Hyderabad Telangana Real Estate Regulatory Authority has ordered penalty proceedings against a Nizamabad developer and three landowners for selling a flat nearly four months before registering the project under the Real Estate (Regulation and Development) Act.In its recent order, the Authority held that Manik Infra and the landowners violated Section 3 of the Act by executing the sale of the property on Feb 23, 2023, while the project was registered with TG RERA only on July 7, 2023. It directed the secretary of TG RERA to initiate proceedings against all respondents under Section 59, which provides for penalties for contravention of the project-registration requirement.The Authority, however, rejected allottee Thumma Srinivas’s plea for refund of ₹51 lakh. It held that the remedy of withdrawing from the project under Section 18(1) was no longer available after a registered sale deed had been executed and the allottee had exercised ownership rights over the property.Sale deed, mortgage weighed against refund claimSrinivas, a resident of Ayyappa Society in Madhapur, had filed the complaint against Manik Infra, represented by its partner Bellal Shashank Reddy, and landowners Akula Subash, Gajawada Pradeep and Bellal Praveen Kumar, all from Nizamabad.The dispute concerned a flat in ‘Mahadev Heights’ in Nizamabad. Srinivas claimed that he paid ₹51 lakh for the flat, including ₹13.5 lakh cash and ₹37.5 lakh recorded in the registered sale deed.He alleged that only the skeletal structure of the apartment had been completed and that possession was never effectively delivered. He sought a refund of the entire amount with interest, besides a penalty of 5% against the respondents.The Authority noted, however, that the registered sale deed had transferred ownership to the complainant. It also took into account that Srinivas had mortgaged the property and engaged a contractor to carry out internal works. These actions, it held, showed that he had exercised rights as the owner of the flat.On this basis, TG RERA concluded that the transaction could not be treated as one from which the allottee could withdraw under Section 18(1) of the Act and declined to order the refund.Developer disputes payment, says possession deliveredThe respondents disputed the complainant’s account of the transaction. They claimed that the agreed sale consideration was ₹54.5 lakh and that Srinivas had paid only ₹40.5 lakh, leaving ₹14 lakh outstanding.They maintained that possession had been handed over and that certain finishing works, including the laying of tiles and completion of toilets, were kept pending at the complainant’s request to enable him to carry out the interiors according to his own designs.Srinivas also alleged several deviations in the project, including non-conforming floor heights, conversion of visitor parking space into a gym, defective septic tanks and the absence of a mandatory fire safety no-objection certificate.The respondents denied that the project had major deviations. They said variations in floor height were made to facilitate water drainage. They also contended that clearance from the fire department was not required as Mahadev Heights was not classified as a high-rise building.They further argued that the project had been validly registered with TG RERA and that the registration period remained in force until 2028.While the Authority did not accept the complainant’s refund claim, it found that the sale itself had taken place before the mandatory registration of the project. It consequently ordered separate penalty proceedings against the developer and the three landowners for the violation of Section 3 of the Act.
