Telangana RERA Orders Vasavi Realtors To Pay 10.70% Interest, Flags “Grave Concern” Over 50+ Complaints

The Telangana Real Estate Regulatory Authority (Telangana RERA) on 25 August directed Vasavi Realtors LLP to pay 10.70% annual interest to homebuyers Shilpa and Sridhar for delayed possession in its Vasavi Lake City West project, noting that more than 50 complaints had reached it against the developer concerning the same project.

A Bench comprising Members Laxmi Narayana Jannu and K. Srinivasa Rao expressed “grave concern” over a “systemic pattern of default” and directed interest payment from 1 March 2024 until lawful possession and warned that any further default or non-compliance would invite penalty proceedings under Section 63 of the Real Estate (Regulation and Development) Act, 2016. The Authority observed:

“This Authority takes note, with grave concern, that over fifty complaints have already been received against this same Respondent arising from the same project. Such a systemic pattern of default, repeated false assurances, and disregard for the statutory framework strikes at the very foundation of homebuyer confidence. The RE(R&D) Act was enacted as a beneficial legislation to protect innocent homebuyers, and this Respondent's conduct is in gross derogation of that mandate. Any further default, non-compliance, or grievance brought by allottees will invite proceedings under Section 63 of the RE(R&D) Act, 2016.”

Shilpa and Sridhar purchased Flat No. W060707 in Vasavi Lake City West in October 2021. They executed the Agreement of Sale on 18 August 2021 for a sale consideration of Rs. 51.72 lakh. The Agreement required Vasavi Realtors to hand over possession by 31 August 2023, with a six-month grace period, making 28 February 2024 the final agreed deadline. Vasavi Realtors did not deliver possession by that date.

The homebuyers said Vasavi Realtors later informed allottees that the project had received a one-year COVID-19 extension and would be completed by 7 February 2025. They alleged that the developer subsequently gave handover timelines around Dussehra/Diwali 2024, March 2025 and June 2025, but failed to meet them.

By September 2025, the buyers said, the project remained only around 70% complete. They said Vasavi Realtors had yet to complete the lifts, power infrastructure, clubhouse, landscaping and sewage treatment plant. The homebuyers then approached Telangana RERA under Section 31 of the RERA Act and sought possession, interest for the delay and compensation.

Vasavi Realtors opposed the complaint. It contended that the buyers had not first invoked the dispute-resolution mechanism under the Agreement or issued a legal notice. The developer attributed the delay to COVID-19, labour shortages, rocky site conditions and third-party litigation, and claimed that it had completed more than 80% of the construction.

The Authority rejected these defences. It held that the dispute-resolution clause in the Agreement could not restrict the statutory remedies available under RERA. It also noted that the parties executed the Agreement on 18 August 2021, after the pandemic had substantially subsided. It held that Vasavi Realtors entered into the Agreement with knowledge of the prevailing circumstances and could not subsequently invoke COVID-19 as a retrospective force majeure defence.

Further, the Bench rejected Vasavi Realtors' reliance on extensions of the project's RERA registration and revised possession timelines uploaded on the Telangana RERA portal. It held that such extensions could not dilute the homebuyers' contractual and statutory rights and that the possession date stipulated in the Agreement would prevail.

The buyers had paid approximately Rs. 32 lakh, but Vasavi Realtors had not delivered possession. The Authority therefore held the developer in breach of Section 11(4)(a) of the RERA Act and found the buyers entitled to delay interest under Section 18(1). It also held that any residual payment arrears claimed against the buyers could not shield a promoter already in default from liability to pay delay interest.

Accordingly, Telangana RERA directed Vasavi Realtors to pay interest at 10.70% per annum, being SBI MCLR plus 2%, on the amounts actually paid by the buyers from 1 March 2024 until lawful possession.

It directed the developer to clear the interest accrued up to the 25 August 2026 order within 60 days. Thereafter, Vasavi Realtors must pay the accruing interest every month, on or before the 10th day of the succeeding month, until it delivers possession.

Lastly, the Authority also directed Vasavi Realtors to complete the project forthwith and gave the buyers liberty to separately pursue compensation before the Adjudicating Officer.

Appearances for complainants (Achanti Shilpa & Achanti Sridhar): Complainant in person.