Telangana RERA Orders Penalty Proceedings Over 40 Unregistered Plots

Telangana’s real estate regulator has ordered penalty proceedings against Sivom Projects and two of its representatives after finding that 40 plots in the Sivom Sahasra II venture at Jeedimetla were sold without mandatory RERA registration.

The order, issued on October 14, follows a complaint filed by Kambalipati Haribabu on behalf of the Sivom Social Welfare Association. The venture, spread across 18,755.25 square yards, has 45 plots. According to the authority’s findings, 40 were sold and registered during 2021 and 2022, even though the project had not obtained the required registration.

The Telangana Real Estate Regulatory Authority (TG RERA) has directed its secretary to initiate proceedings to determine the penalty under Section 59 of the Real Estate (Regulation and Development) Act, 2016. The order holds the company’s managing director, Isukapatla Sambamurthy, and authorised power of attorney holder VSN Raju jointly responsible for violations of Sections 3 and 4.

No final penalty amount has been specified in the reported order. The authority has also not directed the developer to complete the pending infrastructure work, as disputes involving layout approval and related court proceedings remain unresolved.

What Happened at Sivom Sahasra II?

The dispute concerns more than the registration status of the plotted venture. Buyers told the authority that roads, drainage and other infrastructure had not been completed, leaving them unable to begin construction on their plots.

The complaint also raised concerns about alleged encroachment, damaged boundary markers and threats that reportedly restricted access to the site. TG RERA said issues relating to security and access should be taken up with the police or civil courts, as they fell outside the immediate scope of the regulatory proceedings.

The matter has continued for several years. For plot owners, the delay has meant uncertainty over when the site’s infrastructure will be completed and whether they can use their properties as intended.

The authority’s order addresses the alleged failure to register the project. It does not settle every dispute concerning the land, layout approval or completion of development work.

Why Registration Matters Under RERA

Section 3 of the RERA Act generally prohibits a promoter from advertising, marketing, booking or selling a real estate project that requires registration until the project has been registered with the relevant state authority. The law contains specific exemptions, so whether registration is required depends on the circumstances of the project. Buyers unfamiliar with these requirements can read more about RERA registration and its role in property transactions.

Section 4 sets out the information and documents that promoters must submit when applying for registration. These requirements are intended to give buyers access to key details about a project and make developers more accountable for their disclosures and commitments.

In the Sivom Sahasra II case, TG RERA found that 40 plots had been sold without the required project registration. It has now directed the next stage of proceedings to determine the applicable penalty.

Section 59 provides for a penalty that may extend to 10% of the estimated cost of the real estate project for a promoter’s contravention of Section 3. Further consequences may apply if the violation continues, in accordance with the Act.

That statutory ceiling is not the same as a penalty imposed in an individual case. The amount, if any, will depend on the proceedings and the authority’s final determination.

Why the Infrastructure Work Remains Unresolved

Despite ordering penalty proceedings, TG RERA did not direct Sivom Projects to finish the pending development work.

The authority referred to a status quo order from the Telangana High Court concerning tentative layout approval granted by the Greater Hyderabad Municipal Corporation (GHMC). A civil partition suit and proceedings related to GHMC’s review of the layout approval are also pending.

These matters affect what can be directed while the legal disputes continue. A finding about unregistered sales does not automatically resolve questions about land ownership, layout permissions or the steps required before infrastructure work can proceed.

The buyers had also asked the authority to take over the development and use five plots mortgaged to GHMC to fund the work. TG RERA rejected that request at this stage and indicated that the association could approach it again after the pending proceedings were resolved.

The landowners named in the dispute challenged the developer’s authority to sell the plots, referring to limitations in the development arrangement and ongoing ownership-related proceedings. TG RERA did not specifically hold the landowners liable for the registration violation. It noted that the developer and its representatives had been entrusted with the relevant statutory approval and marketing responsibilities.

The immediate regulatory action is therefore focused on the unregistered sales. The question of completing the venture remains tied to the separate legal and administrative disputes.

What Plot Buyers Should Check Before Investing

The case is a reminder that buyers should look beyond the sale deed or registration of an individual plot when assessing a plotted development. Reviewing the legal documents required when buying property in India can help buyers understand which ownership records and approvals to examine before proceeding.

First, they should check whether the project requires RERA registration and, if so, whether the promoter has obtained it. The project name, promoter details and registration number should match the information available on the relevant state RERA website.

Layout approval is another important check. Buyers should establish whether the layout has been approved by the competent authority and whether any conditions, restrictions or disputes affect the property.

Land records and development commitments deserve equal attention. A buyer should understand who owns the land, whether mortgages or disputes exist, and which party is responsible for roads, drainage, water supply and other promised facilities.

Before paying a booking amount, buyers should also read the sale agreement carefully. It should set out the payment terms, development commitments, expected timelines and remedies for non-compliance. Where the status of a project or its approvals is unclear, independent legal advice can help identify risks before money changes hands.

A registered sale document alone does not establish that every approval for the wider development is in place or that promised infrastructure has been completed.

What Happens Next?

TG RERA has directed its secretary to initiate penalty proceedings under Section 59. The reported order does not state a final fine or provide a deadline for completion of the infrastructure work.

The future of the pending development work will also depend on the outcome of the related court proceedings and GHMC’s review of the layout approval. Until those matters are resolved, the buyers’ request for the regulator to take over the work remains unapproved.

The case brings two issues into focus: the requirement to register qualifying real estate projects before selling them, and the practical difficulty buyers can face when regulatory compliance and development approvals remain disputed.

For now, the regulator has moved to address the alleged registration violations. The infrastructure concerns raised by the plot owners remain unresolved.