Order Complaint No. 583 Of 2022

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.583 OF 2022
16th Day of April 2024
Corum:

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

Sri R. Srinivasa Rao

…Complainant
Versus

M/s Sandstone Infra India Pvt. Ltd.
Represented by its Managing Director,
Sri M. Chandra Sekhara Reddy

…Respondent

The present matter filed by the Complainant herein came up for hearing
on 18.01.2024 and 15.02.2024 before this Authority in the presence of the
Complainant in person, and none for the Respondent, and upon hearing the
arguments, this Authority passes the following ORDER:

2.

The present Complaint has been filed under Section 31 of the Real Estate

(Regulation and Development) Act, 2016 (hereinafter referred to as the “Act”) read
with Rule 34(1) of the Telangana Real Estate (Regulation and Development) Rules,
2017 (hereinafter referred to as the “Rules”) requesting appropriate action against
the Respondent Builder.

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Brief facts of the case:
3.

The Complainant submitted that in January, 2018, Respondent published

one of his ventures "SPRING CITY", situated in Survey No. 383 / P 385 / P 386/P,
387 / P 388 / P 455 / P & 456 / P at Sultanpur Village, Ameenpur Mandal,
Sanga Reddy District (hereinafter referred to as the ‘Project’), as a Registered Real
Estate Project and that he agreed to sell the Plot bearing No. 144, admeasuring
480 Sq. yards, in the said Project for a valuable sale consideration of
Rs.61,15,000/- (Rupees Sixty One Lakhs Fifteen Thousand Only). The
Complainant submitted that the Respondent represented to register the plot
within 1 (one) month from the date of Agreement of Sale.

4.

That thereafter, the Complainant paid an amount of Rs.28,00,000/-

(Rupees Twenty-Eight Lakhs Only) on different dates by way of cheques which
are all encashed by the Respondent and subsequently, both parties entered into
an Agreement of Sale dated 05.10.2019 towards purchase of the Plot bearing No.
144, admeasuring 480 Sq. yards, in the Project. Following the execution of the
Agreement of Sale, the Complainant was advised to prepare for the registration
of the Sale Deed, ensuring that the remaining sale consideration of
Rs.33,15,000/- (Rupees Thirty-Three Lakhs Fifteen Thousand Only) is ready for
the transaction within one month from the date of the said Agreement of Sale i.e.,
from 05.10.2019.

5.

The Complainant submitted that Respondent promised that the Plot

bearing No.144 shall be executed in favour of the Complainant or his nominees
and that if there is any delay in completion of the work pertaining to the
agreement from the Government or from any statutory authority both the parties

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have to wait for the same and there shall not be any dispute on this point and
both the parties have to abide by the same.

6.

It was further submitted that the remaining sale consideration was

arranged and consequently the Complainant approached the Respondent to get
the Sale Deed executed in his favour. Whereas the Respondent was postponing
the execution of Sale Deed on one pretext or the other that there was delay from
the government and statutory authorities, thereby trying to take undue
advantage of one of the clauses of the Agreement. In lieu thereof, the Complainant
prayed that the Respondent may be directed to register Plot No.144 in favour of
the Complainant.

Reply by the Respondent:
7.

Per contra, Vide reply dated 29.11.2022, the Respondent submitted that

the Project is registered with RERA bearing No. P01100003171 dated 24.07.2021.
The Respondent submitted that it is true that the Complainant, has approached
on his own to purchase a plot bearing No. 144 admeasuring 480 Square Yards
in the Project. However, the Respondent has asked Complainant that he will
register land to the extent of advance paid as the development works will take
time. But the Complainant informed that he would wait and that he selected the
Plot which is mortgaged.

8.

That the Respondent informed that the selected plot is mortgaged and also

mentioned that the Respondent will allot another Plot to him and get the same
registered, but the Complainant insisted to register the same plot which is
mortgaged. The Respondent further submitted that due to the lockdown and

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COVID-19 pandemic situation, the Project faced delays. Respondent added that
he is willing to return the amount along with interest, if applicable. The
Respondent, therefore, prayed to drop the complaint in which the delay is caused
due to pandemic situations.

Rejoinder:
9.

The

Complainant,

vide

Rejoinder

dated

23.01.2023,

denied

the

Respondent Developer's contentions. He submitted that the Respondent
Developer has not admitted to the execution of the 'Agreement of Sale' or the
receipt of the sale consideration in their reply. The Mortgage Deed with HMDA,
executed by the Developer subsequent to the execution of Agreement of Sale
dated 05.10.2019 wit the Complainant, is deemed illegal and against the laws
governing property transactions. The Developer's attempt to take advantage of
the COVID-19 pandemic situation is refuted, as the Agreement of Sale was
executed prior to the pandemic. He added that the Respondent is in violation of
the provisions of the Act, 2016 and the Rules thereunder as he has executed an
agreement of sale with the Complainant much prior to even making an
application before this Authority.

10.

Accordingly, the Complainant prayed to direct the Respondent Developer

to register the Schedule Residential Plot per the Agreement of Sale dated
05.10.2019, accepting the remaining sale consideration. And that if the agreed
plot is mortgaged, direct the Respondent Developer to provide an undertaking to
release the mortgage and register the plot in the Complainant's name after
receiving the balance sale consideration.

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Hearing conducted:
11.

During the course of hearing, the Complainant reiterated the contents of

his complaint and the Counsel for Respondent appeared on 18.01.2024 and
sought time for arguments. Accordingly, the matter was adjourned to 15.02.2024
for final arguments as the pleadings were complete. On 15.02.2024, the
Respondent, despite explicit directions from this Authority to make final
submissions, failed to appear. Complainant appeared and prayed to grant reliefs
as prayed for.

Observations and Directions of the Authority:
12.

As the Respondent failed to appear despite explicit directions of this

Authority, vide this final order, the Respondent Developer is set ex-parte.

13.

After perusal of the contentions and averments of both parties in their

respective pleadings, it is observed that the Respondent admittedly executed an
Agreement of Sale dated 05.10.2019 with the Complainant, prior to obtaining
RERA registration, which was only granted on 24.07.2021. This sale is in clear
violation of Section 3 which categorically prohibits any sale by the promoter
before obtaining registration from this Authority.

14.

Therefore, while exercising its powers under Section 59 read with Section

38 of the Act, this Authority deems it fit to impose penalty for an amount of
Rs.7,07,926/- (Rupees Seven Lakhs Seven Thousand Nine Hundred and TwentySix Only) upon the Respondent Developer for having admittedly, violated Section
3 of the Act, 2016 payable within 30 days in favour of TS RERA FUNDS through
Demand Draft or online payment to A/c No.50100595798191, HDFC Bank, IFSC

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Code: HDFC0007036, failing which appropriate action under Section 63 of the
Act, 2016 shall be initiated against the Respondent.

15.

Further, the Plot No.144, which was so allotted to the Complainant was

admittedly, mortgaged to the HMDA subsequently in the year 2020. In this
regard, it is pertinent to note that Section 11(4)(h) of the Act provides as under:
(h) after he executes an agreement for sale for any apartment, plot or
building, as the case may be, not mortgage or create a charge on such
apartment, plot or building, as the case may be, and if any such mortgage
or charge is made or created then notwithstanding anything contained in
any other law for the time being in force, it shall not affect the right and
interest of the allottee who has taken or agreed to take such apartment, plot
or building, as the case may be;

16.

Therefore, as per Section 11(4)(h), the Complainant's rights and interests

concerning Plot No. 144 in the Project shall remain unaffected in line with the
Agreement of Sale dated 05.10.2019, and the Respondent shall be held
accountable for complying with the terms specified therein.

17.

Therefore, upon consideration of the facts and circumstances, while

exercising its power under Section 37 of the Act, this Authority deems it fit to
pass the following directions:

a. The Respondent shall be liable to pay a penalty of Rs.7,07,926/- (Rupees
Seven Lakhs Seven Thousand Nine Hundred and Twenty-Six Only) upon
the Respondent Developer for having admittedly, violated Section 3 of the

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Act, 2016 payable within 30 days in favour of TS RERA FUNDS through
Demand Draft or online payment to A/c No.50100595798191, HDFC
Bank, IFSC Code: HDFC0007036, failing which appropriate action under
Section 63 of the Act, 2016 shall be initiated against the Respondent; and
b. The Respondent is directed, if not already done, to release the mortgage of
the Plot No.144 admeasuring 480 Sq, in "SPRING CITY" from HMDA
through the sub-registrar within 60 days; and
c. As per the Agreement of Sale, the Respondent agreed to register the Plot
No.144 in favour of the Complainant within 1 (one) month from the date of
the Agreement i.e., 05.11.2019, but he has failed to do so as mortgage had
not been released. Therefore, the Respondent is directed to pay interest at
the rate of 10.65% as per Rules, 2017 to the Complainant for delay in
possession of the Plot No.144 admeasuring 480 Sq, in "SPRING CITY" from
05.11.2019 within 30 days. It is also not correct on the part of the
Complainant to make sale agreement of the plot which has been mortgaged
to HMDA; and
d. The Complainant shall pay the remaining balance sale consideration of
Rs.33,15,000/- (Rupees Thirty-Three Lakhs Fifteen Thousand Only) to the
Respondent Developer within 30 days of release of mortgage of Plot No.144
admeasuring 480 Sq, in "SPRING CITY" from HMDA through the subregistrar by the Respondent; and
e. The Respondent, within 30 days of receiving the said consideration,
register Plot No.144, admeasuring 480 Sq, in "SPRING CITY", situated in
Survey No. 383 / P 385 / P 386/P, 387 / P 388 / P 455 / P & 456 / P at
Sultanpur Village, Ameenpur Mandal, Sanga Reddy District, Telangana in
favour of the Complainant.

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18.

In lieu thereof, the present complaint stands disposed of.

19.

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. Srinivasa Rao,
Hon'ble Member,
TS RERA

Sd/Sri Laxmi Narayana Jannu,
Hon'ble Member,
TS RERA

Sd/Dr. N. Satyanarayana, IAS (Retd.),
Hon'ble Chairperson,
TS RERA

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