Order Complaint No. 522 Of 2024

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
31st July, 2024
Corum:

Dr. N. Satyanarayana, IAS (Retd.), Hon’ble Chairperson
Sri LaxmiNarayanaJannu, Hon’ble Member
Sri K. SrinivasaRao, Hon’ble Member

Between
Sri Abdul Wahid

COMPLAINT NO.522 OF 2024
…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd

…. Respondent

COMPLAINT NO.523 OF 2024
Between
Sri Alamanda Krishna Prasad

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd
COMPLAINT NO.291 OF 2024
Between
Sri Bala Mukunda

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd
…. Respondent
COMPLAINT NO.952 OF 2023
Between
Sri Paravaram Chanakya

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd
…. Respondent

There complaints have come for final hearing on 23.04.2024, before this
authority, in the presence of Complainants party in persons and Respondent
counsel Sri Ramabika in all the complaints and after hearing both the parties,
the Authority passes the following:
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COMMON ORDER

2.

These complaints have 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.
3.

The case of the complainants in all the complaints is on similar

grounds. Similarly the stand taken by the Respondent in their counters is
also same. Therefore for the sake of the convinenince and to avoid repetitions
the pleadings from the complaint no.952 of 2023 are referred below.

A. Facts of the Case:
4. The Respondent company published a pre-launch offer for the project "Jaya
Gold" at Nizampet in January 2022. All the complainants purchased flats in
the year 2022 and entered into a Memorandum of Understanding (MoU) with
the Respondent. As per the MoU, the Respondent assured the handover of the
flats by December 2021. However, no work has been initiated on the site to
date.
5. The complainants have attempted to contact the Respondent and their
Directors, but have received no response to calls or meetings. Consequently,
the complainants have approached this Authority requesting a refund along
with interest.
B. Relief(s) Sought:
6. Refund of the amount along with interest.
C. Respondent's Reply:
7. With the consent of the Authority, the Respondent will resolve the issues
within a period of three months.

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8. The Respondent is willing to settle the matter through cash or property
with the complainants' consent.
9. If the Authority accepts the proposal, the Respondent shall arrange cash or
substitute land for the complainants and repay the amount within three
months.
D. Hearing Conducted:
10. During the hearing, both parties requested to consolidate the four
complaints and issue a common order. Consequently, the four complaints are
disposed of by a common order. Both parties were heard.
11.

Hearings were conducted on 06.03.2024, 02.04.2024, and 23.04.2024.

During the hearings, the complainants reiterated their original contentions.
Given the Respondent's unclear role and the Authority's awareness of
malpractices by M/s Jayathri Infrastructures Pvt Ltd in other projects, the
Authority, under Section 35 of the Real Estate (Regulation and Development)
Act, 2016 (RE(R&D) Act), directed the Engineering Staff College India (ESCI)
via letter no. 1458/2023/TSRERA dated 10.10.2023 to conduct an inspection
and submit a comprehensive evaluation report of the "Jaya Gold" project.
12.

As per the ESCI report, the project is designed with a Ground + 5 upper

floors configuration, featuring commercial spaces on the Ground and First
floors, and residential flats on the four upper floors.
13.

According to the complainants, when purchasing the units, the

Promoter displayed a sale agreement between the Respondent and M/s
Gayathri Homes for a land area of 2456.0 sq. yds., with a sale consideration
of Rs. 16 crore. They had advanced Rs. 3.0 crore in January 2022, with the
balance payable by April 2022 for land registration.
14.

M/s Gayathri Homes owns 4840.0 sq. yds. of land, acquired from M/s

Turbovent Industries Private Ltd. via sale deed no. 12313/20217 dated
25.09.2017. M/s Turbovent Industries converted the agricultural land to nonagricultural purposes through RDO Malkajgiri proceedings no. L/1334/2017
dated 24.10.2017.

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15.

Subsequently, M/s Gayathri Homes sold 1245.0 sq. yds. of land to Sri

Gollapalli Venkat Ramaiah via sale deed 24755/2022 dated 01.09.2022.
16.

Upon reviewing the documents provided by the complainants, it is

observed that M/s Gayathri Homes submitted an application for building
construction

permission

to

HMDA

in

May

2022,

vide

file

no.

004729/BP/HMDA/0899/MED/2022. The building construction permission
was rejected by HMDA due to the surrender of land for road widening
purposes and a standstill.
17.

Upon perusing the documents furnished by the complainants, the ESCI

team could not find any circumstantial evidence of either property rights or
authorization or a sale deed of ownership of land by M/s Jayathri Infra for the
"Jaya Gold" project. No progress has been made on the site.
18.
in

M/s Jayathri Infrastructure Private Limited is not reflected anywhere
the

hierarchy

of

possessing

title

rights

or

any

authority

as

a

builder/developer on the subject property. It is further opined that Jayathri
has merely acted as an agent.
19.

During the hearing, the Respondent informed the Authority that due to

the non-performance of the contract with M/s Gayathri Homes, the
Respondent could not initiate construction and is willing to repay the amount
to the allottees within three months.
20.

At the final hearing, the complainants consented to the Respondent's

proposal and submitted a letter dated 23.04.2024 indicating their consent.
However, they requested the Authority to ensure the settlement is made in
cash with interest, not through property.
E. Points for Consideration:
a. Whether the Respondent is in violation of Section 3 of the RE(R&D)
Act?
b. Whether the complainants are entitled to the relief sought?
21.

Point a: The Authority has carefully reviewed the material on record

and considered the contentions of the parties, along with the detailed and
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comprehensive report submitted by ESCI. It is evident that the Respondent
has advertised the project "Jaya Gold" on various websites, entered into MoUs
with the allottees, and collected amounts for the flats in the concerned
project. The Respondent, without acquiring any legal title, indulged in these
acts despite having no RERA registration for the project. The Respondent has
evidently violated Section 3 of the RE(R&D) Act, 2016. Hence, the answer is
affirmative.
22.

Point b: The complainants have sought a refund with interest. As the

Respondent

neither

disputed

nor

refuted

the

relief

sought

by

the

complainants but instead submitted its willingness to refund the entire
amount, the point is concluded. Hence, the complainants are entitled to a
refund.
23.

Now, whether the Respondent shall also pay interest is a point that

needs clarification. The provision for interest for delayed possession applies
when the promoter fails to complete the project and the allottee wishes to
withdraw. The allottee is entitled to interest to safeguard their interests if the
promoter fails to perform their obligations and is unable to hand over
possession.
24.

Attention is drawn to the decision of the Hon'ble Supreme Court of

India in Civil Appeal Nos. 3581-359 of 2022, Civil Appeal Diary No.
9796/2019, M/s Imperia Structures Limited vs. Anil Patni & Others, wherein
it was held:
"In terms of Section 18 of the RERA Act, if a promoter fails to
complete or is unable to give possession of an apartment by the
date specified in the agreement, the promoter would be liable, on
demand, to return the amount received in respect of that
apartment if the allottee wishes to withdraw from the project.
Such a right of the allottee is 'without prejudice to any other
remedy available to him'. This right is unqualified, and if availed,
the deposited money must be refunded with interest as prescribed.
The proviso to Section 18(1) contemplates that if the allottee does
not intend to withdraw from the project, they are entitled to
interest for every month of delay until possession is handed over.
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The allottee may proceed under Section 18(1) or the proviso
thereto."
25.

The RERA Act thus provides a remedy to an allottee who wishes to

withdraw from the project or seek a return on their investment. Therefore, as
per Section 18(1) of the RE(R&D) Act, the promoter is liable to return the
amount received along with interest and compensation if the promoter fails to
complete or deliver possession of the apartment as per the sale agreement.
26.

Further, in the decision of the Hon'ble Supreme Court in Civil Appeal

Nos. 6745-6749 of 2021, M/s Newtech Promoters and Developers Private
Limited vs. State of UP & Others, it was held:
"Section 18(1) of the Act spells out the consequences if the
promoter fails to complete or is unable to give possession of an
apartment, plot, or building in terms of the agreement for sale.
The allottee/home buyer holds an unqualified right to seek a
refund of the amount with interest as prescribed."
26.

From the averments made in the complaint, it is evident that the

Respondent kept the complainants on hold for two years, making false
promises about registering the units in the complainants' names. After the
complaints were filed, the Respondent revealed they failed to acquire the
project, preventing registration. The Authority believes that the complainants,
having paid a significant amount in the hope of acquiring units, have been
wronged due to the Respondent's complete failure to execute the project. It is
unjust for the complainants not to receive interest on the amount paid.
Additionally, the Respondent has consistently violated the RE(R&D) Act by
deceiving the public in various other projects, demonstrating malafide
intentions.
27.

Therefore, in the interest of the allottees, the Authority believes that the

complainants are entitled to interest. Under Sections 37 and 38 of the
RE(R&D) Act, the Authority opines that the Respondent should pay interest as
per Rule 15 of the TG RE(R&D) Rules, which stipulates the Marginal Cost of
Lending Rate (MCLR) plus 2% interest. The current MCLR of the State Bank is
8.65% plus 2%.

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28. The Respondent shall repay the entire amount paid by each complainant
along with interest of 10.65% per annum from the due date for handing over
the units as mentioned in the MoU, i.e., 01.12.2023, until the actual
realization within 90 days from the date of this order.
F. Directions of the Authority:
29.

In exercise of the powers conferred under Section 31 of the Real Estate

(Regulation and Development) Act, 2016, the complaint numbered 756 of
2023 is hereby allowed. In light of the findings of the Authority as recorded
above, the following directions are issued under Section 37 of the RE(R&D)
Act to ensure compliance with the obligations imposed upon the promoter as
per the functions entrusted to the Authority under Section 34(f) of the
RE(R&D) Act:
I.

The Respondent is directed to refund the entire amount paid by the
each complainant for the units in the project "Jaya Gold" as mentioned
above, along with interest of 10.65% per annum from the due date of
01.12.2023

II.

The refund of the entire amount and interest accrued from the due date
mentioned by the Authority, i.e., 01.12.2023, until the date of the order
by the Authority, shall be paid by the Respondent to the allottee within
a period of 90 days from the date of this Order.

III.

For contravening Section 3 of the Act, this Authority, exercising its
powers under Section 59 of the Act, imposes a penalty of Rs. 9,78,812/.
This penalty is imposed for marketing/selling villas of the Project
without registering the project before this Authority. The amount is
payable in favor of TGRERA FUND through a Demand Draft or online
payment to A/c No. 50100595798191, HDFC Bank, IFSC Code:
HDFC0007036, within 30 days of receipt of this Order by the
Respondents/Promoter.

30.

In light of the above findings and directions, the present complaint

stands disposed of. The parties shall bear their own costs. The parties are
hereby informed that failure to comply with this Order shall attract Section 63
of the Act.
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31.

If aggrieved by this Order, the parties may approach the Telangana Real

Estate Appellate Tribunal as per Section 44 of the Act, 2016.

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

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

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

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