Order Complaint No. 678 of 2022

TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY
COMPLAINT NO.678 OF 2022
Date of decision: 29.08.2023
Mr. Gaddam Sridhar Reddy & Others

…Complainants
Versus

M/s Jubilee Hills Landmark Projects Pvt Ltd. & (2) others

…Respondents

Quorum:

Dr. N. Satyanarayana, Hon’ble Chairperson
Sri K. Srinivas, Hon’ble Member
Sri Laxmi Narayana Jannu, Hon’ble Member

Appearance:

Mr. Gaddam Sridhar Reddy in person (Complainant)
Mr. Anand Subrahmanyam, Advocate for Respondent Nos.1
and 2.
Mr. R.V.Subba Rao, Advocate for Respondent No.3.
ORDER

The present complaint has been filed by Gaddam Sridhar Reddy and 10
others under Form M against Respondent Number 1, 2 and 3 as under:
A. FACTS OF THE COMPLAINT:
The complainants have made the following submissions:
2.

That the Respondent No.1 had acquired the property admeasuring 28,303

Sq.Yards (equivalent to 23,661.77 Sq.Meters) in T.S.No.16/3 (Old Sy.No.120/Part,
403/Part), Block-II, Ward No.9, Near Jubilee Hills Check Post, situated at
Shaikpet Village and Mandal, Hyderabad, Telangana from Hyderabad Urban
Development Authority (HUDA) by virtue of Regd. Sale Deed bearing Doc.No.5227
of 2006 dated 19.09.2006. HUDA has handed over the possession of the property
to Respondent No.1 on 30.08.2006.

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3.

That the Respondent No.1 (promoter) subsequently had entered into a

Registered Development Agreement cum General Power of Attorney (DGPA) dated
05.05.2011 vide Doc.No.1327 of 2011with Mantri Mansions Private Limited
(‘MMPL’) and Avant-Garde Beverages Private Limited (‘ABL’), wherein;
MMPL is the Developer for Residential Project and was entitled to 55% share
in the built-up area along with proportionate undivided interest/share in
the land and similarly Respondent No.1 was entitled to 45% share in the
total built up area in the Residential Project along with Proportionate
undivided interest/share in the land.
4.

Thereafter, in connection to the aforesaid DGPA, the following registered

documents are entered;
a) Respondent No.1, MMPL and ABL have entered into Registered First (1st)
Amendment Agreement dated 24.08.2011, wherein both MMPL and
Respondent became entitled for revised share of 50% each in both total
built up area and undivided share of land.
b) Respondent No.1, MMPL and ABL have entered into a Registered Second
(2nd) Amendment Agreement dated 04.12.2012, wherein proposal for
commercial project was withdrawn and certain terms were amended.
The ABL is the Conforming party to this agreement.
c) Thereafter, MMPL has amalgamated with Mantri Developers Private Ltd
(MDPL) –Respondent No 2 in 2018 and all the rights and liabilities of
MMPL were transferred to MDPL.

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5.

The Complainant stated that, the Respondent No.1 and MMPL have entered

into a Supplementary Agreement dated 10.09.2013 with three Annexure A, B, C
as under:
a. As per Annexure-A, 59 units are for the share of Owner and the total
area is coming to 3,93,745 sq. feet.
b. As per Annexure-B, 59 units are for the share of Developer and total
area is coming to 3,93,840 sq. feet.
c. Annexure C - copy of Approved Residential Project Layout Plan.
6.

That all conditions in the Supplementary Agreement are same as the

Principal Agreement, Registered First (1st) Agreement and Registered Second (2nd)
Agreement except the fact that Supplementary agreement has taken Approved
Residential Projects layout as main basis.
7.

The Supplementary agreement also said if there is a variation between

Approved Residential Projects layout and GHMC Building permission, either party
may propose an amendment to the supplementary agreement by taking into
account the difference.
8.

That Respondent No.1and MMPL have entered into Registered Third (3rd)

Amendment Agreement dated 24.01.2018, wherein the reference date was defined
and deadlines for completion of the project was defined.
9.

That GHMC vide Permit No.15505/HO/CS/Cir-10/2012 dated 06.10.2012

has accorded permission for construction of residential building consisting of 3
basements parking, Ground plus two upper floors.

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10.

Thereafter, a revised vide GHMC Permit No.53442/HO/CZ/Cir-10/2016

dated 21.02.2018 for construction of 3 cellars for parking and Ground plus Seven
(7) Upper floors including club house consisting of built-up area of 66,997.12 Sq.
Meters was granted.
11.

Again, another revised vide GHMC Permit No.53629/HO/CZ/Cir-10/2016

dated 29.09.2021 for additional built-up area of 31577.05 Sq. Meters by way of
62 residential units on 8th to 11th floors on the top of existing G+7 floors was
granted.
12.

Thereafter the Respondent No.1 had registered the Residential Project

under the provisions of the Real Estate (Regulation and Development) Act, 2016
(referred to as the “Act”) vide Regn.Nos.P02500000549 dated 27.03.2019 with the
proposed completion date of 30-09-2022.
13.

Further the Respondent No.1 had obtained the registration under the Act

classifying the additional floors i.e., 8th to 11th floors as Phase-II construction
and to that affect, Regn. No. P025000003725 dated 20.12.2021 was issued by the
RERA, with the proposed completion date of 30-09-2023.
14.

The Complainant further stated that MMPL had mortgaged 50% of the

constructed area in the land, measuring 11830.88 Sq. Mts. along with Super
Built-up Area to be converted thereto, measuring to 4,19,999 sft., for collateral
security to the avail loans facilities with Allahabad Bank (Now merged with Indian
Bank) for which the Respondent No.1 & MMPL have jointly executed a Registered
Memorandum of Deposit of Title Deed(MODT) bearing Doc.No.5078/2016 dated
28.09.2016 with the Respondent No.3 to avail the loan to the tune of
Rs.112,00,00,000/-.

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15.

Pursuant to this MODT, the original documents pertaining to the Schedule

Property including the Supplementary Agreement dated 10.09.2013 mentioned in
Second Schedule of MODT was deposited with the Respondent No.3.
16.

The complainants submit that,
a)

The developers share as per Supplementary Agreement was 59
units with built up area as 3,93,840 square feet.

b)

The developers share as per Schedule A of the MODT showed
as 4,19,999 sq. feet, an excess of 26,159 SqFt.

c)

The

developers

share

as

No.53442/HO/CZ/Cir-10/2016

per

GHMC

dated

vide

Permit

21.02.2018

is

3.60.575.5 square feet only, while as per Schedule A of the
MODT

showed the developers share as 4,19,999 sq. feet, an

excess of 59,423SqFt.
17.

Similarly, the Respondent no.1 being the Promoter had approached the

ILFS (now merged with YES BANK) in the year 2018 to avail loan facility by
mortgaging 34 specified units, total measuring 2,36,325 sq.feet out of 50% share
of the owner/Promoter as per the DGPA dated.05-05-2011, three subsequent
Amendment agreements and Supplementary agreement. The respondent No.1 has
failed to repay the loan amounts and the YES Bank has issued a public Notice
dated.21.06.2021 cautioning the general public not to enter into any sale
transactions in respect of 34 units given thereunder.
18.

That the Respondent. No. l & 2 have executed Registered Agreement of Sale

in favor of the Complainants and therefore the Complainants are bona-fide
Allottees of their respective Units in 8th to 11th floors more fully detailed
hereunder:

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Unit
No.

In favour
of
Complai
nants

Regd.
Agreement of
sale details

Agreement
of Value
(Rs.)

Amenities
cost (Rs.)

Amount
Amount due
paid as of Apart from
today (Rs.)
applicable
taxes.

G-902

Fl
oo
r
No
.
9th

No.1 & 2

3,42,25,000

66,35,250

3,95,11,070

13,49,180

F-802

8th

No. 3 & 4

Doc.No.5869
/2022
Dt.13.09.2022
Doc.No.2315
/2022
Dt.30.03.2022

5,25,14,340

72,75,000

2,25,00,000

3,72,89,340

D-901

9th

No. 5

Doc.No.5870
/2022
Dt.13.09.2022

3,87,00,000

72,17,000

3,27,72,075

1,31,44,925

F-902

9th

No. 6 to 9

Doc.No.2316
/2022
Dt.30.03.2022

8,41,70,000

72,75,500

1,08,00,000

8,06,45,500

E-802

8th

No.10

& Doc.No.3079
/2022
Dt.07.05.2022

7,48,89,575

72,78,750

3,63,00,000

4,58,68,325

11

19.

That as stated supra, the Respondents No.1 through its POA i.e., the

Respondent No.2 had applied and obtained the revised permission for
construction of multi-storied residential building consisting of 8th to 11th
additional floors over the permitted and existing building of 3-cellars for parking
and Ground plus Seven (7) upper floors with Amenities Block, vide Permit
No.53629/HO/CZ/Cir-10/2016 Dt 29.09.2021 for additional constructed area of
31577.05 Sq. Meters.
20.

Based on this, the total sanctioned built-up area in Phase-I & Phase-II will

be 98,574.17 Sq. Meters. That the Respondent No.2 vide its Resolution Dt
25.03.2022 has resolved to give up his rights on additional constructed area of
31577.05 Sq. Meters.
21.

That it will effectively reduce the share of the Respondent No.2’s from the

original 50% to 33.98% of constructed area. Since the undivided share in the

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land is proportional to built-up area the undivided interest in land of the
Respondent No.2 will also reduce from 50% to 33.98% i.e., 11,803.88 Sq. Meters
to 8,045 Sq. Meters.
22.

As such, it is incumbent on the Respondent No.2 to intimate the

Respondent No.3 about the reduction of Respondent No.2’s Undivided Share’s i.e.,
from 11,803.88 Sq. Meters to 8,045 Sq. Meters and shall amend the Memorandum
of Deposit of Title Deeds accordingly. But, the Respondent No.2 had failed to
intimate and amend the necessary documents, resulting which, the rights and
interest of the Complainants who are the allottees/purchasers would be affected.
23.

That the Respondent No.2 vide its Resolution Dt 25.03.2022 had confirmed

that the Company will not evince interest in taking up the development of
additional floors and will restrict its role to the project as per the terms of the
Agreements upto 7th floors only.
24.

Further, it has been confirmed that the Company will not have any

objection for JHLPPL (i.e., Respondent No.1) for developing additional floors i.e.,
8th to 11th floors at its own cost and as per the sanction plans approved from
GHMC, Hyderabad and the said 8th to 11 floors are registered under RERA vide
Approval No.P02500003725 Dt 20.12.2021.
25.

Further, it is confirmed that the mortgage of the Company’s share of the

land and flats to Allahabad Bank now merged with Indian Bank as per MOU Dt
28.09.2016 will remain unaffected and will continue to be in force as per law of
land.
26.

As a matter of fact, as stated supra, the Respondent No.2 i.e., Developer’s

share had been reduced from 50% to 33.98% i.e., 11,803.88 Sq. Meters to 8,045
Sq. Meters.
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27.

However, by way of Resolution Dt 25.03.2022 had confirmed that the

mortgage of the Developer’s share i.e. the Respondent No.3 as per MOU Dt
28.09.2016 will be remain unaffected, which is untenable.
28.

In as much, it is giving the scope for the Respondent No.3 bank to claim

the Respondent No.2’s share as 11,803.88 Sq. Meters instead of 8,045 Sq. Meters,
which the Respondent No.2 is actually entitled to in the project.
29.

Thus, if the Respondent No.3 Bank proceeds ahead with the proposed

auction presuming that it had right over the claimed share of UDS and Built-up
area as specified in the auction notice, the rights and interest of the
allottee(s)/purchaser(s) including the Complainants herein would be defeated. As
such, the rights and interest of the Complainants are to be protected by issuing
necessary

instructions directions to the Respondent No.3 before proceeding

with the sale.
30.

It is submitted that the Respondents No.1 & 2 have created charge over the

Residential Projects to their respective shares i.e., 50% share each, with the banks
as stated above, only in respect of 3 cellars plus Seven (7) upper floors including
amenities, comprising of 128 residential flats. However, due to revised sanction
plans wherein the additional 4 floors have been added to the residential projects
and thereby the super built up area and undivided share of the land in the
residential projects has been reduced proportionately.
31.

It is respectfully submitted that notwithstanding the charge created under

mortgage with the Respondent No.3 & 4 Banks by the Respondents No.1 & 2, the
Complainants being the bona fide flat purchasers (home buyers) shall have to be
protected under Section 11 (4) (h) of the Real Estate (Regulation and Development)

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Act, 2016 and also under the provisions of the Telangana Apartments (Promotion
of Construction and Ownership) Act, 1987.
32.

It is submitted that the charge created in favor of the Respondent No.3 & 4

was in respect of 50% share each to the Respondent No.1 & 2 respective in the
residential property, which is based on the initial sanctioned plans for 3
basements, Ground plus 7 seven floors. Later on, the Respondent No.1 had come
forward to construct additional floors i.e., 8th to 11th floors in different blocks,
the charge created by the Respondent No.2 is restricted only upto 7 floors. The
Respondent No.2 has no claim whatsoever in nature on the additional floors i.e.,
8th to 11th floors in the residential projects, as such the RespondentNo.3 who is
the lender of the Respondent No.2 is also not having any claim over the same.
33.

That the Respondent No.2 have defaulted in making payments of the loan

amounts availed by it, consequently the Respondent No.3 had issued the Auction
Notice for Sale of property, under the premise that 50% Developers undivided
share right and title in the land comprised in above said property measuring
11,830.88 Sq. Mtrs., forming portion of property bearing Sy.No.16/3 (P), Block-H,
Ward No.9, situated at Shaikpet Village and Mandal, near Jubilee Hills Check
Post, Hyderabad, along with 50% of Super Built-Up area to be constructed thereto,
measuring 4,19,999 sq. feet being the Developer’s share in the project.
34.

As a matter of fact, due to construction of additional of floors i.e., 8th to

11th floors, the Respondent No.2 i.e., Developer’s share had been reduced from
50% to 33.98% i.e., 11,803.88 Sq. Meters to 8,045 Sq. Meters.
35.

Further, vide Permit No.53442/HO/CZ/Cir-10/2016 Dt 21.02.2018, the

total sanctioned saleable built-up area is 66,997.12 Sq. Meters equivalent to
721150.99 Sq. Feet. Hence, as per the sanctioned plan, the 50% of the Developer’s

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share comes to 360,575.5 Sq. Feet. If the Respondent No.3 Bank proceeds ahead
with the proposed auction presuming that it had right over the 50% share of the
Respondent No.2 being Developer in built-up area and undivided share interest in
the entire project, the rights and interest of the allottees(s)/purchaser(s) including
the Complainants who have paid substantial amounts would be defeated.
36.

That, since the Respondents No.3 has exercised its rights over the real

estate project under Section 13 of the SARFAESI Act, it therefore becomes the
assignee of the Promoter and Developer, as applicable and hence, will squarely
come under the definition of ‘Promoter’. As

such, the Respondents No.3 Bank

is necessary and party to the present application.
37.

It

is

well

settled

principle

of

law

that

the

rights

of

the

allottee(s)/purchaser(s) shall have to be protected under the provisions of the Act.
In case, either Owner/Promoter or Developer creates any charge or mortgage, for
part or full extent of the property under Development, the Banker who has rights
certainly under the provisions of SARFAESI Act would not affect the rights of the
allottee(s)/purchaser(s) which are protected under the Act. Further, the Act would
prevail over the SARFAESI Act and its Rules, 2002. Thus, the right and interest of
the allottee(s)/purchaser(s) are safeguarded by virtue of the provisions contained
in Section 11 (4) (h) of the Act.
38.

Also by virtue of sub-section (1) of section 15 of the Act, the secured

creditor cannot take a significant portion of the project into its possession without
obtaining prior written consent of the two-third of the allottees and without the
prior written consent of this Authority. This provision of the Act accords certain
protections to the Allottees and therefore needs to be upheld by this Authority.
Since, the Respondent No.3 who is taking recourse under the SARFAESI Rules,
2002, the complainants being the aggrieved persons are approaching the RERA
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Authority praying for the necessary reliefs. No proceedings under SARFAESI Act
can deprive allottees of his rights under the Act. Unless, the RERA Authority
protects the right and interest of the Complainants by passing necessary interim
measures and directions under Section 36 & 37 of the Act, the rights and interest
of the complainants who have paid substantial amounts would be deprived and
will suffer an irreparable loss.
B. REPLY ON BEHALF OF RESPONDENT NO 1 AND 2:
The Respondent No1 & 2 filed their reply as follows:
39.

That the Respondent No 1 and 2 have reiterated certain facts as stated by

the Complainant like the Sale deed executed between HUDA and JHLPPL with
regard to subject land, Development agreement cum GPA entered by JHLPL with
MMPL,

First

Amendment

Agreement,

Second

Agreement

,Supplementary

agreement and Third amendment development agreement.
40.

They further reiterated the first two GHMC sanctions at different time

intervals as stated above.
41.

In addition to the above stated documents the Respondent No 1 and 2

referred to another Supplementary agreement Dt 23-05-2018 entered between
JHLPPL and MMPL, under this agreement the parties revised their area sharing in
terms of the above sanctions/approvals/proceedings, after which another GHMC
sanction permit was given on 29-09-2021 for 8th to 11th floors.
42.

They further reiterated the Registration with RERA at two different time

intervals as stated above.

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43.

Further, they also mentioned about loans they obtained from Allahabad

Bank now Indian Bank and also about auction notification issued by the Indian
Bank for default of payment.
44.

Respondent No 1 and 2 further replied to the allegations raised by the

complainant as under.
45.

The Complainants’ Agreements of Sale are of the year 2022 i.e., post all

the Agreements between these Respondents and Respondent No.3 as also all the
sanction plans ( 1st, 2nd, 3rd ).
46.

That for the purposes of adjudication of a complaint under section 31 of

the Act, to the knowledge of the Respondents and subject to correction, no such
adjudicating authority has been constituted as per the Act and Rules. Thus, notice
Dt. 30-11-2022 is untenable and without jurisdiction on many counts.
47.

The alleged violation under Section 11(4) (h) of the Act, 2016 has been

misapplied in as much as such provision is only applicable when mortgage/charge
is created by the promoter after the execution of Agreement of Sale. In the present
situation this is not the case as elaborated herein before and after.
48.

That the RERA would not apply in relation to the transaction between

borrower and banks/financial institutions in cases where security interest has
been created by mortgaging the property prior to the introduction of the Act.
49.

The complainants are guilty of forum shopping in a much as a writ

petition seeking identical reliefs as has been sought in the present complaint that
has been filed before the Hon’ble Telangana High Court. As such the complainants
are not entitled to any relief from this Hon’ble Authority.

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50.

Further, the respondents No.1 & 2 made submission in respect to the loan

obtained from respondent No.3, subsequent proceedings under the SARFAESI Act
including the Sale auction and also stated about their dispute with Respondent
No.3.
51.

In view of the submission the respondent No.1 & 2 state that, first and

foremost, the present proceedings purportedly under section 31 of the Act r/w.
Rules framed thereunder for the alleged violations, are without jurisdiction and
that the specific reference to section 11(4)(h) concerning the functioning the duties
and functions of the promoter are not applicable to the present case in view of the
fact that:
a) RE (R&D) Act came into force in 2017;
b) Telangana State Real Estate (Regulations and Development
Rules 2017) was notified/came into force on 31-07-2017.
c) All loan documents executed by and between the them
Respondent no 3 are prior to 2017.
d) The RE (R&D) Act, 2016 and RE (R&D) Rules 2017 are
prospective and not retrospective.
e) The Complainant’s agreement of Sale are of year 2022 i.e post
all the agreements

between

answering

respondents

and

respondent no 3 as also all the sanction plans ( first, second,
third).

52.

Therefore, the above stated complaint must fail factually and legally.

C. REJOINDER FILED BY COMPLAINTANTS:

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The Complainants filed a rejoinder on 10-07-2023, wherein he mentioned certain
aspects that were originally not mentioned in their complaint, as under;
53.

That the promoter and developer have already received considerable

amount (more than 70% and some have paid 95%) from homebuyers and yet 25%
of work only is completed. It is a classic case of fund diversion and
misappropriation. Further delays will be death-knell to the project.
54.

That the inspite of issuing notices the respondent No.3 (bank) proceeded

with two rounds of auction and when the present complaint was submitted to
there was no adjudicating body to conduct hearing and decide on our complaint.
Since the sale auction (22 Nov 2022) is impeding on them, the writ petition was
filed by them before the Hon’ble High court. Therefore the allegation of the
respondent No.1&2 that, the complainant is guilty of forum shopping is frivolous
and inconsequential.
55.

That, the Hon’ble High Court vide its order Dt. 22 Feb 2022 has issued

direction that “TS RERA to consider the complaint lodged by the petitioners on 1411-2022 by giving due opportunity to all the parties and decide the matter as
expeditiously as possible, preferably with a period of eight weeks from the date of
receipt of copy of this order. Till a decision is made by TS RERA, the respondent
Bank (i.e Indian Bank) shall not go for conducting of auction." The respondent No.3
conducted sale auction twice on 22 Nov 2022, 31 Jan 2023 and inspite of the said
direction of Hon’ble High Court the Respondent No.3 proceeded with auction again
on 14 March 2013, but these auctions were unsuccessful as there were no bidders.

56.

That, the objection of the respondent No.1 and 2 in respect of the

maintainability of complaint is untenable. The complainant cited some judgments
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of Hon’ble Supreme court , orders of RERA, reference of notification in support of
their case as under;
A) Vide notification dtd 26 April 2016, the central government has
appointed 1st May 2016 as the commencement date of RERA Act 2016.
B) Odisha RERA in its order dtd. 02/12/2021 in Complaint 04 of 2021,
has observed (in Para 9 of its order) that - The RERA Act, 2016 got
Presidential assent on 25-3-2016 and published in the Gazette of India
on 26-3-2016 and any ongoing real estate project which did not get
completion certificate prior to commencement date of RERA Act 2016,
would be subject to the provisions of the Act.
C) The Hon’ble Supreme Court vide its judgement dtd 11 November 2021,
in the case of Newtech Promoters and Developers Private limited vs. The
State of UP and others, has held that The RERA Act, 2016 is retroactive
in its application and covers all ongoing projects for which completion
certificate has not been issued.
D) The Hon’ble Supreme Court vide its judgement dtd in the case of Union
Bank of India Vs Rajasthan Real Estate Regulatory Authority &Ors, has
ruled that the RERA Act would have a retrospective application if the
security interest is created fraudulently or in collusion with the
Bank/Financial Institutions.
E) Haryana RERA in Puneet Gupta v. International Infratech Private
Limited observed that RERA is an enactment subsequent to SARFAESI
and has been enacted to protect the interest of the allottees in real estate
projects. They observed that by the virtue of investment being made by
the allottees and execution of a builder buyer agreement, a vested right
is created for an allottees and the same cannot be taken away by a

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financial institution. It is further observed that RERA is an enactment
subsequent to SARFAESI and has been enacted to protect the interest of
the allottees in real estate projects.
57.

That, Mortgage Security Interest was created in Collusive and Fraudulent

Manner and these unscrupulous actions of the MDPL (Developer) and Indian Bank
(Secured Lender) done behind the backs of existing stakeholders of Mantri project
would adversely jeopardize and infringe upon the interest of allottees who have
invested substantial amounts in the project.
58.

The action of Indian Bank is malafide in as much as no due diligence was

done by it while executing MODT to ensure that the UDS and Built-up figures are
specified in Schedule A of MODT match the figures from sanctioned plan. Further,
in view of all the changes to the project subsequent to the original MODT executed
in 2016 where in the promoter-developer applied and obtained additional built-up
area, both the lender and borrower are contractually obligated to amend the
original MODT revising the UDS and built-up area figures, which both parties have
failed to do.
59.

The Complainant further stated that the promoter/developer deliberately

did not disclose about the Loan facilities availed from the Allahabad Bank (now
Indian Bank) and Yes Bank in the RERA Form B affidavit Dt. 30th Nov 2018,
although the MODT with the Allahabad bank was entered in September 2016.Only
in the subsequent Form B Dt. Dec 2019, there was a cursory mention of these
charges without specifying any details.Some home buyers have already made the
payments and entered into sale agreements by March 2019 itself relying on the
Title report and Form B affidavit declaration dtd. 30th Nov 2018 which does not
mention any charges/encumbrances. The home buyers became aware of these
liens/mortgage charges only when Yes Bank issued public notice in June 2021
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and subsequently when Indian Bank issued Sale Auction Notice in Oct 2022, due
to default of MDPL and JHLPL in servicing these loans.that the promoters have
deliberately suppressed this information from RERA authority and also Allottees
and is clear case of misrepresentation and is in violation of Section 4(2)(l)(B) of
the Act and also Rule 14 (1) (d) of TS RE (R&D) Rules.
60.

That there are lapses in the periodic quarterly update of the project on

TSRERA Website. The last update for Phase1 was on 13th October 2022. No
project progress photographs are updated as mandated. Form 1 - Architect
Certification was last uploaded on 09-10-2021 and is not updated quarterly and
Form 3- CA Certificate (cost incurred and valuation of the sold inventory) is
completely missing, which is violation of Section 11(1) of act 2016 and Rule
14(1) of TS RE (R&D) Rules.
61.

That the Promoter is required to inform the Allottees at the time of

agreement as to existence of any prior encumbrances, no such disclosure was
made. There was no mention of any prior loans/credit facilities availed by the
promoter and/or developer nor of any charges on Mantri ‘A’ property mortgaged
against such credit facilities to secured creditors in Allotment Letter nor Sale
Agreement nor in any other communication by JHLPL-MDPL to its customers,
amounts to breach of Clause 16 and Clause 6.1(iv) of agreement of sale.
62.

That the action of MDPL & Indian Bank is mala fide in as much as no due

diligence was done by it while executing Memorandum of Deposit of Title Deeds
(MODT) to ensure that the UDS and Built-up figures specified in Schedule A of
MODT match the figures from GHMC sanctioned plan. Further, in view of all the
changes to the project subsequent to the original MODT executed in 2016 where
in the promoter-developer applied and obtained additional built-up area, both the
lender and borrower are contractually obligated to amend the original MODT
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revising the UDS and built-up area figures, which both parties have failed to do.It
is incumbent on the MDPL to intimate its secured lender (Indian Bank) about the
reduction of MDPL’s built-up area and UDS area as a result of GHMC sanctioned
figures being less than the indicative figures and to amend the MODT accordingly.
But, MDPL had failed to intimate and amend the necessary documents, resulting
which, the rights and interest of the other unit buyers would be affected. Same
amount to the breach of Clause 1.15 and 6.1 (vii) of Sale Agreement.
63.

That the promoter instead of promptly approaching DRT/DRAT to contest

Indian Bank SARFAESI proceedings, JHLPL-MDPL has been a mute spectator and
has deliberately failed to initiate any remedial steps, which amply points to the
lack of serious intent on their part in settling the outstanding liabilities. These
unscrupulous actions of the JHLPL-MDPL(promoter-developer) and Indian Bank
(Secured Lender) done behind the backs of existing stakeholders of Mantri A
project would adversely jeopardize and infringe upon the interest of 60+ allottees
who have invested substantial amounts in the project, therefore it is breach of
Clause 1.13 of Sale Agreement.
64.

That the home buyers though opposing the move, respondent no.1

(JHLPL) has decided to opt for 12% GST (instead of 5%) and they were given
assurances that ITC (Input Tax Credit) benefit will be passed on to home buyers.
Subsequently, when requested for periodic updates on actual Taxes paid and ITC
benefit availed, they were not provided with these details. This is a violation of
Clause 1.3 (iv) of Sale Agreement.
65.

That as per third Amendment to Development Agreement cum GPA ( DGPA),

the MDPL has failed to fulfill its obligation within stipulated time of 48 months (
by Feb 2022) from reference date of 21-02-2018 and completed only less than 50%
of phase I project. Also the MDPL has defaulted in respect of loan(s) obtained on
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security of Scheduled property.Therefore MDPL (Residential Developer) is in
breach of Clause 7.7 (a) and (b) of DGPA and hence the owner (JHLPL) is very
much entitled to invoke Clause 7.7 (i) and (ii) of DGPA and terminate DGPA with
Residential Developer.
66.

That it is evident from Encumbrance Certificate (Annexure 2), Conveyance

Deed/Sale Deed for a total of 31 units was executed in favor of NCC Ltd (17 units
), RNRL LLP (14 units). Although the project is an ongoing with 75% of the works
yet to completed however the conveyance deed for these 31 units are executed
without mandatory completion certificate or occupancy certificate, which is a clear
violation of Section 17(1) of the Act. It is very disconcerting as this whole exercise
was done behind the backs of existing Allottees/Homebuyers and they are not
made aware of this nor was their consent taken. Further there is no clarity about
nature of the association of NCC and RNRL with Mantri A Project.
67.

That in 2018, JHLPL has availed project loan from Yes Bank and has

mortgaged 34 units of this project as security. However mysteriously the project
loan was sanctioned by the bank to Propcare Mall Management India Pvt Ltd,
although the funds were meant to be used for JHLPL towards Mantri A project.
This entity ‘Propcare’ is neither the promoter nor the developer of Mantri A project
and is not connected to Mantri A project. Therefore it is clear case of fund diversion
and potential money laundering. The diversion of loan funds for unapproved
purposes violates the provisions of RERA, various guidelines of RBI and also
provisions of PMLA. Post RERA, it is mandated that any promoter/developer can
mortgage land/units of the project only to raise project/construction loan
exclusively to be used in the project only. Further the borrower has defaulted in
making repayments of loan sanctioned by the bank and Yes Bank has already

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initiated Insolvency Proceedings against MDPL and its entities. Also since
promoter has defaulted on loan, it is breach of Clause 1.15 of Sale Agreement.
68.

That the promoter has siphoned-off customer funds and project loans for

other purposes, which is the primary reason for project delay. It is estimated that
JHLPL has received customer funds to the tune of 400 crores from the sale of
units. However the promoter has only infused less than 150 crores into the project
since inception. Further the promoter and developer have raised loans worth 250+
crores by pledging Mantri A assets/units and they failed on repayment of these
loans, thereby jeopardizing the assets of the project.
D. THE MEMO DT 26-07-2023 OF THE RESPONDENT NO.1 TO THE
REJOINDER:
The respondent No.1 in the above said Memo submits that:
69.

The rejoinder/addendum cannot be received on record as it is noticed that

‘Mantri A Denizens Guild’ which in not even a complaint in the said case and is
now surreptitiously attempting to join the present case as complainant No.12 and
therefore cannot be permitted to take up the case on behalf of the complainants.

70.

The petition filed by the financial creditor i.e., M/s India Bulls Housing

Finance Limited bearing C.P.(IB) No. 94/BB/2022 under section 7 of I & B code,
2016 R/w rule 4 of I & B (AAA) Rules,2016, before Hon’ble NCLT, Bengaluru Bench
and the adjudicating

authoritypassed an order Dt.28-03-2023 against the

corporate debtor i.e., Respondent No.2 herein ( M/s Mantri Developers Private
Limited), admitted the said petition and declared moratorium under Section 14 of
IBC. The respondent No.1 further stated about the subsequent Appeal filed against

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the said NCLT order, and about the other proceeding in connection to the said
NCLT order before the Hon’ble High Court of Karnataka and the Hon’ble Supreme
court of India. Finally, the respondent No.1 states that, the present proceeding
has to be adjourned sine die in view of the moratorium which is in force. In the
reply Dt. 10-08-2023 filed on behalf of the respondent No.1 to the rejoinder of the
complainant, it is submitted that, the said proceeding before NCLT was withdrawn
vide order Dt.07-08-2023. Therefore, the said issue in not necessary for
consideration by authority now.
E. THE REPLY DT.10-08-2023 OF THE RESPONDENT NO 1 TO THE
REJOINDER:
The respondent No.1 in the above said Reply submits as hereunder:
71.

That Mantri A Denizens Guild has no locus standi to participate in the

present proceedings by filing pleadings, being a third party. Since the present
proceeding was instituted originally by 11 persons being co-owners of 5 apartments
out of total 63 apartments (constitutinglessthan 8% of total allottees), the said third
party entity cannot be permitted to take a back door entry and drive the proceeding
in as much as under the Rule 2(i) of the TSRERA Rules, a complainant only means
any aggrieved personmaking acomplaint. In the present case, Mantri A Denizens
Guild has not filed the Complaint and cannot be treated to be a complainant. The
Rejoinder/Addendum Dt 15.07.2023 has been signed by the said third party and
therefore cannot be taken on record.

72.

The said Mantri A Denizens Guild which claims to be an association of the

homebuyers / allotees has no legal sanctity and mandate of majority of
allotees.Out of the total63 allotees,only5 allotees(11Complainantswho are

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relatives) have preferred the present complaint and formed such association to
further their personal agenda and blackmail / arm-twist the Answering
Respondent to succumb to their demands. The actions of these allottees are
detrimental to the interest of all the stakeholders. Neither the said Guild nor these
Complainants represent the will of all the allottees and cannot be said to be their
representatives.
73.

The amended interim reliefs which have been sought in the Rejoinder /

Addendum from 'a' to 'k' are beyond the mandate of the Act and therefore cannot
be maintained.
74.

The Complainants have sought to transpose Indian Bank (Respondent No.3

herein) to assume the role of the promoter by substituting the Answering
Respondent. Such a prayer is premised on an erroneous assumption by importing
and reading the provisions of SARFAESI Act into the Act which is impermissible
under law. Assuming without admitting, if at all the Complainants are entitled to
any final reliefs, they can at best be granted, by way of return of amount and
compensation U/s. 18 of the Act, which is of course, subject to further
adjudication U/s. 71of the Act that stipulates for holding an enquiry in the
prescribed manner by the adjudicating officer.

75.

The drastic step of revocation of registration under prayer 'a' and

consequential reliefs under prayer 'b' and 'c' that has been sought by the
Complainants cannot be done without following the process prescribed U/s. 7(2)
of the Act. In any event, no grounds have been made out by the Complainants for
exercising such drastic powers by this Authority which would be jeopardizing the
entire fate of the project thereby prejudicing the rights of all the stakeholders
including those who are not parties to the present proceeding.
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76.

All the loan documents executed by and between the Answering Respondent

and the financial institutions were prior to 2017 before the Act came into existence
and also prior to execution of the respective agreements of sale entered into with
the Complainants. Therefore, the Complainants have misled the Authority by
stating that mortgage security interest was created in a collusive manner behind
the back of the Complainants. As such, there is no violation U/s.11(4)(h) of the
Act which governs the functions and duties of the promoter, like the rest.

77.

In regard to the allegations that, the Promoter has received 70% to 95%

consideration from the home buyers. The said allegation isbaseless and they have
no locus standi to make the said allegation in representative capacity because they
have booked only 5 Apartments out of total 63 Apartments booked. The
Complainants are only Agreement holders of 5 Apartments and they cannot speak
on behalf of rest of the home buyers who are not even parties to the present
proceeding. The core allegation that the project was completely halted is false and
misleading in as much as retro-fitting and de- watering works are ongoing in the
project even as of date. Though the project commenced in 2014, as stated inthe
rejoinder/addendum, however on account of force-majeure events that were
beyond the control of the Answering Respondent, the project could not maintain
the pace. In this regard, it must be stated that the Government of Telangana's
proposal to build flyovers and walk ways near the Jubilee Hills Check post
Junction taken under SRDP which resulted in the project being halted for almost
3 years i.e., from 2015 to 2018, since there were plans in taking over part of the
project land for SRDP. Later on the GHMC gave Building permit for 3 Basement +
Ground + 7 Upper floors. Furthermore, the global pandemic COVID-19 resulted in
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the project being halted for almost 2 years. This global pandemic affected all the
sectors and business and real estate sector was seriously affected due to migration
of labor which was a vital clog in the construction industry. Further, essential raw
material supply was also severely affected the Real Estate Sector in general and
Mantri A project in particular. There were various government orders factoring
such events and advisories were issued for extension of timelines under RERA.

78.

The Complainants entered into their respective registered Agreements of

Sale in the year 2022 being absolutely cognizant of the developments from 2014
onwards. As such, the events prior to 2022 were within the knowledge of the
Complainants and they cannot make an issue at this stage. Obviously, the
Complainants found the project profitable and lucrative and therefore, have
chosen to invest in the project out of their own free will and volition. It is important
to note that at this stage, the Complainants have not sought for refund of amounts
which goes on to show that the Complainants are not short-changed in the project.
Therefore, it may be concluded that the Complaint is malafide and deserves to be
dismissed.

79.

In response to the 'applicability of RERA Provisions', the Answering

Respondent challenged the jurisdiction of the Authority in the context of the
prayers made by the Complainants and not the adjudicatory jurisdiction of the
Authority. The said objection still holds good. The allegations with regard to
creating mortgage security interest in collusive and fraudulent manner, nondisclosure of loan facility, mortgaging the assets in a fraudulent manner are
outright baseless and contrary to records. It must be stated that all the financial

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arrangements availed by the Answering Respondent were prior to the
Agreements for Sale with the Complainants. Moreover, these facilities were
availed even prior to the Act coming into force. All the disclosures that were
required to be made by the Answering Respondent under the Act were duly
complied with. The statements made in the corresponding paragraphs of the
rejoinder are misleading and contrary to the records.

80.

In respect to the stance that the 'Lender assumes the role of promoter if

exercising rights under Section 13 of SARFAESI Act', it is reiterated that the
provisions of the SARFAESI ACT cannot be imported and read into the provisions
of the Act as the object sand scope of the respective enactments are different. In
any event, since the Complainants have directed such relief against Respondent
No.3, it is for the said Respondent No.3 to answer. It must however be submitted
that no occasion has arisen for such type of reliefs to be granted.

81.

In respect to the 'Forum Shopping', it is submitted that the Answering

Respondent maintains its stance that the Complainants are indulging in Forum
Shopping for their ulterior gains.

82.

In response to the allegation that 'Collusion between Promoter-Developer-

banker', it is submitted that the Complainants were well aware of the
collaboration between the Developer and the Answering Respondent and their
arrangement with the Banker. Such arrangements are not uncommon in real
estate projects and cannot be by any stretch of imagination being termed as
fraudulent. These arrangements are backed by contracts and are legally
recognized and valid. In a malafide manner, this collaboration has been termed

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as 'collusion'. Since the Respondent No.3 was acting unreasonable with regard
to the facility extended to the Respondent No.2, steps were taken by Respondent
No.2 before the appropriate judicial forums like Commercial Court and NCLT. It
is therefore misleading to contend that the Respondent No.2 has done nothing
with regard to the finance facility with Respondent No.3. It is not out of place to
mention here that the RespondentNo.2is in active talks with RespondentNo.3to
settle their dispute which is borne by the fact that in response to the OTS that
was offered, a revised OTS is being negotiated. The Answering Respondent is
hopeful that soon, a quietus could be achieved in this regard and the project will
be developed at the intended pace.

83.

In response to the contention that 'Homebuyers interests and rights to be

protected', it is submitted that there cannot be any quarrel with such proposition,
however, with a disclaimer that such provisions are meant for bonafide
customers and not unscrupulous litigants.

84.

In response to that the 'RE (R&D) Act taking precedence over SARFAESI

Act, 2002', lt Is submitted that such submission does not exist anymore in the
context of moratorium which has now been lifted in view of settlement between
the parties and the NCLT proceedings having been closed vide order Dt
07.08.2023 passed by the NCLAT.

85.

In response to contention that 'Construction Works halted and Project

Abandoned', It is submitted that the allegations made in the corresponding para
is heresay and denied. Itis emphasized that the project has not been abandoned
as falsely claimed by the Complainants. In fact, the respondents have taken
requisite proactive actions to ensure that there isno compromise in structural
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integrity and basic maintenance /upkeep and security of the project is intact.

86.

In response to the contention that Lack of communication from Promoter

and/ or failure to respond to customer correspondences with respect to project
status (Breach of Sec 19(2) of the Act), itis submitted that the averments made
In this para are not reflecting the correct acts most of the communication
addressed by one Mantri A Denizens Guild which is neither a customer nor
recognized legal entity as such, soliciting no response. The respondent have
always attended to individual customers and addressed all their issues and
concerns. In fact, the higher officials of the Answering Respondent have been
regularly attending to the calls of the customers. The present complainants are
only 5 members and they cannot represent the other majority customers and
thus making allegations which not born by facts. The customer relationship
department of the Answering Respondent has always shared the periodical
status of the project and other information.

87.

In response to the Breach of Chapter-IV Rule 14(1)(d), Rule 14(1)(c) of

TSRERA Rules, Section 4(2)(1)(8) and Section 11(1) of the Act, 2016, the
allegations are denied as false. The Answering Respondent has diligently met
the requirements under the rules as there are enough safeguards under the Act
and Rules to enforce such requirements. Such compliance is evidenced by the
fact that the concerned Authority has not raised any objection in this regard
being privy to such records furnished by the Answering Respondent from time
to time. The allegations have been made only to prejudice the Authority and the
Complainant is put to strict proof of the same.

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88.

In response to the Breach of Clause 16, Clause6.l(iv,vii,viii, ix,),

Clause1.13and Clause1.15 of Sale Agreement, such allegations are only cosmetic
in as much as if there has been any breach ofthe agreement, theComplainants
always had anoption of rescinding the contract and seek refund. This itself shows
that such make- believe breaches are highlighted only to prejudice this Authority
for ulterior motives. Except the Complainants covering 5 apartments, the rest have
not alleged any such breaches. This in itself shows that all disclosures were made
by the Answering Respondent to the satisfaction of the customers.

89.

In response to the Breach of Section 13(1) of the Act of 2016 (Promoter

failing to register Sale Agreement), it is submitted that in the present case, the
Complainants agreements have been registered and the allegations with regard to
the rest is only here say in as much the customers have not approached this
Authority with any such grievance.

90.

In response to the Breach of Clause 1.3(iv) of Sale Agreement (Tax paid -

GST figures not provided), it is submitted that the project was initially registered
under the old GST scheme and the Answering Respondent continued under the
same scheme.
91.

In response to the Non-Termination of Development Agreement by the

Promoter (Breach of 6.1 (vii) of Sale Agreement), it is submitted that it is the
prerogative of the Answering Respondent to enter into agreements and continuance
thereof. The Complainants cannot advise in this regard. If at all there are any
issues between theparties to the development agreement, they would be only interse. Having stated thus, theAnswering Respondent isnotaverse toending the
contractual relationship with Respondent No.2 and is proactively considering and

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exploring the same.

92.

In response to the breach of Section 17(1) of the Act, such impression of the

Complainant is unfounded in as much as the Answering Respondents have not
executed any such sale deed and the Complainants are put to strict proof of the
same.

93.

In response to Diversion of YES Bank Project Loan (Breach of RERA/RBI

and PMLA Provisions and Clause 1.15 of AoS, it is submitted that the allegations
made in this para by the complainants are false and not borne out of facts, the
allegation of diversion of fund is also not correct since the said bank has not
provided loan to the Answering Respondent but to a sister concern namely
Propcare Real Estate Management Pvt. Ltd. It is obvious that theComplainants
have narrated misleading facts to prejudice this Authority.
94.

In response to Diversion of Customer Funds(Breach of RERA/RBI), it is

false, baseless and contrary to records in as much as the quarterly reports filed
by the Answering Respondent before this Authority in compliance with the
provisions of this Act amply demonstrates that there is no diversion of funds as
alleged or at all.

F. THE COUNTER AND WRITTEN SUBMISSION FILED ON BEHALF OF
RESPONDENT NO.3 (BANK):

The respondent No.3 in the counter and written submission submits as hereunder:

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95.

That the respondent No.2 i.e., M/s Mantri Developers Primate Limited

mortgaged its 50% share in the building along with undivided share in land in
favour of the respondent No.3 bank.

96.

That the respondent No.3 reiterated certain facts as stated by the

Complainant like the Sale deed executed between HUDA and JHLPPL with regard to
subject land, Development agreement cum GPA entered by JHLPL with MMPL, First
Amendment Agreement , Second Agreement ,Supplementary agreement and Third
amendment development agreement.

97.

That the respondent No.3 further mentioned about the respective notice

issued by it hereunder;

04-08-2021

Demand Notice U/Sec.13 (2) of SARFAESI Act 2002

18-01-2022

Possession notice

17-10-2022

First Sale notice putting the property for auction
22.11.2022 .
Second Sale notice putting the property for auction
31.01.2023 .
Third sale notice putting the property for auction
14.03.2023 .

13-01-2023
24-02-2013

98.

That as there no bidders the auctions could not be materialized and the

secured asset was not sold.
99.

That even according to the complaint;
a. There is no amendment in respect of the mortgaged 50% share
of the respondent No.2 created in favour of respondent No.3.
b. The respondent No.3 never at any stage released part of
mortgaged property created by respondent No.2.

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100.

That the following is the schedule of the property mortgaged in favour of the

respondent No.3 by respondent Nos.1 and 2 as per Memorandum of Deposit of
Title Deeds No.5078 of 2016 dt:28.09.2016.
(PROPERTY BEING DEPOSITED BY WAY OF FIRST CHARGE UNDER
THE DEPOSIT OF TITLE DEEDS)
The 50% of developers undivided share right and title, in the land
comprised in the Schedule A Property measuring 11,830.88 sq.mts
forming portion of property bearing T.S.No.16/3 (P) Block -H Ward No.9
situated at Shaikpet Village and Mandal, near Jubilee Hill Check Post,
Hyderabad along with 50% of super built up area to be constructed
there to measuring to 4,19,999sq.ft being the developer's share in the
project and bounded by:
North by: Road (Jubilee Hills Check Post)
South by: KasuBrahmananda Reddy Park
East by : Road No.2 Banjara Hills
West by : Road No.l Jubilee Hills.

101.

That the respondent No.l and 2 in terms of the development agreement-

cum-general power of attorney demarked the constructed area by way of
Supplementary Agreement dt: 10.09.2013.
102.

That the undivided share of land and corresponding to built up area

mortgaged to the bank.

Undivided share in land

Corresponding to constructed super
built up area

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11,830.88 sq.mts

103.

4,19,999sq.ft.

That after creating mortgage of 50% of the share by the respondent No.2

the respondent No.1 and 2 obtained permission for construction of additional
floors from the GHMC and started constructing.
104.

That it may be noted that by the date of the said resolution dt.25.03.2022

the respondent No.3 bank initiated proceeding under the SARFAESI Act and taken
possession of the secured asset.
105.

The contention that the mortgage is restricted to the flats/units mentioned

in the supplemental agreement. It is submitted that the said contention is
baseless.
106.

That the undivided share of the land corresponding to the flats claiming by

the complainants is out of the 50% of the undivided share mortgaged to the bank
by the respondent No.2.
107.

That the respondent No.3 as per the procedure published the possession

notice in the newspapers much earlier to the agreement of sale entered by the
complainants with the respondent Nos. I and 2.
108.

That the relief sought by the complainants in 5.(a) and (b) of the complaint,

as the proceedings were initiated by the bank under SARI'AESI Act, 2002 the
Honorable Debt Recovery Tribunal, at Hyderabad is the proper Tribunal to decide
the same. Hence the said reliefs are not maintainable before this Honorable
Authority.

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109.

That the respondent No.3 already taken possession of the 50% of the project

mortgaged in its favour under the provisions of SARFAESI Act,2002 on 18.01
.2022 any interference by any third party is nothing but trespassing into the
property.
110.

That the respondent No.3 is a nationalized bank dealing with public funds

and duly following the procedure under the Act to recoveries out standing’s from
the respondent No.2 by enforcing the securities as per law.
111.

That the bank is proceedings further as per the provisions of SARIAESI Act,

2002 to sell the secured asset.

I. COMPLAINANTS REPLY TO THE COUNTER AND WRITTEN SUBMISSION OF
RESPONDENT NO.3 (BANK):
112.

The complaint raised the objection against the delay in filling Written

Submission by Indian Bank.
113.

The complainants further reiterated his submission in respect of MODT

entered between Respondent No.1 & 2 with Respondent No.3, the synopsis of
contentions in brief are as under:
a. MODT area figures are not in concurrence with GHMC
sanctioned area.
b. MODT area figures not in concurrence with Supplementary
Agreement.
c. Respondents failed to Amend inconsistent MODT area
figures.

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d. MDPL development rights (and therefore Indian Bank rights)
limited to G+7 Floors.
e. Purchased Units by the complainants are out of JHLPL
share and not from MDPL share.
f. The MODT charge is limited to G+7 Floors.
g. MDPL has defaulted in developing the project and therefore
is not vested with any substantive rights.
h. The JHLPL is the landowner and has appointed MDPL as
developer of Mantri A project vide Development agreement
executed

b/w

these

two

entities.

Under

JDA,

only

development rights were granted to the developer - MDPL &
therefore it does not accrue any right over the land in
question. MDPL would have been vested with ownership
rights of its share of build-up area/units only after it
completes the development activities of the whole project as
per the agreed terms of JDA and handover the fully
developed units to the land-owner JHLPL as per terms of
area sharing.
i. MODT is Defective, Flawed and Created in Fraudulent
Manner.
j. UDS rights in Land are derived from and in proportion to
Built-up area, the sum of all the flat owners UDS has to be
equal to the property land size.
J. ISSUES FOR ADJUDICATION:
On the above pleadings/contentions, the Point that arises for consideration is:
Whether the Complainants are entitled for the reliefs sought?
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114.

Copies of all the relevant documents have been filed and placed on the record

by complainants and respondents No.1 and 2. The respondent No.3 didn’t file any
documents on its behalf. There is no dispute in respect of the said copies of
documents filed.

As such the complaint can be decided on the basis of these

undisputed documents and submissions made by the respective parties at length.
K. RELIEF SOUGHT:
115.

The complainants have prayed for grant of following reliefs:

a) To direct the Respondents No.3 to conduct the Sale Auction on 22.11.2022
limiting the proposed sale only to an extent of 360,575.5 Sq. Feet & Undivided
Share of Land 8,045 Sq. Meters, towards the share of the Developer’s share (i.e.,
Respondent No.2) upto 7th floor in the Property, forming portion of property
bearing Sy.No.16/3 (P), Block-H, Ward No.9, situated at Shaikpet Village and
Mandal, near Jubilee Hills Check Post, Hyderabad, instead of proceeding with
the sale of 50% Developers (i.e., Respondent No.2) undivided share right and title
in the land comprised in above said property measuring 11,830.88 Sq. Mtrs.,
forming portion of property bearing Sy.No.16/3 (P), Block-H, Ward No.9, situated
at Shaikpet Village and Mandal, near Jubilee Hills Check Post, Hyderabad,
along with 50% of Super Built-Up area to be constructed thereto, measuring
4,19,999 sq. feet being the Developer’s (i.e., Respondent No.2) share in the
project.
b) To direct the Respondents No.1 to 3 not to affect any of the rights and interests
of the Complainants herein, in contravention of the terms and conditions of the
Agreement of Sale entered between the Complainants herein and the
Respondents No.1 & 2, including all common areas, common amenities, car
parking etc

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c) To direct the Respondents No.1 & 2 to complete the project duly in compliance of
the terms and conditions which have been agreed under RERA provisions?
d) To revoke the registration granted to the project U/s sub section 1 of section 7 of
RERA Act, for not complying with the requirements of the Act or the Rules.
e) To decide further course of actions to be taken for carrying out the remaining
development in the project U/s 8 of the RERA Act 2016, the measure may include
handing over the project to the existing stakeholders and /or outside interested
builders.
f) To issue any such direction in interest of the buyer or in the public interest at large
u/s section 7 Clause (d) of Sub-section (4) of the Act
Are they entitled to any other relief/reliefs in the circumstances of the
complainant’s case?
L. OBSERVATIONS AND FINDINGS OF THE AUTHORITY:
A. The observations and findings of this Authority so far as the relief (a) is
concerned, Since the auctions proceedings conducted by Respondent No 3 on
22.11.2022, 31.01.2023 and 03.03.2023 inspite of the directions of the Hon’ble
High Court in WP No.41976/2022. On 22.02.2022 has become unsuccessful
as no bidders have participated.
B. Further, the authority has observed that the MODT (enclosed Supplementary
Agreement) dated 28.09.2016 was signed based on approved residential plan
and not sanctioned plan. However, in the Supplementary agreement second
part of clause (2) stated as under:

As such, in the event of any difference variation of any nature
between the approved

Residential

Project Plan

and

the

Residential sanctioned plan, either party may propose an
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amendment to this agreement consequent to which the parties
shall amend this agreement taking into account the difference
between approved residential project plan and residential
sanctioned plan.

C. This authority has observed that, inspite of the said clause neither the
Respondent 1 nor Respondent No 2 has made any attempt to execute another
amendment agreement.
D. While the matter stood like this, though the supplementary agreement dated
10.09.2013 clearly shows the super built up area to an extent of 3,93,480
square feet was the share of the Respondent No 2 , the Respondent No 3 has
executed a MODT dated. 28.09.2016, for an extent of 4,19,999 square feet.
Further, it is pertinent to submit that no supporting documents were filed by
either of the parties to show how the Respondent No 1, 2 and 3 entered into
the MODT for an extent of 4,19,999 square feet.
E. This authority also observes that vide permit Number. 53442/HO/CZ/Cir10/2016 dated 21-02-2018 where the total sanction saleable built up area is
7,21,150.99 square Feet as such 50% of the developers share comes to
3,60,575.5 square feet.
F. The observations and findings of this Authority so far as the relief (b) is
concerned, as per the agreement of Sale entered between the respective
Complainants with Respondent No 1 and 2 , it is sole obligation on the
Respondent No 1 to protect the Rights and interests of the complainants
herein.
G. The observations and findings of this Authority as far as the relief (c) is
concerned, as per the RERA registration certificate the Project completion date
is 30.09.2023. The said deadline date is approaching. Further, in the Memo
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filed by the Respondent No 1 dated 30.08.2023, 31.78 % of work is completed
as on 30.08.2023. However, as per the Complainant in his rejoinder dated
10.07.2023 has stated only 25% of the work is completed. This authority
without going into the correctness of the figures is of the opinion that
approximately 70% of the work is still pending.
H. The observations and findings of this Authority so far as the relief (a) in the
rejoinder filed by the Complainant is concerned, though Sub section 1 of
section 7 of the Act encourages revocation of Registration in certain
circumstances and also considering the deviations(shielding encumbrances in
FORM B and also in agreement of Sale)

stated by the Complainant , this

authority keeping in view the interest of larger allottees in the entire project, is
not inclined towards the said revocation as the primary objective is to protect
the Rights and Interests of allottees with stipulated timelines.
I. The observations and findings of this Authority so far as the relief (b) in the
rejoinder filed by the Complainant is concerned, since this Hon’ble Authority
is of the considered opinion that Revocation may be inappropriate at this stage,
the relief sought for at this juncture does not arise.
J. The observations and findings of this Authority so far as the relief (c) in the
rejoinder filed by the Complainant is concerned, in the circumstances of the
said case this authority deems it appropriate to invoke Section 7(3) of the Act
in the larger interest on the allottees.
K. So far as the Interim Reliefs sought for by the Complainant is concerned, in
view of the orders passed by this Hon’ble authority the issue of interim relief
does not arise.
L. In addition to the point wise observations and findings for the relief sought for
by the complainant, this Hon’ble authority has also made certain additional
observations like the Respondent No 1 and 2 did not disclose the encumbrance
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with the Respondent no 3 and Yes Bank and the same has come to the notice
of the Complainant herein after Respondent No 3 issued a auction notice dated
17.10.2022.
M. This Hon’ble Authority most significantly observes that the Form B dated
30.11.2018

filed

before

RERA

incorrectly

stated

that

there

are

no

encumbrances over the said property which is a direct violation of Section
4(2)(l)(B) of the Act.
N. This Hon’ble Authority during the course of the oral arguments questioned
Respondent No.1 about suppressing the information related to the loan
obtained from the Allahabad bank in the year 2016 in Form-B Dt. 30-11-2018
filed before RERA. In response the Counsel for Respondent No 1 urged time to
file Memo, which was never clarified in subsequent Memo filed.
O. This Hon’ble Authority most significantly also observes that in the Agreements
of Sale executed with the Complainants in the year 2019 and subsequently
again in the year 2022 the Respondent No 1 and 2 vaguely mentioned about
the encumbrance with the bank, however the details of such encumbrance
have not been stated in detail which is which is a direct violation of Section
4(l)(B) of the Act.
P.

This Hon’ble Authority also observes that the Respondent No 1 has completely
failed to comply with Section 11(1) of the Act which dictates to upload quarterly
Charted Accountant Certificate.

Q. This Hon’ble Authority further observed that so far as the objections raised by
Respondent No 1 that a rejoinder was filed by “Mantri A Denizens Guild” on
behalf of all the Complainants is concerned, though the Rejoinder was filed by
“Mantri A Denizens Guild” the subsequent Written arguments were filed by all
the Complainants. This is a technical and procedural objection and does not
have any affect on the result of the case.
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R. This Hon’ble Authority further observed that so far as the objections raised by
Respondent No 1 that all the Development agreements, all Amendment
Agreements, Supplementary Agreement and MODT came into existence prior
to the Act is concerned, it has to be noted that the very project comes within
the definition of on-going project and as such the subject property is very much
under the purview of RERA.
S. This Hon’ble Authority also observes that the conduct of the Respondent No.1
and 2 is detrimental to the interests of the allottees and project
accomplishment.
M. DIRECTIONS OF THE AUTHORITY:
116.

In view of the observations and discussions made above, this Hon’ble

Authority hereby passes orders as under and issues the following directions under
Sections 37 and 38 of the Act:
1. Respondent No 1 is directed to pay Rs.6,50,00,000/- (Rupees Six Crores
and Fifty Lakhs Only) as penalty under Section 60 & 61 of the Act payable
in favour of TS RERA FUNDS through Demand Draft or online payment to
A/c No.50100595798191, HDFC Bank, IFSC Code: HDFC0007036 within
a period of 30 days from the date of receipt of this order. The penalty is
being imposed for furnishing incorrect information in FORM B dated
30.11.2018 stating that there are no encumbrances over the subject
project, not uploading quarterly update status of the Project audit report.
2. Respondent No 1 is directed to deposit fresh equity of the Promoter
Company (Respondent Nos.1 & 2) of Rs.200,00,00,000/- (Rupees Two
Hundred Crore Only) in a separate designated bank account as stated in
Section 4 (2)(l)(D), within a period of 30 days from the date of receipt of this
order; and furnish compliance report. It is imperative to state that the said
deposits may only be utilized for the construction of the subject project
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considering the prolonged delay in the construction to safeguard the
interests of the allottees.
3. Respondent No.1 is directed to strictly upload project status phase wise
reports on the RERA website on quarterly basis as required under Section
11 (1) of the Act and Annual Accounts Audit Report as required under
Section 4(2)(l)(D), 3rd proviso.
4. Respondent No.1 is directed to take all necessary steps to deliver hindrance
free property to the respective complainants/prospective buyers in
accordance with the Agreement of Sale.
5. Respondent No.3/Indian Bank is directed not to conduct any auction of the
subject matter of property as per Memorandum of Deposit of Title-deeds,
dt.28.09.2016 (Document No.5078/2016) over and above ground + 7 floors
where permission has been obtained subsequently.
117.

In lieu thereof, the present complaint stands disposed of. The parties are

hereby informed that failure to comply with this Order shall attract action under
Section 63 of the Act.
118.

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) within 60 days from the date of receipt of this Order.
Sd/Sri K. Srinivasa Rao, Hon’ble Member
TS RERA
Sd/Sri Laxmi Narayana Jannu, Hon’ble Member
TS RERA
Sd/Dr. N. Satyanarayana, Hon’ble Chairperson
TS RERA

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