In a significant ruling protecting the rights of homebuyers, the Telangana Real Estate Regulatory Authority (TG RERA) has held that a promoter cannot deduct the booking amount, GST, or any arbitrary charges when a buyer chooses to withdraw from a delayed real estate project.
The Authority directed Sukhii LLP to refund ₹1,04,87,870 along with 10.70% annual interest after finding that the developer failed to deliver possession of the apartment within the contractual timeline.
The ruling reinforces the consumer protection objectives of the Real Estate (Regulation and Development) Act, 2016 (RERA) and sends a strong message that developers cannot impose unfair financial deductions after defaulting on their contractual obligations.
Background of the Case
The complaint was filed by Vemulapalli Sai Vasanthi and Ghattamaneni Venkat Sai Maithreya, who booked Apartment No. 510 in the Sree Sumeru Residential Project located at Uppal Bhagayath, Hyderabad.
The apartment measured 1,695 sq. ft. and included two car parking spaces.
The booking was made in December 2022, while the Agreement for Sale was executed in February 2023.
The buyers paid ₹1,04,87,870, representing nearly 95% of the total sale consideration.
Possession Was Promised by June 30, 2025
Under the Agreement for Sale, the developer undertook to:
- Complete construction.
- Obtain the Occupancy Certificate (OC).
- Execute registration.
- Hand over possession.
The agreed completion date was March 31, 2025, with a contractual grace period extending up to June 30, 2025.
Despite the expiry of this deadline, the project remained incomplete.
Project Was Still Incomplete
The homebuyers informed TG RERA that several promised amenities had not been completed, including:
- Clubhouse
- Gymnasium
- Children’s play area
- Landscaped gardens
- Internal roads
More importantly, the project had not received the Occupancy Certificate, making legal possession and registration impossible.
The buyers also alleged that repeated requests seeking a definite completion schedule went unanswered.
Buyers Exercised Their Right to Withdraw
Initially, in July 2025, the purchasers demanded interest for delayed possession.
When the delay continued, they formally exercised their statutory right under Section 18(1) of the RERA Act in September 2025, seeking:
- Refund of the entire amount paid.
- Statutory interest.
According to the complaint, the developer orally stated that cancellation would be allowed only after deducting:
- Booking amount
- GST
- Other miscellaneous charges
The builder also refused to pay any interest.
Builder Failed to Contest the Proceedings
TG RERA observed that the developer appeared only during one hearing and thereafter remained absent despite several opportunities.
No written reply or defence was filed.
Accordingly, the Authority proceeded ex parte and decided the matter based on the documents and evidence submitted by the complainants.
Section 18 Gives Homebuyers an Absolute Right to Refund
Referring to Section 18(1) of the Real Estate (Regulation and Development) Act, 2016, TG RERA held that once:
- The promoter fails to deliver possession within the agreed timeline; and
- The allottee decides to withdraw,
the buyer becomes legally entitled to:
- Full refund of the amount paid
- Interest from the dates of payment until actual refund
The Authority reiterated that these statutory rights cannot be curtailed by unilateral conditions imposed by the developer.
Builder Cannot Deduct Booking Amount or GST
One of the most significant findings of the Authority was that:
A defaulting promoter cannot deduct booking charges, GST or any arbitrary amount while processing the refund.
TG RERA observed that permitting such deductions would defeat the very objective of the RERA Act, which was enacted to protect homebuyers from unfair practices.
The Authority made it clear that a developer who has failed to fulfil contractual obligations cannot financially penalise buyers for exercising their statutory rights.
TG RERA’s Final Directions
TG RERA directed Sukhii LLP, represented by its authorised partner Srinivasulu Kandey, to:
Refund Amount
₹1,04,87,870
Interest
10.70% per annum
Interest Calculation
Interest shall be calculated from the respective dates of each payment made by the homebuyers until the actual date of refund.
Time for Compliance
The refund must be paid within 45 days from receipt of the order.
Warning of Penal Action
The Authority also warned that failure to comply with its directions would attract proceedings under Section 63 of the RERA Act, which empowers the Authority to impose penalties for non-compliance with its orders.
Compensation Can Be Claimed Separately
While granting the refund, TG RERA clarified that claims relating to:
- Mental agony
- Financial hardship
- Litigation expenses
are to be decided by the Adjudicating Officer under Section 71 of the RERA Act.
The Authority granted liberty to the complainants to pursue those claims separately before the competent forum.
Significance of the Order
The ruling is significant because it establishes several important legal principles:
Full Refund Means Full Refund
Developers cannot deduct:
- Booking amount
- GST
- Administrative charges
- Cancellation charges
- Any other arbitrary deductions
when buyers withdraw because of the builder’s delay.
Occupancy Certificate Remains Crucial
Without obtaining the Occupancy Certificate, possession cannot be treated as legally complete.
Section 18 Protects Homebuyers
The decision reinforces that buyers have a statutory right to exit delayed projects and recover their investment with interest.
Developers Must Honour Timelines
Failure to complete projects within the agreed schedule can result in refund orders, statutory interest, and further penalties under the RERA Act.
Conclusion
The TG RERA order against Sukhii LLP is another important milestone in strengthening homebuyer protection under the RERA Act. By ruling that builders cannot deduct booking amounts, GST, or arbitrary charges after failing to deliver possession on time, the Authority has reinforced the principle that defaulting promoters cannot shift the financial burden onto purchasers.
The decision provides much-needed clarity on refund rights and serves as a reminder that compliance with contractual timelines and statutory obligations remains the cornerstone of the RERA framework.
