Order Complaint No. 383 Of 2023

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.383 OF 2023
31st day of May, 2024
Corum:

Dr. N. Satyanarayana, IAS (Retd.),Hon’ble Chairperson
Sri Laxmi Narayana Jannu, Hon’ble Member
Sri K. Srinivasa Rao, Hon’ble Member
M/s Cresco Housing Welfare Association
…Complainant
Versus
M/s Cresco Housing Project

…Respondent

The present matter filed by the Complainant herein came up for final
hearing on 27.03.2024 before this Authority in the presence of Complainant
association represented by Vice President M.Ashok

and

Sri Laxman

authorised representative 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.

The present complainant is a registered association, vide registration

number 709/2020, named Cresco Housing Welfare Association. In 2017, the
association members entered into Agreements of Sale with M/s Cresco
Housing Projects, located at 6-60, Singapuram (V), Shankerpally (M),
Rangareddy District, for the purchase of plots and construction of houses.
The development included an HMDA-approved layout on land measuring
11.10.96 acres in Sy No 317 and 324, with relevant documents provided to
individual plot owners. A substantial number of individuals also paid the
agreed amounts without formal agreements.
4.

Many purchasers, primarily employed in government/private firms or

working as small-scale vendors, invested 90% of the agreement amount,
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relying on the prospect of securing housing loans. Unfortunately, these loans
were denied due to legal heir issues with the landowner. Consequently,
individuals borrowed money at high interest rates to fulfil their payment
commitments to the builder, leading to significant financial hardship.
5.

As per clause 5.7 of the Agreement of Sale, the developer was obligated

to complete house construction within 24 months from the date of the
Agreement, with a grace period of 6 months, subject to payments from
purchasers. However, this clause lapsed in 2019, and the houses remain
incomplete.
6.

Despite repeated appeals and requests, the developers have failed to

complete construction, leaving the dwelling units unfinished and the
properties unregistered.
7.

No

progress

has

been

observed

at

the

construction

site

for

approximately two years. Per HMDA guidelines, all development works should
have been completed within six years from the date of layout permit approval
(April 10, 2017), with the Development Agreement period expiring on April 9,
2023.
8.

Construction progress stands at only 60%-70%, with no infrastructure

development as required by HMDA guidelines.
9.

The developers have wilfully violated TS RERA Bye Laws and legislative

provisions of the State of Telangana, including G.O.M.S. No. 202 (dated
February 31, 2017) and G.O.M.S. No. 6.8 (dated January 11, 2018). This has
raised concerns about transparency, efficiency, and the protection of the
hard-earned money of employees and small-scale workers.
B. Relief(s) Sought
10.

In light of the above, we earnestly request your intervention to:

a. Direct the respondent to register the allotted villas as per the agreement
with the association members.
b. Take action against the respondent and the owners of the project.
C. Respondent's Reply
11.

The complaint has been signed by 28 individuals, many of whom we

have no prior association with. The complainants have approached this
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authority with malafide intentions, evident from the fact that their complaint
was filed a month after the expiration of the RERA registration's validity,
which lapsed on April 9, 2023.
12.

The complainants must substantiate their claims of payments made by

certain individuals without corresponding agreements, and they shall be
required to provide strict proof thereof.
13.

With the exception of two individuals among the complainants, none of

the other persons paid the amounts as claimed by them. A separate sheet
detailing the statement of payments made by agreement holders, along with
necessary particulars, is attached for reference.
14.

Indian Bank sanctioned housing loans to many of these complainants

in 2017; however, they failed to comply with the sanction terms and did not
avail housing loans during the lifetime of the landowner, who passed away in
2018. The complainants are well aware that the legal heirs did not fulfil their
obligation to rectify the DGPA, resulting in the non-disbursement of loans, for
which they bear no fault.
15.

The units could have been delivered within 30 months if the

complainants had made timely payments as per the schedule agreed upon in
the sale agreement.
16.

The complainants suffered a significant setback due to the death of the

landowner, whose legal heirs ratified the DGPA in August 2022. Two of the
complainants registered their dwelling units in May 2023 by fulfilling their
financial obligations as per the sale agreement. It is crucial to note that the
respondents have not increased any prices for the allottees.
17.

The respondents request this authority to consider compensation for

the delayed payments made by the complainants.
D. Rejoinder:
18.

Among the 28 members, several are also purchasers of dwelling units

from M/s Cresco Housing Project, Shankarpally. These buyers reside or
work in different villages, and some were unavailable during the
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submission of the above complaint. Hence, only those who were available
at the time signed the application. The management of M/s Cresco
Housing Project is well aware of all these buyers.
19.

As per the letter, 21 out of 28 members were recognized with Agreement

of Sale documents, and 2 were registered in May 2023. In total, 23 out of
28 members have been recognized. The payment receipt vouchers for the
remaining members are duly signed by one of the partners.
20.

Though some individuals do not possess agreement documents, they

have made part payments for their respective units as evidenced by the
receipt vouchers. They have not lent money to the management as claimed
in their reply letter. Cresco management assured them that the units
would be registered directly without the need for an agreement, hence they
made the payments.
21.

Furthermore, the housing units were promised to be handed over at

least by the end of the validity period of the TSRERA registration. The
management failed to adhere to the timeline provided by TSRERA, thereby
disappointing the complainants.
22.

The buyers approached TSRERA after the completion of 5-6 years of

this project seeking further guidance and justice, without any malafide
intention as alleged in the reply. They did not approach earlier to claim the
validity period of the RERA registration, hence they waited until the date of
validity of the TSRERA registration.
23.

The unit price is as per the rate declared in their leaflet, i.e., 24.5 Lacs,

published in the market during the initial period by M/s Cresco Housing
Project. Some buyers negotiated a lower rate for their units. The rate
mentioned in the Agreement of Sale documents is different. The 90%
payment specified in our letter is based on the earlier value. Now, Cresco
management is calculating the 90% based on the rate mentioned in the
agreement documents. The rate with the excess amount was mentioned in
the document with the intention of securing a higher percentage of loans
from the bank for the individuals.
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24.

In some cases, the management has issued a receipt voucher for the

excess amount as well. This was mutually agreed upon during the
document writing. Calculating the amount of 90% based on the agreement
document is felt to be unjust. The Cresco management is well aware of this
issue.
25.

It is true that Indian Bank sanctioned housing loans for a few

individuals in November 2017. The loan process was in progress when,
unfortunately, the landowner died in April 2018, an unforeseen event.
Cresco management informed the bank authority to halt loan issuances as
the landowner's demise could lead to legal heir issues in the future.
Consequently, the bank denied issuing the loan. As per their letter, they
obtained the legal heirs certificate in August 2022.
26.

If the buyers had not paid the amounts as per the schedule, Cresco

management could have issued warning letters to the individuals with
deadlines for payment. Hence, it is clear that buyers paid the amounts as
and when requested. Cresco Housing Project's management did not inform
the individuals about the progress of the work. How can individuals be
aware of the work progress unless the builder informs them, especially as
they reside in different locations? Therefore, it is incorrect to blame the
buyers for not paying as per schedule.
27.

Additionally, it should be noted that the office of Cresco Housing Project

was relocated to Hyderabad, and there is no office or representative
available at Shankarpalli. This has caused inconvenience for the buyers to
approach the appropriate person. Often, phone calls go unanswered.
Hence, it is incorrect to blame the buyers for not paying as per schedule.
28.

Calculating the overall revenue of the project based on the payments

made by the 28 individuals is not understood.
29.

It is true that two of the above members had their dwelling units

registered in May 2023, but 19 units/plots were registered during the
lifetime of the landowner.

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30.

We would like to bring to your notice that in August 2020, some buyers

were ready for the registration of their units. One buyer paid a bank
challan for Rs. 120,000, towards registration and stamp duties as per
management guidelines. Unfortunately, one of the partners objected to
proceeding with the registration process, stating that they had no authority
to sign the registration papers.
E. Hearing Conducted
31.

A

hearing

was

conducted

on

11.10.2023,

during

which

no

representatives appeared on behalf of the Complainants, and the Respondent
requested additional time to file a reply. A fresh notice for appearance was
issued to the Complainants.
32.

On November 9, 2023, both parties appeared before the authority. The

Complainants asserted that they had purchased the unit between the years
2014 and 2019. The Respondents have only registered four units to date.
When questioned about the delay in completing the project, the Respondents
stated that they were unable to complete the project due to the Complainants'
failure to pay the sale consideration amount. Furthermore, ongoing disputes
between the partners contributed to the delay. The Respondents also asserted
that they have no association with all the members of the concerned
association and have only allotted villas to two or three members.
Consequently, the authority directed the Complainants to submit relevant
documents evidencing that the villas in the concerned project have been
allotted to all members of the association.
33.

The Complainants contended that the Respondents did not provide the

required documents to avail a loan, which prevented them from paying the
remaining balance. Denying these allegations, the Respondent informed this
authority that they were facing issues in providing the necessary documents
due to the death of the landowner.
34.

Meanwhile, on 21.12.2023, S. Jagdeshwar Rao, Advocate for Mr. Ashok,

a member of the association, filed a separate Vakalatnama and requested time
to file a reply. Despite explicit directions to submit relevant documents with
respect to the allotment of villas of all the members, the association failed to
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do so.On subsequent hearing dates, Mr. Ashok's advocate requested
additional time to file a reply, citing that the Respondent had not provided the
relevant documents to the Complainant. A fresh notice has been served to the
Respondent for the next hearing date.
35.

When questioned about the absence of the members of the complainant

association at the last three hearings and the lack of submitted documents or
substantive evidence indicating their allotment in the concerned project, Mr.
Ashok, Vice President of the association, stated that the members were no
longer interested in proceeding with the matter. However, no written
application to this effect was submitted to the Authority. Additionally, Mr.
Ashok expressed his willingness to pursue the matter himself and submitted
the Rejoinder.
F. Observations of the Authority
36.

The points for consideration before the Authority is as follow:

a. Whether all 28 members can be recognized as allottees of the concerned
project.
37.

Point A. The Authority notes that the Complainants, along with Form

M, submitted a list of 28 members who purportedly purchased villas in the
Respondent's project. The Respondent, however, denies recognizing these 28
members as legitimate allottees, asserting that most of these individuals have
no association with their project.
38.

The Complainant association, in its rejoinder, maintains that all 28

members have been allotted villas, though only two have been officially
registered. Despite this claim, the Complainant association failed to provide
this Authority with substantial documentation—such as agreements, payment
receipts, or allotment letters—to demonstrate that each of the 28 members
entered into an agreement with the Respondent or made payments.
39.

It is a well-established principle that the burden of proof lies on the

party asserting a claim. In this instance, the Complainant association failed to
provide sufficient evidence, aside from documents pertaining to three

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individuals, namely Sri Sunil Kumar, M. Ashok, and L. Janardhan, these
documents alone confirm their status as allottees.
40.

Therefore, due to the lack of substantial evidence confirming that all 28

members have been allotted villas, this Authority cannot recognize all 28
members as allottees of the concerned project. The formed and registered
Association lacks sufficient evidence to support that all members are allottees
of the concerned project; hence, the Authority cannot consider this
Association as valid.
41.

In light of the aforementioned observations, the Authority hereby

dismisses the complaint on the grounds that the Association is deemed
invalid and the present complaint cannot be tenable. Consequently, the
Authority will not delve into the merits of the reliefs sought, rendering the
entire complaint infructuous.
42.

However, the complainant association member, Mr. Ashok, who has

requested to continue with the matter individually and has made an advocate
file a Vakalatnama, retains the liberty to approach the Authority with a fresh
complaint.
43.

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

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