Order Complaint No.672 Of 2022

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY
[Under the Real Estate (Regulation and Development) Act, 2016]
COMPLAINT NO.672 OF 2022
01st Day of June, 2024
Corum:

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

M/s AERWA

…Complainant
Versus

1. Sri Hari Chella
2. Sri C. Venkat Prasanna
3. Sri Raju Yadav

…Respondents

The present matter filed by the Complainant herein came up for hearing on
29.06.2023, 01.11.2023, 28.12.2023, 30.01.2024 and 15.02.2024 before this
Authority in the presence of the Counsel for Complainant Smt. C. Rakee Sridharan,
Sri Vijay Kumar and Sri Sai Kumar, and Counsel for Respondents Nos.1 to 3, Sri
Alluri Krishnam Raju, Sri D.A. Suryanarayana Raju, Sri Ramesh and Smt. P.
Deepthi, and upon hearing the arguments, this Authority passes the following
ORDER:

2.

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

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

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Brief facts of the case:
3.

The

Complainant

submitted

that

on

basis

of

Respondents’

grand

advertisement, special features and prospectus mentioning the project highlights,
the members of the Complainant Association had approached the in "Aliens Elite"
and purchased the apartments/semi-finished flats with super built-up area in
different variances ranging from 746 square feet to 3200 square feet in Phase-1 and
Phase -2 consisting of 12 and 3 blocks respectively, with 2 car parking by adhering
to all terms and conditions of the Respondents.

4.

That all the flat owners have contributed and paid @ Rs. 100 per square foot

including the common area, which was included in the sale consideration, to the
Developer towards the corpus fund, for the purpose of long-term maintenance of the
complex.

5.

That as per the respective Sale deed of each flat owner of the Complainant

Association, the corpus fund will carry interest @10% per annum from the date of
handing over the possession of all the flats in the complex and such interest earned
on corpus fund shall be used for monthly maintenance and repairs, replacements
etc for the maintenance of the building complex such as water maintenance, salaries
for securities, stand-by DG power supply, electrical charges for common area
lighting, water supply pump and lifts etc.

6.

That the purchase of the said apartments/semi-finished flats happened

between 2006 to 2011, a total of 321 flats, post which the maintenance was carried
out by the Respondents for a period of 2 years from the interest accrued from the
corpus collected at the time of purchasing, the semi-finished flats, post which the
corpus fund shall be handed over to the association as per the respective sale deeds.

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7.

That, the total square feet is 5,09,235 and that the Respondents have collected

the corpus @ 100 rupees at the time of sale consideration from each flat owner, the
total corpus amount comes to Rs.5,09,23,500/- (Rupees Five Crores Nine Lakhs and
Twenty-Three Thousand and Five Hundred Rupees Only).

8.

The Complainant Association further submitted that all the flat owners paid

the entire amount which includes the corpus fund and the said amount collected by
the Respondents for the maintenance of "Aliens Elite". That all the flats were occupied
by 2011 and continued for further years and as promised and agreed on the
agreements by the Respondents the maintenance of "Aliens Elite" was not properly
undertaken by the Respondents despite having collected the corpus and committing
to utilizing the interest on the corpus amount.

9.

That there was no transparency in maintaining records and bill books.

Further, the Respondents started exploiting the funds of the members and the
monthly maintenance amount for the huge community. Under these circumstances,
the Complainant formed an association namely Aliens Elite Welfare Association
before the office of registrar of societies, RR District under AP societies Act, 2001,
Reg No. 609 of 2013 dated 02.05.2013 to settle the day-to-day maintenance issues
for the residents of 'ALIENS ELITE'.

10.

That several times appeals were made by the Complainant/Members of the

Resident Welfare Association to the Respondents. A Management Committee was
formed by the Residents and the said Management committee visited the
Respondents’ office several times. During the year (reference e- mails and messages)
25.03.2014, 06.04.2014, July 2015, August 2015 and September 2016. In addition

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in the year 2018, several representations were made through the association and
notices were sent to the Respondents demanding the refund of the Corpus Fund
along with Interest but the Respondents informed that the they shall repay the entire
corpus with interest within 6 months. But the Respondents neither returned the said
corpus amount nor addressed the day-to-day maintenance issues which cause great
hardship to the complainant association to resolve the respective day-to-day
activities and maintenance.

11.

That the Respondents have kept all income-generating areas though the

Complainant/flat owners have paid for these areas the Complainants did not receive
the actual benefits of the commercial areas whereas the Respondents were collecting
rents out of those complexes/shops.

12.

At this juncture, even after repeated requests and emails, as the Respondents

failed to respond, on 23.08.2019, the Complainant Association issued a legal notice
(via email) claiming their rights and interest. That the Respondents promised that
they will execute and register the said 1-acre Property situated at Tellapur in the
name of the Complainant Association but ended in vain. On believing the
Respondent's version an unsigned Memorandum of Understanding (“MOU”) was
executed

between

Respondents

and

Complainant/Aliens

Elite

Residential

Association (AERWA) 2020 and as per the MOU, the Respondents agreed to refund
the corpus fund.

13.

That in addition, the Respondents collected an amount of Rs.55,00,000/-

(Rupees Fifty-Five Lakhs Only) towards the Building Penalization Scheme,
intentionally informed that the Respondents have paid Rs.64,93,481/- (Rupees Sixty
Four Lakhs Ninety-Three Thousand and Four Hundred and Eighty-One Only)

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(Through letter no. ALIENS/ELITE/02/2012 dated 30.12.2012) towards Building
Penalization Scheme dated 30.12.2012 for the Aliens Elite project and incurred an
additional sum of Rs.5,00,000/- (Rupees Five Lakhs Only) from the Complainant
towards unofficial amount to consent department. That the Respondents paid
Rs.30,00,000/- (Rupees Thirty Lakhs Only) towards water pipeline unofficial amount
to consent department. Later, the Complainant came to understand that the
Respondents committed fraud by collecting money for purposeless schemes which
doesn't exist and misappropriating the corpus fund.

14.

That even after the meetings and incomplete MOU, the Respondents breached

the trust of the Complainant and told that the said property which the Respondents
agreed to give was not the real one and again promised that the property will be
constructed and handed over to the Complainant in three months. Neither the
construction of the property was completed nor the amount given to the
Complainant.

Relief prayed for:
15.

Aggrieved by the conduct of the Respondents, the Complainant prayed for the

following reliefs:
a. Direct the Respondent to deposit the Corpus fund a said sum of
Rs.5,09,23,500/- (Rupees Five Crores Nine Lakhs and Twenty-Three Thousand
Five Hundred Only) along with 18% from 2013 to 2022 till date (from the date
of formation of the apartment) a said total sum of Rs 21,28,14,379/- (Rupees
Twenty-One Crores Twenty-Eight Lakhs Fourteen Thousand Three Hundred
and Seventy-Nine Only);
b. Refund the Corpus Fund - Rs. 5,09,23,500/- (Rupees Five Crores Nine Lakhs
and Twenty-Three Thousand Five Hundred Only) and interest thereon as below.

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i.

Interest thereon or 2013-2019 years @ 18%- Rs 8,65,47,245/-

ii.

Interest thereon for 2019-2022@18% - Rs. 7,11,70,804/-

iii.

And Damages of 2% on total Corpus fund -Rs 41,72,830/-

c. Total of Rs.21,28,14,379/- (Rupees Twenty-One Crores Twenty-Eight Lakhs
Fourteen Thousand Three Hundred and Seventy-Nine Only) in favour of the
Complainant/Aliens Elite Residents Welfare Association.

Reply by the Respondents:
16.

Per contra, vide Preliminary Reply dated 31.03.2023, the Respondents

submitted that the powers conferred on the Hon'ble Authority can be exercised only
when the Real Estate Project which is the subject matter of the complaint falls within
the purview of the said Act and the Rules made thereunder. Further, this Authority
is not vested with the jurisdiction to entertain any complaint from any of the flat
purchasers of the project which is the subject matter of the present complaint as the
said project was completed by 2011 and handed over the flats to the respective flat
purchasers who are the members of the Complainant Association.

17.

It was submitted that the Complainant Association admitted that all the flats

are occupied in subject Residential project by 2011 and that an association named
as ALIENS ELITE Welfare Association was registered by the flat owners vide
Registration No.609 of 2013 dated 02.05.2013. Therefore, execution and completion
of the project had taken place much prior to the Act coming into force.

18.

It was further submitted that “ongoing project” is defined under Rule 2(j) as 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

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viz., UDAS / DTCP / Municipal Corporations / Municipalities / Nagar Panchayats /
TSIIC as the case may be". To the subject real estate project, the building permissions
were approved by the authorities vide Lr.No. 12172/P4/Plg/HUDA/2005, dated
11.05.2006 and Proceeding No.G/77/BP/2338/2006-2007 dated 07.06.2006.

19.

It was submitted that from the building permissions and the statements made

in the complaint the project "Aliens Elite" does not even come within the scope of
"ongoing project" in terms of definition of ongoing project vide Rule 2(j). Furthermore,
the rules framed in exercise of power conferred under said Act also excluded the
projects for which building permissions were accorded prior to 01.01.2017, and
accordingly prayed to dismiss the Complaint on the ground of lack of jurisdiction.

20.

When directed to file a detailed reply, while refuting all the contentions raised

in the complaint as well as the Rejoinder filed by the Complainants, the Respondents
vide Reply dated 15.02.2024, further submitted that the complaint is not in
consonance with the Act and the Rules thereunder and hence is liable to be rejected.
It was submitted that the amount alleged to have been with the Promoter as corpus
fund is not to pay interest on the corpus fund much less the rate claimed by the
Complainant. The members of the Complainant Association having failed to pay the
maintenance charges for number of years have no right to demand the corpus fund
and/or interest thereon without settling the amounts due and payable to the
promoter together with interest thereon. That the complaint is lodged only to harass
the Respondents despite admitting that the Respondents provided all the amenities
and completed the project and handed over the flats by 2011 itself.

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21.

It was also submitted that the complaint is barred by limitation and the

Authority is not vested with the powers to entertain the complaint which are stale
and hopelessly time barred.

22.

It was submitted that the project was not promoted/developed by Aliens

Developers Pvt Ltd., however, by Aliens Group Infra Pvt. Ltd. The said company is a
person as for the definition of Section 2 (zg) but not the Respondents No. 1 and 2
who are arrayed in their personal capacity as Respondents. That there is no
agreement for payment of interest between the parties and the claim for interest is
devoid of merits and cannot be granted. There is no breach of trust, negligence,
cheating, deficiency in service committed by the Respondents as alleged by the
Complainant.

23.

Without prejudice to right of the Respondents, it was submitted that, it has

maintained the project till the year 2013, even after completion of project and
handing over of the flats to the respective purchasers. The expenses incurred were
all paid by the Respondents towards monthly maintenance charges and the
Complainant/ the flat purchasers have not settled the accounts of the expenditure
incurred on the maintenance of the project including the PMC charges of the
Respondents. The Corpus so collected eroded as it was used for the maintenance of
the project as the amount collected and the monthly expenditure incurred on the
maintenance was not adequate and sufficient to maintain the project.

24.

The allegations that, the Complainant came to understand that the

Respondents played fraud, by misappropriation of corpus fund, breach of trust,
breach of contract, deficiency in service improper drainage system ceiling leakage,
low-quality electrical wiring and plumbing, non-handover of car parking & and not

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providing manjeera water not providing the occupation certificates etc, are all denied
as baseless. The flats were handed over more than 13 years as on the date of
complaint. The repairs required as a result of wear and tear need not be attended by
the Promoter, and they have to be serviced by the occupants of the flats.

25.

It was submitted that there is no dispute in regard to execution and

completion of the project and all the flats are occupied by 2011 much prior to the
Real Estate (Regulation and Development) Act 2016 came into force which is evident
from the complaint itself that an association named as ALIENS ELITE Welfare
Association has been registered by the flat owners vide Registration No 609 of 2013
dated 02.05.2013.

26.

As regards relief sought, the Respondents submitted that the same is not

maintainable under law and also in facts and unless and until the amounts liable to
be paid towards project maintenance after arriving at the expenditure incurred
exceeding the notional income on corpus fund, the question of payment of corpus
fund is premature. The interest recorded in the sale deed as a notional income is
only 10% but whereas the interest claimed is at 18% which is in violation of the terms
of the sale deed. The complainant is not entitled for any damages since, the
Respondents has not committed any breach of the obligations. Furthermore, the
Authority has no powers to direct the Respondents to pay any amount as they are
imaginary, speculative and without any basis.

27.

The Respondents further submitted that there is no violation, breach,

cheating, misappropriation and embezzlement of corpus fund by the Respondents as
alleged by the complainant and RERA has no authority to entertain the complaint.
Further, the judgements referred by the complainant are not applicable and there is

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no cause of action that is continuing after enactment of the Act for the purpose of
entertaining the complaint. The promoter has completed the project in all aspects.

28.

Further, the Electricity Bill (June 2023) reflecting on the name of Aliens filed

along with the rejoinder cannot be construed as proof of pending handover
completion. The Association failed to get their name recorded in the place of the
Promoter.

29.

It was accordingly prayed to dismiss the complaint.

Rejoinder by the Complainant:
30.

The Complainant filed a detailed Rejoinder dated 24.07.2023 to the

Preliminary Reply dated 31.03.2023 filed by the Respondents and submitted that
there has been a violation, breach, cheating, misappropriation and embezzlement of
corpus fund by the Respondents and hence, this Authority is competent to hear the
matter. It was submitted that RERA is retroactive (as deduced by the Hon’ble
Supreme Court in "Newtech Promoters and Developers Limited v. State of UP ") in
nature and thus has the authority to entertain the present complaint and
Respondents cannot escape from their liability. It was also submitted that the
Hon’ble Supreme Court also made it clear that RERA does not apply to the Projects
already completed or to which the Completion certificate has been granted at the
commencement of the Act.

31.

It was added that in the present case the Project “Aliens Elite” has not been

accorded completion certificate and hence Project is well within the jurisdiction of TS
RERA. The construction of many amenities is still pending. This is conclusive
evidence to consider that the subject matter as a continuing construction.

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32.

The Complainant, in its Rejoinder referred to two case laws titled “The Shyam

Sunder Sharma v. Ashiana Housing Corporation Limited” before Delhi High Court,
wherein, the Delhi High Court held that the Real Estate Regulatory Authority (RERA)
can hear a dispute relating to a project that was completed before RERA came into
force if the builder has failed to provide the promised amenities. That depending on
the building permission date to determine the maintainability of the application in
RERA is against the principles of natural justice.

33.

It was submitted that the handover of the property to the Residents Welfare

Association is not yet done, no corpus was refunded, no documents or completion
certificates were handed over, hence Respondents are liable to complete the same. It
was therefore prayed that this Authority is competent to entertain the present
complaint as the Project falls within the purview of the Act under which the Authority
is constituted to protect the interests of the Complainant Association.

Observations and Directions of the Authority:
34.

Matter was heard at length, wherein the Complainants reiterated the contents

of their Complaint and the Rejoinder to the Preliminary Reply and categorically
prayed that the Respondents are obligated to refund the corpus amounts paid by the
members of the Complainant Association under the provisions of the Act, 2016. It
was also submitted that as the Respondents have failed to procure completion
certificate in accordance with Section 3 and that therefore, the project is on-going
and falls well within the jurisdiction of this Authority.

35.

Per contra, the Respondents categorically submitted that Project procured

competent authority permission way back in the year 2006 and completed the Project

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in the year 2010 and was admittedly handed over to the members of the Complainant
Association in the year 2011. It was submitted that Rule 2(1)(j), the definition of ongoing project which stipulates that on-going project is that 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. In accordance with the said definition, as
the Project in question obtained permission in the year 2006, more specifically on
07.06.2006. That in view of the same, Project may not be an on-going project as per
the Rules, 2017 and therefore, it cannot be construed that present matter falls within
the jurisdiction of this Authority.

36.

Admittedly, for the Project “Aliens Elite” building permissions were approved

by the authorities vide Lr. No. 12172/P4/Plg/HUDA/2005, dated 11.05.2006 and
Proceeding

No.

G/77/BP/2338/2006-2007

dated

07.06.2006.

And

further,

admittedly, the members of the Complainant Association have been handed over
their respective flats in the year 2011 and have been residing there for the last
thirteen years as on today.

37.

In a comprehensive understanding of Section 3, it is evident that Project for

which completion certificate has not been obtained and is on-going as on the date of
commencement of the Act, 2016, falls within the jurisdiction mandating the promoter
to register the project with the Authority within three months of the commencement.
In this regard, it is pertinent to note the definition of a “completion certificate” under
the Act, 2016. A completion certificate is defined under Section 2(q) as the completion
certificate, or such other certificate, by whatever name called, issued by the competent
authority certifying that the real estate project has been developed according to the

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sanctioned plan, layout plan and specifications, as approved by the competent
authority under the local laws.

38.

However, the said provision under Section 3 has to be read in accordance with

the local laws prevalent at the time in order to ascertain whether the project in
question were under obligation to obtain completion certificate or occupancy
certificate. In this regard, it is pertinent to note that G.O.Ms. No.86, MA & UD Deptt.
Dated 03.03.2006, which was subsequently amended by G.O.Ms. No.168 dated
07.04.2012, were issued by the then Government that governed Building Rules that
were published in the Official Gazette on 04.03.2006, the date on which the said
G.O. was made mandatory and applicable to all buildings henceforth.

39.

The G.O.Ms. No.86 dated 03.03.2006 makes a mention of completion

certificate in accordance with the definition of the same as mentioned supra but does
not make it obligatory upon the promoter to obtain the same upon completion of the
construction of the building. However, the said G.O. mandates procuring an
occupancy certificate from the competent authority for all buildings before occupying
the same. As the present project obtained building permission on 07.06.2006,
therefore, ideally the promoter i.e., the Respondents were obligated to procure
building permission as per the said Rules.

40.

Now the question is whether the Respondent/Promoter has obtained a

completion certificate and an occupancy certificate or not. Admittedly, the
Respondent, despite this Authority repeatedly asking for producing the said
document, has failed to do so stating that the project, having obtained permission in
the year 2006, does not fall within the jurisdiction of this Authority.

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41.

To comprehend as to whether this Authority has jurisdiction over the present

project for which permission was obtained in the year 2006, it is relevant to take note
the judgment of the Hon’ble Supreme Court in Newtech Promoters & Developers Pvt.
Ltd. vs. State of U.P. & Ors., wherein, upon discussion as to whether the Act of 2016
is retrospective or retroactive in nature, the Hon’ble Apex Court held as under:

“36. Looking to the scheme of the 2016 Act 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 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 stakeholders, including allottees/homebuyers, 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. (emphasis supplied)

37. The emphasis of Mr Kapil Sibal, learned Senior Counsel for the appellant is
that the agreement of sale was executed in the year 2010-11 i.e. much before
the coming into force of the Act and the present Act has retrospective application
and registration of ongoing project under the Act would be in contravention to
the contractual rights established between the promoter and allottee under the
agreement for sale executed which is impermissible in law and further submits
that Sections 13, 18(1), 19(4) of the 2016 Act to the extent of their retrospective
application is in violation of Articles 14, 19(1)(g) of the Constitution of India.

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38. Mr Tushar Mehta, learned Solicitor General, on the other hand, submits that
a bare perusal of the Objects and Reasons manifests that the Act does not take
away the substantive jurisdiction, rather it protects the interest of homebuyers
where project/possession is delayed and further submits that the scheme of the
Act has retroactive application, which is permissible under the law.

39. The learned counsel further submits that the keyword i.e. “ongoing on the
date of the commencement of this Act” by necessary implication, ex
facie and without any ambiguity, means and includes those projects
which were ongoing and in cases where only issuance of completion
certificate remained pending, the legislature intended that even those
projects have to be registered under the Act. Therefore, the ambit of the
Act is to bring all projects under its fold, provided that completion
certificate has not been issued.

40. The clear and unambiguous language of the statute is retroactive
in operation and by applying purposive interpretation rule of statutory
construction, only one result is possible i.e. the legislature consciously
enacted a retroactive statute to ensure sale of plot, apartment or
building, real estate project is done in an efficient and transparent
manner so that the interest of consumers in the real estate sector is
protected by all means and Sections 13, 18(1) and 19(4) are all
beneficial provisions for safeguarding the pecuniary interest of the
consumers/allottees. In the given circumstances, if the Act is held prospective
then the adjudicatory mechanism under Section 31 would not be available to
any of the allottees for an ongoing project. Thus, it negates the contention of the

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promoters regarding the contractual terms having an overriding effect over the
retrospective applicability of the Act, even on facts of this case.

41. What the provision further emphasises is that a promoter of a project
which is not complete/sans completion certificate shall get the project
registered under the Act but while getting the project registered, the
promoter is under an obligation to prescribe fresh timelines for getting
the remaining development work completed and from the scheme of the
Act, we do not find that the first proviso to Section 3(1) in any manner
is either violative of Articles 14 and 19(1)(g) of the Constitution of India.
Parliament is always competent to enact any law affecting the antecedent
events under its fold within the parameters of law.

…….
50. Thus, it is clear that the statute is not retrospective merely because it affects
existing rights or its retrospection because a part of the requisites for its action
is drawn from a time antecedent to its passing, at the same time, retroactive
statute means a statute which creates a new obligation on transactions
or considerations already passed or destroys or impairs vested rights.

51. Parliament intended to bring within the fold of the statute the ongoing real
estate projects in its wide amplitude used the term “converting and existing
building or a part thereof into apartments” including every kind of
developmental activity either existing or upcoming in future under Section 3(1)
of the Act, the intention of the legislature by necessary implication and without
any ambiguity is to include those projects which were ongoing and in cases
where completion certificate has not been issued within fold of the Act.

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52. That even the terms of the agreement to sell or homebuyers agreement
invariably indicate the intention of the developer that any subsequent
legislation, rules and regulations, etc. issued by competent authorities will be
binding on the parties. The clauses have imposed the applicability of
subsequent legislations to be applicable and binding on the flat buyer/allottee
and either of the parties, promoters/homebuyers or allottees, cannot shirk from
their responsibilities/liabilities under the Act and implies their challenge to the
violation of the provisions of the Act and it negates the contention advanced by
the appellants regarding contractual terms having an overriding effect to the
retrospective applicability of the Authority under the provisions of the Act which
is completely misplaced and deserves rejection.

53. From the scheme of the 2016 Act, its application is retroactive in
character and it can safely be observed that the projects already
completed or to which the completion certificate has been granted are
not under its fold and therefore, vested or accrued rights, if any, in no
manner are affected. At the same time, it will apply after getting the
ongoing projects and future projects registered under Section 3 to
prospectively follow the mandate of the 2016 Act.”

42.

A bare reading of the said judgment, makes it explicitly clear that for projects

where completion certificate is not obtained irrespective of the date of obtaining
competent authority permission, falls within the ambit of the Act, 2016. It can
further, be seen that the sale agreement, in the above-mentioned case, has been
executed in the year 2010-11, however it has been held that the Act is retroactive in

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nature, and non-obtaining of completion certificate by the promoter is a fit ground
to bring the project within the jurisdiction of the Act, 2016.

43.

This Authority has considered the contentions of both parties and has keenly

observed that the Respondents have categorically not denied that no such corpus is
pending to be paid. In fact, the Respondents pleaded that the members of the
Complainant Association having failed to pay the maintenance charges for number
of years have no right to demand the corpus fund and/or interest thereon without
settling the amounts due and payable to the promoter together with interest thereon.
They added that the corpus so collected was used for the maintenance of the project
as the amount collected, and the monthly expenditure incurred on the maintenance
was not adequate and sufficient to maintain the project.

44.

In this regard, the Authority observes that the Respondents are merely trying

to waive off their obligation and liability towards the members of the Complainant
Association and not intending to return the corpus fund by portraying that the
Project does not fall within the purview of the Authority. It is well established that
maintenance charges are distinct from the corpus fund. Maintenance charges
pertain to the costs associated with the upkeep of infrastructure, payment for
utilities such as water and electricity, security, landscaping, staff salaries, and
similar expenses. Conversely, the corpus fund is allocated for significant
expenditures, including but not limited to, the acquisition and maintenance of
equipment such as generators and sewage treatment plants, which are beyond the
scope of routine maintenance charges.

45.

For the sole alleged reason that the Complainant Association failed to pay the

maintenance charges for number of years does not entitle the Respondent to usurp

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the corpus fund paid by the members of the Complainant Association and not refund
the same to their detriment and financial loss.

46.

Therefore, in view of the foregoing observations, and in the peculiar

circumstances of the case, which shall not be a precedent, as this is a beneficial
legislation to protect the interests of the allottees, this Authority finds that the project
falls within the jurisdiction of this Authority. Nevertheless, directing the Respondents
to register the project at this stage would be futile, as no flats are available for sale
and the members of the Complainant Association have been residing in the project
premises for the last 13 years without any hindrance.

47.

In view of the above, this Authority deems it appropriate to direct the

Respondent to refund the corpus fund along with interest in accordance with the
Rules, 2017, due to the Promoter's failure to comply with the obligations under the
Act, 2016, and the Rules promulgated thereunder, as well as the obligations under
the respective sale deed of the members of the Complainant Association. This
Authority further opines that the Complainant Association would otherwise be left
without any legal recourse to claim the corpus fund.

48.

Consequently, the Respondents are jointly and severally liable to refund the

corpus amounts of Rs.5,09,23,500/- (Rupees Five Crores Nine Lakhs and TwentyThree Thousand Five Hundred Only) along with interest at the rate of 10.65% as per
Rules, 2017 from the year 2013 till the date of actual payment, within 60 days to the
Complainant Association failing which appropriate action will be initiated under
Section 63 of the Act, 2016. Similarly, as contended by the Respondent, and not
denied by the Complainant Association, the Complainant Association is hereby
directed to pay the pending maintenance charges for the year 2011 to 2013 as

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maintained by the Respondent along with interest of 10.65% as per Rules, 2017
within 60 days to the Respondent, failing which appropriate action will be initiated
under Section 67 of the Act, 2016.

49.

In lieu of the foregoing observations and directions, the present Complaint

stands disposed of. No order as to costs.

50.

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)
in accordance Section 44 of the Act, 2016.

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

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

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

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