The Telangana Real Estate Regulatory Authority (TG RERA) passed a significant order against Ramky Estates and Farms Ltd. in a complaint filed by homebuyers K. Sravanthi and K. Bhanu Prakash concerning an apartment in the Ramky One Symphony project at Patancheru, Hyderabad.
The buyers had booked a 1,585 sq. ft. apartment and executed an Agreement for Sale on July 26, 2022. The total consideration for the apartment was approximately ₹1.03 crore, out of which the buyers had already paid ₹98.05 lakh.
As per the agreement, the developer promised to hand over possession by September 30, 2025.
However, when the promised possession date arrived, the builder had not obtained the Occupancy Certificate (OC) from the competent authority.
Homebuyers Exercised Their Right to Seek Refund
Since the Occupancy Certificate had not been obtained by the promised possession date, the homebuyers chose to withdraw from the project and sought a refund under the provisions of the Real Estate (Regulation and Development) Act, 2016 (RERA).
The buyers argued that without an Occupancy Certificate, the project could not be considered legally complete and therefore the possession offered by the developer was invalid.
Builder’s Defence Before TG RERA
Ramky Estates contended that:
- Construction of the apartment had been completed before the deadline.
- Delay in obtaining the Occupancy Certificate was merely procedural.
- The Occupancy Certificate was eventually issued on December 11, 2025.
The developer argued that the delay in obtaining the OC should not result in refund liability.
TG RERA Rejects Builder’s Arguments
TG RERA categorically rejected the builder’s defence and held that:
Possession cannot be legally offered without first obtaining an Occupancy Certificate.
The Authority observed that merely allowing buyers to undertake interior work or giving fit-out possession does not amount to lawful possession under the RERA Act.
According to TG RERA:
Fit-out possession without an Occupancy Certificate has no legal recognition under the Real Estate (Regulation and Development) Act, 2016.
Importance of Occupancy Certificate Under RERA
An Occupancy Certificate (OC) is issued by the local authority certifying that:
- The building has been constructed according to approved plans.
- Safety requirements have been complied with.
- The property is fit for occupation.
Without an Occupancy Certificate:
- The building may face legal complications.
- Buyers may face issues in obtaining utility connections.
- Banks and financial institutions may hesitate to provide financing.
- Possession offered by the developer may not be legally valid.
Section 18 of the RERA Act Gives Buyers the Right to Refund
TG RERA relied on Section 18(1)(a) of the RERA Act, which provides that:
If the promoter fails to complete or is unable to give possession in accordance with the terms of the agreement, the allottee has the right to withdraw from the project and receive a refund along with interest.
The Authority also relied upon the Supreme Court judgment in:
M/s Newtech Promoters and Developers Pvt. Ltd. vs State of Uttar Pradesh
The Supreme Court held that:
- Homebuyers possess a statutory and enforceable right to seek refund when possession is delayed.
- Such rights cannot be diluted by contractual clauses or unilateral actions of the promoter.
TG RERA’s Final Directions
The Authority directed Ramky Estates and Farms Ltd. to:
Refund Amount
₹98,05,087
Interest Payable
10.70% per annum
Interest Period
From September 30, 2025, until the actual date of payment.
Why This Order Is Significant
The decision is important because it clearly establishes that:
1. Occupancy Certificate Is Mandatory
A builder cannot claim project completion without obtaining an Occupancy Certificate.
2. Fit-Out Possession Is Not Legal Possession
Allowing buyers to carry out interior work does not satisfy the builder’s obligation under RERA.
3. Homebuyers Can Withdraw from Delayed Projects
If possession is not delivered as promised, buyers can seek refund with interest.
4. Developers Cannot Escape Liability Due to Procedural Delays
Internal administrative or procedural delays in obtaining approvals cannot deprive buyers of their statutory rights.
Impact on Real Estate Sector
The order sends a strong message to developers that:
- Compliance with statutory approvals is mandatory.
- Buyers’ rights under RERA cannot be compromised.
- Delays in obtaining Occupancy Certificates can result in significant financial liability.
For homebuyers, the ruling reinforces confidence that RERA authorities will protect purchasers against delayed possession and incomplete projects.
Conclusion
The TG RERA order against Ramky Estates is another landmark ruling strengthening the rights of homebuyers under the RERA framework. By holding that fit-out possession without an Occupancy Certificate is not valid possession, the Authority has reaffirmed that builders must strictly comply with statutory requirements before handing over apartments.
The ruling also reinforces that homebuyers are entitled to refund and interest when developers fail to deliver possession within the agreed timeline.
