Telangana RERA Says Buyers Who Paid For Beccun Flats Are Allottees Even Without Sale Agreement

The Telangana Real Estate Regulatory Authority (RERA) has recently held that buyers in the delayed “Beccun Life Style” project in Kompally, Hyderabad cannot be denied the status of allottees merely because formal agreements for sale were not executed, where they had paid substantial amounts and were allotted flats.

Rejecting objections raised by Beccun Infrastructure Limited, the Authority held that such buyers are entitled to be treated as allottees and can maintain complaints before it.

Chairperson Dr. N. Satyanarayana and Members K. Srinivasa Rao and Laxmi Narayana Jannu said:

"The Respondent, however, has sought to contend that in the absence of duly executed Agreements of Sale signed by both parties, the Complainants cannot be treated as allottees. This contention cannot be accepted. The issuance of receipts, acknowledgment of payments, and allotment of specific units clearly establish the existence of a transaction and the intention to transfer such units in favour of the Complainants.", it said.

"In such circumstances, this Authority holds that the Complainants fall within the definition of “allottees” under Section 2(d) of the Real Estate (Regulation and Development) Act, 2016, and their rights and interests are directly linked to the completion of the project, execution of conveyance, and delivery of possession.", it added.

The complaints were filed by homebuyers including Prasenjith Kambde, Polavarpu Satya Harish and Erukulla Manasa, who had booked flats in the project between 2020 and 2021 after paying substantial portions of the sale consideration through advances, instalments and housing loans.

They submitted that the project, which was promised to be completed within two to three years, remained incomplete even after four to five years.

The complaints were filed under Section 31 of the Real Estate (Regulation and Development) Act, 2016 seeking directions to complete the project, execute and register sale deeds, and grant compensation for delay. Some complainants also sought refund of the amounts paid along with interest.

The developer opposed the complaints, claiming that several buyers were investors who had entered into Memoranda of Understanding instead of formal agreements for sale and that such disputes were contractual in nature and outside RERA's jurisdiction.

It also argued that the complaints were defective and that delays were caused by force majeure, financial constraints and payment defaults by buyers.

The Authority rejected these objections, holding that procedural defects could not defeat the right of an aggrieved person to approach it under Section 31.

On merits, it found that the committed timelines had long lapsed and construction remained incomplete. It held that the developer failed to justify the delay or show valid grounds for extension of registration under Section 6.

The Authority said that payment obligations of buyers are linked to construction progress and cannot be enforced where the project has stalled.

It further found that units sold on unsanctioned floors amounted to misrepresentation in violation of Sections 12 and 14 of the Act.

Directing relief, the Authority said the developer must offer alternate units of equivalent value within the sanctioned portion of the project or refund the entire amount paid with interest under Section 18(1)(a), at the rate prescribed under Rule 15 of the Telangana Real Estate (Regulation and Development) Rules, 2017.

It directed the developer to complete construction and communicate a timeline within 30 days, execute agreements for sale where they were not executed earlier, and accept payments only in proportion to construction progress.

The Authority also clarified that buyers are entitled to seek delay interest under Section 18, and may pursue compensation before the Adjudicating Officer under Section 71.

It further directed the developer to deposit 100 percent of collections in the RERA-designated account to ensure regular disclosures and warned that failure to comply could invite penalties.