TG RERA rejects Vasavi Infracon’s COVID delay defence
HYDERABAD: The Telangana Real Estate Regulatory Authority(TGRERA) has ordered Vasavi Infracon LLP to cancel the allotment of a flat in its Bachupally project and refund Rs 40 lakh to a homebuyer couple, with 10.70% per annum interest. This follows an 18-month delay in handing over possession of the flat.
Going further into details, Renu Agarwal and Bharat Agarwal booked Flat No. B11-605 on the 6th floor of Block-11 in the “Vasavi S Urban” project under an Agreement of Sale dated July 4, 2022. The total agreed consideration was Rs 44 lakh of which they paid Rs 40 lakh. The developer promised possession by December 26, 2024, with a grace period extending to August 2025.
However, as of January 2025, the project was only 60 to 70 percent complete, and the respondent extended the completion timeline to December 2026, resulting in a delay exceeding 18 months.
COVID defence rejected
The respondent attributed the delay to COVID-19 disruptions, labour shortages, supply chain bottlenecks, material cost inflation, and High Court boundary and FTL litigation affecting Blocks 8, 9, and 12. Furthermore, it claimed the project had reached nearly 85 percent overall completion and sought an extension to hand over possession until December 2026.
The bench comprising Laxmi Narayana Jannu and K. Srinivasa Rao, however, rejected the force majeure defence, noting that COVID-19 cannot be cited for an agreement executed on July 4, 2022, well after the pandemic onset. Additionally, labour shortages, supply chain issues, and price hikes are ordinary business risks assumed by developers. The Authority also held that litigations concerning Blocks 8, 9, and 12 had no bearing on Block-11 where the subject flat is located. Regulatory extensions on the RERA portal, it observed, do not override the contractual delivery date in the Agreement of Sale.
Moreover, the Authority found the levy of a “debris charge” of Rs 30,000 per flat to be illegal and lacking contractual or statutory basis. The respondent had claimed it rationalized the charge to Rs 20,000 after allottee consultations.
The complainants had fulfilled their payment obligations, and the respondent defaulted under Clause 9 of the Agreement of Sale and Section 18 of the RE(R&D) Act, 2016.
Refund and compliance
Consequently, the Authority directed the respondent to cancel the flat allotment and refund the full paid amount with interest calculated individually on each installment from its respective payment date until actual refund. Accrued interest arrears up to the date of the order must be paid within 60 days, with ongoing monthly interest due by the 10th of each succeeding month. Any collected debris charges must be refunded or adjusted into the total refund.
Complainants have been granted liberty to file a separate proceeding before the Adjudicating Officer under Form N for compensation for mental agony and harassment. Failure to comply will attract penalty proceedings under Section 63 of the Act.
The accused response could not be obtained for this report, but it will be added if received later.
