Telangana RERA Orders Refund To Homebuyers Of Jaya Gold And Imposes Penalty On Jayathri Infrastructures For Selling Unregistered Project

Additionally, the Authority imposed a penalty of ₹9.78 Lakh on the builder for marketing, advertising, and selling the unregistered project to homebuyers.

Background Facts

In 2022, the builder (Respondent) published a pre-launch offer for their upcoming project named Jaya Gold at Nizampet. The homebuyers (Complainants) purchased flats in the builder's project that same year and entered into a Memorandum of Understanding (MOU) with the builder.

As per the MOU, the builder promised to hand over possession of the flats by December 2021. however, the homebuyers mentioned that no work has been initiated on the project site to date.

Furthermore, the homebuyers tried to contact the builder and the directors of the company, but they received no response. Therefore, feeling aggrieved, the homebuyers filed a complaint before the Authority, seeking a refund of their money with interest.

Observation and Direction by Authority

The authority found that the builder advertised the Jaya Gold project online, entered into MOUs, and collected consideration from the homebuyers without having legal ownership of the property or obtaining registration for the project. Therefore, builder has violated Section 3 of the RERA, 2016.

Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was held that if the builder fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer's right under the RERA, 2016 to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

The authority also referred the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Another, where it was held that under Section 18 of the RERA Act, if a builder fails to complete or give possession of an apartment by the specified date, the builder must return the amount received if the homebuyer wishes to withdraw from the project.

The Authority observed that the builder kept the homebuyers waiting for two years with false promises of registering the units in their names. After the complaints were filed, the builder admitted they failed to acquire the project. The builder also consistently violated the provisions of RERA, 2016, and deceived the public in other projects, showing bad intentions. Therefore, the Authority held that the homebuyers are entitled to a refund with interest.

Therefore, the authority directed the builder to refund the amount paid by the homebuyers along with interest at 10.65% per annum. Additionally, the authority imposed a penalty of Rs. 9,78,812/- on the builder for violating Section 3 of the RERA, 2016.

Case - Sri Abdul Wahid Versus M/s Jayathri Infrastructures India Pvt Ltd A/W 3 others

Citation - COMPLAINT NO.522 OF 2024 A/W 3 others