Rs 5.04 lakh interest compensation for homebuyer ordered by Telangana RERA as builder delayed possession and imposed Rs 30,000 debris charge

Laxmi Narayana Jannu and K. Srinivasa Rao, members of Telangana RERA, in a recent order provided relief to Mr VenuGopal from Neredmet, Secunderabad, after it was proved that the builder had delayed possession of his flat by 18 months and also charged him an additional Rs 30,000 for debris.

Telangana RERA authority held that the builder failed to meet its obligations under the Agreement of Sale and Section 11(4)(a) of the RERA Act, dismissing the builder’s claims that Covid-19 was responsible for this delay.

What happened to VenuGopal’s flat?

Mr VenuGopal purchased a flat for Rs 44.36 lakh by getting influenced by an advertisement and the builder’s website. The builder allotted him a flat in the 10th floor of 2nd block in his project at Bachupally. VenuGopal signed the agreement of sale on February 28, 2023, and the builder assured him that possession would be given by December 26, 2024 with an option for an extended grace period up to August 2025. Based on these assurances, VenuGopal paid Rs 40.32 lakh, including charges towards amenities, parking, EV charging and allied facilities.


However, the builder repeatedly revised possession timelines without providing clarity regarding completion of construction, amenities, or procurement of the Occupancy Certificate.

Moreover, the builder also imposed an undisclosed debris charge of Rs 30,000 and this was not written in the agreement. The builder said that the project had achieved nearly 85% completion, and so debris charges were rationalised to Rs 20,000 per flat after consultations with homebuyers.

VenuGopal said to Telangana RERA authority that he continues to face financial hardship as he continues to pay the home loan EMI and also the rent. So he appealed that the TGRERA authority gives him interest compensation as per RERA Act.

The builder said that they were trying their best to finish the construction within the now extended deadline of December 2026 as they’ve faced multiple issues like labour shortage, Covid-19, and legal issues with encroachment.

To give you a clearer picture of the problems, the builder invoked the force majeure clause on the basis of Covid-19 and said that construction would be delayed. The builder also told the Telangana RERA authority that there was a FTL encroachment issue affecting Blocks 8 and 9, and disputes relating to the F-line boundary near Block 12, which collectively resulted in operational setbacks, labour dispersal, customer panic, and withdrawal of institutional funding.

Also read: Builder fined Rs 1.03 crore by Telangana RERA for unregistered, unfinished villas; homebuyer gets Rs 79 lakh refund + Rs 21.7 lakh interest

According to the builder, the Telangana High Court later clarified that work could continue in blocks other than Blocks 8 and 9, and the HMDA subsequently confirmed that there was no substantial FTL violation except for a minor issue which had been rectified.

Thus, the builder extended the construction deadline to December 18, 2026, which means a delay of over 18 months for possession.

On August 25, 2026, VenuGopal won the case in Telangana RERA as the RERA authority said that the builder has to pay 10.7% interest compensation for this delay in possession.

How did VenuGopal win this case in TSRERA?

Asha Kiran Sharma, Partner at King Stubb and Kasiva, said to ET Wealth Online, the Telangana RERA authority has firmly rejected the builder's argument about Covid-19 and its downstream effects as justification for delay.

Sharma says that the Telangana RERA's logic was pointed: the Agreement of Sale was signed in February 2023, well after the pandemic had subsided, meaning the builder entered into its possession commitment with full knowledge of the operating environment at the time.

A builder cannot sign a contract after a disruption (Covid-19) in this case has passed and then invoke that same disruption years later to excuse non-performance, and by rejecting this retrospective use of force majeure, the Telangana RERA Authority sent a clear signal that builders cannot treat Covid-19 as a permanent, all-purpose shield against accountability.

Telangana RERA authority also observed that the litigation issue cited by the builder concerned other blocks entirely and had no bearing on the tower where VenuGopal's flat was located, further weakening their force majeure claim.

Beyond the possession delay, the Authority found the developer's conduct troubling on other counts too. It struck down the Rs 30,000 "debris charge" levied on the flat as having no basis in the Agreement of Sale and as contrary to the statutory obligations under the RERA Act, and it rejected, for lack of supporting evidence, the developer's claim that a reduction in the number of lifts had been agreed to by homebuyers.

Also read: 5069 sq ft advertised, 3900 sq ft delivered : Telangana RERA orders Rs 20 lakh refund for homebuyer and Rs 98 lakh penalty for builder. Know what happened

Telangana RERA order discussion

Sale agreement was signed in 2023, so builder can’t cite Covid-19 force majeure clause

Although the builder invoked the force majeure clause, blaming Covid-19 for the delay in construction, the Telangana RERA Authority found such a contention untenable, since the Agreement of Sale was executed in February 2023, well after the onset and near subsiding of the Covid-19 pandemic.

Telangana RERA authority said: “Having undertaken contractual commitments with full awareness of the prevailing circumstances, the Respondent (builder) cannot retrospectively invoke Covid-19 to evade its contractual and statutory obligations.”

The Telangana RERA cited the case of Bombay High Court in Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India [2017 SCC OnLine Bom 9302] and said that the date of possession as stipulated in the Agreement of Sale shall prevail.

The evidence shows a pattern of false promises by the builder

So the situation as it unfolds is VenuGopal without any default paid Rs 40.32 lakh out of a total of Rs 44.36 lakh, but didn’t get possession within the agreed upon timeline of December 26, 2024, even after the expiry of the grace period.

The Telangana RERA authority said that this establishes a clear breach of contractual and statutory obligations by the builder under Section 18 of the RERA Act.

The Telangana RERA authority said: “The material on record clearly demonstrates a continued pattern of false assurances despite the Respondent’s (builder’s) knowledge of its inability to adhere to the committed timelines, while the project admittedly remains incomplete beyond the stipulated possession date.”

VenuGopal needs to file Form ‘N’ to get compensation for mental agony, others

The Telangana RERA said that if VenuGopal wants any compensation for mental agony, financial loss, and any assured compensation amounts promised by the builder, then he can file an application form using Form ‘N’ before the Adjudicating Officer under Section 71 of RERA Act.

The Telangana RERA authority also rejected the debris charge imposed by the builder as it was unsupported by the terms of the Agreement of Sale and contrary to Sections 11(4)(a), 11(4)(d), and 14 of the RERA Act.

TGRERA orders compensation for delayed possession

Telangana RERA ordered that VenuGopal is entitled to get interest compensation at 10.7% rate per annum (SBI MCLR + 2% as per Rule 15 of the TG RE(R&D) Rules, 2017), computed on the amounts paid, with effect from June 26, 2025 until actual handing over of lawful possession.

Telangana RERA ordered the builder to pay the arrears accrued up to the date of the order within 60 days and if it is not paid, then the builder has to pay the accruing interest on a monthly basis, on or before the 10th day of each succeeding month, until VenuGopal gets possession of of the flat.

Calculation of interest (our estimate)

• Amount paid: Rs 40,32,784:
• Annual interest @ 10.70%: Rs 4,31,508 approx

If we calculate only up to the August 25, 2026 order date, the interest for roughly 1 year and 2 months would be approximately Rs 5.04 lakh. This is not the final amount. Interest continues at 10.70% until the builder actually hands over lawful possession.