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

When Ms Kumari from Mansoorabad, Hayath Nagar, Hyderabad wanted to buy a nice villa, she reached out to Mr Gupta, a real estate agent from Begum Bazar. He connected her to a builder from Uppal who gave an presentation to Mrs Kumari about his upcoming villa project in Pasumamula Village, Abdullapurmet Mandal, Ranga Reddy.

Once the presentation was over, the builder told Ms Kumari that if she made an advance payment right away, he could deliver her the villa in about six months from the date of agreement. Liking the presentation and trusting Mr Gupta’s recommendation, she went ahead and booked villa number 85, which measures 3600 square feet and cost Rs 2.14 crore. For the advance payment, she transferred Rs 79 lakh through various payment methods.

This sale agreement was signed on February 5, 2024, and Mrs Kumari was hopeful that she would get the finished villa by 2025 or latest by first half of 2026, but as of August 2026, the construction still hasn’t been finished. Feeling cheated, Ms Kumari filed a legal case with the Telangana Real Estate Tribunal (TSRERA) and made Mr Gupta and the builder both a party to this case.


On August 20, 2026, Ms Kumari won the case. The Telangana RERA bench which heard her case included Hon’ble Members, Srinivasa Rao and Laxmi Narayana Jannu.

The reason the real estate agent Mr Gupta was made a party to this case as Ms Kumari said that it was Mr Gupta who had introduced her to this builder and was well aware of the project since he was a real estate agent involved in the villa’s sale.

Also another fact is when the Telangana RERA sent notices to Mr Gupta and the builder, neither of them came to defend the case, so it was decided ex-parte.

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

Why did the homebuyer win the case?

Pooja Rao Putrevu, Founder of Annex Legal, said to ET Wealth Online that the homebuyer (Mrs Kumari) won the case predominantly because of three reasons:

• Failure on part of the builder to acquire a RERA registration which is a mandate under the TSRERA regulations,
• Carrying marketing, advertising activities without statutory permissions for the project,
• Failure to complete the construction within the promised timelines, thereby leaving the buyers in a state of confusion. not only did the buyer fail to oblige by the statutory mandates, they also failed to abide by the procedure established by law to respond to the claims, resulting in the case to be ruled ex-parte.

Putrevu says: "For a homebuyer in todays day and age, it is very essential to have clear paper work and most importantly ensuring that the developers oblige by the statutory obligations. All home buyers should be vigilant and thorough with these aspects before purchasing an asset."

Also read: Booked flats for Rs 1.16 crore, two homebuyers awaiting possession find project lapsed; MahaRERA orders builder to give money back with interest

Telangana RERA discussion

There is no material on record indicating the construction progress

The Telangana RERA observed that the builder has collected Rs 79 lakh from Ms Kumari yet there is no material on record indicating the present stage of construction of the villa, nor has the builder placed anything before the TGRERA authority whether by way of reply, progress report, or documentary evidence to demonstrate that construction was underway or nearing completion.

Thus Telangana RERA authority said that from the non-responsiveness of the builder and lack of evidence of construction, they concluded an adverse inference against the builder and accordingly proceeded on the premise that the builder had failed to complete the construction as agreed.

However, the agreement of sale which Ms Kumari signed was completely silent about the date of possession. So the Telangana RERA authority observed that Ms Kumari cannot be left to wait indefinitely for a project to be completed, or for the builder to furnish a definite date of possession, particularly where the builder has furnished no material whatsoever regarding the stage of construction reached.

The Telangana RERA said that a builder cannot be allowed to retain about Rs 79 lakh of Ms Kumari’s money without a corresponding and demonstrable progress in construction. Thus, the TGRERA authority ordered a refund of Rs 79 lakh to Ms Kumari with 10.7% interest (8.7% SBI MCLR+2%) calculated from the respective date of Agreement of Sale date: February 5, 2024 until the date of actual refund.

(Our calculations if we assume builder has paid the interest on August 20, 2026: Mrs Kumari had paid Rs 79 lakh and the TGRERA said that the interest is 10.7% p.a., so the period is about 2.54 years or 927 days, thus the interest comes to Rs 21.47 lakh)

Also read: Homeowner wins against builder over roof leakage: Telangana RERA cites 5- year liability rule

Builder penalised Rs 1.03 crore for failing to take RERA registration and selling villas

The Telangana RERA authority held that the builder has marketed and sold plots and villas in an unregistered project in contravention of Section 3(1) of the RE(R&D) Act, 2016, and so must pay Rs 1.03 crore as penalty for violating of Section 3 for non-registration of the project.

The Telangana RERA observed that Ms Kumari’s sale agreement mentions that the builder owned a big agricultural land parcel and with HMDA’s permission to convert it into residential villas for sale.

However, the agreement to sale contains no reference whatsoever to registration of the project under RERA.

Telangana RERA says: “This establishes that the said Agreement of Sale was executed, and consideration collected thereunder, prior to obtaining registration of the project under the provisions of the Act.”