Order Complaint No. 1837 Of 2023

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.1837 OF 2023
20th August, 2024
Corum:

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

Sri Ramakrishna Rampally
…Complainant
Versus
M/s Nebula Aavaas
…Respondent
The present matter filed by the Complainant herein came up for final
hearing on 25.04.2024 before this Authority in the presence of Complainant
present in person and Counsel S.S.Prakash Reddy on behalf of the
Respondent and upon hearing the arguments of the parties, 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. Brief Facts on behalf of the complainant:
3.

Complainant a resident of Hyderabad booked a flat in an under-

construction project by Aavas Hyderabad with project registration number
P02200000223. The payment of Rs. 8,06,875 was made in instalments from
December 2016 to July 2020. However, unable to secure a home loan,
Ramkrishna discontinued payments, leading to the cancellation of his flat
booking in January 2021.

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4.

Subsequently, Ramkrishna made multiple refund requests via email,

messages, and phone calls. Aavas company processed a refund of Rs.
5,67,656 on 6th October 2023, after an 18-month delay. It is important to
note that the instalments were paid with GST, and all payment receipts have
been attached.
B. Relief(s) sought:
5. (a). Full refund of the total payment made from December 2016 to July 2020,
amounting to Rs. 8,06,875.
(b).

Consideration for the delayed refund process, which took place almost 18

months after the cancellation of the flat booking.
C. Respondent Reply:
6.

The Respondent denies each and every allegation made in the complaint

unless expressly admitted herein.
7.

The Respondent alleges that the complainants have approached the

forum with unclean hands, suppressing material facts, thereby invoking the
doctrine of suppressioveri and suggestiofalsi.
8.

Mr. Ramakrishna Rampally booked Flat/Unit No. CW3-401 on 20th

March 2017 with an initial payment of Rs.50,000/-. He agreed to pay 20% of
the initial down payment via 36 EMIs, with the remainder to be paid through
construction-linked payments or a bank loan. The complainant was paying
the EMIs by way of cheques and NEFT from March 2017, during which some
cheques were dishonored. Despite being informed of the dishonor, the
complainant continued to issue the same cheques for EMIs, which were again
dishonored with different endorsements. A notice regarding this was issued to
the complainant on 10.08.2018, which the complainant acknowledged.
However, the complainant neither replied nor paid the EMI. The last notice
and final reminder were issued to the complainant on 06.01.2019 through
RPAD post, informing about the dishonored cheques and unpaid EMI. The
complainant received and acknowledged this notice but neither paid the
amounts nor responded to it.

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9.

The company issued a cancellation notice dated 21.01.2022 through

RPAD regarding the concerned unit. Despite receiving this cancellation notice,
the complainant did not respond. Under these circumstances, the company
refunded an amount of Rs. 5,67,656/- through NEFT on 06.10.2023 to the
complainant. The booking was cancelled due to non-payment of dues as per
the construction-linked payment schedule.
10.

The complainant has lodged a false complaint by making baseless

allegations against the respondent while suppressing the true and material
facts, including the dishonour of cheques and non-payment of amounts. The
complainant has no locus standi to represent, and thus the complaint is not
maintainable.
11.

Furthermore, the complainant is seeking compensation from the

respondent despite failing to pay the amounts as per the construction-linked
payment schedule. Without fulfilling their part of the obligation, the
complainant's claim for compensation from the respondent is unfair and
unjust. Therefore, the complainant is not entitled to any relief from this
Hon’ble forum.
D. Written Arguments filed by the Complainant:
12.

The Complainant booked Flat/Unit No. CW3-401 in the Respondent's

apartment complex on March 20, 2017, by paying a token advance of Rs. 50,000/-.
The Complainant agreed to pay 20% of the total sale consideration through 36
equated monthly installments (EMIs), with the remaining 80% to be paid as per the
construction-linked payment scheme or through a bank loan.

13.

It is essential to note that the Complainant has never denied making

any payments, as stated in the counter filed. The Complainant’s defense is
that the cheques he deposited bounced, and when the Respondent reminded
him about these cheques, he promised to deposit the amount as soon as
possible, as he was experiencing financial difficulties. This explanation by the
Complainant should be taken into consideration when evaluating the case, as
it provides context for the payment issues in question.

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14.

The Complainant faced financial difficulties after losing his job during

the COVID-19 pandemic in August 2020, which prevented him from obtaining
a home loan. Due to these unforeseen circumstances, the Complainant’s
financial situation has changed, making it challenging for him to meet the
remaining payment obligations.
15.

The Respondent made a payment reminder call every month to the

Complainant. However, due to financial hardship, the Complainant, unable to
pay, requested the Respondent to cancel the flat in November 2020. The
Respondent did not acknowledge this request and continued sending payment
reminders. Finally, after 13 months, the Respondent canceled the flat in
January 2022.
16.

In light of these circumstances, the Complainant has requested the

Respondent to consider refunding the amount paid in installments for the
registration of the flat, which totals Rs. 8,06,875/-.
17.

The complainants’ request highlights the importance of considering the

individual circumstances when dealing with financial agreements. Unforeseen
events can significantly impact one’s ability to fulfill financial commitments,
and it is crucial to approach such situation with empathy and understanding.
18.

In conclusion, the complainant’s request to revert back the amount

paid for the flat reflects their genuine financial hardship. The Respondent
should carefully assess the situation and work towards a fair and equitable
outcome for both parties involved.
19.

It is submitted that Section 18(1)(b) of the Real Estate (Regulation and

Development)

Act,

2016

(RE(R&D)

Act) clearly stipulates

that due

to

the

discontinuance of a developer's business on account of suspension or revocation of
the registration under this Act, or for any other reason, the developer shall be liable,
on demand, to the allottees. In such a case, if the allottee wishes to withdraw from
the project, the developer is required to return the amount received in respect of that
apartment, plot, or building, as the case may be, with interest at such rate as may be
prescribed, including compensation in the manner provided under this Act. Provided,

however, that where an allottee does not intend to withdraw from the project,

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the promoter shall pay interest for every month of delay, until the handing
over of possession, at such rate as may be prescribed.
20.

It is most important to note that developers registered under the RERA are

bound to return the amount collected at the time of purchase or booking in case of
cancellation within 45 days of cancellation. However, in this case, it has exceeded the
prescribed time as per the Act. Additionally, the Haryana Real Estate Regulatory
Authority has directed a Gurugram-based builder to refund the amount paid to a
homebuyer who

defaulted

in

making

timely

payments,

after forfeiting

the

predetermined earnest money.A three-member bench comprising Sanjeev Kumar

Arora, Ashok Sangwan, and Vijay Kumar Goyal stated that while canceling
the flat buyer's unit on account of default, it was an obligation of M/s Martial
Buildcon Private Ltd. to return the paid amount after forfeiting the earnest
money. The Authority relied on Maula Bux v. Union of India (1970) and
Sirdar KB. Ram Chandra Raj Urs v. Sarah C. Urs (2015), wherein it was
held that forfeiture of the amount in case of breach of contract must be
reasonable. If the forfeiture is in the nature of a penalty, then the provisions
of Section 74 of the Indian Contract Act, 1872, are applicable, and the party
forfeiting the amount must prove actual damages."After cancellation of
allotment, the unit remains with the builder; as such, there is hardly any
actual damage."
21.

In accordance with this complaint, it may be noted that as per the RERA Act,

the refund shall be paid within 45 days. However, the Respondent has not adhered to
this requirement. The Complainant has been regularly following up with the
Respondent via phone calls, emails, and personal visits to the Respondent’s office to
recover his money. Despite these efforts, the Respondent took 20 months to refund
only a partial amount.In view of the foregoing, I earnestly appeal to this

esteemed authority to consider our request and direct the Respondent to
refund the entire balance amount of Rs. 3,29,000/-, along with applicable
interest. Additionally, we seek compensation of Rs. 5,00,000/- for the damage
and mental agony caused to the Complainant.
F. Findings on the relief sought by the complainant:
F:1. Direct the respondent to refund the paid up amount along with interest

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22. The Complainant submitted that on 20.03.2017, he booked a flat with the
Respondent and paid a token amount of Rs.50,000/-. An agreement was
executed for an initial down payment of 20% through a structured plan of 36
equated monthly installments. The remaining 80% of the total sale
consideration was to be paid according to the work schedule. The
Complainant acknowledged that the cheques issued by him were dishonored,
attributing this to job loss during the COVID-19 pandemic and a lack of
funds, which prevented him from obtaining a loan and continuing the
purchase process. Consequently, the Complainant submitted a cancellation
request in November 2020, which the Respondent did not acknowledge,
continuing instead to send payment reminders. The cancellation was finally
executed

after

13

months,

in

January

2022.

Post-cancellation,

the

Complainant requested a refund of the amount of Rs.8, 06,875/-, but the
Respondent refunded only Rs.5,67,675/- via NEFT on 06.10.2023. The
Complainant contended that the remaining Rs.3, 92,000/- was forfeited in
gross violation of the rules, terms, and conditions, and he is entitled to a
refund of the entire amount with interest and compensation.
23. The Respondent's counsel submitted that as per the terms of the booking
form duly signed and submitted by the Complainant, the cancellation policy
was clearly communicated. The policy stipulates that timely payment of
installments is essential, and in the event of a breach, the allotment can be
canceled at the developer's discretion with certain deductions: Rs.25,000/- for
1BHK and Rs.50,000/- for 2BHK, primarily towards administrative charges.
The management reserves the right to impose additional charges based on
direct and indirect expenses related to the sale/project. It is also stated that
the management would not be responsible for refunding any collected interest
on late payments and would deduct any unpaid interest on delayed payments.
The balance amount would be refundable without interest after deducting
administrative expenses and only after the same apartment is allotted to
another intending allottee. The developer may condone delays by charging
penal interest at 1.5% per month for up to three months. The company
reserves the right to cancel bookings with a default of three payments and
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release the unit for resale. Hence, the cancellation was executed per the
agreed terms and conditions signed by the Complainant during the booking
process.
24. The Respondent further relied on the condition that any amount can be
deducted for breach of contract, with the cancellation at the developer's
discretion. The Complainant did not dispute the delay in payments. The
Complainant approached the Respondent for cancellation in November 2020,
which was acknowledged by the Respondent two years later. However, no
evidence was provided by the Complainant to substantiate the cancellation
request in November 2020. The Respondent claimed that the Complainant
defaulted on payments until 10.09.2021, calculating the total amount due till
that date, and that the Complainant owed Rs.14,30,882 as of the cancellation
date. The applicable cancellation charges were Rs.3,03,943 (10% of the total
consideration value of Rs.30,39,430).
25. For a proper appreciation of the submissions made by the parties, the
admitted facts are as follows: The Complainant applied for an apartment in
the concerned project, and an allotment letter was subsequently issued to
him. It is also admitted that the Complainant sought the cancellation of the
unit and a refund of the entire amount deposited by him. The Respondent
later terminated the booking of the unit in favor of the Complainant. It is
further admitted that the Complainant deposited Rs.8,06,875/- out of the
total sale consideration of Rs.30,39,430/- for the allotted unit.
26. Upon careful examination of the facts, the Authority is of the opinion that
no formal agreement of sale was executed between the parties. As such, the
Respondent cannot rely on the cancellation policies or terms that are not
explicitly mentioned in the allotment letter, which has been placed before this
Authority. The cancellation policy relied upon by the Respondent appears to
be based on a booking agreement that has not been presented to this
Authority. Therefore, the Respondent cannot invoke a cancellation policy
without providing substantive evidence. Moreover, the Authority finds the
Respondent in violation of collecting more than 20% of the total sale
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consideration without entering into a formal agreement of sale and further
deducting 10% from the total sale consideration.
27. It is noted that the Respondent cannot forfeit amount at its discretion.
The Telangana Real Estate (Regulation and Development) Rules, 2017,
Annexure 38, clearly stipulates that only the booking amount may be
deducted by the promoter in cases where there is no fault on the part of the
promoter. Hence, if the promoter is of the view that any amount can be
deducted at its discretion, such an act shall be considered a violation by this
Authority.
28. In light of the above, there is no basis for the Respondent's contention
regarding the forfeiture of 10% of the total sale consideration amount paid by
the Complainant. However, the Authority notes that there is no fault on the
part of the promoter in the cancellation sought by the Complainant and
therefore allows the promoter to deduct the booking amount as per the TG
RE(R&D) Rules, Annexure 38.
30.It is therefore held that the Complainant is entitled to a refund of the
amount paid by him, subject to the forfeiture of the booking amount, i.e.,
Rs.50,000/-, paid by him to the Respondent.
31. Furthermore, the Complainant has sought interest on the substantial
amount that was refunded after 1.5 years, with a deduction of 10% from the
total sale consideration. As per Rule 9.3(ii) of the TG RE(R&D) Rules, the
promoter is obligated to repay the amount within a period of ninety days after
the termination or the date on which the promoter is able to resell the
apartment. Given that the cancellation notice was issued to the Complainant
on 21.01.2022, the Respondent should have repaid the amount by
21.04.2022; however, the Respondent only refunded the amount on
06.10.2023.

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32. In the absence of evidence from the Complainant substantiating that he
approached the Respondent for cancellation in November 2020, the Authority
considers the cancellation letter dated 21.01.2022 issued by the Respondent
to the Complainant. Furthermore, the Authority observes that the promoter
utilized the amount paid by the Complainant for the development of the
concerned project for approximately 2.5 years, retaining the total amount paid
by the Complainant and returning only Rs.5,67,675/- on 06.10.2023.
Consequently, the promoter deprived the allottee of the amount for 1.5 years
without any justification.
33. In view of the above observations, the Authority is of the opinion that the
forfeiture of an amount up to 10% of the total sale consideration is
unreasonable, and depriving the allottee of the amount for approximately 1.5
years is not acceptable. Therefore, considering the peculiar circumstances of
the case, the Respondent is directed to pay interest to the allottee on the
refunded amount of Rs.5,67,675/- from 21.04.2022 to 06.10.2023 and refund
the remaining balance amount along with interest from the due date of
21.04.2022 after deducting the booking amount. The interest at 2% above the
State Bank of India’s highest marginal cost lending rate, which as of
22.07.2024 is 8.85%, totaling 10.85% per annum, shall be payable by the
promoter/respondent to the complainant.
34. Additionally, the Authority also notes that the Respondent collected more
than 10% of the total sale consideration without entering into an agreement of
sale, which constitutes a gross violation of Section 13 of the RE(R&D) Act,
which prohibits a promoter from accepting a sum exceeding 10% of the cost of
the apartment as an advance or application fee from the allottee without
entering into a written agreement for sale. The Respondent's failure to adhere
to the provisions of the RE(R&D) Act and the demand for more than ten
percent of the total plot amount is a violation of the law.33. We

therefore

proceed to pass the following order:
Directions of the Authority:

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35.

In light of the findings of the Authority as recorded above, the following

directions under section 37 of the RE(R&D) Act to ensure compliance with
obligations imposed upon the under the RE(R&D) Act are issued:
1. The Respondent is directed to pay interest to the complainant on the
refunded amount of Rs.5,67,675/- from 21.04.2022 to 06.10.2023 and
refund the remaining balance amount along with interest from the due
date of 21.04.2022 after deducting the booking amount. The interest at
2% above the State Bank of India’s highest marginal cost lending rate,
which as of 22.07.2024 is 8.85%, totaling 10.85% per annum.
2. Parties to bear their own costs.
3. For contravening Section 13 of the RE(R&D) Act, the Authority,
exercising its powers under Section 61 of the RE(R&D) Act, imposes a
penalty of Rs. 2,00,000/-. This penalty is imposed for collecting a sum
of more than 10% of the cost of the concerned apartment without
entering into a written agreement for sale. The amount is payable in
favor of TGRERA FUND through a Demand Draft or online payment to
A/c No. 50100595798191, HDFC Bank, IFSC Code: HDFC0007036,
within 30 days of receipt of this Order by the Respondents/Promoter.
4. The parties are hereby informed that failure to comply with this Order
shall attract Section 63 of the Act.
5. If aggrieved by this Order, the parties may approach the TG Real Estate
Appellate Tribunal as per Section 44 of the Act, 2016.

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

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

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

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