TGRERA Tribunal split over extent of penalty on promoter
Hyderabad: The Telangana Real Estate Appellate Tribunal has issued directions to the promoter of ‘Western Springs’ project to comply with regulations following violations under the RERA Act. However, the tribunal members were split on the severity of the penalty to be imposed on the promoter.
A petition was filed against the ‘Western Constructions’, the real estate firm behind the ‘Western Springs’ project by Jai Kumar Tawrani, who alleged that the promoter kept the details of a portion of the project land in Survey No. 341 that was classified as “prohibited property” under the Telangana Assigned Land (Prohibition of Transfers) Act hidden from them. It was also claimed that the promoter did not disclose the ongoing litigation related to the land in its RERA filings.
As the promoter was found to have violated major provisions of the Real Estate (Regulation and Development) Act, 2016 and the Telangana State RERA Rules, 2017, the tribunal reached a unanimous decision and directed the promoter to file a revised Form-B declaration and an updated legal title report within 10 days. Additionally, the promoter was directed to upload information regarding litigation and land classification on the TGRERA portal.
While rejecting the appellant’s demand for blacklisting the promoter, revoking the project registration or cancelling executed sale deeds, the tribunal chairman A Rajashekar Reddy observed that the promoter deliberately withheld essential information and directed that the monetary penalty must be increased from Rs. 1.11 crore to Rs. 2.23 crore.
The tribunal chairman hoped that a combination of enhanced financial penalty and public disclosure would serve as a deterrent from future violations.
However, P Pradeep Kumar Reddy, member (judicial) disagreed with the decision to enhance the penalty. He said before imposing an immediate penalty, the promoter should be given a final opportunity to rectify the violations.
While Chitra Ramchandran, member (administrative), proposed a penalty which is 1.5 per cent of the project cost of Rs 1,154.57 crore amounting to Rs 17.32 crore.
With no scope for resolving such disagreements within the bench, the tribunal left the matter open-ended while allowing the parties to seek resolution from the appropriate forum regarding the imposition of penalties.
The tribunal dismissed the appeal of Jai Kumar Tawrani stating that he lacked the legal standing to pursue the appeal as he was not an “aggrieved person” under Section 31 of the RERA Act.
