Order Complaint No.1504 of 2023

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.1504 OF 2023
4th Day of November 2024
Corum:

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

1. Ms. Velagala Navya Radhika
2. Sri Shaik Javed Hussain
3. Sri M. Venkateswara
4. Ms. Sneha Gandhi
5. Sri Tumuluri Sai Anirudh
6. Sri Attaluri Siva

…Complainants
Versus

1. Sri Mohd. Yaseen
2. Sri Mahammed Abdul Aleem
3. Sri Mahammed Jaweed
4. Sri Mohd. Abdul Khaleel
5. Sri Syed Arfat

…Respondents

The present matter filed by the Complainant herein came up for hearing on
22.11.2023,

02.01.2024,

30.01.2024,

27.02.2024,

27.03.2024,

16.04.2024,

30.04.2024, 11.06.2024, 25.06.2024 and 25.07.2024 before this Authority in the
presence of Counsel for Complainants, Sri D. Krishna Murthy & Sri M. Chandra
Shekar along with Counsel for Respondent Nos.1 & 2, Sri Mohd. Zakir Hussain,
Counsel for Respondent No.3, Sri B. G. Rajeshwar, and Respondent Nos.4 & 5 in
person, and after hearing the arguments, this Authority passes the following
ORDER:

2.

The present Complaint has been filed by the Complainants under Section 31

of the Real Estate (Regulation & Development) Act, 2016 read with Rule (hereinafter

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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”) seeking
appropriate relief(s) against the Respondents.

Brief facts on behalf of the Complainants:
3.

The Complainants submitted that they booked their respective flats in JAZ

Hillside Constructions, Narsingi Heights, Ranga Reddy District and entered into
respective Agreement of Sales with three business partners and two landowners who
are the Respondents herein. That the complex is built on Sy Nos.314 & 315, 300,
301, 303, 306 to 313 on Plot No. 434 & 435 admeasuring 767 sq yds (640.474 Square
Meters).

4.

It was submitted that as per Agreement of Sale, Respondents agreed to

handover the property within 4 months from the date of receiving the advance
payment and register the property as per Sale Agreement. That despite several
reminders, the Respondents are not honoring the Agreement and handing over the
Flats to the Complainants nor is agreeing to give refund.

5.

Therefore, the Complainants prayed as under:

Complainant
Flat No.
Ms. Velagala Navya 302
Radhika

Sri
Shaik
Hussain

Javed 401

Sri M. Venkateswara

501

Ms. Sneha Gandhi
301
Sri Tumuluri Sai 202
Anirudh
Sri Attaluri Siva
201

Prayer
• Registration of Flat
• Refund of Rs.1,65,000 (cancellation of bank
loan) + Rs.2,28,500 (registration & stamp duty
paid) – total Rs.3,93,550/• Registration of flat
• Ready to pay balance amount by obtaining by
loan
• Registration of flat
• Ready to pay balance amount
• Refund of Rs.12,00,000
• Refund of Rs.12,00,000
•

Refund of Rs.40,00,000

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Reply on behalf of Respondent Nos.1, 2 and 3:
6.

Vide Reply dated 22.11.2023, Respondent Nos.1, 2 and 3 submitted that the

complex is built on the land admeasuring 760 square yards, situated in Sy.No. 314
of Narsingi Village, Ranga Reddy district. However, the Complainants falsely stated
in the complaint that the complex is built on land admeasuring 767 square yards,
situated in Sy.Nos. 314, 315, 300, 301, 306 to 313 on Plot No. 434 & 435 of Narsingi
Village, Ranga Reddy district.

7.

It was submitted that the sale deeds could not be executed due to a civil

dispute in which competent court has ordered status quo. However, that the building
has been completed within the time agreed in the agreement of sale and the
complainants have been requested to take possession of the respective flats with
immediate effect and registration will be done at a later stage subject to the final
outcome of the civil suit vide O.S.No. 1123/2022 on the file of Hon'ble VII Additional
District Judge, Ranga Reddy at L.B.Nagar. The Complainants have been informed
about the status quo order of the court and a copy has been duly handed over to
each of the Complainant. Unfortunately, the complainants refused to take possession
of the respective flats.

8.

It was submitted that all three Respondents i.e., Respondent Nos.1, 2 and 3

have returned from the Gulf with our hard-earned money to make some good
investment. At that point of time, the Respondent Nos. 4 and 5 and their relatives
lured said Respondent Nos.1, 2 and 3 with attractive returns and requested them to
invest in the construction of the apartment at Narsingi. Respondent Nos.4 and 5
have shown Respondent Nos.1, 2 and 3 the documents related to building permission
and made them to trust completely following which Respondent Nos.1, 2 and 3 went
on investing money. Hence, Respondent Nos.1, 2 and 3 are unaware about the

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approval to be taken from RERA since Respondent Nos.4 and 5 assured that they
will undertake procuring of all the mandatory approvals. It was submitted that
Respondent Nos.4 and 5 have played fraud with Respondent Nos.1, 2 and 3 and
swindled their hard-earned money leaving all three of them in deep financial crisis.

Reply on behalf of Respondent Nos.4 and 5:
9.

Respondent Nos.4 and 5 filed a joint counter affidavit and submitted that the

complaint is not maintainable against Respondent Nos.4 & 5 as there is not privity
of contract between the Complainant Nos. 1, 2, 4 & 5 and the said Respondents.
These Respondents never received any amounts from the Complainant Nos.1, 2 & 4
to 5 at any point of time and these respondents never executed any documents in
favor of the complainant Nos. 1, 2, 4 & 5. That except signing the agreement by these
Respondents along with Respondent Nos.1 to 3 in favour of M.Venkatesh, these
respondents never received any amounts from Complainants. Further these
Respondents received the amount of Rs.5,00,000/- only from the complainant No.3
(Javed Hussain) and the remaining amounts mentioned in the agreement of
complainant No.3 received by the Respondent Nos.1 to 3. Further these respondents
are not the builders and they are only the land owners and therefore the provisions
of the Act, 2016 are not applicable against these Respondents.

10.

It was submitted that the Respondent Nos.4 & 5 are the absolute owners and

possessors of the open plot in Sy No.314 admeasuring 760 Sq yards of Narsinghi
Village, Gandipet Mandal, Ranga Reddy District. After acquiring the said property,
the said Respondents entered into registered development agreement dt.30.06.2021
bearing Doc No.8747/2021 with Respondent Nos. 1 to 3 to construct a residential
building consisting of one stilt + five upper floors after obtaining the necessary
permission from your authorities without any deviations. The Municipal Authorities

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sanctioned

permission

to

construct

the

building

vide

permit

No.3129/W1/2021/0096 dt.22.06.2021, accordingly the Respondent Nos.1 to 3
constructed the building strictly as per the sanction plan, also obtained electricity
connection and paying the electricity charges to the concerned department.

11.

It was submitted that after obtaining permission from Municipal authorities,

when the construction is going on, M/s Agri Gold Multimedia instigated the police
and other Government officials and when they tried to stop the construction. Writ
Petition No.30210/2021 was filed before the Hon'ble High Court against the police
including CID, Revenue authorities and Municipal authorities. The Hon'ble High
Court by order dt.24.11.2021 granted interim direction to Superintendent of Police,
CID not to interfere with the property in respect of the open land admeasuring 760
sq yards in Sy No.314 of Narsingi Village and the said orders are still in subsistence.
After obtaining the said orders, M/S Agri Gold Multimedia represented by its
Managing Director A.Sita Rama Rao approached the Respondent Nos.4 & 5 and
admitted the title and possession over the property and he further requested the
Respondents herein to pay the amount of Rs. 1,11,38,500/- (Rupees One Crore
Eleven Lakhs Thirty-Eight Thousand Five Hundred Only) to them. Said Respondents
agreed to pay the said amount to M/s Agri Gold Multimedia and accordingly they
paid the amount of Rs.1, 11, 38,500/- (Rupees One Crore Eleven Lakhs Thirty-Eight
Thousand Five Hundred Only) to M/S Agri Gold Multimedia. M/S Agri Gold
Multimedia also handed over all the original documents including all the link
documents to the Respondent. Further M/S Agri Gold Multimedia also gave no
objection in favour of Respondents herein stating that they have no objection in
respect of the above-said property.

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12.

It was submitted that M/s Agri Gold Multimedia having executed the NOC in

favour of these Respondents, by suppressing the said fact M/s Agri Gold Multimedia
filed suit in OS.No. 1123/2022 on the file of Hon'ble VIII Addl District Judge, Ranga
Reddy District, L.B.Nagar for declaration of title and recovery of possession. Further
M/s Agri Gold Multimedia filed application Nos.398/2022 & 399/2022 for grant of
temporary injunction restraining the Respondents and other parties from alienating
and changing the nature of the subject property. The Hon'ble court was pleased to
grant ex-parte status quo orders.

13.

That the Respondents also filed separate applications to vacate the interim

orders and the said applications are also pending for consideration. In view of the
orders passed by the Hon'ble VIII Addl District Judge, the Respondent Nos.4 & 5 are
not in a position to execute the register sale deeds in favour of the purchasers of the
apartment i.e., Complainants herein.

14.

It was submitted that the Respondent Nos.4 & 5 are willing to execute

registered documents in favour of the Complainants herein. He accordingly prayed
to dismiss the present complaint.

Observations and directions of the Authority:
15.

The matter was called for hearing, wherein the Complainants appeared and

reiterated the contents of the Complaint. The Respondents, though filed their counter
affidavits, failed to appear. This Authority has taken into consideration the respective
contentions of the parties and the documents filed by them which form part of the
record.

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16.

The Complainant’s main contention is that they paid certain amounts to the

Respondents in return of which the Respondents executed an Agreement of Sale in
favour of each Complainant. Despite several reminders, the Respondents failed to
register the respective flats in favour of each Complainant.

17.

The Respondents Nos. 1, 2, and 3, on the other hand, contended that the

execution of the sale deeds has been hindered due to an ongoing civil dispute,
wherein the competent court has passed an order for maintaining the status quo.
The complainants have been duly notified and requested to take possession of their
respective flats immediately, with the assurance that the registration of the
properties will be carried out upon the resolution of the civil suit, being O.S.No.
1123/2022, currently pending before the Hon'ble VII Additional District Judge,
Ranga Reddy at L.B. Nagar. It is not clear to this Authority, how the Respondent
Nos.1, 2 and 3 offered possession of flats which have not been registered in favour of
the Complainants which is in contravention of the procedure enumerated under the
Act, 2016 more specifically under Section 11(4). When the Act clearly provides for
first entering into Agreement of Sale and then executing conveyance deed, thereafter
handover possession of the respective flat, the said procedure has to be followed in
stricto senso. Merely submitting that they offered possession to the Complainants
does not absolve them of their statutory responsibilities under the provisions of the
Act, 2016.

18.

Respondent Nos.4 and 5, submit that there is no privity of contract between

the Complainant Nos. 1, 2, 4 & 5 and the said Respondents as no amounts paid by
the Complainants were received by Respondent Nos.4 and 5. Further these
Respondents are not the builders and they are only the landowners and therefore
the provisions of the Act, 2016 are not applicable against these Respondents.

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19.

It was submitted that after obtaining necessary permissions from municipal

authorities for construction, M/s Agri Gold Multimedia interfered in the peaceful
possession of their land. Consequently, Writ Petition No. 30210/2021 was filed
before the Hon'ble High Court against police, CID, revenue, and municipal
authorities. The High Court, by order dated 24.11.2021, granted an interim direction
to the Superintendent of Police, CID, not to interfere with the property in favour of
the Respondent Nos.4 and 5, and this order remains in force. Thereafter, M/s Agri
Gold Multimedia, represented by Managing Director A. Sita Rama Rao, acknowledged
the Respondents' title and possession of the property and requested a payment of
Rs. 1,11,38,500/-, which was duly paid. In return, M/s Agri Gold Multimedia handed
over all original and link documents, issuing a No Objection Certificate (NOC) in favor
of the Respondents. However, this Authority observes that no document of any such
settlement was filed on behalf of the Respondent Nos.4 & 5 in support of this
contention which cannot be taken into account.

20.

It was also submitted by that despite the NOC, M/s Agri Gold Multimedia later

filed O.S. No. 1123/2022 before the Ld. VIII Additional District Judge, Ranga Reddy,
seeking a declaration of title and recovery of possession, along with applications for
a temporary injunction. Ex-parte status quo orders were granted by the court, and
the Respondents' applications to vacate the interim orders are still pending and in
view of the same, Respondent Nos. 4 and 5 are currently unable to execute the sale
deeds in favor of the Complainants.

21.

In view of the status quo order of the Ld. VIII Additional District Judge, Ranga

Reddy in O.S. No. 1123/2022 filed by M/s Agri Gold Multimedia, which is part of the
record, the sale deeds cannot be registered in favour of the Complainants. As per
submission of the Respondent Nos.4 and 5, they have taken steps for vacating the

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said status quo order, however the same is subject to adjudication before the VIII
Additional District Judge, Ranga Reddy. However, in such a situation, the
Complainants who are bonafide allottees in the project, cannot be left in lurch until
the adjudication of the O.S. No. 1123/2022. Therefore, this Authority is of the
considered opinion that the Complainants have a right of seeking refund in
accordance with Section 18 of the Act, 2016 which provides as under:

“18. (1) If the promoter fails to complete or is unable to give possession of an
apartment, plot or building,—
(a) in accordance with the terms of the agreement for sale or, as the case may
be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of
suspension or revocation of the registration under this Act or for any other
reason, he shall be liable on demand to the allottees, in case the allottee wishes
to withdraw from the project, without prejudice to any other remedy available,
to return the amount received by him in respect of that apartment, plot, building,
as the case may be, with interest at such rate as may be prescribed in this
behalf including compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to withdraw from the project,
he shall be paid, by the promoter, interest for every month of delay, till the
handing over of the possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any loss caused to
him due to defective title of the land, on which the project is being developed or
has been developed, in the manner as provided under this Act, and the claim
for compensation under this sub section shall not be barred by limitation
provided under any law for the time being in force.

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(3) If the promoter fails to discharge any other obligations imposed on him under
this Act or the rules or regulations made thereunder or in accordance with the
terms and conditions of the agreement for sale, he shall be liable to pay such
compensation to the allottees, in the manner as provided under this Act.”

22.

The Hon’ble High Court of Judicature at Bombay observed on similar lines in

Sanvo Resorts Pvt. Ltd. and Others vs. Shital Nilesh Deshmukh and Another, 2023
SCC OnLine Bom 1850 which is reproduced hereunder:
“21. In this context, the Supreme Court in the case of Newtech Promoters and
Developers Pvt. Ltd. (supra) in paragraphs 22 and 25 has expressly observed
that the allottee has an unqualified right to claim interest under Section 18(1) of
the RERA Act if the promoter fails to discharge his obligation in accordance with
the terms and conditions of the agreement. This unqualified right is not
dependent on any contingencies or stipulations and therefore the legislature has
consciously provided this right of refund as an unconditional absolute right to
the allottee if the promoter fails to give possession within the stipulated time
regardless of unforeseen events or stay order of the Court which is in either way
not attributable to the allottee.” (emphasis supplied)

23.

This Authority has also taken note of the Order passed by the Hon’ble High

Court of Bombay in Wadhwa Group Housing Pvt. Ltd. vs. Vijay Choksi & Anr. (Second
Appeal No.21842/2023), in which, it is categorically held as under:
“17. ….Thus, definition of the term “Promoter” under Section 2(zk) of RERA is
wide enough to include every person who is associated with construction of the
building such as builder, coloniser, contractor, developer, estate developer or by
any other name or even the one who claims to be acting as the holder of a power
of attorney from the owner of the land. One of the principal objectives of RERA

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is to bring transparency in real estate sector and to protect the interests of the
consumers in the real estate project. The term ‘Promoter’ has been so widely
defined that it virtually includes every person associated with construction of
the building. Thus, even a person who is merely an investor in the project
alongwith the Promoter and who is entitled to benefit in the real estate project
is also covered by definition of the term ‘Promoter’. In the present case, I need
not delve deeper into the enquiry as to whether Appellant is covered by the
expression ‘Promoter’ or not. While registering the project as ongoing project
under Section 3 of the RERA, Appellant’s name has been included in the list of
Promoters. Therefore, Appellant cannot run away from the 16 of 24 fact that it
is the promoter in respect of the project ‘The Nest’. Explanation to Section 2(zk)
makes all persons who construct or convert building into apartments or develop
a plot for sale, as well as a person who sells apartments or plots to be promoters
making them jointly liable as such for the functions and responsibilities
specified under the Act, or the Rules and Regulations made thereunder. Thus,
a person who does not actually construct or causes to be constructed a building
but merely takes part in the joint venture and sells flats, becomes a Promoter.
Appellant admits that it is entitled to a share in the joint venture in the
constructed area, which it is entitled to sell. Thus, the Appellant is entitled to
sell flats in the project and accept consideration for such sale. There is therefore
no doubt to the position that, both Appellant as well as the second Respondent
are Promoters and are and Regulations made thereunder. jointly liable in
respect of the responsibilities under the RERA and Rules.

18. In my view therefore, mere falling of flat in the share of the second
Respondent under the Joint Development Agreement, would not excuse the
Appellant from the responsibilities and liabilities under the RERA, Rules and

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Regulations made thereunder qua that flat. RERA does not demarcate or restrict
liabilities of different promoters in different areas. The liability is joint for all
purposes under the Act, Rules and Regulations.
…
23. Thus, under Section 18(1)(b), the liability to return the amount received from
the flat purchaser is on the Promoter. Since the Appellant is covered by definition
of the term ‘Promoter’, it is also jointly liable to refund the amount along with
the other promoter, being the second 17 of 24 Respondent. Section 18 cannot be
narrowly interpreted as sought to be suggested by Mr. Engineer, to include only
that promoter who actually received the amount. The objective behind
enactment of RERA must be borne in mind. If such narrow interpretation of
Section 18 is accepted, it would give a license to developers to deliberately
accept payments in the accounts of one of the promoters and then escape the
liability to refund or to pay interest by taking a specious plea that the other
promoters are not liable in respect of those payments. Mr. Engineer has sought
to draw distinction between projects launched before and after coming into force
of RERA by submitting that now the monies must be received in the registered
account, which was not the case before registration under RERA. To my mind,
this distinction sought to be made cannot be a ruse to escape the liabilities as
promoter under RERA. The Act applies even to ongoing projects and therefore
the account in which monies are received by promoters is irrelevant for the
purpose of determining joint liability of promoters under Section 18.
24. The Appellant’s contention about absence of privity of contract between it
and the Complainant is totally misplaced. Definition of the term ‘promoter’ under
Section 2(zk) of the RERA would indicate that even persons/entities with whom
a flat purchaser does not enter into contract are also covered by definition of the
term ‘promoter’. Therefore, it is not necessary that there has to be an agreement

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between every Promoter and the flat purchaser. As observed above, it is a
matter of indoor management between the Promoters and the flat purchaser
who is not supposed to know the intricacies of the arrangements made between
several promoters amongst themselves. When a claim is raised in respect 18 of
24 of a real estate project by a flat purchaser, all promoters become jointly liable
qua that flat purchasers, irrespective of whether there is privity of contract with
each of the promoter or not. This is the scheme of RERA and mere absence of
privity of contract with a particular promoter does not relieve such promoter in
respect of the liabilities under RERA. 25. I am therefore of the view that
Appellant cannot escape the liability to refund the amount received towards sale
of flat to Respondent No. 1.”

24.

A careful perusal of the said judgments of the Hon’ble High Court of Bombay,

make it abundantly clear that landowners i.e., Respondent Nos.4 and 5 herein are
also equally responsible towards its functions under the Act, 2016.

25.

This Authority issued a Show Cause Notice to the Respondents for entering

into Agreements of Sale with the Complainants before registering the project with the
Authority. To which, the Respondent Nos.1, 2 and 3 submitted that they are unaware
about the approval to be taken from RERA since Respondent Nos.4 and 5 assured
that they will undertake procuring of all the mandatory approvals and that
Respondent Nos.4 and 5 have played fraud with these Respondents by swindling
their hard-earned money. However, no such understanding or agreement between
the parties has been filed herewith to establish that only Respondent Nos.4 and 5
were mandated to take necessary approvals.

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26.

Further, Respondent Nos.4 and 5 submit that they are not the builders and

they are only the land owners and therefore the provisions of the Act, 2016 are not
applicable against them. In this regard, Section 2(zk) of the Act, 2016 defines
promoter as under:

“(zk) "promoter" means,—
(i) a person who constructs or causes to be constructed an independent building
or a building consisting of apartments, or converts an existing building or a part
thereof into apartments, for the purpose of selling all or some of the apartments
to other persons and includes his assignees; or
(ii) a person who develops land into a project, whether or not the person also
constructs structures on any of the plots, for the purpose of selling to other
persons all or some of the plots in the said project, whether with or without
structures thereon; or
…
(v) any other person who acts himself as a builder, coloniser, contractor,
developer, estate developer or by any other name or claims to be acting as the
holder of a power of attorney from the owner of the land on which the building
or apartment is constructed or plot is developed for sale; or
(vi) such other person who constructs any building or apartment for sale to the
general public.
Explanation.—For the purposes of this clause, where the person who constructs
or converts a building into apartments or develops a plot for sale and the
persons who sells apartments or plots are different persons, both of them shall
be deemed to be the promoters and shall be jointly liable as such for the
functions and responsibilities specified, under this Act or the rules and
regulations made thereunder.”

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27.

A simple reading of the above-quoted definition would mean to include any

person who causes to construct such apartments for the purpose of sale and
therefore, Respondent Nos.4 and 5 being the landowners who offered their very land
for construction and subsequent sale of apartments are promoters under the Act,
2016. Therefore, both Respondent Nos.1, 2 and 3 and Respondent Nos.4 and 5 are
jointly severally liable under the provisions of the Act, 2016 for registering the Project
under Sections 3 and 4 without which they could not have jointly executed
agreements in favour of the Complainants. This attracts penalty under Sections 59
and 60 of the Act, 2016.

28.

Therefore, in view of the above discussion, this Authority vide its powers under

Sections 37 and 38 of the Act, 2016 issues the following directions:
i.

In accordance with the discussion at Para Nos.25, 26 and 27 above, the
Respondents are jointly and severally liable for penalty under Sections 59 and
60 for violation of Sections 3 and 4 respectively. Penalty of Rs. 3,84,742/(Rupees Three Lakh Eighty-Four Thousand Seven Hundred and Forty-Two
Only) is imposed on the Respondents herein payable within 30 days in favour
of TG RERA FUNDS through Demand Draft or online payment to A/c
No.50100595798191, HDFC Bank, IFSC Code: HDFC0007036; and

ii.

Respondents are hereby directed to submit an application for registration of
the project in accordance with Section 4 and the Rules thereunder with
immediate effect; and

iii.

In accordance with the discussion at Para Nos.15 to 24, this Authority directs
the Respondents herein to refund the amounts paid by the Complainants
along with interest at the rate of 10.85% in accordance with Rule 15 of the
Rules, 2017.

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29.

Upon failure of Respondents to comply with the above directions, appropriate

action shall be initiated under Section 63 of the Act, 2016.

Sd/Sri K. Srinivasa Rao,
Hon'ble Member,
TG RERA

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

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

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