Telangana RERA Imposes Penalty Of Rs. 17.88 Lakhs On Sterling Homes For Delays & Deviations From Sanctioned Plan

The builder merged the clubhouse facility which was originally meant for the homebuyers of Phase I of the project with the upcoming Phase II.

Background Facts

Homebuyers (Complainants) purchased their respective flats in the builder's (Respondent) project named “Sterling Orchids" situated in Medchal-Malkajgiri District, Telangana.

The homebuyers mentioned that the proposed date for the completion of the project was 01.07.2023. However, the builder has neither completed the construction nor handed over the flats to the homebuyers by obtaining the Occupancy Certificate from the competent authorities.

The homebuyers contended that the builder has not completed the construction of Sterling Orchids and has started another project on the eastern side named Sterling Orchids Phase II. Additionally, the builder has failed to construct a wall on the eastern side partitioning the two projects intending to use the pathway of Sterling Orchids as a common pathway for both projects.

Therefore, being aggrieved by the builder's actions the homebuyers approached the authority seeking the completion of the project as per the approved plan, possession of their flats and a direction to stop the construction of Sterling Orchids Phase II.

Observation and Direction by Authority

The Authority found that when the homebuyers purchased their flats they understood that the project would be independent and constructed according to the sanctioned plan. The clubhouse was intended exclusively for the homebuyers of Phase I.

However, the builder merged Phase I and Phase II sharing the clubhouse without the consent of the Phase I homebuyers. By changing the usage of the clubhouse the builder violated the provisions of Section 14 of RERA, 2016.

The Authority also found that the builder violated Section 11 of RERA, 2016 by failing to hand over possession of the flats to the homebuyers by the promised date. Consequently, the Authority imposed a penalty of ₹17,88,325/- on the builder for violating Section 11, Section 14 and the sanctioned plan.

Authority further held that the homebuyers are entitled to receive interest from the builder at a rate of 10.95% p.a. for the delay in handing over possession of their respective flats. Additionally, the Authority directed the builder to complete the entire Sterling Orchids Phase I project, along with the amenity block, within 90 days.

Case – Allam Nagaraju & 14 others Versus M/s Sterling Homes Private Ltd

Citation - COMPLAINT NO.45 OF 2024

Date – 14.11.2024