The Telangana Real Estate Regulatory Authority (TGRERA) has directed a developer to refund ₹14.17 lakh paid by homebuyer Lily Sahu, along with applicable interest, after finding that the project had remained stalled and the promoter had failed to demonstrate a credible path towards completion. According to reports from Economic Times, the estimated interest in the case was around ₹6.4 lakh up to August 24, 2026. The order offers a practical example of how the Real Estate (Regulation and Development) Act, 2016 (RERA) provides important safeguards for homebuyers when developers fail to deliver promised properties. The case demonstrates that the distinction between a delayed project and an abandoned project matters significantly for the remedy available to buyers.
Sahu had signed an agreement for sale with the developer on June 21, 2022 and paid ₹14.17 lakh towards a 3BHK flat priced at ₹56.7 lakh. The 1,575 sq ft flat was to be delivered within 36 months from the date of obtaining the required building permission from the Hyderabad Metropolitan Development Authority. However, according to the TGRERA order, the promoter neither obtained the necessary statutory approvals nor commenced meaningful construction. The buyer also received no response from the developer, with the authority noting that several other homebuyers had already approached it against the promoter. As reported by Economic Times, the project had been stalled for several years and the promoter had not established any genuine intent or credible plan to resume construction.
Section 18(1)(a) of RERA allows an allottee to withdraw from a project and seek a refund of the amount paid, along with prescribed interest and compensation where applicable, if the promoter fails to complete the project or is unable to give possession in accordance with the agreement for sale. The authority would generally examine the possession or completion date mentioned in the agreement, the extent and duration of the delay, the actual construction status, statutory approvals and the project's RERA registration. The promoter's conduct is also relevant, including whether construction has stopped, whether the project has effectively been abandoned, and whether the developer has been declared a defaulter. In this case, the reported findings on the promoter's default, the project's revoked registration and the absence of construction supported the decision to grant an exit rather than require the homebuyer to continue waiting.
The interest payable under Section 18 is calculated according to the rate prescribed under the relevant state's RERA rules. In this Telangana case, the authority directed payment of interest under Rule 15 of the Telangana RERA Rules, 2017, with the prescribed rate linked to State Bank of India's Marginal Cost of Lending Rate (MCLR), with an additional two percentage points. The interest is calculated from the respective dates on which the buyer made payments until the refund is fully realised. As reported by Economic Times, the practical lesson from the Telangana case is that buyers should preserve purchase agreements, payment records, communications with developers and evidence showing the current status of projects to support their claims. The amount would continue to depend on when the refund is actually realised, with the figure being an estimate rather than a fixed final amount.
Getting a favourable RERA order does not necessarily mean the buyer will receive the money immediately. If the promoter fails to comply, the buyer may have to pursue execution and recovery proceedings. According to Economic Times, a homebuyer has a statutory right to seek execution of the order under Sections 40(1) and 40(2) of RERA, with amounts payable towards refund, interest or penalties recoverable through prescribed mechanisms, including as arrears of land revenue. The authority's reasoning in this case treated the circumstances as more serious than an ordinary construction delay, with the promoter previously declared a defaulter under RERA and the project registration revoked. Failure to comply with a refund order can attract a continuing penalty for every day that the default persists, with the penalty potentially extending up to five percent of the estimated cost of the real estate project as determined by the authority.
