The Telangana Real Estate Regulatory Authority (TG RERA) has granted relief to a homebuyer who was left waiting for possession of a 3BHK flat after the developer failed to obtain the necessary approvals and did not legally commence construction.
In the case involving Lily Sahu, the buyer had paid ₹14.17 lakh towards a flat valued at ₹56.7 lakh. Despite the passage of more than three years from the agreement, the project had not progressed as promised.
TG RERA has now directed the builder to refund the entire amount paid by the buyer along with interest. The total amount, including interest calculated up to August 24, 2026, stood at approximately ₹20.57 lakh.
Homebuyer Booked 3BHK Flat in Telangana Project
Lily Sahu entered into a Sale Agreement on June 21, 2022, for a 3BHK flat measuring approximately 1,575 sq. ft.
The property was located at Velimela village, Telangana.
The total agreed value of the flat was approximately ₹56.7 lakh, out of which Sahu paid ₹14.17 lakh to the developer.
The agreement provided that possession would be handed over within 36 months from receipt of the necessary approvals from the Hyderabad Metropolitan Development Authority (HMDA).
However, the required approvals were not obtained as expected and construction did not legally commence.
Project Failed to Progress
The homebuyer alleged that despite making a substantial payment, there was no meaningful progress towards completion of the flat.
The situation became more serious when it emerged that the developer had not obtained the necessary approvals and had not legally commenced construction at the site.
The project’s RERA registration was subsequently cancelled, and the developer was treated as a RERA defaulter.
The buyer was also left without meaningful communication from the developer.
Why Did TG RERA Order a Refund?
The Authority’s decision was based on the failure of the promoter to fulfil its obligations concerning possession and project development.
Under Section 18 of the Real Estate (Regulation and Development) Act, 2016, an allottee has important remedies when a promoter fails to complete a project or is unable to give possession within the period specified in the Agreement for Sale.
Where the allottee chooses to withdraw from the project, the promoter is required to return the amount received from the allottee along with applicable interest and compensation in accordance with the Act.
The provision is intended to prevent homebuyers from being indefinitely locked into projects that fail to progress according to the agreed terms.
Buyer Was Entitled to Exit the Project
In the present case, the circumstances went beyond a simple delay in possession.
The developer had allegedly failed to obtain the required approvals, construction had not legally commenced, the project’s RERA registration had been cancelled and the developer had failed to provide the promised possession.
Against this background, TG RERA found that the buyer was entitled to withdraw from the project and seek a refund.
The Authority therefore directed the promoter to return the amount paid by Sahu.
₹14.17 Lakh Deposit Plus ₹6.4 Lakh Interest
TG RERA directed the builder to refund the ₹14.17 lakh paid by the homebuyer.
Interest was ordered to be calculated in accordance with the applicable Telangana RERA rules, at the rate of SBI’s MCLR plus 2% per annum.
The interest was calculated from the respective date of deposit until repayment.
As of August 24, 2026, the interest component was approximately ₹6.4 lakh.
Therefore, the total amount payable at that point was approximately:
Principal amount: ₹14.17 lakh
Interest: ₹6.40 lakh
Total: ₹20.57 lakh
The final amount payable would depend on the actual date of payment and further accrual of applicable interest.
Section 18 Gives Important Protection to Homebuyers
The case highlights the importance of Section 18 of RERA for homebuyers facing delayed or stalled projects.
Broadly, where a promoter fails to complete or is unable to give possession in accordance with the terms of the Agreement for Sale, the allottee has a statutory remedy.
A buyer who does not wish to continue with the project can seek return of the amount paid along with applicable interest and compensation as provided under the law.
On the other hand, where the allottee chooses to remain in the project, the statutory framework provides for interest for the period of delay until possession is handed over, subject to the applicable provisions.
This means a buyer is not necessarily required to remain indefinitely tied to a project where the promoter has failed to meet its obligations.
What If the Builder Stops Responding?
The case also highlights an important warning sign for homebuyers: a developer becoming unresponsive.
According to the complaint, the developer eventually stopped communicating with Sahu.
When a builder stops responding, buyers should avoid relying solely on verbal assurances.
They should preserve:
- Sale Agreement
- Allotment letter
- Payment receipts
- Bank statements
- Demand letters
- Emails
- WhatsApp communications
- Letters sent to the developer
- RERA registration details
- Construction photographs and videos
Such records can become important evidence if a dispute subsequently reaches RERA or another legal forum.
What Should Homebuyers Check Before Booking a Property?
The dispute provides several lessons for prospective property buyers.
1. Verify RERA Registration
Before making a substantial payment, buyers should check whether the project is registered with the relevant state RERA authority.
They should also verify the registration number and examine the information disclosed on the regulatory portal.
2. Check the Possession Clause
The Agreement for Sale should clearly specify the promised possession date and the conditions linked to possession.
A buyer should understand whether the possession timeline is linked to approvals, commencement of construction or another event.
3. Verify Approvals
Homebuyers should verify whether the developer has obtained the necessary building permissions and other statutory approvals applicable to the project.
4. Visit the Actual Project Site
Advertisements and brochures cannot substitute for checking the actual condition of the project.
Buyers should examine whether construction has actually commenced and whether the progress corresponds with the developer’s representations.
5. Check the Builder’s Track Record
Before committing a large amount, buyers should examine the developer’s past projects, delays, complaints, litigation and RERA cases, wherever such information is available.
6. Understand Refund Rights
Buyers should understand their remedies in the event of delayed possession, project abandonment, cancellation of RERA registration or failure to obtain approvals.
What Should a Buyer Do When a Project Is Already Delayed?
If a project is already delayed, the first step should be to examine the Agreement for Sale and identify the promised possession date and applicable conditions.
The buyer should then determine the period of delay and collect all relevant documents.
It is also important to check the project’s current RERA registration status and whether the regulator has passed any orders against the promoter.
The actual status of construction should also be documented.
A buyer’s legal strategy may differ depending on whether the buyer wants to:
Continue with the project and seek interest for delay
or
Withdraw from the project and seek refund with applicable interest and compensation.
Therefore, where substantial amounts are involved, obtaining appropriate legal advice before filing proceedings can help the buyer determine the appropriate remedy.
The Bigger Lesson for Homebuyers
The Lily Sahu case demonstrates that paying a builder does not mean a homebuyer has to wait indefinitely for possession.
Where a promoter fails to obtain necessary approvals, does not commence construction, loses project registration and fails to provide possession, the RERA framework can provide an important remedy to the affected allottee.
For buyers, the most important protection remains due diligence before payment and prompt action when warning signs emerge.
Checking the project’s RERA registration, verifying approvals, carefully reading the Agreement for Sale and maintaining complete records of payments and communications can significantly strengthen a buyer’s position in the event of a dispute.
Key Takeaway
The Telangana RERA order reinforces an important principle under Section 18 of RERA: where a promoter fails to deliver possession in accordance with the agreed terms and the allottee chooses to withdraw, the buyer can seek refund of the amount paid along with applicable interest.
In Sahu’s case, TG RERA ordered the builder to return ₹14.17 lakh plus interest of approximately ₹6.4 lakh, taking the amount payable to around ₹20.57 lakh as of August 24, 2026.
The ruling serves as a reminder that homebuyers should not remain trapped indefinitely in stalled projects, particularly where regulatory approvals and construction itself have not progressed.
