TGRERA orders Vasavi Infracon to refund Rs 40 lakh to flat buyer
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 the allottee with 10.70% per annum interest. Notably, the Authority rejected the developer’s force majeure claim regarding COVID-19, stating it was not valid for an agreement executed in 2024.
Going further into details, Niten Kumar, a resident of Gajularamaram, booked Flat No. B05-1812 on the 18th floor of Block-05 in the “Vasavi Urban” project under an Agreement of Sale dated January 18, 2024. The total sale consideration was Rs 44 lakh of which he paid Rs 40 lakh. According to the agreement, the respondent 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. As a result, the respondent repeatedly revised the completion timeline and failed to provide a clear schedule or occupancy certificate.
Builder’s defences rejected
The respondent, represented by Managing Partner Chanda Sowmya, attributed the delay to COVID-19, labour shortages, escalation of material costs, and litigation concerning boundary and Full Tank Level (FTL) disputes affecting Blocks 8, 9, and 12. Furthermore, the respondent claimed the project, comprising 12 towers under the PMAY scheme, was nearly 85 percent complete and sought an extension to hand over possession by December 2026.
The bench comprising Laxmi Narayana Jannu and K. Srinivasa Rao rejected all force majeure grounds, noting that COVID-19 could not be invoked for an agreement executed in 2024. Additionally, routine operational and cost issues, the Authority held, are ordinary business risks, and litigation involving Blocks 8, 9, and 12 had no bearing on Block-05 where the subject flat is located.
The Authority also found that the levy of a Rs 30,000 “debris charge” was illegal and lacked contractual or statutory basis. The respondent claimed it had rationalized the charge to Rs 20,000 after consultations with allottees. Consequently, the Authority directed that the charge be refunded or adjusted into the total refund amount.
Refund schedule and penalty warning
The Authority directed the respondent to refund the entire amount paid by the allottee with interest at 10.70% per annum, computed as SBI MCLR plus 2% under Rule 15 of TG RERA Rules, 2017. Specifically, interest is to be calculated on each installment from its respective payment date until the date of actual refund. Accrued interest arrears up to the date of the order must be paid within 60 days, and ongoing monthly interest is due by the 10th of each succeeding month.
Regarding compensation for mental agony, the Authority clarified that the matter falls under the jurisdiction of the Adjudicating Officer and granted the complainant liberty to file a separate Form N application. Finally, non-compliance with these directions will attract penalty proceedings under Section 63 of the Real Estate (Regulation and Development) Act, 2016.
