Order Complaint No. 753 Of 2023

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
12th August 2024
Corum:

Dr. N. Satyanarayana, IAS (Retd.), Hon’ble Chairperson
Sri LaxmiNarayanaJannu, Hon’ble Member
Sri K. SrinivasaRao, Hon’ble Member
COMPLAINT NO.1037 OF 2023

Between
Sri D. Sri Ramachandra Varma

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1515 OF 2023
Between
Sri Paramjyoti Veera

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

Between
Sri Vangari Sridhar Babu

…. Respondent

COMPLAINT NO. 1589 OF 2023
…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1520 OF 2023
Between
Sri Vinay Kumar Gasapa

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1106 OF 2023
Between
Sri Siva Jagan Mohan Rao

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

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COMPLAINT NO. 1109 OF 2023
Sri Shanmukha Rao Mopidevi Subrahmanya

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1689 OF 2023
Sri Kanimati Prakash Shetiya

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 753 OF 2023
Sri Shaik Jeelani Basha

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 659 OF 2023
Sri Chandan Choudary

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1201 OF 2023
Sri Solomon Branham Gorantla

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1038 OF 2023
Sri Swetha Sama

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1102 OF 2023
Sri T. Siva Sankara Rao

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1103 OF 2023
Sri Srinivas Rao Guda

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

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COMPLAINT NO. 891 OF 2023
Sri Bandi Madhavi

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 951 OF 2023
Sri Srinivasa Rao Mukkapati

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 911 OF 2023
Sri L.Narsimha

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 857 OF 2023
Sri Akula Govinda Narasing

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMPLAINT NO. 1590 OF 2023
Sri Yerragudi Lavanya

…. Complainant

AND
M/s Jayathri Infrastructures India Pvt Ltd. rep by Sri K.Srinivas

…. Respondent

COMMON ORDER
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:
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

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also same. Therefore for the sake of the convinenince and to avoid repetitions
the pleadings from the complaint no.1520 of 2023 are referred below.
A. Facts of the Case:
4.

The complainants have booked commercial spaces/apartments

from

the Respondent in the project "Western Galaxy" located at Gopanpally Village,
Serilingampally Mandal, Sy. No. 361/20, by M/s Jayathi Infrastructures
Private Ltd., as part of a pre-launch booking offer.
5.

The complainants have paid amounts to the Respondent and entered

into MoUs for the same. All the complainants have paid the entire sale
consideration amount, yet to date, the Respondent has failed to even initiate
construction in the promised premises. The Respondent has absconded and
has not been reachable to the allottees of the concerned project for the past
two years.
6.

The Respondent was booked with a criminal case at KBHB Police

Station, was sent to custody, and is presently out on bail.
7.

On various occasions, the complainants have tried to approach the

Respondent Company to refund the amount with interest; however, no efforts
have been made by the Respondent to date.
B. Relief(s) Sought:
8.

In view of the above mentioned fact, direct the Respondent to refund the

amount along with interest.
C. Respondent's Reply:
9.

That the Respondent has registered the collateral land security for the

amount paid by the existing customer, which is still in the customer’s name.
Once the Respondent settles the amounts through the lands, cash, or any
property with the customer's consent, the above collateral land should be
returned to the client or held in their name.
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10.

These customers have filed complaints against my client.
Customers List
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.

VEERA PARAMJYOTHI
Sirish Daspet&Maitri joshi.
NARASIMHULU
Akula Narsing
Janaharsha Group
Sridhar babu Vangari
Md.Ifteqaruddin farooqui.
SHAIK JEELANI PASHA
D.S.R VARMA
L NARASIMHA
V MURALI KRISHNA
RAMA DEVI
P SREEDEVI
T LAKSHMA REDDY
H SAI KUMAR
NARASIMHA RAO
RENUKA
SANDHYA
CHANDRA SHEKAR

11. That if the Authority accepts the proposal, the Respondent shall process
for refunding the amount through property or any suitable land for the paid
amount.
D. Hearing Conducted:
10. During the hearing, both parties requested the consolidation of the
seventeen complaints and the issuance of a common order. Consequently,
the seventeen (17) complaints were 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 "Western Galaxy”.
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12. As

per

the

ESCI

report

ESCI/PD/TSRERA/07/2023-24

dated

01.12.2023, during the inspection, it was stated that the concerned
project site is located on the main road leading to Gopanpally Thanda,
adjacent to Bhagya Nagar TNGOs Mutually Aided Co-operative Housing
Society, Hyderabad. As of the date of inspection, it was noticed that the
site is a vacant land with no progress of work. It was learned that the
builder had proposed residential apartments in 6 acres of land and a
commercial complex in 4 acres of land, totaling 10 acres of land. Prima
facie, it appears that the company has no legal authority to undertake the
project.
13. 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 "Western Galaxy" project. No progress has been made on the site.
14. During the hearing, the complainants submitted to this Authority that
they are not interested in the collateral land given by the Respondent, as
the value of those lands is nowhere near a substitute for the amounts
paid by the complainants. Hence, they requested the Authority to direct
the Respondent to take back the collateral lands and refund the amount
paid to the Respondent along with interest.
15. Further, the Respondent submitted to this Authority that due to a few
non-compliance terms of the Agreement of Sale entered with Sri M. Laxmi
Kanthai and Sri V. Gowrith dated 25.03.2021, part of the concerned
project land is under pending litigation before the Supreme Court, hence,
the project could not be initiated.
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?
16.

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 "Western Galaxy" 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.
17.

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 stated that they shall settle the amount through
property or any suitable land for the paid amount. It is noted that the
Respondent

has

entered

into

collateral

land

agreements

with

the

complainants as security for their amounts paid for the concerned project.
However, it is crystal clear that the complainants do not wish to keep the
collateral lands and are instead only interested in the refund of the amount
along with interest.
18.

In view of the above observations, the Authority is of the opinion that

the Respondent entered into collateral land agreements; however, as those
land values are not proportionate to the amounts paid by each complainant,
the allottees are not willing to accept the registration of those lands and are
only seeking their amount to be paid back. The Authority is of the view that as
it is evident that there is a fault on behalf of the Respondent that he failed to
provide the possession of the allotted commercial space/units assured by the
Respondent in its MoUs, and in such cases as per Section 18 of the RE(R&D)
Act, allottees have the remedy for the return of the amount paid by them in
respect to the commercial space/units.
19.

Hence, this Authority views that, as the Respondent is unable to give

possession to the complainants herein due to his own fault, and the
complainants wish for a refund of the amount, the Respondent shall refund
the amount. Wherein the collateral lands shall be returned to the Respondent
as soon as the payment is made to the complainants as agreed and submitted
by the Respondent in its reply dated 10.11.2023.

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20.

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

needs clarification.
21.

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.
22.

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.
The allottee may proceed under Section 18(1) or the proviso
thereto."
23.

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
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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."
24.

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

Respondent kept the complainants on hold for two – three years, making false
promises

about

registering

the

commercial

space

or

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 allotted space/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.
25.

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%.
26.

The Respondent is directed to repay the entire amount paid by each

complainant, along with interest at the rate of 10.65% per annum, calculated
from the date of the Memorandum of Understanding (MOU) entered into with
each allottee, until the date of actual realization. This repayment must be
completed within 90 days from the date of this order.
27.

The complainants shall return the collateral lands to the Respondent

immediately upon receipt of the refunded amount, inclusive of interest.
F. Directions of the Authority:
28.

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)
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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 commercial spaces/units in the project
"Western Galaxy" as mentioned above, along with interest of 10.65% per
annum from the date of the Memorandum of Understanding (MOU)
entered into with each allottee, until the date of actual realization.

II.

The refund of the entire amount shall be paid by the Respondent to the
allottees within a period of 90 days from the date of this Order.

III.

The complainants shall return the collateral lands to the Respondent
immediately upon receipt of the refunded amount, inclusive of interest.

IV.

For contravening Section 3 of the Act, this Authority, exercising its
powers under Section 59 of the Act, imposes a penalty of Rs
36,70,000/-. 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.

29.

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.
30.

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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