 12 of the

RE(R&D) Act. The brochure circulated by him falsely indicated a valid RERA registration
(P02400007405), when in fact the registration pertains to an entirely unrelated entity. By
inducing the Complainant to invest based on this misrepresentation, the Respondent has
caused pecuniary loss and thereby violated Section 12, which reads:
“Where any person makes an advance or a deposit on the basis of the information
contained in the notice, advertisement or prospectus, or on the basis of any model
apartment, plot or building, as the case may be, and sustains any loss or damage by
reason of any incorrect, false statement included therein, he shall be compensated by
the promoter in the manner as provided under this Act.”
22.

Therefore, this Authority finds that the Respondent has committed fraudulent

misrepresentation, thereby attracting Section 12 and penalty under Section 61 of RE(R&D)
Act. Further that The Respondent, having acted as a promoter, failed to hand over possession
and is consequently liable under Section 18 for refund with interest, therefore The
Respondent’s actions were in breach of Sections 11 and 18 of the RE(R&D) Act, and merit
regulatory scrutiny.

23.

This Authority also notes with grave concern the unauthorised and deceptive conduct

of the Respondent in marketing and transacting in a project over which he has no ownership
or authority. Accordingly, the Secretary, Telangana RERA, is directed to initiate a detailed
inquiry and issue a Show Cause Notice to the registered promoters of “Kaasvi E-City,”
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The RE(R&D) Act is a consumer welfare legislation and must be interpreted

purposively. The Respondent cannot be allowed to escape liability merely because he was not
a registered promoter or because the Complainant failed to verify the RERA number
beforehand. The fraud perpetuated by the Respondent cannot be ignored, and relief cannot be
denied on mere technicalities.
25.

Therefore, in exercise of the powers conferred under Sections 37 and 38 of the Real

Estate (Regulation and Development) Act, 2016, this Authority holds the Respondent liable
to refund the entire sum of Rs. 9,00,000/- received from the Complainant, along with interest
at the prescribed rate from the respective dates of receipt, till the date of realization.
26.

The rate of interest shall be calculated at the rate prescribed under the TG RE(R&D)

Rule 2017, i.e., MCLR of SBI plus two per cent, i.e.11% (9.0 + 2) per annum calculated from
the date of receipt of each payment until the date of repayment.
E. Directions of the Authority:
27.

In exercise of the powers conferred upon this Authority under Sections 37 and 38 of

the Real Estate (Regulation and Development) Act, 2016, and in furtherance of the findings
and conclusions drawn hereinabove, the following directions are hereby issued:
I.

The Respondent is held liable for contravention of Section 12 and Section 11(4)(a) of
the Real Estate (Regulation and Development) Act, 2016, and is accordingly directed
to pay a penalty of Rs. 4,54,682/-(Four Lakhs Fifty Four Thousands Six Hundred and
Eighty Two Rupees) under Section 61 of the Act. The said amount shall be remitted
within thirty (30) days from the date of receipt of this Order in favour of TG RERA
FUND through a Demand Draft or online payment to A/c No. 50100595798191,
HDFC Bank, IFSC Code: HDFC0007036; and

I.

The Respondent is further directed to refund the entire amount received from the
Complainant, as stipulated in the Agreement of Sale dated 07.06.2024, along with
interest at the rate of 11.00% per annum (being the prevailing SBI MCLR of 9.00%
plus 2%) calculated from the respective dates of each payment till the date of actual
realization. The said refund shall be effected within thirty (30) days from the date of
receipt of this Order.
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In light of the serious irregularities observed, the Secretary, Telangana RERA is
directed to initiate a detailed inquiry into the conduct of the Respondent, who has
purportedly engaged in marketing, advertising, selling, and collecting monies from
allottees while projecting himself as the absolute owner of the project titled “Kaasvi
E-City.” A Show Cause Notice shall be issued to the registered promoters of the said
project with a detailed written explanation clarifying:
a) Whether the Respondent was ever authorized, either expressly or impliedly, to
market, advertise, or transact in respect of the said project;
b) The basis, if any, on which such conduct by the Respondent was permitted or
overlooked; and
c) All supporting documents, communications, or agreements in relation to the
same.

28.

Failing to comply with the above-said directions by Respondent shall attract penalty

in accordance with Section 63 of the RE(R&D) Act, 2016.
29.

The Complaints are disposed of in lieu of the above directions. No order as to costs.

Sd/-

Sd/-

Sd/-

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

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

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

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