Flat Not Ready For Possession Without Basic Amenities Like Water, Electricity: Telengana RERA

The Telangana Real Estate Regulatory Authority (TGRERA) has ruled that a flat cannot be treated as ready for possession merely because construction is complete or an Occupancy Certificate has been obtained. Basic facilities such as potable water and electricity must also be available.

A bench comprising Member Laxmi Narayana Jannu and Member K. Srinivasa Rao imposed a ₹32.17 lakh penalty on Janapriya Projects Pvt. Ltd. for accepting booking money before registering its “Sitara at Janyapriya Lake Front” project. It also directed the developer to pay 10.70% annual interest for the delay in handing over lawful possession.

The dispute concerned Sridhar Bagaluri and Shrisha Bagaluri, who booked Apartment A2-328 in the project for ₹26.05 lakh. They paid ₹20,000 on March 30, 2019, and another ₹2.24 lakh on August 2, 2019. The project was registered with TGRERA only on October 5, 2019.

The Agreement of Sale was executed on March 11, 2020, with August 20, 2024, recorded as the promised possession date. The buyers later complained that the flat and common areas were incomplete and that water and electricity connections were unavailable.

Janapriya Projects maintained that the flat had been completed and made habitable by July 2024. It argued that only minor snagging work remained and that the buyers had delayed possession by repeatedly seeking documents and inspections.

TGRERA rejected the explanation. It noted that the Occupancy Certificate was obtained only on September 30, 2024, after the promised possession date.

An independent inspection later found that operational water supply through HMWS&SB and individual electricity meter connections for Block A2 were still pending. The developer had admitted that temporary arrangements were being used.

The Authority observed,

“The readiness of an apartment cannot be judged merely by civil completion or procurement of an Occupation Certificate. Availability of basic amenities such as potable water supply and electricity forms an integral part of such readiness. A residential unit can be said to be fit for occupation only when it is capable of being actually used and enjoyed for residential purposes. Offering possession without functional basic utilities like potable water and electricity is merely symbolic and does not satisfy the statutory mandate.”

It further held that offering possession without functional water and electricity was “merely symbolic” and did not satisfy the statutory requirement.

The Authority also rejected the developer's attempt to blame the buyers for the delay. It held that requests to inspect the apartment, verify project documents and clarify pending works could not be treated as refusal to take possession.

Under Section 18 of RERA, an allottee who remains in the project is entitled to interest when possession is delayed. TGRERA accordingly directed the developer to pay 10.70% annual interest on the amounts paid from August 21, 2024 until actual handover of lawful, ready-to-move-in possession.

The developer must first complete the pending water and electricity connections. It must then hand over possession and execute the registered sale deed.

The buyers' claims for rent, legal expenses, inspection charges, travel expenses and mental agony were not decided by TGRERA. They were left open for proceedings before the Adjudicating Officer under Section 71, which deals with compensation and damages.

Separately, TGRERA found that Janapriya Projects had accepted ₹2,44,608 towards booking/allotment before the project's registration. Section 3(1) prohibits a promoter from booking or selling a unit in a project without first obtaining RERA registration.

For the violation, the Authority imposed a ₹32,17,780 penalty under Section 59, payable within 30 days to the TGRERA Fund. The complaint was disposed of with no order as to costs.