Telangana RERA pulls up Hyderabad builders for failing to complete infrastructure, disclosing details of joint project
Telangana RERA directs developers to complete projects as per approved plans within two months; urges buyers to verify RERA registration and promoter details
The Telangana Real Estate Regulatory Authority (TGRERA) has come down heavily on two Hyderabad-based firms, Suvarnabhoomi Infra Developers Pvt. Ltd. and Maha Infra and Developers, for failing to complete the infrastructure and disclosing details of their joint project, Silpa’s Suvarna Sampada 2, located in Patancheru, Sangareddy district.
It directed them to jointly complete the development of the entire project in strict accordance with the sanctioned plan approved by the competent authority, within 60 days from the date of the order.
The order stated that “such dual presentation, without clear disclosure of the respective roles and extent of transfer, amounts to misrepresentation and undermines the intent of Sections 4 and 11(2).”
It further said that internal agreements between parties cannot supersede their obligations to homebuyers, the order said.
Issuing a public advisory, a two-member bench urged homebuyers to verify a project’s RERA registration and ensure that the marketing entity and registered promoter are the same. “Buyers should not rely solely on advertisements or celebrity endorsements,” the order warned. “They must check project details on the RERA website, review approvals, and seek professional advice before investing.”
About the case
The complaint was filed by a plot owner who alleged that the project, registered with RERA in 2019, remained incomplete even years after its approval period lapsed in 2021. Essential infrastructure, such as roads, drainage, street lighting, and water pipelines, was missing, and plots mortgaged to the Hyderabad Metropolitan Development Authority (HMDA) were sold.
“The buyer additionally submitted that Suvarnabhoomi Infra Developers Pvt. Ltd. engaged prominent film actors to endorse and promote the project through advertisements and public campaigns. These endorsements misrepresented the state of the layout and created a false impression of well-developed infrastructure, thereby misleading prospective purchasers, including the buyer,” the order dated Oct 22 said.
The order noted that the complainant alleged the developer had illegally sold plots that were mortgaged to the Hyderabad Metropolitan Development Authority (HMDA). ..The complainant claimed that the developer collected large sums from unsuspecting purchasers, despite the mortgage restriction, which constitutes a major regulatory violation, the order stated.
TGRERA findings
The TGRERA order found that the developers had entered into undisclosed Memorandums of Understanding (MOUs) and side agreements transferring marketing and sale rights to third parties without informing the Authority or homebuyers.
“The Authority hereby issues a stern warning to Respondent No. 2 (Maha Infra and Developers) for entering into undisclosed Memorandums of Understanding (MOUs) and mutual arrangements with third parties while suppressing material facts from this Authority and from allottees. Such conduct strikes at the very heart of the transparency regime envisaged under the Real Estate (Regulation and Development) Act, 2016,” the order said.
These arrangements allowed one entity to register the project while another handled promotions and sales under a different brand name, a practice the Authority said undermines transparency and misleads purchasers.
"The Act creates a protective canopy for the purchaser. The promoter cannot, by private arrangement, shift the burden of meeting statutory obligations onto purchasers or on third parties without making such arrangements transparently known at the time of registration and in the public records. Where, as here, Respondent No.2 (Maha Infra and Developers) represented the project to the public registry as a single project but, prior to registration, had created separate arrangements entitling Respondent No.1 (Suvarnabhoomi Infra Developers) to market and sell a significant part of the land under a different brand, the public interest in transparent disclosure has suffered," the order said.
“Such dual presentation, without transparent disclosure of the respective roles and the extent of transfer, constitutes a misrepresentation which undermines the intent of Sections 4 and 11(2),” the order said.
After reviewing submissions from both sides, the TGRERA ruled that both the developer and the marketing company qualified as “promoters” under the Real Estate (Regulation and Development) Act, 2016, and could not escape responsibility by blaming each other.
“The developer and the seller may be different persons, but both are deemed to be promoters and jointly liable for compliance,” the order stated, emphasizing that internal agreements between parties cannot override their obligations to homebuyers.
TGRERA also came down heavily on the growing practice of developers entering into undisclosed Memorandums of Understanding (MOUs) or side agreements with third-party marketers. Calling such actions “a serious breach of transparency,” the Authority warned that any repetition would lead to the firms being declared defaulters.
"Therefore, both the promoters Respondent No.1 and Respondent No.2 shall be jointly and severally liable to complete the project strictly in accordance with the approved and sanctioned plan obtained from the competent authority. Respondent No.1 shall ensure that all specifications, facilities promised under the registered Agreement for Sale with the Complainant are duly provided within the stipulated time frame. 53. Respondent No.2, having participated in the sale and promotion process, cannot escape from corresponding liability under the RE(R&D) Act. He shall cooperate fully in the completion process and ensure compliance with the sanctioned plan and promised development works," the order said.
The Authority further directed its secretary to verify whether the previous penalties of ₹5.97 lakh imposed on the same developers had been complied with. If violations persist, fresh proceedings under Section 63 of the Act will be initiated, it said.
A list of questions has been sent to the developers. The story will be updated if a response is received.
