Order Complaint No. 38 of 2025

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
Complaint No. 38 of 2025
31st March, 2026
Quorum:

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

Smt. Adi Vanaja
W/o Dr. Adi Mohan Rao, R/o. Villa No.8, Aditya Impress Park
Shaikpet Nallah, Toli Chowki, Hyderabad-500 081

… Complainant
Versus
1. M/s. Ayyanna Infra Private Limited
Plot. No.350, Street No.8, Kakatiya Hills,
Madhapur, Hyderabad-500 081

2. Sri. Puralashetty Sreedhar
Managing Director of Respondent No.1 Villa No.9,
Phase-I, Kamalapuri Colony Srinagar Colony, Hyderabad

3. Smt. G. Suma, W/o GVR Surendra,
R/o. 10830, Barbadosisle Dr.Tampa
FL 33467,8368, USA, presently staying in Hyderabad

4. Smt. Vaniambadi Srinivasan Hemalatha
R/01708, Pegausus B Wing, Meenakshi Sky
Lounge Hitex Road, Kondapur, Hyderabad-500 084

5. Sri. Kaza Kalyan Chakravarthy
R/o. Flat. No.201, Sai Kiran Deluxe Apartments,
Srinagar Colony, Hyderabad-500 073

6. Smt. Vijaya Sri Gajarapu,
R/o. 3-6-594/402, Sarada Gopalan Apartments,
Street. No. 8, Himayat Nagar, Hyderabad-500 029

7. Sri. Kedari Suryanarayana,
S/o K. Satyanarayana,
R/o. House. No. 1-8-425, Chikkadpally, Hyderabad-500020

8. Smt. K. Laxmi,
W/o K. Ramesh Kumar,
R/o. H.No. 1-8-425, Chikkadpally, Hyderabad-500020

9. Sri. Chittineni Venkata Srinivasa Rao,
S/o Chitneni Koteshwar Rao,
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10. State Bank of India,
SME Branch, Yellareddyguda, Srinagar Colony,
Khairatabad, Hyderabad, Telangana-500073

… Respondents
The present matter filed by the Complainant herein came up for hearing before this
Authority in the presence of A. Rajendra Prasad, Counsel for the Complainant, T. Niharika,
Counsel for Respondent No. 1 to 9, B. Sathish, Counsel for Respondent No. 10 and after
hearing the submission made by both the parties, 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 “RE (R&D) Act”)
read with Rule 34(1) of the Telangana Real Estate (Regulation and Development) Rules, 2017
(hereinafter referred to as the “TG RE(R&D) Rules”) seeking appropriate relief(s) against the
Respondents.
A. Brief facts of the Case:
3.

The Complainant submitted that she came into contact with Respondent No. 2 through

her brother and relatives around 15.08.2020, and that Respondent No. 2 represented that he and
his wife were owners of Respondent No. 1 Company, M/s. Ayyanna Infra Private Limited,
which was engaged in real estate and construction activities in Hyderabad, and showed her
brochures of buildings claimed to be constructed by his company.
4.

The Complainant submitted that Respondent No. 2 informed her that Respondent No. 1

had entered into a Development Agreement-cum-General Power of Attorney with landowners
over 2,500 sq. yds. at Guttala Begumpet, and that a 12-storied apartment building named
"Ayyanna Prima" was proposed, which induced her to show interest in purchasing a flat in the
said project. Upon the invitation of Respondent No. 2, she visited his residence on 30.08.2020,
where he assured her that the construction of “Ayyanna Prima” (2 cellars + 1 stilt + 12 upper
floors) would be completed within two years and that work would commence shortly, and
further represented that Respondent No. 1 was a family-owned company in which he was the
final decision-maker.
5.

The Complainant submitted that Respondent No. 2 told her that the application for

building permission had been filed with GHMC and that permission was expected soon, and
citing heavy demand in the area, induced her to take a quick decision, leading her to book Flat
No. 801 on the 8th floor admeasuring about 4,500 sq. ft and further the Respondent No. 2
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The Respondent No. 2, taking advantage of being a distant relative, induced her to pay

further amounts by stating that construction had commenced and required immediate funds,
due to which she paid Rs. 1,00,00,000/- on 08.09.2020 (Rs. 50,00,000/- in cash and Rs.
50,00,000/- through RTGS). The Respondent No. 2 continued to induce her to make further
payments on the pretext of construction progress, due to which she paid Rs. 75,00,000/between 09.10.2020 and 21.11.2020, thereby making a total payment of Rs. 2,00,00,000/- by
the end of November 2020, and that Respondent No. 1 later issued a payment statement
reflecting total payments of Rs. 3,45,00,000/- up to 10.01.2023, confirming that Rs.
2,00,00,000/- had indeed been paid by 21.11.2020.
7.

The Complainant submitted that upon repeated requests from her for execution of the

Agreement of Sale, Respondent No. 2 called her to Hyderabad on 30.01.2021 and handed over
an already-signed Agreement of Sale showing only Rs. 1,00,00,000/- as advance payment, and
when she objected, he assured her that a revised agreement reflecting actual payments would
be prepared for registration shortly. As Respondent No. 1 had issued receipts for all payments
and having no option after paying huge amounts, she signed the Agreement of Sale, although
at that time Respondent No. 1 did not possess any Supplementary Development Agreement
with landowners conferring exclusive authority to sell Flat No. 801, nor had GHMC granted
construction permission as on the date of the Agreement.
8.

The Respondent No. 1 had executed Supplementary Development Agreements with

only two out of seven landowners, and that the Supplementary Agreements allocating Flat No.
801 to Respondent No. 1’s share were executed only on 18.09.2021, much after the Agreement
of Sale dated 30.01.2021, and that without the execution of Supplementary Agreements by all
landowners, Respondent No. 1 was not legally entitled to sell Flat No. 801; yet Respondent
No. 2 deliberately concealed these material facts and induced her to pay huge sums.
9.

The Agreement of Sale clearly shows that Respondent No. 1 Company was constructing

a multi-storied residential building (2 Cellars + 1 Stilt + 12 Upper Floors) under the name
“AYYANNA PRIMA” on plots No. 335, 336, 337, 360 (Phase-I), 360 (Part-II) & 361 in Sy.
No. 33, 34/P, 35/P, 36, 37, 38 & 39 at Ravindra Co-Operative Housing Society Limited, Guttala

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The Complainant submitted that on the same day, Respondent No. 2 presented a further

“Sale-cum-Development Agreement” with similar terms and two additional clauses providing
that the purchaser and vendor mutually agreed to undertake certain specific improvements and
add-ons at an estimated cost of Rs. 2,25,00,000/- (flat development price), with all development
costs to be paid by the purchaser as per the payment schedule, including applicable GST or
other taxes, and that the purchaser would pay the balance amount of Rs. 3,50,00,000/- towards
the flat sale price at the time of commencement of the 8th floor brick work.
11.

The Complainant submitted that as per the General Payment Schedule, the payments

were to be made as follows:
•
•
•
•
•

Advance at the time of booking - 25% of the total sale consideration on completion of
the basement slab;
On completion of the basement slab 25% of the total sale consideration
10% on commencement of brick work;
10% on commencement of flooring work; and
5% before registration or taking possession.

The Complainant further submitted that Respondent No. 2, however, had shown only Rs.
1,00,00,000/- (Rupees One Crore) in the Agreement as against the Rs. 2,00,00,000/- (Rupees
Two Crores) actually paid by her as advance.
12.

The Complainant have asked the Respondent No.2 about the necessity of the second

agreement i.e., “Sale-Cum-Development Agreement” since the specific improvements had not
yet been decided, mentioning an estimated cost of Rs. 2,25,00,000/- for such undecided works
had no basis; however, Respondent No. 2 insisted on signing the second “Sale-cumDevelopment Agreement,” assuring that any excess payment beyond Rs. 2,25,00,000/- would
be adjusted against stamp duty, registration charges, GST, maintenance charges, and the
specific improvements to be finalized after completion of the flat. The Complainant, having no
alternative, signed the agreement on his insistence.
13.

The Complainant further submitted that despite repeated requests for registration of the

Agreement of Sale before the sub-registrar, Respondent No. 2 willfully avoided the matter. It
is therefore submitted that by 30-01-2021, the Complainant had paid Rs. 2,00,00,000/- to
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Rs. 50,00,000/- in cash on 23rd December 2022;

•

Rs. 25,00,000/- through bank transfer on 6th January 2023;

•

Rs. 35,00,000/- through bank transfer on 9th January 2023;

•

Rs. 35,00,000/- in cash on 10th January 2023;

•

Rs. 37,50,000/- through bank transfer on 19th July 2023;

Thus, an amount of Rs. 1,82,50,000/- was paid after signing the Agreement of Sale on 30th
January 2021. In total, the Complainant had paid Rs. 3,82,50,000/- on different dates, with the
last payment on 19th July 2023. The Complainant maintains that by 10th January 2023, she
had paid Rs. 3,45,00,000/-, which exceeds the agreed sale consideration of Rs. 2,25,00,000/by Rs. 1,10,00,000/-. The excess payments were towards specific improvements and add-ons,
which were never finalized, and the flat construction had not been completed.
15.

The Complainant submits that she was unable to contact Respondent No. 2 regarding

the construction status, as he was not responding to calls and the office staff merely directed
her to him. Consequently, she requested her husband, Dr. A. Mohan Rao, who was in
Hyderabad on 20th March 2024, to meet Respondent No. 2. After considerable difficulty, her
husband met Respondent No. 2 at his office to request expediting the construction and to
convey the Complainant’s intention to occupy the flat as agreed. Respondent No. 2 assured
him that a written update on the project status would be sent. However, no such communication
was ever received, nor were calls answered thereafter. Accordingly, the Complainant issued a
letter dated 1st April 2024 to the Respondents seeking handover of possession of Flat No. 801
at the earliest.
16.

The Complainant submitted that Respondent No. 1 Company, vide letter dated 25.04.2024,

informed her that she had failed to adhere to the payment schedule despite constant follow-up, and
alleged that the Agreement of Sale had been cancelled by an email purportedly sent on 14.09.2023. The
Respondent also claimed that, following the alleged cancellation, Flat No. 801 had reverted back to the
company, which had obtained bank financing and availed a loan thereon.

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The Complainant submitted that she was shocked by the alleged termination, having

paid the full sale consideration before completion of the flat, and had committed no breach of
contract; therefore, no right accrued to Respondent No. 1 Company to cancel the Agreement,
rendering the unilateral cancellation illegal, non-est, and not binding.
18.

The Complainant submitted that, by her letter dated 09.05.2024, she requested a copy

of the alleged email, and Respondent No. 1 Company forwarded a copy on 16.05.2024. Upon
examination, the Complainant submitted that
i.

the alleged email of 14.09.2023 was not addressed to her;

ii.

she had not provided any email ID to the Respondent nor did the Agreement authorize
sending notices to that address;

iii.

the contents of the alleged email were contrary to the provisions of the Agreement of
Sale and hence illegal and non-binding; and

iv.

The Complainant have paid the full sale consideration as acknowledged by Respondent
No. 1 Company, no rights were conferred upon the Respondent to cancel the
Agreement, and the purported cancellation was beyond its powers.

19.

The Complainant submitted that Clause 4 of the Agreement of Sale provides that in the

event the purchaser fails to pay the balance amount within 30 days of the milestone payment,
the vendor may allot the flat to another party and refund only 75% of the amount paid, forfeiting
25% as liquidated damages. The Complainant submitted that this clause is contingent upon
non-payment, and since she had paid the full sale consideration, Respondent No.1 Company
had no right to invoke the clause or cancel the agreement. The Complainant further submitted
that Respondent No.1 Company’s failure to immediately refund 75% of the payments
evidences a fraudulent intention.
20.

The Complainant submitted that Respondent No.1 Company, through a Memorandum

of Deposit of Title Deed registered as Document No. 17170/2023 on 31.10.2023, availed a loan
of Rs. 7.0 Crores from State Bank of India by creating a charge over multiple flats including
Flat No.801, thereby violating the provisions of the Real Estate (Regulation and Development)
Act, 2016. The Complainant have attempted to meet Respondent No.2, but he avoided her,
compelling her to file a police complaint for fraud, cheating, criminal breach of trust, and
misappropriation. She further submitted that at the time of execution of the Agreement of Sale
on 30.01.2021, Respondent No.1 Company did not possess the authority to sell Flat No.801,
as the supplementary agreements with the landowners were executed only later on 18.09.2021,
with no agreement with the remaining landowners, amounting to misrepresentation and
violation of RERA.
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The Respondent No.1, to avail a loan from SBI, fraudulently cancelled the Agreement

of Sale through a message dated 14.09.2023 and executed the deposit of title deed in favour of
SBI, creating a charge over several properties including Flat No.801. She submitted that
construction of the project has been stopped since October 2023, with Flat No.801 incomplete,
despite her having paid Rs.2.25 Crores and an additional Rs.1,57,50,000 for specific add-ons,
evidencing fraud and misrepresentation.
22.

The Complainant submitted that Respondent No.2, by misrepresenting facts, induced

her to believe that a 12-floor building with 2 cellars and one stilt would be constructed, despite
knowing that GHMC permits only 10 upper floors. She submitted that payments were collected
even before GHMC sanctions, constituting fraud, concealment of material facts, criminal
breach of trust, and repeated violation of the RERA provisions, as further demonstrated by the
illegal termination of the Agreement of Sale and subsequent creation of a bank charge over the
property.
23.

The Complainant submitted that Respondent No.2 may have collected substantial

amounts from other persons who booked the remaining nine flats falling into his share, while
the land of certain owners is currently locked in litigation; therefore, proper verification by this
authority is necessary to instill public confidence and prevent influential builders like
Respondent No.2 from cheating innocent allottees. The Complainant have issued Legal Notices
dated 03.10.2024 and 05.11.2024 to the Respondents, to which Respondent No.1 and 2 replied
through their Advocate, Sri N. Naveen Kumar, by Reply Notice dated 21.11.2024.
24.

The Respondent No.1 and 2, in their Reply Notice, denied the full payments made by

her, falsely contended that RERA provisions do not apply to the disputed agreement of sale,
alleged failure on her part to adhere to payment terms, and asserted that the termination of the
contract/agreement of sale was within their rights, further claiming that no valid agreement for
sale subsists between the Complainant and Respondent No.1 and 2.
25.

The Complainant submitted that Respondent No.1 and 2 refused to implement the

Agreement of Sale entered into with her. Respondent No.1, acting as attorney and GPA holder
for Respondents No.3 to 9, is responsible for constructing the apartment building for mutual
benefit and profits of all respondents according to their shares, and by virtue of the irrevocable
Development Agreement and GPA with Respondents No.3 to 9, all respondents are jointly and
severally accountable to implement the contractual obligations under the Agreement of Sale
executed in favor of the Complainant. Further, the Respondents No.3 to 9, as landowners who

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In view of the facts mentioned above, the Complainant sought the following reliefs:

a)

To direct the Respondent Nos. 1 and 2 shall register a sale deed with respect to Flat
No. 801 with three car parking areas of 100 square feet each, along with an undivided
share of land admeasuring 105 square yards out of 2,500 square yards in the multistoried Residential Building under the name and style of "AYYANNA PRIMA" in favour
of the Complainant in accordance with the Agreement of Sale executed on 30th January
2021 for a sale consideration of Rs. 2,25,00,000/-;

b)

To direct the Respondent Nos. 1 and 2 shall pay the Complainant rent at Rs. 22,725/per month with effect from 3rd June 2024 till handing over of possession of the
scheduled property, duly completed construction as per the specifications agreed upon;

c)

To direct the Respondent Nos. 1 and 2 shall refund the excess amount of Rs.
1,57,50,000/- paid by the Complainant towards certain specific improvements and addons to the said flat, immediately with Bank Interest rate from 3rd June 2024 till actual
payment by the Respondents;

d)

To direct the Respondent Nos. 1 and 2 shall remove the charge created against the
scheduled property of Flat No. 801 immediately;

e)

That Respondent Nos. 3 to 9 being land owners who have entered into a Development
Agreement and an irrevocable General Power of Attorney with Respondent No. 1, are
jointly and severally liable and responsible for the implementation of the contractual
obligations in respect of the agreement of sale executed in favour of the Complainant.

C. Counter filed by Respondents No. 1 and 2:
26.

The Respondent Nos. 1 and 2 stated that the reliefs sought by the Complainant, namely

execution of sale deed in respect of Flat No.801 along with three car parking spaces and
undivided share of land, payment of rent at Rs.22,725/- per month from 03.06.2024, refund of
alleged excess amount of Rs.1,57,50,000/- with interest, and removal of charge over the
schedule property, are wholly untenable, self-contradictory, and not maintainable in law or on
facts. It is further stated that the interim relief seeking restraint against alienation and direction
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The Respondent Nos. 1 and 2 stated that the present complaint is an abuse of process of

law, filed with suppression and distortion of material facts, and the Complainant has
approached this Hon’ble Authority with unclean hands solely to harass and pressurize the
Respondents to accede to illegal and untenable demands. It is submitted that all allegations,
claims, and averments made in Complaint No.38/2025/TG RERA are false and baseless, and
none of the contents therein shall be deemed admitted by reason of non-traverse.
28.

The Respondent Nos. 1 and 2 stated that Respondent No.1 Company is engaged in real

estate development and had entered into valid Development Agreements-cum-General Power
of Attorney with Respondent Nos.3 to 9, being landowners of the subject property admeasuring
2500 square yards situated at Guttala Begumpet. It is further stated that pursuant thereto, the
Respondent Company proceeded with development of the project “Ayyanna Prima” after
obtaining necessary permissions and commenced construction in accordance with applicable
laws.
29.

The Respondent Nos. 1 and 2 stated that the Complainant, along with her husband,

voluntarily approached the Respondents expressing interest to purchase a flat in the said
project, and the transaction was initiated solely at her insistence under a pre-launch
arrangement. It is submitted that payments were made voluntarily by the Complainant to block
the flat at concessional rates, without any solicitation or inducement by the Respondents, and
that the arrangement was entered only due to acquaintance and persistent insistence of the
Complainant.
30.

The Respondent Nos. 1 and 2 stated that upon further insistence by the Complainant for

availing bank loan, an agreement was executed for facilitating such loan, despite the
Respondents clearly informing that statutory approvals were still under process. It is submitted
that subsequently a comprehensive Sale-cum-Development Agreement reflecting the true
consideration was also executed between the parties, which has been deliberately suppressed
by the Complainant, and reliance on the unregistered agreement is a clear misrepresentation of
facts.
31.

The Respondent Nos. 1 and 2 stated that the allegations regarding lack of authority,

absence of supplementary agreements, and collection of amounts prior to permissions are
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The Respondent Nos. 1 and 2 stated that the Complainant failed to adhere to the agreed

payment schedule, thereby committing breach of contractual obligations, which constrained
the Respondents to terminate the Sale-cum-Development Agreement dated 30.01.2021 in
accordance with its terms. It is further submitted that such termination was duly communicated
to the Complainant through email dated 14.09.2023, and despite having knowledge of the same,
the Complainant mischievously issued notices seeking possession, which is legally untenable.
33.

The Respondent Nos. 1 and 2 stated that despite receipt of termination, the Complainant

has initiated multiple proceedings with mala fide intent to harass the Respondents and to coerce
them into illegal demands. It is submitted that the conduct of the Complainant in suppressing
material facts, misrepresenting the transaction, and pursuing vexatious litigation disentitles her
from any equitable or statutory relief, and on this ground alone, the present complaint is liable
to be dismissed in limine.
34.

The Respondent Nos. 1 and 2 stated that the Complainant, by deliberately suppressing

material facts and circumstances, has initiated criminal proceedings with mala fide intention
against the answering Respondents, resulting in registration of FIR No.202 of 2024 on the file
of Central Crime Station, Hyderabad; it is further stated that the said criminal action is
vexatious, misconceived, and instituted solely to harass and coerce the Respondents into
yielding to untenable demands, and that being aggrieved by such unlawful initiation, the
Respondent No.1 has approached the Hon’ble High Court for the State of Telangana by
invoking its inherent jurisdiction under Section 528 of the Bharatiya Nyaya Sanhita, 2023,
seeking quashing of the aforesaid FIR, and the said proceedings are presently sub judice.
35.

The Respondent Nos. 1 and 2 stated that the Hon’ble High Court for the State of

Telangana, upon being satisfied with the merits of the case, was pleased to grant interim orders
staying all further proceedings in the impugned crime in FIR No.202 of 2024, and that the said
interim protection continues to subsist as on date; it is further stated that, being aggrieved by
the grant of such interim relief in favour of the answering Respondents, the Complainant, with
a mala fide intention to harass and disrupt the functioning of the project, has instituted the
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Further, the Respondent Nos. 1 and 2 stated that Maintainability of the Present complaint,

in view of the facts and circumstances set out hereinabove, the present Complaint is not
maintainable either in law or on facts and is liable to be dismissed in limine; it is further stated
that the Complainant, having already invoked multiple remedies including initiation of criminal
proceedings and issuance of legal notices, has indulged in impermissible forum shopping,
which is contrary to settled principles of law and amounts to abuse of process of law; it is also
submitted that the Sale-cum-Development Agreement dated 30.01.2021 having been validly
terminated in accordance with the terms thereof and in consonance with Section 11(5) of the
Real Estate (Regulation and Development) Act, 2016, no cause of action survives for invoking
the jurisdiction of this Hon’ble Authority under the said Act.
37.

the Complainant has failed to discharge her reciprocal contractual obligations,

particularly the obligation to make timely payments as mandated under Section 19(6) of the
Act, and therefore cannot seek enforcement of alleged rights arising out of the said agreement;
it is further stated that the Complaint is devoid of any specific pleadings as to the precise
provisions of the Act alleged to have been violated, and the allegations are vague, omnibus,
and lacking in material particulars, thereby rendering the Complaint legally untenable; it is a
settled proposition that only an allottee who is in due compliance of contractual obligations can
claim relief for alleged default of the promoter, and in the absence of such compliance, no
enforceable cause of action accrues.
38.

The Respondent Nos. 1 and 2 stated that a prima facie consideration of the material on

record clearly establishes non-performance and breach on the part of the Complainant, and the
present proceedings are instituted with an intent to misrepresent and frustrate the contractual
framework; it is further stated that the Complaint is founded upon a purported sale agreement
while deliberately suppressing the true and binding Sale-cum-Development Agreement,
thereby misleading this Hon’ble Authority; moreover, the prayers sought are selfcontradictory, inasmuch as the Complainant alleges lack of authority on the part of the
Respondents to sell the subject property, while simultaneously seeking execution of sale deed
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The Respondent Nos.1 and 2 stated that the contents are either matters of record or are

false and are accordingly denied. While admitting acquaintance between the parties and the
existence of the project, it is specifically denied that Respondent No.2 made any
misrepresentation regarding ownership, control, or management of Respondent No.1
Company. It is asserted that the Company is duly incorporated and operates strictly in
accordance with the provisions of the Companies Act, 2013, and that no assurances as alleged
were ever extended to the Complainant.
40.

The Respondent Nos.1 and 2 stated that the averments are misconceived and denied to

the extent they allege inducement, misrepresentation, or fraudulent conduct. It is admitted that
the Complainant was informed about the status of permissions; however, it is denied that any
coercion or undue influence was exercised. The Respondents reiterate that the transaction was
initiated solely at the insistence of the Complainant for pre-launch allotment and that all
payments were voluntarily made by the Complainant for the purpose of blocking the flat.
41.

The Respondent Nos.1 and 2 stated that the contents are denied as false and contrary to

the actual arrangement between the parties. It is submitted that two agreements were executed
only upon the insistence of the Complainant for facilitating bank loan purposes, and the
comprehensive Sale-cum-Development Agreement reflects the true consideration of Rs.4.5
Crores. Any allegation that the Respondents misrepresented the consideration or concealed
material facts is specifically denied.
42.

The Respondent Nos.1 and 2 stated that the averments are either matters of record or are

denied insofar as they attribute fault to the Respondents. It is reiterated that the Complainant
was fully aware of the status of permissions, which was expressly recorded in the agreement.
The allegation that the Respondents avoided registration or acted in violation of statutory
provisions is denied, and it is contended that all actions were in accordance with the contractual
terms and prevailing law. It is specifically asserted that the agreed sale consideration was Rs.4.5
Crores and not Rs.2.25 Crores as alleged. The Respondents acknowledge receipt of certain
payments but contend that the Complainant failed to adhere to the agreed payment schedule,
thereby committing breach of contractual obligations, which necessitated termination of the
agreement.

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The Respondent Nos.1 and 2 stated that the averments are either admitted to the extent

they are borne out of record or otherwise denied. It is submitted that the termination of the
agreement was duly communicated through email dated 14.09.2023 to the registered email
address of the Complainant. The Respondents further assert that despite repeated requests, the
Complainant failed to provide bank details for refund, and hence no liability can be attributed
to the Respondents.
44.

The Respondent Nos.1 and 2 stated that the contents are denied except to the extent

admitted. It is submitted that upon lawful termination of the agreement, no subsisting right
remained with the Complainant over the subject property. Consequently, any charge created or
subsequent dealings with the property were undertaken in the ordinary course of business and
cannot be construed as illegal or mala fide.
45.

The Respondent Nos.1 and 2 stated that the averments are false and are denied in toto. It

is contended that the termination of the agreement was in accordance with contractual terms
and not with any ulterior motive. The allegations of fraud, cheating, or criminal breach of trust
are baseless. It is further submitted that the construction progressed in accordance with
sanctioned permissions and any delay or modification arose due to regulatory constraints
beyond the control of the Respondents.
46. The Respondent Nos.1 and 2 stated that the contents are denied as frivolous and untenable.
It is specifically denied that the Respondents engaged in multiple sale transactions or induced
other purchasers. It is clarified that only limited transactions were undertaken, and the
Complainant’s allegations are speculative. Further, the attempt to implicate other Respondents
is misconceived and legally unsustainable, as their role is limited to that of landowners under
the Development Agreement.
47.

The Respondent Nos.1 and 2 stated that the averments are either denied or stated to be

formal in nature requiring no specific reply. It is reiterated that the Complainant has suppressed
material facts, including initiation of criminal proceedings and pendency thereof, and has
approached this Authority with unclean hands. In view of the foregoing facts and
circumstances, it is submitted that the Complainant is not entitled to any of the reliefs sought
and the present complaint is liable to be dismissed in limine.
D. Counter filed by Respondents No. 3 to 9:

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The land owners, i.e., Respondent Nos. 3 to 9, through their General Power of Attorney

holder, filed a counter in response. They submitted that they are filing the present counter only
to the limited extent of the allegation that they are jointly and severally liable for
implementation of the alleged Agreement of Sale entered into by Respondent No. 1 with the
Complainant. While the Complaint seeks various reliefs sale deed execution, possession,
refund with interest, removal of charges, and interim injunction they deny participation in the
sale transaction and clarify their limited involvement through the Development Agreement cum
General Power of Attorney (DAGPA) entered with Respondent No. 1.
49.

Each Respondent Nos. 3 through 9 separately executed Development Agreements (Doc.

Nos. 4416/2019, 4113, 8011, 4695, 4694, and 7463/2019) with Respondent No. 1 over
respective parcels ranging from 250 to 500 sq yards, collectively forming the 2,500 sq yard
project. They affirm that their obligations are strictly confined to the DAGPA and assert they
are not parties to the Sale-cum-Development Agreement executed on 30.01.2021 between the
Complainant and Respondent No. 1 for Flat No. 801, which had a total consideration of ₹4.5
crores. The Complainant also separately executed an unregistered agreement for ₹2.25 crores
to facilitate bank financing an arrangement understood to be non-enforceable and made at her
insistence.
50.

The Respondents No. 3 to 9 explains that the Complainant approached Respondent No. 2

(Managing Director of Respondent No. 1) through a personal connection to book the flat in
advance at a pre-launch price and subsequently made payments amounting to approximately
₹3.82 crores. However, when she failed to satisfy contractual payment milestones, Respondent
No. 1 terminated the agreement as allowed under Section 11(5) of the RERA Act, via email
dated 14.09.2023.
51.

Despite this termination, the Complainant pursued civil and RERA proceedings,

including a criminal complaint (FIR No. 202/2024) alleging fraud and breach of trust under
Sections 403, 406, and 420 IPC. These criminal proceedings are subject to a stay granted by
the Telangana High Court under Section 528 of the Bharatiya Nyaya Sanhitha, 2023. The
landowners point out that they received legal notice dated 05.11.2024 concerning the claim,
which was duly responded to on 21.11.2024 by Respondent No. 1.
52.

The landowners insist that their legal liability is limited to the DAGPA and that they

bear no obligations under the separate Sale-cum-Development Agreement with the
Complainant. They reject any notion of joint or several liability beyond the scope of the
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The Respondents No. 3 to 9 denies that Flat No. 801 is subject to any litigation beyond

the present RERA dispute; they deny any wrongdoing or inadequate authority. They underscore
that the allocations under the DAGPA have been completed, with Flat No. 801 falling in
Respondent No. 1’s share, affirming its legal right to effect sale of the property. Contending
that DAGPA does not confer joint liability, they argue that mere existence of a shared
development pact does not make them liable for disputes under a separate sale agreement
executed by Respondent No. 1 and the Complainant.
54.

The Respondents No. 3 to 9 oppose the Complainant’s interim prayers and final reliefs,

calling the Complaint inadmissible in law and fact and seeking its dismissal in limine. They
emphasize that no enforceable claim lies against them, and urge the Authority to refuse
imposition of any obligations or liability on Respondents Nos. 3 to 9, while rejecting all reliefs
sought by the Complainant.
E. Counter filed by Respondent No.10
55.

The Respondent No.10 submitted that it has been unnecessarily impleaded in the present

proceedings and is constrained to file the present counter to place the true and material facts
before this Hon’ble Authority. It is stated that the case of the Complainant pertains to an
Agreement of Sale dated 30.01.2020 entered with Respondent No.1 for purchase of Flat No.801
in the project “Ayyanna Prima” for a sale consideration of Rs.2.25 Crores along with alleged
additional payments towards add-ons, and the reliefs sought are against Respondent Nos.1 and
2 including registration of sale deed, payment of rent, refund of alleged excess amount, and
removal of charge. It is further submitted that the Complainant is liable to bear the costs
incurred by this Respondent Bank in defending the present proceedings.
56.

The Respondent No.10 stated that all the allegations made in the complaint are denied

except those specifically admitted, and the Complainant is put to strict proof of each and every
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The Respondent No.10 submitted that Respondent No.1 Company had availed a loan of

Rs.7.00 Crores from the Bank by creating a valid and subsisting equitable mortgage through
Memorandum of Deposit of Title Deeds dated 31.10.2023, registered as Document
No.17170/2023, over various flats including Flat No.801 and other portions of the project. It is
asserted that the Bank holds a lawful and enforceable charge over the said properties and is
entitled to exercise its rights as a secured creditor until full repayment of the loan.
58. The Respondent No.10 stated that the Complainant has no valid or subsisting right, title,
or interest over the subject property in view of the cancellation of the Agreement of Sale by
Respondent No.1 on account of alleged payment defaults, and therefore lacks locus standi to
maintain the present proceedings against the Bank. It is further contended that the dispute is
purely civil in nature involving complex questions of fact and law, for which the appropriate
remedy lies before a competent Civil Court by way of a suit for specific performance, and not
before this Authority.
59.

Further, The Respondent No.10 submitted that it has no knowledge whatsoever regarding

the alleged transactions, payments, inducements, representations, or agreements entered into
between the Complainant and Respondent Nos.1 and 2, including allegations relating to
payments of Rs.3.45 Crores or execution of Agreement of Sale, and the same are denied for
want of proof. It is reiterated that the Bank is not concerned with or responsible for any such
dealings inter se the parties. The allegations relating to execution, contents, payments, add-ons,
communications, permissions, cancellation of Agreement of Sale, and other contractual aspects
are matters exclusively between the Complainant and Respondent Nos.1 to 9, and the Bank has
neither any role nor any involvement in the same. All such allegations are denied, and the
Complainant is put to strict proof thereof.
60.

It is admitted that Respondent No.1 availed the loan facility by creating a registered

charge over the subject property, and such act does not amount to any violation of law. It is
further stated that the Agreement of Sale relied upon by the Complainant had already been
cancelled prior to creation of mortgage, and therefore the allegations of fraud or illegality in

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The Respondent No.10 stated that there is no cause of action against it, and the complaint

is bad for misjoinder of parties, lack of jurisdiction, and limitation, apart from being frivolous
and vexatious. It is therefore prayed that this Hon’ble Authority may be pleased to dismiss the
complaint as against Respondent No.10 with exemplary costs and pass such other order as
deemed fit in the interest of justice.
F.
62.

Rejoinder filed by Complainant to the counter filed by Respondent Nos. 1 and 2
The Complainant has filed a detailed rejoinder affidavit in response to the counter filed

by Respondents Nos. 1 and 2, wherein she has categorically denied all allegations made against
her and reaffirmed the factual basis and legality of her claims under the RERA framework. She
submits that the Agreement of Sale executed on 30.01.2021 by Respondent No. 1 in her favour,
pertaining to Flat No. 801, was done at a time when Respondent No. 1 did not possess any
right, title, or authority over the said flat. The flat had not been demarcated or allotted to
Respondent No. 1 under the terms of the Development Agreement cum General Power of
Attorney or the subsequent Supplementary Agreement dated 18.09.2021. In light of this, the
Complainant contends that the very sale of Flat No. 801 was void ab initio and executed without
legal authority.
63.

The Complainant further submits that the version projected by Respondents No. 1 and

2 suggesting that the booking was a “pre-launch” initiative made at her own instance—is a
fabrication and an afterthought aimed at evading accountability. She asserts that no
documentary evidence has been placed on record to support the claim that she had initiated the
purchase or requested a pre-launch offer. To the contrary, the Complainant has stated that she
made a substantial payment of ₹2 crores even before the formal execution of the agreement,
purely on the representations and inducements of Respondent No. 1. These payments were
made in good faith, relying on Respondent No. 1’s assurances regarding the flat, which were
later discovered to be misleading and devoid of legal sanction.
64.

It is the specific grievance of the Complainant that Respondent No. 1 deliberately

suppressed material information from her, particularly the fact that it had not obtained
construction permission from the GHMC for the project. The Complainant asserts that this
suppression of facts, coupled with the acceptance of funds, amounts to gross misconduct and
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The Complainant has pointed out that the construction of the project has not been

completed as per the agreed time frame, which was thirty months from the date of obtaining
the GHMC construction permission. No plausible explanation has been offered for the delay,
and the Complainant submits that she is entitled to compensation for delayed possession in
accordance with Clause 27 of the agreement, which provides for payment of rent at the rate of
₹5 per square foot per month. In addition to this, the Complainant asserts that she has already
paid a total of ₹3.45 crores to Respondent No. 1 by 10.01.2023, which is in excess of the actual
agreed sale price. She submits that this excess payment further negates the false charge of noncompliance with milestone payments, as alleged by Respondent No. 1.
66.

A key contention raised by the Complainant is the unlawful and unilateral cancellation

of the Agreement of Sale by Respondent No. 1. She has averred that the cancellation was done
in violation of the mandatory procedure laid down under Section 11(5) of the RERA Act. The
notice of cancellation was not served upon her but was instead sent to an unregistered email ID
belonging to her husband, which cannot be considered valid service. Additionally, Respondent
No. 1 has failed to provide any proof of non-payment or breach by the Complainant. The
Complainant has categorically stated that such unlawful termination, combined with the
misleading conduct of the Respondents, amounts to criminal breach of trust and fraud.
67.

Moreover, the Complainant has raised serious allegations regarding financial

misconduct by Respondents No. 1 and 2 in collusion with Respondent No. 10, a financial
institution. She has brought to light that a loan of ₹7 crores was sanctioned for the project even
though construction had not reached a viable stage. The Complainant alleges that these funds
were diverted and misused, thereby establishing a fraudulent nexus between the developer and
the financier. She draws attention to similar instances in other states, including Delhi and Uttar
Pradesh, where the CBI has investigated such fraudulent transactions in the real estate sector.
68.

The Complainant also rebuts the developer’s justification for project delay on the ground

that GHMC had rejected construction approval for the 11th and 12th floors. She contends that
this is a specious defence, as the developer had promised and committed to construct 12 floors,
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In conclusion, the Complainant has denied all averments made by Respondents No. 1

and 2 which are inconsistent with her pleadings. She has reaffirmed her entitlement to the
reliefs sought in the original complaint, including refund of monies paid with interest, damages
for mental harassment and financial loss, and penalties against the Respondents for violation
of their obligations under the RERA Act. The Complainant further prays for prosecution of the
Respondents under Sections 59 and 60 of the Act and calls upon the Authority to disregard the
evasive and misleading submissions of the Respondents, and to pass appropriate orders in
accordance with law.
G. Additional Reply by Respondent No. 2
70.

The Respondent No.1 entered into a Development Agreement-cum-General Power of

Attorney with Respondent Nos.3 to 9 for an extent of 2,500 sq. yards, wherein, as per Clause
16, Respondent No.1 was authorized to sell flats only upon execution of a Supplementary
Agreement specifying individual shares. The Complainant submitted that such Supplementary
Agreement was executed only on 18.09.2021, whereas the Agreement of Sale dated 30.01.2021
was executed much prior thereto, thereby establishing that Flat No.801 was not allotted to the
share of Respondent No.1 at the relevant time and consequently, Respondent No.1 lacked
authority to enter into the said transaction.
71.

The plea of Respondent No.1 that the transaction was a “pre-launch offer” made at the

insistence of the Complainant is false and unsupported by any documentary evidence. It is
further stated that Respondent No.1, despite receiving substantial payments amounting to
Rs.2.00 Crores even prior to execution of the Agreement of Sale, failed to disclose the
pendency of building permission before GHMC, thereby violating statutory obligations and
acting in disregard of applicable regulatory provisions.

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The agreed sale consideration for Flat No.801 is Rs.2.25 Crores as expressly recorded

in the Agreement of Sale, and that the additional amount of Rs.2.25 Crores pertains only to
proposed “add-ons” which were tentative and subject to mutual agreement. It is submitted that
the Respondent’s contention that the total sale consideration is Rs.4.50 Crores is false,
misleading, and advanced with ulterior motives for wrongful gain.
73. The Respondent No.2 had undertaken to complete the project within 30 months from the
date of GHMC permission, which period is reasonable and sufficient as per civil construction
standards. It is further stated that the Respondent failed to complete the project within the
stipulated time and did not communicate any delay, thereby evidencing dishonest conduct. The
Complainant asserted entitlement to delay compensation in the form of rent as per the terms of
the Agreement.
74.

The Respondent No.2 submits that the payments amounting to Rs.3.45 Crores as on

10.01.2023 are admitted by Respondent No.1, including Rs.2.00 Crores paid by 21.11.2020,
thereby disproving the allegation of default. It is submitted that the Complainant has in fact
paid amounts far exceeding the agreed sale consideration of Rs.2.25 Crores, and hence the
allegation of non-adherence to payment terms is false and raised only to justify illegal
cancellation of the Agreement of Sale.
75.

The alleged cancellation of the Agreement of Sale is illegal, arbitrary, and contrary to

law, as no valid notice was served upon the Complainant and no default on her part has been
established. It is further stated that the Respondent deliberately addressed communications to
the Complainant’s husband without authorization and failed to provide any proof of followups or demand notices, thereby rendering the cancellation invalid and amounting to breach of
trust. The conduct of Respondent Nos.1 and 2, including fraudulent cancellation of the
Agreement, non-refund of amounts, misrepresentation regarding construction, and diversion of
funds, establishes fraud and illegality. It is further submitted that even after availing bank
finance, there is no progress in construction, and the Respondents have misled the Complainant
regarding approvals and project execution. Therefore, the Complainant prayed that this
Hon’ble Authority may allow the Complaint, grant the reliefs sought, impose exemplary costs
and penalties, and pass such orders as deemed fit in the interest of justice and to safeguard the
interests of home buyers.
H. Show cause Reply

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The Respondent submits that the subject project, namely “Ayyanna Prima,” was duly

registered with the Authority on 14.05.2021 vide Registration No. P02400002914, valid for a
period extending up to 02.03.2027, thereby demonstrating compliance with statutory
requirements.
77.

The Respondent submits that the dispute emanates from a private and fiduciary

arrangement between the parties, wherein the Complainant, by virtue of acquaintance,
persuaded the Respondent to extend certain concessions, and the transaction was not in the
nature of a commercial public offering. The execution of the Sale-cum-Development
Agreement and Agreement of Sale was undertaken solely to facilitate the Complainant,
including enabling loan arrangements, and the same were not intended as instruments of public
sale or marketing.
78.

It submits that no act attributable to it constitutes a violation of Sections 3(1) or 4(1) of

the Act, as there was neither advertisement nor solicitation of the general public in respect of
the subject transaction. In the present complaint is an afterthought, arising out of subsequent
disputes between the parties, and is a misuse of the statutory framework under the Act to project
a private dispute as a regulatory violation.
79.

Accordingly, Section 3(1) of the RE(R&D) Act, is attracted only in cases involving

public advertisement, marketing, or sale without registration, whereas the present transaction
was a singular, private arrangement with a known individual and thus falls outside its ambit
and also the Section 4(1) of the RE(R&D) Act has been duly complied with, as the project
stands registered with the Authority, and therefore, invocation of the said provision is legally
untenable.
80.

The Respondent submits that the issuance of the Show Cause Notice is beyond the scope

of the original complaint, which was confined to cancellation of the Agreement of Sale, and
did not allege any violation of Sections 3(1) or 4(1) of the RE(R&D) Act, thereby rendering
the present proceedings without jurisdiction. Further, it is submits that it has at all times acted
in conformity with the provisions of the Act and has neither willfully nor otherwise
contravened any statutory mandate, and therefore prays that the Show Cause Notice be
withdrawn and the proceedings be dropped in the interest of justice.
I. Interim order:

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The Authority have directed the interim order dated: 01.04.2025 that the alleged

unilateral cancellation of Agreements of Sale dated 30.01.2021 in respect of Flat No.801 in the
project “Ayyanna Prima,” notwithstanding the Complainant’s assertion of having paid the
entire sale consideration; the Respondents, while disputing such payment and seeking to justify
the cancellation, have failed to demonstrate valid termination in accordance with law, and in
view of the prima facie subsistence of the Agreements coupled with the likelihood of creation
of third-party interests, this Authority has deemed it appropriate, pending adjudication, to grant
limited interim protection by restraining alienation or encumbrance of the subject property and
directing maintenance of status quo.
J. Points for consideration:
82.

Based on the above facts and circumstances, the following questions arise before this

Authority for determination:
I.

Whether the Complaint is maintainable under the provisions of the RE(R&D) Act,
2016?

II.

Whether the Respondent has violated the provisions of RE (R&D) Act, 2016?

III.

Whether the Complainant is entitled to the relief(s) as prayed for? If yes, to what extent?

K. Observation of the Authority:
83.

The Authority has carefully perused the entire material on record, including the

Complaint, Counter affidavits filed by Respondent Nos.1 to 10, Rejoinder filed by the
Complainant, Reply to Show Cause Notice, documents annexed by the parties (including the
Agreement of Sale dated 30.01.2021, Sale-cum-Development Agreement dated 30.01.2021,
payment receipts/statement acknowledging payments up to Rs.3,45,00,000/- as on 10.01.2023
and further payments thereafter aggregating to Rs.3,82,50,000/-, Development Agreementcum-GPA, Supplementary Development Agreements dated 18.09.2021, GHMC permissions,
Memorandum of Deposit of Title Deeds dated 31.10.2023 registered as Document
No.17170/2023, alleged cancellation email dated 14.09.2023, legal notices and replies, RERA
Registration Certificate No.P02400002914 dated 14.05.2021, and the Interim Order dated
01.04.2025), and has heard the detailed submissions of the learned counsels for the respective
parties. The Authority now proceeds to record its observations and findings on the points for
determination framed at para 82 supra

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The first point for consideration is whether the present Complaint is maintainable under

the provisions of the Real Estate (Regulation and Development) Act, 2016 Respondent Nos. 1
and 2 have raised the following specific preliminary objections to the maintainability of this
Complaint: (i) that the transaction was a private arrangement between known individuals and
does not attract the provisions of the RE(R&D) Act since no public advertisement or
solicitation was made; (ii) that the Complainant has engaged in forum shopping by pursuing
criminal proceedings, issuing multiple legal notices, and simultaneously invoking RERA
jurisdiction; (iii) that the Agreement of Sale/Sale-cum-Development Agreement was validly
cancelled under Section 11(5) of the RE(R&D) Act on account of payment default by the
Complainant under Section 19(6), and therefore no subsisting agreement exists to found a cause
of action before this Authority; (iv) that the complaint lacks specific averments as to which
provisions of the RE(R&D) Act have been violated and is vague and omnibus in nature; (v)
that the Complainant herself, not being in compliance with her reciprocal obligations under the
agreement, has no cause of action before this Authority; and (vi) that there is an internal
contradiction in the complaint inasmuch as the Complainant simultaneously contends that
Respondent No. 1 had no authority to sell Flat No. 801 and yet seeks execution of a sale deed
in her favour. This Authority shall address each of these objections in turn.
85.

As regards the first objection, that the transaction was a private arrangement not attracting

the Act this Authority is unpersuaded. The RE(R&D) Act does not carve out any exception for
transactions effected through personal or family connections, or for so-called “pre-launch”
arrangements. The applicability of the RE(R&D) Act is determined by the nature of the subject
matter, not by the mode of approach of the parties. Section 2(zk) of the RE(R&D) Act defines
a “real estate project” broadly to encompass any development involving construction of a
building or apartment for the purpose of selling any apartment therein. The project “Ayyanna
Prima” bearing Registration No. P02400002914, registered on 14.05.2021 and valid up to
02.03.2027, is unquestionably a registered real estate project under the RE(R&D) Act. Once a
project is registered under the RE(R&D) Act, every transaction relating to any unit/plot in that
project whether approached through the public or through personal channels is squarely
governed by the RE(R&D) Act and falls within the jurisdiction of this Authority. Any other
interpretation would create an impermissible loophole, enabling promoters to evade statutory
obligations simply by characterising their transactions as “private” or “pre-launch” dealings.
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As regards the second objection, that the Complainant has indulged in forum shopping

by pursuing criminal proceedings and issuing legal notices simultaneously with this complaint
this Authority notes that the RE(R&D) Act is a special legislation enacted to provide a
dedicated and concurrent statutory remedy to allottees. Section 31 of the RE(R&D) Act
specifically confers jurisdiction upon the Authority to entertain complaints filed by any
aggrieved allottee. The pursuit of parallel legal remedies, including criminal complaints under
the Indian Penal Code/Bharatiya Nyaya Sanhita, does not divest this Authority of its statutory
jurisdiction, nor does it bar the filing of a complaint under the RE(R&D) Act. The
Complainant’s recourse to criminal law relates to an alleged offence of cheating and breach of
trust, which is a distinct cause of action from her civil entitlements as an allottee under
RE(R&D). Section 88 of the RE(R&D) Act, specifically states that the RE(R&D) Act
provisions shall be in addition to and not in derogation of, the provisions of any other law. The
doctrine of forum shopping implies simultaneous pursuit of the same cause of action before
multiple fora for the same relief, it does not prohibit a party from exercising different statutory
and criminal remedies. This objection is accordingly not tenable.
87.

As regards the third objection, that the Agreement of Sale was validly cancelled under

Section 11(5) of the RE(R&D) Act for non-payment under Section 19(6), and therefore no
subsisting agreement exists this Authority finds that this contention goes to the merits of the
dispute rather than to the question of maintainability. The Complainant has specifically
disputed the validity of the purported cancellation on the grounds that (a) no valid notice was
served on her; (b) she had in fact paid an amount exceeding the agreed total sale consideration;
and (c) the cancellation was effected to facilitate a fraudulent mortgage. Whether the
cancellation was valid or otherwise is a matter that falls squarely within the jurisdiction of this
Authority under Section 31 of the RE(R&D) Act, and cannot be treated as a threshold
maintainability bar. A respondent-promoter cannot claim immunity from RERA proceedings
by the simple expedient of unilaterally cancelling an agreement and then contending that no
cause of action survives. If such a plea were to be accepted, every promoter could extinguish
an allottee’s RERA remedy merely by issuing a cancellation notice. Such an absurd
consequence cannot be countenanced. The legality of the cancellation shall be examined on
merits under Point No. II. This objection is accordingly rejected at the threshold.

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As regards the fourth objection that the complaint is vague and omnibus in its

averments and does not identify specific provisions of the RE(R&D) Act that have been
violated, a reading of the complaint in its entirety reveals that the Complainant has made
specific averments relating to, collection of advances prior to registration of the project,
execution of an agreement without having authority over the flat, failure to obtain GHMC
approvals and concealment thereof, non-completion of construction within the agreed period,
unilateral cancellation of the agreement without valid notice, and creation of a mortgage over
the subject flat without consent. These are cognisable violations under the RE(R&D) Act, and
the mere fact that the specific Section numbers are not always cited in the complaint does not
render it legally deficient. This Authority, as a quasi-judicial body vested with protective
jurisdiction over allottees, is obligated to examine the substance of the grievance, not its form.
The fifth objection, that the Complainant herself was in default and therefore has no cause of
action, is also a matter going to the merits of the dispute and not to maintainability. Whether
the Complainant defaulted in payments is a contested factual question which must be decided
after examination of the evidence on record. This objection is rejected at this stage.
89.

As regards the sixth objection, that there is an inherent contradiction in the complaint

inasmuch as the Complainant asserts that Respondent No. 1 had no authority to sell Flat No.
801 at the time of the Agreement of Sale (30.01.2021), and yet simultaneously seeks a direction
to register the sale deed, this Authority finds that this objection is misconceived. The
Complainant’s averment regarding absence of authority at the time of the agreement is not a
concession that she does not want the flat, it is a pleading advanced to establish
misrepresentation by Respondent No. 1. The relief sought, registration of the sale deed is
premised on the fact that Respondent No. 1 subsequently obtained the authority (via
Supplementary Agreement dated 18.09.2021) and that the Complainant is entitled to
performance of the agreement after such authority was regularised. The two averments operate
at different points in time and do not constitute a contradiction. A party aggrieved by a
promoter’s misrepresentation at the inception of a contract is not estopped from seeking
specific performance of that contract where the promoter has since acquired the requisite title
and authority. No internal inconsistency vitiates the complaint.
90.

Respondent No. 10, State Bank of India, has contended that the present dispute is

purely civil in nature, that this Authority lacks jurisdiction to entertain the same, and that the
Complaint suffers from misjoinder of parties. At the outset, this contention is devoid of merit.

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Upon a careful consideration of the material available on record, this Authority proceeds

to examine whether the conduct of the Respondents is in conformity with the statutory mandate
of the Real Estate (Regulation and Development) Act, 2016.
92.

At the outset, it is not in dispute that the Complainant had paid an amount of Rs.

25,00,000/- on 30.08.2020, followed by Rs. 1,00,00,000/- on 08.09.2020, and a further sum of
Rs. 75,00,000/- during the period between 09.10.2020 and 21.11.2020, thereby aggregating to
Rs. 2,00,00,000/- by November, 2020. It is equally undisputed that the subject project came to
be registered with this Authority only on 14.05.2021.

93.

This sequence of events assumes critical significance. Section 3(1) of the RE(R&D) Act

unequivocally mandates that no promoter shall advertise, market, book, sell, or invite persons
to purchase any apartment or plot in a real estate project without prior registration of the project
with the Authority. The provision is couched in prohibitory terms and admits of no exception.
The legislative intent is clear to ensure regulatory oversight before any form of public dealing
or financial transaction is undertaken in respect of a real estate project.
94.

In the present case, Respondent No. 1, much prior to obtaining registration, not only

invited the Complainant to purchase the subject flat but also proceeded to collect substantial
amounts aggregating to Rs. 2,00,00,000/-. Such conduct is in the teeth of Section 3(1) of the
RE(R&D) Act and constitutes a clear and unequivocal violation thereof. The magnitude of the
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The position is further compounded by the contents of the Agreement of Sale dated

30.01.2021, which itself records that the requisite building permission from GHMC was still
pending as on the date of its execution. Notwithstanding the absence of such statutory
approvals, the Respondent had already commenced collection of advances from as early as
August, 2020. This conduct reflects a premature and unauthorized commercialization of the
project, undertaken without the foundational approvals mandated under law. A promoter,
irrespective of its capacity or interest in the project, is statutorily restrained from inviting or
accepting investments in the absence of registration and requisite approvals. The actions of the
Respondent, therefore, strike at the very root of the regulatory framework envisaged under the
RE(R&D) Act.
96.

Further, Section 13 of the RE(R&D) Act imposes a specific restriction on the promoter

from accepting more than ten percent of the cost of the apartment as advance or deposit without
first entering into a written Agreement for Sale and registering the same. In the present case,
the Respondent accepted an amount of Rs. 2,00,00,000/-, which constitutes approximately 89%
of the total sale consideration of Rs. 2,25,00,000/-, prior to the execution and registration of
the Agreement of Sale. Such acceptance of funds is in flagrant violation of Section 13 of the
RE(R&D) Act.
97.

The breach is not merely technical but substantive in nature. The provision is designed

to safeguard the interests of allottees by ensuring that their financial exposure is limited until a
formal, enforceable, and registered agreement crystallizes the rights and obligations of the
parties. By collecting an overwhelming portion of the sale consideration in advance, the
Respondent has effectively rendered this statutory safeguard otiose.
98.

Further, Section 11(4)(h) of the RE (R&D) Act, 2016 places an express embargo upon

the promoter from creating any mortgage or charge over an apartment or project, after
execution of an Agreement for Sale in favour of an allottee. In the present case, it is borne out
from the record that Respondent No. 1, by way of a Memorandum of Deposit of Title Deeds
registered as Document No. 17170/2023 dated 31.10.2023, created an equitable mortgage over
multiple flats, including Flat No. 801, in favour of Respondent No. 10, State Bank of India, for
availing a loan of Rs. 7,00,00,000/-, without the knowledge or consent of the Complainant.

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The sequence of events assumes significant importance. The Agreement of Sale was

executed on 30.01.2021 and substantial consideration had already been received by the
Respondent. Thereafter, Respondent No. 1 purported to cancel the allotment by way of an email
dated 14.09.2023 alleging non-compliance with payment terms. However, within a short span
of time, i.e., on 31.10.2023, the Respondent proceeded to create the subject mortgage over Flat
No. 801 along with other units. Significantly, the record further discloses that even subsequent
to such alleged cancellation, the Respondent addressed a communication dated 25.04.2024 to
the Complainant, which indicates that the Respondent itself continued to acknowledge the
subsisting status of the Complainant in respect of the subject flat. This conduct is wholly
inconsistent with the stand that the allotment stood validly and conclusively terminated.
100.

In light of the above sequence, this Authority is unable to accept the purported

cancellation as a bona fide exercise of contractual rights. On the contrary, the timing and
surrounding circumstances strongly suggest that the said cancellation was orchestrated as a
device to facilitate the creation of a mortgage, thereby defeating the rights of the Complainant.
101.

Respondent No. 10 Bank has sought to justify its position by contending that it is a

bona fide mortgagee and that the mortgage was created subsequent to the cancellation of the
Agreement of Sale. However, such a defence cannot be accepted in a routine or mechanical
manner. A financial institution of the stature, experience, and institutional capacity of the State
Bank of India is expected to undertake comprehensive due diligence prior to accepting
immovable property as security.
102.

The subject project being a registered project under the RE (R&D) Act, any reasonable

inquiry, including verification of QPRS’s, would have disclosed the existence of an allotment
and Agreement of Sale in favour of the Complainant. The Bank, therefore, cannot be heard to
contend that it was unaware of the subsisting rights of the allottees. The plea of bona fide
mortgage, in the absence of demonstrable due diligence, cannot be sustained.
103.

Even otherwise, the statutory mandate under Section 11(4)(h) operates independently

of the knowledge or lack thereof on the part of the mortgagee. Any mortgage created in
contravention of the said provision is inherently defective qua the rights of the allottee and
cannot prejudice or override such rights. The promoter cannot, by unilateral acts or engineered
transactions, dilute the statutory protection afforded to the allottee.

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It is also pertinent to note that even if the Respondent promoter had failed to duly

update the quarterly progress reports on the RERA portal, such omission cannot enure to the
benefit of the Bank. The obligation to undertake due diligence is squarely cast upon the lending
institution. The Bank is expected to verify not only the title documents but also the statutory
compliances and encumbrance status of the project, particularly when dealing with a RERAregistered development.
105.

In such circumstances, this Authority is of the considered view that both the conduct

of the promoter in creating the mortgage and the acceptance of such mortgage by the Bank
suffer from serious legal infirmities. The Bank, having failed to exercise the degree of diligence
expected of it, cannot absolve itself of responsibility, nor can it claim superior rights over the
allottee in derogation of the statutory protections enshrined under the RE(R&D) Act.
106.

In view of the foregoing, this Authority has no hesitation in holding that Respondent

No. 1 has committed clear and multiple violations of the provisions of the RE (R&D) Act,
2016, particularly Sections 3(1) and 13, and 11. The conduct of the Respondent reflects a patent
disregard for the mandatory provisions of the RE(R&D) Act.
Point No .III: Whether the Complainant is entitled to the relief(s) as prayed for? If yes, to
what extent?
a. Registration of Sale Deed / Handing Over of Possession:
107.

The Complainant has sought a direction against Respondent Nos. 1 and 2 to execute

and register a Sale Deed in respect of Flat No. 801, together with three car parking spaces and
an undivided share of land admeasuring 105 sq. yds., in terms of the Agreement of Sale dated
30.01.2021, for a total sale consideration of Rs. 2,25,00,000/-.
108.

At the outset, this Authority is required to examine whether the Agreement of Sale

dated 30.01.2021 subsists and is enforceable. In this regard, the Respondent has sought to rely
upon a purported unilateral cancellation dated 14.09.2023. The validity of such cancellation
must therefore be tested in light of the factual matrix and the statutory framework.
109.

It is an admitted position that the Agreement of Sale was executed on 30.01.2021 and

that substantial consideration had already been received by the Respondent. Thereafter,
Respondent No. 1 purported to cancel the allotment by way of an email dated 14.09.2023
alleging non-compliance with payment terms. However, within a short span of time, i.e., on
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Significantly, the record further discloses that even subsequent to such alleged

cancellation, the Respondent addressed a communication dated 25.04.2024 to the Complainant,
which clearly indicates that the Respondent continued to acknowledge the subsisting status of
the Complainant in respect of the subject flat. Such conduct is wholly inconsistent with the plea
that the allotment stood validly and conclusively terminated.
111.

This Authority further notes that under the Agreement of Sale dated 30.01.2021, the

total sale consideration for the flat was fixed at Rs. 2,25,00,000/-. It is borne out from the record
that the Complainant has already paid amounts far exceeding the said consideration. Even if
the additional arrangements relating to add-ons and subsequent construction, aggregating to a
larger estimated consideration, are taken into account, the Complainant has admittedly paid a
sum of Rs. 3,45,00,000/-, which constitutes more than 80% of the overall financial
commitment.
112.

In such circumstances, the Respondent, having received the entire consideration

towards the flat, could not have resorted to cancellation of the allotment. At best, any alleged
delay in payment towards add-on components could have been addressed in accordance with
the contractual terms governing such additional works, but the same could not form the basis
for cancellation of the core allotment of the unit itself.
113.

Further, Clause 4 of the Agreement of Sale provides that cancellation may be effected

in the event of failure by the allottee to adhere to the payment schedule. However, such a clause
cannot be invoked in isolation or arbitrarily. Section 11(5) of the RE (R&D) Act mandates that
cancellation of allotment must be strictly in accordance with the terms of the agreement, which
necessarily implies adherence to principles of natural justice, including issuance of prior
notices and affording reasonable opportunity to the allottee.
114.

In the present case, there is nothing on record to demonstrate that the Respondent issued

any demand notices, reminders, or pre-cancellation notices to the Complainant in respect of
alleged defaults in milestone payments. On the contrary, the Respondent has not placed any
material to show that construction had progressed to stages warranting such payments.
115.

It is also pertinent to note that as per the Agreement of Sale, possession was to be

delivered within 30 months from the date of obtaining GHMC permission. Even assuming such
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In such a situation, where the promoter itself is in delay and has failed to complete

construction within the agreed period, it does not lie in the mouth of the Respondent to attribute
default to the Complainant and proceed with unilateral cancellation. The conduct of the
Respondent, in effecting cancellation without notice, without demand, and in the face of its
own default, is arbitrary, unjustified, and contrary to both the contractual terms and statutory
mandate.
117.

Viewed in totality, the sequence of events execution of Agreement, receipt of

substantial consideration, sudden unilateral cancellation, followed immediately by creation of
mortgage clearly indicates that the purported cancellation was not a bona fide exercise of
contractual rights, but a premeditated device adopted to facilitate encumbrance of the subject
property.
118.

Accordingly, this Authority has no hesitation in holding that the purported cancellation

dated 14.09.2023 is illegal, arbitrary, and non est in the eyes of law. The Agreement of Sale
dated 30.01.2021 is therefore held to be valid, subsisting, and enforceable.
119.

In view of the above findings, Respondent No. 1 is directed to execute and register the

Sale Deed in favour of the Complainant in respect of Flat No. 801, upon receipt of any balance
amount, if legitimately due, within a period of 30 days from the date of this Order. The
Respondent shall further ensure completion of the project in all respects, strictly in accordance
with the sanctioned plan, and hand over possession of the subject flat in a habitable and livable
condition.
120.

In regards with claim for compensation for mental harassment and agony, this Authority

observes that claims of compensation in the nature of damages fall within the exclusive
jurisdiction of the Adjudicating Officer appointed under Section 71 of the RE(R&D) Act. The
Complainant is therefore at liberty to approach the Adjudicating Officer for adjudication of
such claims, if so advised.
121.

The Complainant has further sought refund of an amount of Rs. 1,57,50,000/-, being

the sum allegedly paid in excess of the agreed sale consideration of Rs. 2,25,00,000/-, towards
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It is borne out from the record that the Complainant had paid an amount of Rs.

3,45,00,000/- as on 10.01.2023, which is Rs. 1,20,00,000/- in excess of the agreed sale
consideration. The total payments made by the Complainant further increased to Rs.
3,82,50,000/- as on 19.07.2023, thereby resulting in an excess payment of Rs. 1,57,50,000/over and above the agreed consideration of Rs. 2,25,00,000/- for the subject flat.
124.

The Respondents have sought to justify the said excess by contending that the total

consideration agreed between the parties was in fact Rs. 4,50,00,000/-, comprising Rs.
2,25,00,000/- towards the base sale price of the flat and an additional Rs. 2,25,00,000/- towards
“add-on” improvements and custom specifications.
125.

This Authority, however, is of the considered view that the alleged “add-on”

arrangements, even constitute a separate and independent understanding and agreement and do
not form part of the core transaction relating to allotment and sale of the subject unit under the
Agreement of Sale dated 30.01.2021. Notably, the parties have failed to place on record any
clear, specific, or verifiable details as to the nature, scope, specifications, or valuation of such
alleged add-on works. In the absence of any cogent material delineating the exact nature of the
improvements, their necessity, stage of execution, or corresponding valuation, this Authority
is not inclined to undertake an adjudication into such collateral arrangements, which appear to
be vague, unsubstantiated, and dehors the principal agreement governing the allotment of the
unit. Accordingly, this Authority declines to dwell into the alleged add-on agreements stated
to have been entered into between the parties for their mutual understanding.
126.

The Complainant has sought direction to Respondent Nos. 1 and 2 to remove the charge

created over Flat No. 801 in favour of Respondent No. 10 (State Bank of India) through the
Memorandum of Deposit of Title Deeds dated 31.10.2023. As this Authority has already held
that such mortgage was created in violation of Section 11(4)(h) of the RE(R&D) Act,
Respondent Nos. 1 and 2 are directed to take all necessary steps to procure the release of the
charge over Flat No. 801 from Respondent No. 10, and to ensure that the property is free from
all encumbrances at the time of registration of the sale deed in favour of the Complainant.
L. Directions of the Authority:

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In view of the findings recorded hereinabove under Point Nos. I, II, and III, and upon

consideration of the material available on record, this Authority hereby passes the following
directions:
i.

The purported cancellation of the Agreement of Sale dated 30.01.2021 by Respondent
No. 1 vide communication dated 14.09.2023 is hereby declared as illegal, arbitrary, and
void.

ii.

Respondent No. 1 is directed to execute and register the Sale Deed in favour of the
Complainant in respect of Flat No. 801, together with the agreed appurtenances, upon
receipt of any balance amount, if legitimately due, within a period of 45 days from the
date of this Order.

iii.

Respondent No. 1 shall complete the construction of the subject flat in all respects,
strictly in accordance with the sanctioned plan, and hand over possession of the flat in
a fully habitable and livable condition.

iv.

Respondent Nos. 1 and 2 are directed to take all necessary steps to procure release of
the mortgage/charge created over Flat No. 801 in favour of Respondent No. 10, State
Bank of India, and ensure that the subject property is free from all encumbrances at the
time of execution and registration of the Sale Deed.

v.

In view of the clear and established violations committed by Respondent No. 1,
particularly under Sections 3(1), 13, and 11(4)(h) of the RE (R&D) Act, 2016, this
Authority deems it appropriate to initiate penal action. Accordingly, the Secretary,
Telangana Real Estate Regulatory Authority, is hereby directed to initiate appropriate
steps for imposition of penalty against Respondent No. 1 under Sections 59 and 61 of
the RE(R&D) Act, in accordance with law.

vi.

The Complaint as against Respondent Nos. 3 to 9 is disposed of at this stage.

vii.

In view of the facts and circumstances of the present case, this Authority deems it
appropriate to observe and direct that all lending institutions dealing with real estate
projects registered under the Real Estate (Regulation and Development) Act, 2016 shall
exercise due diligence prior to sanctioning loans or accepting immovable properties as
security.

Such

due

diligence

shall

necessarily

include

verification

of:

registration status of the project with the Authority,
a) details of allotments made in respect of the units,
b) disclosures available on the RERA portal, including quarterly progress reports, and
c) existence of any subsisting Agreement(s) for Sale or allottee rights.
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In view of the above, the present complaint is disposed of. No order as to costs.
Sd/-

Sd/-

Sd/-

Sri. K. Srinivasa Rao,
Hon’ble Member

Sri. Laxmi Narayana Jannu,
Hon’ble Member

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

TG RERA

TG RERA

TG RERA

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