Telangana RERA bars realtor from selling units in delayed Hyderabad project; Buyers’ body told to submit completion plan

The Telangana Real Estate Regulatory Authority (TG RERA) has restrained the real estate developer Jayathri Infrastructures from advertising, marketing, booking, selling, or offering units for sale in the Jaya Diamond project in Hyderabad, which was delayed by almost three years, with ‘immediate effect’.

Considering a request from the residents' association, TG RERA has also asked it to submit a comprehensive plan detailing how the remaining work will be completed. The interim order said this plan must outline proposed funding arrangements, a clear project timeline, and the technical and managerial resources that will be deployed.

"The project Jaya Diamond is hereby placed in abeyance with immediate effect. The developer is directed to immediately cease all activities relating to advertising, marketing, booking, selling, or offering for sale, and inviting persons to purchase any apartment in the said project until further orders," the interim order dated April 9 said.

The interim order instructed the secretary of TG RERA is directed to take appropriate steps regarding the suspension of the project's RERA registration number and freeze the project's designated bank account.

The interim order is effective until the final order is issued. The next hearing is scheduled for April 25, 2025.

Also Read: Karnataka RERA: Projects that applied for OC before RERA came into effect need not be registered

The case

Homebuyers of the project had approached TGRERA seeking intervention after the developer failed to execute construction despite repeated reminders.

The regulatory authority observed that as per the association's submission to TG RERA, construction has seen little to no progress since February 2022, even though the project was initially slated for completion and handover by December that year.

"The managing director, Srinivas Kakarla, has willfully absconded from his duties and misappropriated the consideration amounts received from the sale or agreements relating to 80% of the flats in the project. Furthermore, he has not provided any compensation to the flat owners, as mentioned in the sale deed. Despite multiple attempts to reach Srinivas Kakarla, he remains untraceable," the interim order noted.

TG RERA findings

The authority said that the association of allottees comprising more than 60 members collectively submitted that the project Jaya Diamond had suffered inordinate delays, with negligible physical progress on the ground.

To secure the huge investments made by the members of the Complainant Association, all the allottees have together formed the present Association, namely, "Jaya Diamond Welfare Association" with Society Registration Number: 23 of 2024 dated 09.01.2024 and after due deliberations, decided that JayaDiamond Welfare Association shall take over the project for completion of the project in the interest of all the allottees, the interim order said.

"Any balance sale consideration that is due and payable shall be deposited into the bank account of the association to complete the project," the interim order said.

Considering the Association's prayer, this Authority directed them to submit a comprehensive roadmap and execution plan indicating how the remaining development of the project will be undertaken, including funding mechanisms, timelines, and proposed technical and administrative arrangements.

The Association has further sought interim relief by restraining the Respondent/promoter from selling or otherwise alienating any unsold units in the project. Additionally, they have requested this Authority to direct the Respondent to immediately hand over all project-related documents, approvals, plans, and records to the Association to facilitate the project’s takeover and smooth execution, the interim order noted.

"They sought the intervention of the authority under Section 8 of the Real Estate (Regulation and Development) Act, 2016, to revoke the project's registration and initiate steps for its completion through an alternative mechanism," it said.

Thus, the authority passed an interim order to suspend the project registration and said, "Developer is hereby restrained from alienating, transferring, or encumbering any units or the underlying land of the project Jaya Diamond."

Also Read: Receipt of OC alone does not mark project completion: Bengaluru homebuyers urge KRERA to adopt project closure policy

Developer's take

The Authority further noted that the developer has admitted that the project was delayed and blamed it on several issues, including financial problems, trouble getting more funding, legal hurdles, and the original contractor pulling out.

"The developer said they had already spent over Rs. 1.5 crore and asked for more time—either to refund the money or finish the project. They also mentioned that ongoing criminal cases against them had made it difficult to bring in new developers. Despite this, the developer said they plan to complete the construction themselves and promised the authority that they would not misuse any permissions or orders from local authorities," TG RERA noted.

TG RERA said that although the developer claimed they were trying to bring in new partners to help finish the project, they did not provide any proof or documents to support these claims. After reviewing all the information, the authority said it found no reliable sign that the developer could involve a responsible and qualified partner to complete the work.

HT.com has sent a list of queries to KRERA and the real estate developers. If they respond, the copy will be updated.