✦ AI Summary
Table of Content
▲- The Crisis at Aura (Velimala): How Buyers Got Stuck
- What RERA Law Actually Says: Sections 3 and 4 Explained
- The TGRERA Order: Penalty, Refund, and Mandatory Registration
- Before vs. After the TGRERA Order
- What This Ruling Means for Every Homebuyer in Hyderabad
- Homebuyer Protection Checklist: Before You Book Any Flat in Hyderabad
- Warning for Hyderabad Homebuyers
- Conclusion
Telangana RERA has delivered one of its most buyer-protective rulings of 2025, ordering a builder to fully refund over 62 homebuyers at 11% per annum interest after it emerged that the developer had sold flats, collected large sums, and executed sale agreements, all without ever registering the project under RERA. The ruling in Sri M. Prem Kumar & Others vs M/s Bhuvanteza Infrastructures LLP makes one thing unmistakably clear: an unregistered sale agreement is not a loophole. It is a liability, and it sits entirely with the builder.
For buyers who had already paid and were waiting years for possession in the Aura (Velimala) project in Sanga Reddy district, this order is the legally enforced relief they were owed. For every prospective homebuyer in Hyderabad, it is a masterclass in what RERA actually protects, and how far the Authority is willing to go to enforce it.
The Crisis at Aura (Velimala): How Buyers Got Stuck
The complainants entered into sale agreements with M/s Bhuvanteza Infrastructures LLP to purchase flats in the Aura (Velimala) project in Sanga Reddy district, Telangana. The project developers had promised that they would deliver possession of the property to us by December 2023. By June 2024, only 20% of the construction work had been finished. The project developers had not started work on most parts of the project.
What made this case particularly serious was the full picture that emerged when homebuyers approached the Authority. The grievances on record included:
- Construction at a near-standstill for years after agreements were signed, with no credible completion plan offered
- Project marketed, sold, and money collected, all without mandatory RERA registration being obtained
- Alleged diversion of funds collected from new buyers to the developer's other projects
- Builder's failure to honour a committed rent payment from January 2024 for delays caused
- Land not registered in buyers' names, raising legitimate risk of resale to third parties
- Homebuyers paying both EMI and rent simultaneously with no possession in sight
- No response to repeated follow-ups and no clear update on when construction would resume
Quick Fact: The Aura (Velimala) project covered 7,300 sq. meters, which exceeded the RERA registration threshold by almost 15 times because it exceeded the 500 sq. meter limit. The builder had no valid grounds to argue that registration was not required.
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What RERA Law Actually Says: Sections 3 and 4 Explained
The Telangana RERA bench, comprising Justice Dr. N. Satyanarayana (Chairperson), K. Srinivasa Rao (Member), and Laxmi Narayana Jannu (Member), examined documents submitted by the homebuyers, including HMDA permissions for a residential project on 7,300 sq. meters. The findings on legal violations were unambiguous.
|
RERA Section |
What It Requires |
What the Builder Did |
Violation? |
|---|---|---|---|
|
Section 3(1) |
No project can be advertised, marketed, booked, or sold without prior RERA registration |
Executed sale agreements and collected payments with zero RERA registration |
YES |
|
Section 3(2) |
All projects above 500 sq. meters must register before any commercial activity |
Project area was 7,300 sq. meters, no registration obtained |
YES |
|
Section 4(1) |
Developer must apply for RERA registration before commencing any sales activity |
No registration application was ever made; no evidence of any attempt |
YES |
The Authority found no evidence of a registration application having been made at any point. Despite this, sale agreements were executed and significant sums collected from buyers. The bench concluded this constituted clear and wilful non-compliance, not a procedural oversight.
The TGRERA Order: Penalty, Refund, and Mandatory Registration
The Telangana RERA bench issued a complete judgment which resolved both the legal breach and the financial damage suffered by homebuyers. The directions established specific requirements which needed to be followed.
|
Direction Issued |
Specifics |
|---|---|
|
Financial Penalty |
Rs.14,91,958/- imposed jointly and severally on both respondents for violating Sections 3 and 4 of RERA |
|
Full Refund Order |
Complete refund of all amounts paid by 62+ homebuyers, to be executed within 30 days |
|
Interest on Refund |
11% per annum from the date of each individual payment made by a homebuyer until actual date of refund |
|
Mandatory Registration |
Builder directed to immediately apply for RERA project registration before resuming any marketing, advertising, or sales activity |
|
Joint & Several Liability |
Both Respondent No. 1 and Respondent No. 2 held equally and fully liable for the full penalty and refund obligation |
Before vs. After the TGRERA Order
|
Before the TGRERA Order |
After the TGRERA Order |
|---|---|
|
Project 80% incomplete with no possession timeline |
Buyers entitled to full refund with 11% interest within 30 days |
|
No RERA registration, no legal safeguards for buyers |
RERA jurisdiction confirmed regardless of unregistered agreement |
|
Builder faced no financial consequences for non-compliance |
Rs.14.91 lakh penalty imposed for Sections 3 & 4 violations |
|
Buyers bearing EMI + rent double burden with no recourse |
Legal path to full financial recovery established and enforceable |
|
Builder continuing to market unsold flats without registration |
All marketing and sales activity halted until RERA registration obtained |
What This Ruling Means for Every Homebuyer in Hyderabad
This order carries significance well beyond the 62 buyers directly involved. It establishes principles that matter to every homebuyer looking at real estate in Hyderabad and Telangana today.
- Unregistered sale agreement does not equal loss of rights. RERA's jurisdiction is project-based. If the project required registration and the builder did not obtain it, your rights under RERA are intact.
- Collecting money without RERA registration is itself a punishable offence. It does not matter how the funds were framed in the agreement.
- RERA can order refunds with interest even where no registered deed exists. The Authority's power does not hinge on the format or registration status of the sale agreement.
- Both partners or directors of a builder entity face joint and several liability. There is no hiding behind corporate structure once RERA finds a violation.
- The 500 sq. meter threshold is absolute. Any project above this size is legally required to register with TGRERA before a single booking is made or a rupee is collected.
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Homebuyer Protection Checklist: Before You Book Any Flat in Hyderabad
- Verify the project's RERA registration number on the official TGRERA website before paying any amount
- The RERA registration number must be present on all brochures and advertisements and the sale agreement itself.
- The HMDA or GHMC approvals need to be confirmed as valid for the specific plot and project according to their existing records.
- The sale agreement needs to specify three items: carpet area, possession date, and RERA registration number.
- The builder must maintain a dedicated escrow account for 70% of project construction funds according to the specific project's requirements.
- Check whether the project has any pending dues, litigation, or RERA complaints already filed
Warning for Hyderabad Homebuyers
A builder who refuses to display their TGRERA registration number before accepting your booking amount creates an immediate red flag. The RERA law forbids acceptance of money without a valid registration number according to the sale agreement.
Conclusion
The verdict in Sri M. Prem Kumar & Others vs M/s Bhuvanteza Infrastructures LLP (Complaint No. 105 of 2024) is a landmark signal from Telangana RERA that builder non-compliance with mandatory registration requirements will attract the full force of the law, penalty, refund, and a court-enforceable interest obligation at 11% per annum.
For Hyderabad's homebuyers, the most important takeaway is this: the absence of a RERA registration number on your sale agreement is not your problem to solve. It is the builder's legal failure. And TGRERA has now made clear that it will not only acknowledge that failure, it will order the builder to pay for it, with interest.
Telangana RERA remains the most powerful and accessible legal safeguard available to homebuyers in the state. Use it before you book, and rely on it if you need to fight.
Ans 1. Telangana RERA's jurisdiction is project-based, not agreement-based. If the project required RERA registration and the builder failed to obtain it, homebuyers retain full legal rights under the Act, including the right to seek a full refund with interest through a TGRERA complaint.
Ans 2. Under Section 3(2) of the Real Estate (Regulation and Development) Act, 2016, any project with a plot area exceeding 500 sq. meters or more than 8 residential units must be registered with TGRERA before any advertisement, marketing, booking, or sale activity begins.
Ans 3. A builder who markets or sells flats without mandatory RERA registration violates Sections 3 and 4 of the Act and can be penalized up to 10% of the project's estimated cost. In this case, TGRERA imposed a penalty of Rs.14.91 lakhs along with a full refund order carrying 11% per annum interest.
Ans 4. Telangana RERA directs builders to refund homebuyers at 11% per annum, calculated from the date of each payment made by the homebuyer up to the actual date of refund. This applies in cases of severe construction delay or wilful RERA non-compliance.
Ans 5. Homebuyers can file a complaint online through the official TGRERA website (rera.telangana.gov.in). The complaint should include grievance details, delayed possession, non-registration, or fund diversion, supported by the sale agreement, payment receipts, and builder correspondence. TGRERA aims to resolve complaints within 60 days.
Ans 6. No. Once RERA establishes a violation, it can direct the builder to immediately stop all marketing and sales activity until the project is properly registered. In this case, TGRERA directed the builder to apply for RERA registration before resuming any sales activity whatsoever.
Ans 7. RERA requires at least 70% of funds collected from homebuyers to be deposited in a dedicated escrow account, usable only for that specific project's construction and land costs. This prevents builders from diverting buyer money to other projects, which was among the key allegations raised by buyers in the Aura (Velimala) complaint.
Ans 8. Yes. When RERA finds a violation, both respondents, whether partners of an LLP or directors of a company, can be held jointly and severally liable. This means the entire penalty and refund obligation applies to both parties together, ensuring homebuyers are not left without recourse if one party defaults.
Ans 9. Before signing, a homebuyer should verify the project's RERA registration number on the TGRERA website, confirm HMDA or GHMC approvals are in place, check that the sale agreement explicitly states carpet area, possession timeline, and the RERA registration number, and verify that a dedicated project escrow account exists.
Ans 10. Yes. TGRERA has consistently held that if the project meets the size criteria requiring registration, the builder's obligation arises at project inception. Executing sale agreements and collecting money before obtaining registration constitutes wilful non-compliance and exposes the builder to RERA penalties and full refund obligations regardless of when the agreement was signed.