Order Complaint No.563 of 2022

BEFORE TELANGANA REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
Complaint No. 563 of 2022
21st January, 2025

Corum:

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

1. Savitha Malahotra
2. Reedna Jain
3. Babita Gupta
4. Ganesh Ashok Karche
5. Jitendra Bathla
6. Mahendra Singh Rawat
7. Sunil Kisan Khandare
8. Shiladitya Bhowmick

…Complainants
AND

1. M/s DLF Gayatri Developers
2. M/s Livana Builders & Developers Pvt.Ltd
3. M/s Latona Builders & Constructions Pvt Ltd.
4. M/s Chamundeswari Builders Pvt Ltd.

…Respondents

The present matter, filed by the Complainant, came up for final
hearing before this Authority on 7th August 2024. The hearing took place in
the presence of the Complainant's counsel, Sri Keesara Prithvi Reddy, and
the Respondents' counsels, Sri P. Sri Ram, and B. Suresh. After hearing the
arguments from both parties, this Authority passes the following order:
2.

The complaint has 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"). The Complainants are seeking directions from this Authority to
take action against the Respondents.
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A. Brief facts on behalf of the complainants:
3.

The Complainants respectfully submit that they are individuals who,

over time, booked residential open plots in a real estate project developed by
the Respondents under the name "DLF Garden City." The said project is
located

in

Nandigama

Village,

Kottur

Mandal,

Rangareddy

District,

Telangana (formerly Mahaboobnagar District), hereinafter referred to as "the
Project."
4.

The

Complainants

respectfully

submit

that,

around

2012,

representatives and marketing executives of the Respondents approached
the Complainants with detailed presentations and offers regarding the
Project. The Respondents conveyed that the 1st Respondent, M/s. DLF India
Limited, was developing this Project as a high-end residential layout, spread
across Ac.108.37 Gts. This layout encompassed land in Survey Nos. 120,
121, 122(P), 127(P), 128, 129, 130, 132, 137, 138, 524, 525, 526, 528/P,
529/P, 530/P, 531, 535, 550/P, 551, and 552/P in Nandigama Village,
Kottur Mandal, Rangareddy District.
5.

The Complainants respectfully submit that the Project was promoted

as a joint venture partnership between two renowned entities, M/s. DLF
India Limited and M/s. Gayatri Infra Private Limited. It was projected as a
premium residential township leveraging the reputations of both companies.
The 1st Respondent, DLF India Limited, was presented as a pioneer in real
estate development with over 60 years of history, while M/s. Gayatri Infra
Private Limited was depicted as a leading infrastructure company with a
robust portfolio across India. This collaboration was marketed as a
significant

venture

aimed

at

delivering

cutting-edge

residential

and

commercial developments within a specified timeline, assuring the highest
quality standards.
6.

The Complainants respectfully submit that, attracted by the high-

profile joint venture and the promise of a high-end residential layout, they
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proceeded to book plots in the Project. They entered into agreements for the
purchase of specific plots and made payments according to the payment
plans provided by the Respondents. The Complainants acted in good faith,
relying on the Respondents’ reputation and the representations made during
the marketing campaigns.
7.

The

Complainants

respectfully

submit

that,

upon

further

investigation, they discovered that the land on which the Project was being
developed was jointly held by three developers: (a) M/s. Livana Builders and
Developers Private Limited, (b) M/s. Latona Builders and Constructions
Private Limited, and (c) M/s. Chamundeswari Builders Private Limited. This
land, located in the aforementioned Survey Numbers, extended to 4,38,558
square meters. However, the marketing and sales of the plots were
conducted solely by the 1st Respondent. The Complainants were not
informed about the involvement of the other developers nor made aware of
the legal or contractual relationships between the Respondents and the
landowners. This lack of transparency, including the absence of clarity
regarding the authority under which the Respondents were executing the
Plot Allotment Letters, raised serious concerns.
8.

The

Complainants

respectfully

submit

that,

according

to

the

Respondents, a draft layout approval had been granted by the Hyderabad
Metropolitan

Development

Authority

15510/LO/Plg/SHZ/HMDA/2008,

dated

(HMDA)

vide

25.01.2012.

letter

This

no.

approval

imposed several terms and conditions that the Respondents were required to
comply with during the course of the Project's development. However,
despite this draft layout approval, several restrictions were placed on the
Project. Clause 12 of the draft approval explicitly stated that the executive
authority could not approve or release any building permissions unless the
developer completed the necessary development works and had the
mortgaged land released from HMDA. This critical condition was not
adequately disclosed to the Complainants at the time they booked the plots.

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9.

The Complainants respectfully submit that, following the enactment of

the Real Estate (Regulation and Development) Act, 2016 by the Government
of India, the Government of Telangana notified the Telangana Real Estate
(Regulation and Development) Rules, 2017 (the Rules) under Section 84 of
the RE(R&D) Act. Both the RE(R&D) Act and the Rules clearly mandate that
all real estate projects, including ongoing projects that have not yet received
a completion certificate, must be registered with the Real Estate Regulatory
Authority. This legislative safeguard is crucial for protecting the interests of
buyers and ensuring accountability from real estate developers.
10.

The Complainants respectfully submit that the Respondents, despite

being fully aware of the provisions under the RE(R&D) Act, did not register
the Project with the Real Estate Regulatory Authority (RERA). Instead, they
claimed that the Project was exempt from RERA registration based on the
argument that building permissions had been granted before 01.01.2017, in
accordance with Rule 1(2)(j) of the Telangana Rules. However, no occupancy
certificate or completion certificate had been obtained prior to 01.01.2017,
which is a critical requirement under the RE(R&D) Act for such an
exemption.
11.

The Complainants respectfully submit that, under the applicable law,

the Project is considered as ongoing project since no completion certificate
or occupancy certificate was issued before the enactment of the RE(R&D)
Act. Additionally, it is pertinent to note that the revised final layout approval
for the Project was granted only on 28.01.2019 by HMDA, confirming that
the Project was still ongoing at least until that date. Therefore, the Project
clearly falls within the ambit of the RE(R&D) Act and is required to be
registered under the provisions of the Act and the corresponding Telangana
Rules.
12.

The Complainants respectfully submit that the Respondents, by not

registering the Project under the RE(R&D) Act, not only violated their
statutory obligations but also misled the Complainants and other buyers by
falsely claiming that the Project was exempt. The Respondents acted
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fraudulently by misrepresenting the legal status of the Project and failing to
comply with the regulatory framework intended to protect homebuyers.
13.

The Complainants further submit that the Respondents' failure to

register the Project under the RE(R&D) Act has deprived them of the
protections afforded under the Act, including safeguards related to timely
completion, financial transparency, and developer accountability. As a
result, the Complainants seek the intervention of this Hon’ble Tribunal to
direct the Respondents to fulfill their obligations under the Real Estate
(Regulation and Development) Act, 2016.
B. RELIEF(S) SOUGHT:
14.

In view of the facts mentioned in paragraph 4 above, the complainant

prays for the following relief(s):
a) Direct the respondents to register the project under the name “Garden
City” located at Nandigram Village and Mandal, Ranga Reddy District
with the Telangana Real Estate Regulatory Authority;
b) Punish the Respondents for non-compliance of Section 3 r/w 4(1) of
the Act, Rules and Regulations envisaged therein and;
c) Pass such other order or orders as this Hon’ble Authority may deem
fit and proper in the circumstances of the case.
C. Interim order:
15.

Pending disposal of the complaint, the Complainant prays that this

Hon’ble Authority may be pleased to Stay the registration of plots in the
Layout.
D. Counter filed by the respondents:
16.

The Respondents deny the various allegations in the Complaint as

being absolutely false and untenable, and request leave of this Hon’ble
Authority to submit the following preliminary observations before addressing
the specific allegations made in the Complaint.
1. Preliminary objections:
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The Respondents contend that the complaint is not maintainable either in
law or on facts and should therefore be dismissed in limine. They argue that
the "Gardencity" project had secured approvals well before the Telangana
Rules came into force, thereby rendering the provisions of the RE(R&D) Act
inapplicable. As the project received approval prior to the enactment of the
relevant legal framework, the Respondents assert that the complaint lacks
jurisdiction and should be dismissed without further consideration.
I.

The Respondents submit that the "Gardencity" project, being a
residential plotted layout, obtained layout approval from the
Hyderabad Metropolitan Development Authority (HMDA) in January
and April of 2012. As per the Telangana Rules, only projects
approved on or after January 1, 2017 are required to be registered
under RERA. Additionally, under Rule 2(j) of the Telangana Rules,
the project is classified as an "ongoing project" and is exempt from
registration

since

its

approvals

predate

January

1,

2017.

Consequently, the Respondents argue that the complaint is invalid,
as the project is not subject to RERA registration requirements.
II.

The Respondents assert that the Complainants have approached
the Authority with "unclean hands," having concealed material
facts. They allege that the Complainants, being speculative
investors, acquired plots with the expectation of profit from the real
estate market. Due to the market downturn caused by the COVID19 pandemic, the Complainants now seek to exploit the RERA
framework to evade their payment obligations and exert undue
pressure on the Respondents. The Respondents argue that the
complaint is filed in bad faith with the intent to misuse the legal
process, and therefore, request its dismissal on these grounds.

III.

The Respondents highlight that the Complainants have previously
initiated consumer complaints before the District Consumer Forum
in Hyderabad, seeking compensation for delays in the project.
Although the District Forum ruled in favor of the Complainants, the
Respondents have challenged these rulings before the State
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Consumer Disputes Redressal Commission, which issued an
interim stay. As the matter is currently sub judice, the Respondents
argue that the present complaint under RERA is duplicative and
should be dismissed on the principle that the same issue cannot be
concurrently litigated in multiple forums.
IV.

The Respondents argue that the Complainants were speculative
buyers who invested in the "Gardencity" project solely for profit, not
for

personal

use

or

as

end-users.

They

claim

that

the

Complainants, after booking their plots during a market boom, now
seek to use RERA provisions as a means to avoid making their final
payments, particularly in light of the downturn caused by the
COVID-19 pandemic. The Respondents assert that speculative
investments are not protected under the RERA framework, and the
complaint is, therefore, without merit and should be dismissed.
V.

The Respondents claim that they have adhered to all relevant
regulations, specifically those set by HMDA, which granted layout
approval for the "Gardencity" project in 2012. They have submitted
the necessary applications for final layout permits and completion
certificates,

demonstrating

their

compliance

with

legal

requirements. As such, they argue that their project falls outside
the purview of RERA, and the Complainants' allegations of noncompliance are baseless.
VI.

The Respondents maintain that the project has been fully
completed, including the development of plots, and that they have
already applied for completion certificates from HMDA. They further
submit that the completion of the project prior to the enforcement
of the Telangana Rules in 2017 exempts it from RERA registration.
The Respondents cite the issuance of final layout permits for
various phases in 2018 and 2019, arguing that no violations of the
RE(R&D) Act have occurred.

VII.

The Respondents refer to a circular issued by the Telangana RERA
on September 22, 2018, which stipulates that projects approved
before January 1, 2017, are exempt from RERA registration. Since
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the "Gardencity" project was approved in 2012, the Respondents
argue that they fall within the exemption provided by this circular.
As such, they assert that the complaint lacks a legal foundation
and should be dismissed.
VIII. The Respondents contend that the Complainants have no valid
cause of action. They argue that the Complainants have suppressed
material facts and advanced baseless allegations to mislead the
tribunal. Consequently, the Respondents request that the complaint
be dismissed as frivolous and lacking in merit, and seek
compensatory costs for the inconvenience caused by this litigation.
2. True Facts:
IX.

The project, developed by the Respondents, received layout approval
from the Hyderabad Metropolitan Development Authority (HMDA)
on January 25, 2012, and again on April 2, 2012, as part of a
revised layout plan. These approvals were granted well before the
Telangana Rules came into force on July 31, 2017.

X.

Under the RE(R&D) Act, 2016, as implemented by the Telangana
Rules, 2017, only projects that received building or layout
permissions on or after January 1, 2017, are required to register
with the Real Estate Regulatory Authority. Therefore, the project is
classified as an "ongoing project" under Rule 2(j) of the Telangana
Rules, 2017. Rule 2(j) specifically defines "ongoing projects" as
those for which building or layout permissions were granted prior to
January 1, 2017, but for which a completion certificate or
occupancy certificate has not yet been issued. Projects falling under
this category are not required to register with RERA. Since the
project received approval from HMDA in 2012, it is exempt from
RERA registration.

XI.

The Respondents have demonstrated full compliance with the laws
and regulations in place at the time of the project’s initiation. The
layout approval from HMDA, the competent authority regulating
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land use and layout development in the Hyderabad region, was
obtained in accordance with the rules of that time. The project
involved the development of a residential plotted layout on
approximately 156 acres of land in various survey numbers in
Nandigama Village, Ranga Reddy District. This land was converted
from agricultural to non-agricultural use for layout development
purposes. The Respondents have provided documentary evidence of
these conversions, including sale deeds registered between 2007
and 2008, as well as mutation proceedings and land conversion
certificates issued by the Revenue Divisional Officer and Tahsildar
of Kothur Mandal. The Respondents assert that they adhered to all
terms and conditions imposed by HMDA, including compliance with
layout rules, and obtained approvals for layout development in two
phases. Furthermore, the Respondents applied for a final layout
permit from HMDA, which they received in multiple phases during
2018 and 2019.
XII.

The Telangana Real Estate Regulatory Authority issued a circular
on September 22, 2018, clarifying the scope of the RE(R&D) Act,
2016, and its applicability to real estate projects in Telangana.
According to this circular, only projects approved on or after
January 1, 2017, with an area of 500 square meters or more or
more than 8 residential units, need to be registered with RERA. The
circular further states that any project that received building or
layout permissions from competent authorities before January 1,
2017, does not need to register with RERA, even if the project was
still ongoing after that date. Since the project received layout
approval in 2012, well before January 1, 2017, this circular
explicitly exempts the project from RERA registration requirements.
The Respondents have interpreted this exemption correctly, and
their reliance on this circular is legally sound.

XIII. The Respondents have acknowledged that the project is essentially
complete, but they have applied for the completion certificate from
HMDA. According to the documents provided, the Respondents
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submitted applications for the completion certificate on September
1, 2016, and October 7, 2016, for different phases of the project.
Although the completion certificate had not been issued at the time
of the complaint, the layout permits for the project’s final phase
were issued in 2018 and 2019. The Respondents argue that the
delay in receiving the formal completion certificate does not affect
the project’s exemption status under RERA, as the project was
approved long before the Telangana Rules came into effect in 2017.
Importantly, the absence of a completion certificate does not
automatically imply non-compliance with RERA, as the exemption
for ongoing projects with prior layout approvals remains applicable.
XIV. Another important fact in this case is that the project is a plotted
layout development rather than a building construction project.
Under HMDA’s layout rules, projects that involve the subdivision of
land into individual plots for residential purposes follow a different
approval process than those that involve the construction of
buildings or apartment complexes. The Respondents’ project was
designed to sell plots to individual buyers, who would then have the
option to construct residential units on those plots. Since this type
of

project

requires

layout

permission

rather

than

building

permission, and since the layout permission was obtained in 2012,
the project does not fall under the scope of RERA’s registration
requirements.
XV.

The Complainants have previously filed consumer complaints
against the Respondents before the District Consumer Forum in
Hyderabad, seeking compensation for delays in the project’s
delivery. The District Forum ruled in favor of the Complainants,
granting them delay compensation. However, the Respondents
challenged this decision in the State Consumer Disputes Redressal
Commission, which subsequently granted an interim stay on the
District Forum’s orders. While the existence of these prior consumer
cases is a matter of record, it does not directly affect the present
case under RERA. The State Commission’s stay order means that
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the consumer forum’s ruling has not been finalized, and this
tribunal must independently determine whether the project falls
within the scope of RERA. The prior consumer litigation does not
undermine the Respondents’ argument that the project is exempt
from RERA registration.
XVI. The Respondents have argued that

the Complainants were

speculative investors who purchased plots in the project with the
intent of making a profit rather than for personal use. The
Complainants booked plots between February and July 2012,
during a period when the Hyderabad real estate market was
booming. The Respondents contend that the Complainants are now
using RERA to avoid paying the final demand payments due on
their plots, as the real estate market witnessed a downturn in 20192020

due

to

the

COVID-19

pandemic.

While

speculative

investments do not negate the Complainants’ rights under RERA,
the Respondents believe that this speculative intent should be
taken into account when assessing the merits of the complaint. The
Respondents also highlight that the Complainants signed plot
allotment letters as early as 2012, and the details of these
allotments were shared in the reply. This further shows that the
Complainants entered into these agreements with full knowledge of
the project’s status and timeline.
XVII. The Respondents have consistently maintained that the project is
exempt from RERA due to its approval prior to the relevant cutoff
date in the Telangana Rules, 2017. They base this argument not
only on the circular issued by Telangana RERA in 2018, but also on
the explicit language of Rule 2(j), which defines "ongoing projects"
that do not require registration. The fact that the layout permission
was issued in 2012, more than five years before the RE(R&D) Act
came into force in Telangana, provides a strong legal basis for their
claim that the project falls outside the jurisdiction of RERA. The
Respondents have provided documentation to support their timeline
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and argue that they acted in compliance with all applicable
regulations at the time of development.
E. Rejoinder to the counter of the respondents:
17.

At the very outset, Complainant No. 5 denies each and every

allegation, assertion, and claim made in the counter filed by the
Respondents, dated July 2024, except where explicitly admitted in this
rejoinder. The Complainant submits that the averments in the counter are
incorrect, misleading, and based on factual inaccuracies. The Respondents
have presented a scenario that is not only improbable but also implausible
in the context of the facts of this case. The Complainant respectfully
submits that this Hon'ble Tribunal should treat this rejoinder as an integral
part of the original complaint and prays that both be read together.
18.

The Complainant respectfully submits that the Respondents, in

multiple paragraphs of their counter (including Paras 7, 15, 26, 27, 28, and
30), admitted that the project in question was an "Ongoing Project" at the
time the Telangana Rules came into force in 2017. This is significant, as the
definition of an "Ongoing Project" under Rule 2(1)(j) of the Telangana Rules
is unequivocal. It covers projects where development is in progress and
where neither the Occupancy Certificate nor the Completion Certificate has
been issued. By their own admission, the Respondents have failed to obtain
the necessary certificates, which place the project squarely within the ambit
of the term "Ongoing Project."
19.

It is humbly submitted that the Respondents have failed to comply

with their legal obligations under the RE(R&D) Act, 2016. Section 3(1) of the
RE(R&D) Act mandates that all ongoing projects must be registered with the
Real Estate Regulatory Authority within three months of the Act’s
commencement. This obligation is reinforced by Section 59 of the Act, which
prescribes penalties for non-registration. The Respondents’ failure to register
the project within the stipulated period not only violates the mandatory
provisions of RE(R&D) Act but also exposes them to penalties that may
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extend up to ten percent of the estimated cost of the project, and in certain
circumstances, imprisonment for up to three years.
20.

Misleading and Factually Incorrect Statements by Respondents: a) In

response to Para 1 of the counter, it is respectfully submitted that the
Respondents' statements are vague, generic, and unsubstantiated. The
claim that the complaint is not maintainable is a baseless assertion and
does not merit further reply. b) Paras 2 to 6 of the counter refer to the
Respondents' internal records and personal knowledge, which are not in the
public domain. Such records would have been accessible had the
Respondents complied with their obligations under RE(R&D) Act and
registered the project, as the Act mandates public disclosure of project
details. c) In Para 7, the Respondents allege that the Complainants have
approached this Hon'ble Authority with "unclean hands" and have
suppressed material facts. This allegation is devoid of any merit. The
Complainants have acted in utmost good faith and have disclosed all
necessary and relevant facts to this Hon'ble Authority. The Complainants
submit that the project received its final layout approval in January 2019,
which squarely qualifies it as an "Ongoing Project" under Rule 2(1)(j) of the
Telangana Rules, 2017. Therefore, the project is legally required to be
registered under RE(R&D) Act, and the Respondents' claims to the contrary
are without substance.
21.

The Complainants respectfully submit that the Respondents’ claim

that delays in project completion were caused by the COVID-19 pandemic is
misleading. The Respondents have failed to fulfill their obligations and have
delayed the project for six to seven years beyond the promised timelines. The
delays in delivering the plots to the Complainants have caused significant
hardship. The Respondents' failure to adhere to the timelines committed in
the plot allotment letters has materially affected the Complainants,
irrespective of market conditions or the pandemic.
22.

The Respondents have referred to consumer complaints filed by the

Complainants seeking compensation for the extreme delay in handing over
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possession of the plots. However, it is respectfully submitted that these
proceedings are distinct and separate from the present complaint under
RE(R&D) Act. The Hon’ble Supreme Court in Pioneer Urban Land and
Infrastructure Ltd. v. Union of India (2019) 8 SCC 416 has held that
RE(R&D) Act and consumer forums are concurrent jurisdictions. The
present complaint under RE(R&D) Act seeks redress for regulatory noncompliance,

including

transparency,

project

registration,

and

timely

delivery, which is not addressed in the consumer forum. Therefore, the
proceedings under RE(R&D) Act are valid and maintainable.
23.

It is respectfully submitted that Para 9 of the counter, wherein the

Respondents allege that the Complainants are speculative investors seeking
to exploit the provisions of RE(R&D) Act, is entirely false. The Complainants
are middle-class families who have invested their hard-earned money with
the genuine intention of securing residential plots for personal use. The
Respondents’ attempt to paint the Complainants as speculative investors is
an unfounded effort to distract from their failure to comply with the
RE(R&D) Act provisions.
24.

The Complainants submit that the project qualifies as an "Ongoing

Project" under both the Telangana Rules, 2017, and the RE(R&D) Act, 2016.
The final layout approval for the project was obtained in January 2019, well
after the commencement of RE(R&D) Act. Therefore, the project is required
to be registered under RE(R&D) Act, and the Respondents' argument that
the project is exempt due to prior approvals is without legal basis.
25.

The Complainants respectfully submit that the Respondents have

failed to comply with the mandatory provisions of RE(R&D) Act by not
registering the project. The failure to obtain the necessary Completion and
Occupancy Certificates, coupled with the admission that the project is
ongoing, places the project squarely within the purview of RE(R&D) Act’s
regulatory framework.

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26.

In view of the above submissions, this Hon'ble Tribunal may be

pleased to:
a) Direct the respondents to immediately register the project under
RERA.
b) Impose exemplary costs on the respondents to deter future noncompliance with RERA.
c) Pass such other orders as may be deemed appropriate to ensure the
principles of transparency and consumer protection, which are central
to RERA, are upheld.
F: The points for determination on the reliefs sought in the main
complaint are as follows:
27.

After we have heard learned counsels for the parties at length, the

following questions emerges for our consideration in the present complaint
are as under:
a. Whether the project "DLF Garden City" is required to be registered
under the Real Estate (Regulation and Development) Act, 2016
(RE(R&D)).
b. Whether Central RE(R&D) act overrides the State Rules in case of
inconsistency?
c. Whether the Respondents have violated the provisions of Section 3 of
the RE(R&D) Act.
G: Observations by the Authority
28.

The primary legal issue in this case centres around whether the

project is required to be registered under the RE(R&D) Act. The
Complainants argue that the project is an "Ongoing Project" as defined
under RERA and is therefore subject to mandatory registration. In contrast,
the Respondents contend that the project is exempt from registration
because it secured layout approval from the Hyderabad Metropolitan
Development Authority (HMDA) in 2012, well before the enactment of RERA
in 2016 and the corresponding Rules.
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29.

The Respondents argue that the project is not maintainable under

RERA, citing the definition of "Ongoing Project" under Rule 2(1)(j) of the
Rules, which excludes projects where building permissions were approved
prior to January 1, 2017, by competent authorities such as Urban
Development Authorities (UDAs), Directorate of Town and Country Planning
(DTCP), Municipal Corporations, Municipalities, Nagar Panchayats, and
Telangana State Industrial Infrastructure Corporation (TSIIC).
Rule 2(1)(j) of the Rules defines an “Ongoing Project” as:
““Ongoing Project” means, a Project where development is going
on

and

for

which

Occupancy

Certificate

or

Completion

Certificate has not been issued but excludes such Projects for
which building permissions were approved prior to 01.01.2017
by the Competent Authorities viz., UDAs / DTCP / Municipal
Corporations / Municipalities / Nagar Panchayats / TSIIC as the
case may be.”

30.

In the case of Lucknow Development Authority v. Uma Shankar

Dubey [2020 SCC ONLINE RERA UP 10] it was observed that Section 3(2)
provides specific categories of projects exempt from registration. The section
3(2) reads as under: —
“Notwithstanding

anything

contained

in

sub-section

(1)-

no

registration of the real estate project shall be requireda) where the area of/and proposed to be developed does not exceed
five hundred square meters or the number of apartments proposed
to be developed does not exceed eight inclusive of all phases:
Provided

that,

if

the

appropriate

Government

considers

it

necessary, it may, reduce the threshold below five hundred square
meters or eight apartments, as the case may be, inclusive of all
phases, for exemption from registration under this Act;
b) where the promoter has received completion certificate for a
real estate project prior to commencement of this Act;

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c) for the purpose of renovation or repair or re-development which
does not involve marketing, advertising selling or new allotment of
any apartment, plot or building, as the case may be, under the
real estate project
Explanation.— For the purpose of this section, where the real
estate project is to be developed in phases, every such phase shall
be considered a stand-alone real estate project, and the promoter
shall

obtain

registration

under

this

Act

for

each

phase

separately.”

31.

In Section 3(2)(b), it is clearly stated that projects where the promoter

has received a completion certificate for the real estate project prior to the
commencement of the RE(R&D) Act, 2016, are exempt from registration
requirements. This exemption does not apply to projects that may have
received the completion certificate after the commencement of the Act.
Section 3(2) exempts certain categories of real estate projects from prior
registration-related provisions but does not remove them from the ambit of
other provisions of the RE(R&D) Act, 2016.
32.

A plain reading of Section 3 reveals that projects for which a

completion certificate was issued prior to the commencement of the
RE(R&D) Act are exempt only from prior registration if Section 3(1) is read
with Section 3(2)(b). Section 3(2) specifically provides categories of projects
where no prior registration shall be required. Section 3(2)(b) explicitly
provides that no prior registration of a real estate project shall be required
where the promoter has received a completion certificate prior to the
commencement of the RE(R&D) Act, i.e., before 01.05.2017.
33.

Hon’ble Supreme Court in the case of M/s. Newtech promoters and

developers pvt. Ltd. Vs state of up & others [ll 2021 sc 641], held:
“Looking to the scheme of Act 2016 and Section 3 in
particular of which a detailed discussion has been made, all
“ongoing projects” that commence prior to the Act and in
respect to which completion certificate has not been issued

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are covered under the Act. It manifests that the legislative
intent is to make the Act applicable not only to the projects
which were yet to commence after the Act became operational
but also to bring under its fold the ongoing projects and to
protect from its inception the inter se rights of the stake
holders, including allottees/home buyers, promoters and real
estate

agents

while

imposing

certain

duties

and

responsibilities on each of them and to regulate, administer
and supervise the unregulated real estate sector within the
fold of the real estate Authority.”

In the present case, the Respondents contend that the project does
not need to be registered as per Rule 2(1)(j) of the Rules, claiming
exemption. On the other hand, the Complainants argue that the project
received its final layout permit on 28.01.2019, which was after the
commencement of the RE(R&D) Act, and therefore, as per the proviso to
Section 3 of the Act, the project must be registered. This creates an
inconsistency between the Rules and the RE(R&D) Act.
34.

However upon perusal of Section 89 of RERA act it is evident that

provisions of RERA Act will have an overriding effect on any inconsistent
provisions in the any other law for the time being in force and in this case
the Rules. Section 89 of RERA read as follows:
“89. Act to have overriding effect.— The provisions of this Act
shall have effect, notwithstanding anything inconsistent
therewith contained in any other law for the time being in
force.”

As Section 84 of the Act empowers the state to make rules and
regulations concerning real estate, those rules must remain subordinate to
the central Act and cannot be inconsistent with it. Thus, the RE(R&D) Act
overrides the Rules.
35.

In the event of a conflict between the RE(R&D) Act and any rules

framed by the state government under the same Act, the central legislation
must prevail. This principle aligns with the doctrine of repugnancy under
Article 254 of the Indian Constitution. Section 89 of the RE(R&D) Act
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specifically grants overriding authority to the central law in cases of
inconsistency with other laws. The intent behind this provision is to ensure
uniformity and consistency in the regulation of the real estate sector across
the country.
36.

In the present case, the Respondents obtained the final layout permit

on 28.01.2019, which was after the commencement of the RE(R&D) Act.
Therefore, as per Section 3 of the said Act, the project is required to be
registered under RERA.
36. The Respondents argue that their project is exempt from registration,
citing Rule 2(1)(j) of the Telangana Rules. They contend that they obtained
layout approval back in 2012, prior to the enforcement of the RERA Act, and
since the layout approval was granted before January 1, 2017, they claim
the project qualifies for exemption. However, the Hon’ble Supreme Court in
M/s. Newtech Promoters and Developers PVT. LTD. V. State of UP &
others [LL 2021 SC 641] held that the RE(R&D) Act, 2016, has retroactive
applicability, applying to ongoing projects that had not received a
completion certificate before the enactment of the Act. This ruling confirms
that such projects must comply with the provisions of the RE(R&D) Act,
regardless of their commencement

date.

In

the present

case, the

Respondents received their final layout permit on 28.01.2019, well after the
Act came into effect on 25th March 2016. Since the project had neither been
completed nor granted a completion certificate before RERA came into force,
it qualifies as an "Ongoing Project" under Section 3 of the Act. Consequently,
the project falls within the purview of the RE(R&D) Act, and registration
under RERA is mandatory. The issue at hand relates to the retroactive
application of the provisions of the 2016 Act, particularly concerning
ongoing projects. If we examine the objects and reasons behind the Act, it
becomes evident that Parliament, after extensive deliberations on the
subject, considered it necessary to implement central legislation for effective
consumer protection and the standardization of business practices and
transactions within the real estate sector. The intention was to ensure
greater accountability to consumers, to mitigate frauds, delays, and high
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transaction costs. The Act aims to balance the interests of consumers and
promoters by imposing certain duties and responsibilities on both.
Therefore, projects like the one in question, which have not received
completion certificates before this date, are bound by the provisions of
the RE(R&D) Act.
37.

In view of the above observations, this Authority finds that the

Respondents have failed to comply with Section 3 read with Section 4(1) of
the RE(R&D) Act, 2016, and have instead adhered to the state Rules. It is
further observed that in cases of inconsistency, the RE(R&D) Act will apply
as per Section 89, which grants the Act overriding authority.
38.

Considering the provisions of Section 89 of the RE(R&D) Act, 2016,

which explicitly states that the Act shall have an overriding effect
notwithstanding any inconsistencies with other laws in force, this Authority
finds that the Respondents' reliance on the Telangana State Rules for
exemption from registration is untenable. Under Section 3 of the RE(R&D)
Act, the Respondents were clearly obligated to register the project, and their
failure to do so amounts to a violation of statutory requirements. As
experienced professionals engaged in the real estate business, the
Respondents are expected to be fully aware of the legal obligations that
govern their activities, particularly when the law explicitly overrides
conflicting provisions. The principle of "Ignorantia juris non excusat"
(ignorance of the law is no excuse) further reinforces that the Respondents
cannot plead ignorance of their obligation to register the project under the
RE(R&D) Act.
39.

Upon examining the facts of the case, it is evident that the

Respondent has sold all the plots within the concerned project. The
Authority notes that as per the mandate of Section 3 of the Real Estate
(Regulation and Development) Act, 2016, prior registration with RERA is
compulsory for any real estate project intending to advertise, market, book,
sell, or offer for sale any plots, apartments, or buildings. In the present
matter, the Respondent has failed to obtain RERA registration before
undertaking the sale of plots. This constitutes a clear violation of Section 3
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of the Act. However, as all the plots in the project have already been sold,
the

purpose

of

obtaining

RERA

registration,

which

is

to

ensure

transparency, compliance, and protection of consumer rights during the
marketing and sale phase, has been rendered redundant at this stage.
Nevertheless, the Authority is of the considered view that the Respondent's
non-compliance with Section 3 of the RE(&D) Act, undermines the
regulatory framework and violates the provisions of the said Act, which are
intended to safeguard the interests of the consumers and promote
accountability among promoters. The Authority, therefore, holds the
Respondent liable for non-compliance and reserves the right to impose
penalties as per the applicable provisions of the Act to ensure deterrence
and uphold the objectives of the legislation.
40.

To determine the appropriate quantum of the penalty in light of the

specific facts and circumstances of this case, it is essential to consider the
nature of the violation committed by the Respondent. A plain reading of
Section 3 clearly mandates that all projects, which have not obtained an
occupancy certificate or a completion certificate at the time of the
commencement of the Act, must be duly registered under the provisions of
the Act. In view of this, the Authority finds it necessary to impose penalty. It
is important to clarify that the imposition of this penalty is not intended to
regularize the Respondent’s breach. Rather, the penalty serves as a
deterrent, aimed at discouraging similar violations in the future and
ensuring adherence to the legal requirements established under the said
Act.
41.

For contravening Section 3 of the said Act, this Authority, exercising

its powers under Section 59 of the Act, imposes a penalty on Respondents 14 of Rs.2,50,000/- (Two lakh fifty thousand rupees only). This penalty is
imposed for marketing/selling plots 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.
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42. Respondents 1 to 4 are hereby informed that failure to comply with this
order shall attract Section 63 of the RE(R&D) act.
43. In the result, the complaint is disposed off.

SdSri. K. Srinivas Rao,
Hon’ble Member
TG RERA

SdSri. Laxmi Naryana Jannu,
Hon’ble Member
TG RERA

SdDr. N. Satyanarayana, IAS (Retd.),
Hon’ble Chairperson
TG RERA

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