Builder Cannot Deny Flat Possession To Subsequent Purchaser Holding Registered Sale Deed: Telenga RERA

The Telangana Real Estate Regulatory Authority (TG RERA) has held that a subsequent purchaser holding a registered sale deed qualifies as an allottee for the limited purposes of proceedings under the Real Estate (Regulation and Development) Act, 2016.

It held that a promoter cannot avoid its statutory obligation to hand over possession merely because the apartment was acquired through a subsequent transfer.

Partly allowing a complaint against Aparna Constructions & Estates Pvt. Ltd., the Authority directed the promoter to hand over possession of an apartment in its Aparna Sarovar Zicon project within 30 days.

It clarified that the direction would remain subject to the outcome of pending civil and insolvency proceedings concerning the validity of the transfer documents.

The Authority, comprising Members K. Srinivasa Rao and Laxmi Narayana Jannu, observed: "Section 2(d) of the RE(R&D) Act, 2016 defines an “allottee” to expressly include a person who subsequently acquires an allotment through sale, transfer or otherwise. On the strength of the registered Sale Deed dated 21.09.2024, and for the limited purpose of determining the Respondent-promoter's statutory obligation to hand over possession in the present complaint, the Complainant satisfies the definition of “allottee” under Section 2(d) of the Act. Once a person falls within the definition of an allottee under Section 2(d) for the limited purposes of the Act, the promoter cannot avoid its statutory obligations merely on the ground that the allottee acquired the apartment by way of a subsequent registered transfer. The obligations imposed upon a promoter under the Act are statutory in nature and are not defeated merely because the original allottee has transferred his interest."

The dispute concerned an apartment in Aparna Sarovar Zicon, which Aparna Constructions sold to Koshy Mathew and Shiney Mathew through a registered sale deed dated December 8, 2023.

Physical possession of the apartment had not been handed over. The original purchasers later executed an irrevocable GPA in favour of Vijay Mohan Rao Valluri. Acting under the GPA, he sold the apartment to Shridevi Valluri through a registered sale deed dated September 21, 2024.

Shridevi Valluri approached Telangana RERA alleging that Aparna Constructions failed to hand over possession despite repeated requests. She also sought an update of ownership records and ₹5 lakh as compensation.

The promoter argued that Valluri was not an "allottee" under the Act. It relied on a pending civil suit challenging the GPA, contended that the subsequent sale deed was invalid, and argued that the transfer violated the original sale deed because no no-objection certificate had been obtained.

Rejecting these objections, the Authority held that a registered document carries a presumption of validity until set aside by a competent court. It observed that pending title disputes do not suspend a promoter's statutory obligations under RERA, while questions relating to title must be decided by the competent civil court.

The authority declined to direct updates of title or ownership records. It left Valluri at liberty to seek compensation before the Adjudicating Officer under Section 71 of the Act.