Telangana RERA Imposes ₹10 Crore Fine on on Builder for Regulatory Violations
In a significant judgment, the Telangana State Real Estate Regulatory Authority (TG RERA) penalized Krithika Infra Developers with a fine of ₹9.9 Crore. The ruling, issued in the case of Katchala Nanaji v. Krithika Infra Developers, was in response to a series of violations under the Real Estate (Regulation and Development) Act, 2016, and marked a victory for the complainant, Katchala Nanaji.
The dispute originated when Nanaji booked a flat in Seshadri’s Silver Oak, a residential project near Boduppal in Medchal-Malkajgiri, Hyderabad. Launched in 2020 under the leadership of MD Radha Bhukya, the project promised possession by March 2024. Nanaji paid ₹33.8 Lakh in 2021, purchasing the flat at ₹2,500 per square foot. However, the builder failed to secure mandatory project permits, a critical requirement under the Real Estate Act.
Despite repeated assurances, the developer neither delivered the flat by the promised timeline nor refunded Nanaji’s payment. Frustrated by the lack of resolution, Nanaji approached RERA in 2021, demanding a refund with compound interest and legal action against the company’s leadership.
In response to the allegations, Krithika Infra Developers claimed they had refunded Nanaji’s payment in two installments during August and September 2024. However, this timeline raised suspicions, as the first installment was processed just weeks after RERA’s initial hearing in August 2024. This undermined the company’s credibility and reinforced the complainant’s case.
RERA’s Findings and Penalties
After investigating the case, RERA found Krithika Infra Developers guilty of multiple violations of the Real Estate Act:
- Failure to register the project before selling units, violating Section 3.
- Charging more than the permissible 10 percent advance payment without a formal sale agreement, violating Section 13.
- Non-compliance with mandatory project registration requirements, violating Section 4.
Using its authority under Sections 37 and 38 of the Act, RERA imposed a fine of ₹9.9 Crore on the developer. The authority also issued the following directives:
- Refund ₹33.8 Lakh paid by Nanaji, with a compound interest of 11.05% per annum, effective February 5, 2022.
- Register the Seshadri’s Silver Oak project with RERA in compliance with Section 4.
- Cease all advertising, marketing, and sales activities for the project until registration is completed.
RERA warned the builder of additional penalties under Section 63 for non-compliance with its directives.
While the complainant sought legal action against the CEO and MD, RERA’s judgment focused on financial restitution, project compliance, and safeguarding homebuyers’ interests. This ruling underscores RERA’s critical role in ensuring accountability and transparency in the real estate sector, emphasizing the importance of regulatory compliance to protect homebuyers from exploitation.
