The case involves builders selling a flat to Nanaji before obtaining permits. Nanaji paid over ₹33 lakh for a project in Medchal-Malkajgiri, Hyderabad. He sought a refund and legal action against the CEO and MD through RERA
Published Jan 18, 2025 | 1:27 PM ⚊ Updated Jan 18, 2025 | 1:27 PM
The RERA fined a Hyderabad builder ₹9 Crore
The Telangana State Real Estate Regulatory Authority (RERA) fined a builder close to ₹10 Crore on the penultimate day of 2024. At the final hearing of the Katchala Nanaji v. Krithika Infra Developers, the court ruled in favour of the complainant.
The case pertains to an odd case where the respondent, the builders, sold a flat to Nanaji even before they had permits for the project. The respondents accepted over ₹33 Lakh from Nanaji in payment for the project set to come up near Boduppal in Medchal-Malkakgiri in Hyderabad. Nanaji approached RERA to seek a refund for the payment and initiate legal proceedings against the Chief Executive Officer (CEO) and Managing Director (MD).
The company was incorporated in 2020 with one Radha Bhukya listed as its MD. The project under contention is Seshadri’s Silver Oak. Nanaji didn’t receive the flat at the stipulated time in 2024. However, the company’s website currently lists its status as under construction with expected possession in 2026.
The case began in 2021 when Katchala Nanaji, paid ₹33.8 Lakh to Krithika Infra Developers. He spent the amount to secure a flat at their upcoming project in Beeramguda at the rate of ₹2,500 per square foot.
The company’s CEO and MD repeatedly assured Nanaji regarding the flat. However, they failed to hand over the flat to him by the promised date of March 2024. Nanaji then discovered that the company did not obtain the prior permits for the project and couldn’t deliver the flat. Hence, Nanaji demanded a refund from the company, but the company failed to oblige.
However, the company’s counterclaim tells a different story. As per their claim, Nanaji requested a refund in February of 2022. They further claimed that they refunded the amount in two instalments of about ₹16 Lakh in August and September of 2024. The refund is dated two years after the alleged refund request. However, the first cheque that the company claims they issued, is dated 30 August, 22 days following RERA’s first hearing in the case on 8 August.
The complainant is seeking three primary things. An immediate release of the payment with a compound interest of ₹2 per month. He also demanded strict action against the company and sought legal action against the CEO and MD.
As per Sections 3 and 4 of the The Real Estate (Regulation and Development) Act, 2016, the company is required to register the project before sale. Furthermore, the company also charged more than the permissible 10 percent advance payment as per Section 13.
RERA found Krithika Infra Developers in violation of Sections 3,4, and 13 of the Real Estate (Regulation and Development) Act, 2016. With the powers instated in the body by sections 37 and 38, it imposed a fine of ₹9.9 Crore. It did so under the penalties specified under Sections 59, 60, and 61.
The body further directed the respondent to refund the total ₹33.8 Lakh Nanaji paid. Additionally, the body ordered the company to pay a compound interest of 11.05 percent per annum from 5 February, 2022.
The respondent was also directed to register Seshadri’s Silver Oak Apartments with the authority in compliance with Section 4. Furthermore, it strictly denied the builders permission to advertise, market, book, or sell any units in the project before its registration. It warned of further penalties under Section 63 if the respondent fails to follow the directions.
However, there was no mention of legal proceedings against the CEO and MD.
Krithika Infra Developers was unavailable for comment to South First.
(Edited by Ananya Rao)
