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Builder Cannot Unilaterally Cancel Allotment Under RERA: TGRERA Relief to 14 Homebuyers in Hyderabad

By Advocate Sainath Panjagari, SN Law Chambers | 2 November 2026 | RERA & Homebuyer Rights

Can a promoter cancel a flat allotment four years after receiving full or substantial payment and executing an agreement for sale, simply because homebuyers approach the Authority? Telangana Real Estate Regulatory Authority (TGRERA) answered this in the negative on 24 January 2025. In Complaint No. 32 of 2024 and 13 connected complaints, the Authority held M/s Green Metro Infratech Projects Pvt. Ltd. and the real estate agent jointly and severally liable to register the flats and hand over possession in the Tulasi Bhagyanagar project at Dundigal, Hyderabad. Penalties of ₹8,57,697 each were imposed. The order reinforces that Section 11(5) of the Real Estate (Regulation and Development) Act, 2016, permits cancellation only in terms of the agreement for sale.

What Happened in the Tulasi Bhagyanagar Case?

Fourteen homebuyers entered into agreements for sale between October 2020 and April 2021 for flats in the Tulasi Bhagyanagar residential project at Dundigal, Hyderabad. The project is registered with TGRERA under Registration No. P02200002031 dated 24 August 2020, with validity up to 8 November 2025. The promoter is M/s Green Metro Infratech Projects Pvt. Ltd. (Respondent No. 1). Most transactions were facilitated through M/s Bhuvanteza Infra Projects Pvt. Ltd. (Respondent No. 2).

Buyers paid substantial or full consideration (individual amounts ranging from about ₹13 lakh to ₹31 lakh; Economic Times reported an aggregate of approximately ₹3.37 crore) by cheque and cash. The agreements promised registration within 10 days. Nearly four years passed without registration or possession. Complaints were filed in March 2024 under Section 31 of the RERA Act read with Rule 34(1) of the Telangana Real Estate (Regulation and Development) Rules, 2017.

After the complaints, the promoter cancelled the allotments and refunded amounts (March–May 2024). The agent also refunded certain sums. The promoter claimed no privity of contract and no agreement with the agent for sale or marketing. The agent did not appear despite notice. An interim order restrained the promoter from alienating the flats or creating third-party rights.

Section 11(5) RERA: Cancellation Only in Terms of the Agreement

Section 11(5) of the Real Estate (Regulation and Development) Act, 2016 provides:

“The promoter may cancel the allotment only in terms of the agreement for sale: Provided that the allottee may approach the Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, unilateral and without any sufficient cause.”

In the agreements of sale dated around 8 October 2020 and thereafter, the only cancellation clause available to the promoter related to non-payment of consideration after due notice and opportunity. The homebuyers had complied with payment terms, as evidenced by receipts and cheque numbers. TGRERA examined Clauses 9.3 and 7.5 of the agreements (and corresponding RERA model provisions) and held that cancellation was not authorised.

The Authority noted that the cancellations and refunds occurred only after the complaints were filed. This timing “casts serious doubt on the bona fides of the builder’s actions” and indicated an attempt to evade liability. Referring to the Supreme Court decision in CITI Bank N.A. v. Standard Chartered Bank, (2004) 1 SCC 12, the Authority observed that novation, rescission or alteration of a contract cannot be done unilaterally; it requires mutual agreement.

Consequently, the unilateral cancellations violated Section 11(5) read with Section 61 of the Act.

Liability of the Real Estate Agent Under Sections 9 and 10

Section 2(zm) defines a “real estate agent” to include any person who negotiates or acts on behalf of another in a real estate transaction, including property dealers, brokers and middlemen who introduce prospective buyers. Sections 9(1) and 9(2) prohibit any person from facilitating the sale or purchase of units in a registered project without registration as a real estate agent. Section 10(c)(i)(B) prohibits unfair trade practices, including misrepresentation that the person has approval or affiliation which he does not possess.

TGRERA found that Respondent No. 2 executed agreements on behalf of the promoter, offered units for sale, and portrayed itself (or the promoter) in a manner that misled buyers into believing it was the owner or promoter. There was no valid RERA registration for the agent and no formal marketing agreement. The conduct amounted to unfair trade practice. The agent was therefore liable under Sections 9(1), 9(2) and 10(c)(i)(B) read with Section 62.

Directions and Penalties Imposed by TGRERA

By order dated 24 January 2025 (Coram: Sri K. Srinivasa Rao and Sri Laxmi Narayana Jannu, Members), the Authority issued the following directions under Section 37:

• Respondent No. 1 (Green Metro Infratech Projects Pvt. Ltd.) to pay a penalty of ₹8,57,697 for violation of Section 11(5) read with Section 61, within 30 days to the TGRERA Fund.
• Respondent No. 2 (Bhuvanteza Infra Projects Pvt. Ltd.) to pay a penalty of ₹8,57,697 for violations of Sections 9(1), 9(2) and 10(c)(i)(B) read with Section 62, within 30 days to the TGRERA Fund.
• Complainants who had made partial payments to clear the outstanding consideration (with interest if applicable) within 30 days.
• Both respondents, jointly and severally, to register the respective flats in the names of the homebuyers and hand over possession within 60 days after receipt of full consideration, in accordance with Section 17.
• Non-compliance attracts further penalties under Sections 63 and 65.

The Authority emphasised that allottees’ rights under Sections 19(3) and 19(11) to possession and participation in the conveyance cannot be defeated by disputes between the promoter and the agent. Section 17 obliges the promoter to execute the registered conveyance deed of the apartment along with the undivided share in common areas after the occupancy certificate, and to hand over necessary documents.

Why This Order Matters for Homebuyers in Hyderabad and Telangana

Projects in Dundigal, Medchal-Malkajgiri, Qutbullapur and surrounding areas of Hyderabad frequently involve intermediaries. This order clarifies that:

• Payment of substantial consideration and execution of an agreement create enforceable rights that cannot be extinguished by a post-complaint cancellation letter.
• Unregistered agents who actively market and document sales remain accountable under RERA.
• Joint and several liability protects buyers when the promoter and agent point fingers at each other.
• Interim protection against third-party alienation is available while the complaint is pending.

Buyers facing delayed registration, unilateral cancellation notices or refund offers after filing a complaint can approach TGRERA under Section 31. Parallel remedies under the Consumer Protection Act or civil courts for specific performance remain available, but RERA provides a specialised, time-bound forum.

Procedure and Practical Steps for Affected Homebuyers

1. Preserve the agreement for sale, payment receipts, cheque copies, correspondence and any cancellation/refund letters.
2. File a complaint under Section 31 before TGRERA (online portal or physical) seeking registration, possession, interest for delay, and setting aside of the cancellation. Seek interim restraint on alienation under Section 36.
3. If the agent is involved, specifically implead the agent and plead violations of Sections 9 and 10.
4. For partial payments, be prepared to tender the balance within the time directed so that the registration direction can be enforced.
5. Monitor compliance; non-compliance can be pursued under Section 63 (penalty) and execution proceedings.

Limitation is not strictly prescribed under RERA for such complaints in the same manner as civil suits, but delay weakens the equity and practical recovery. Act promptly after a cancellation notice or prolonged default.

Common Mistakes to Avoid

• Accepting a refund without recording that it is under protest and without reserving the right to seek specific performance or interest.
• Failing to implead the agent when the agent handled the documentation and collections.
• Relying solely on oral assurances after the agreement date; the written agreement and payment proof are decisive under Section 11(5).
• Ignoring the project’s RERA registration status and validity period.

Frequently Asked Questions

Can a builder cancel my flat allotment after I have paid the full amount and signed the agreement?

No. Under Section 11(5) of the RERA Act, cancellation is permitted only in terms of the agreement for sale. If the only ground in the agreement is non-payment and you have paid, unilateral cancellation is invalid. You may approach the State RERA Authority for relief.

What is the remedy if the builder cancels the allotment after I file a RERA complaint?

The Authority can set aside the cancellation, direct registration and possession, and impose penalties. In the Green Metro case, TGRERA treated the post-complaint cancellation and refund as lacking bona fides and held both the promoter and agent jointly and severally liable.

Is an unregistered real estate agent liable under RERA?

Yes. Sections 9 and 10 require registration and prohibit unfair trade practices. An agent who introduces buyers, executes agreements or misrepresents itself as the owner/promoter can be penalised under Section 62 and held jointly liable for the buyer’s relief.

What documents do I need to file a complaint before TGRERA?

Agreement for sale, payment receipts and bank statements, project RERA registration number, correspondence, cancellation letter (if any), and identity/address proof. The complaint is filed under Section 31 read with the Telangana Rules.

Can I claim interest for the delay in addition to registration?

Yes. Section 18 entitles an allottee to interest for the period of delay if possession is not delivered as per the agreement, or a full refund with interest if the allottee withdraws. The TGRERA order focused on registration and possession; interest claims can be pursued in the same or a connected proceeding.

Does the promoter’s claim of “no agreement with the agent” defeat my rights?

No. TGRERA held that disputes between the promoter and the agent cannot prejudice the allottee who has paid and signed an agreement. Joint and several liability was imposed for registration under Section 17.

Where is the Tulasi Bhagyanagar project located and what is its RERA number?

The project is at Dundigal, Hyderabad. The relevant registration is P02200002031 (registered 24 August 2020, validity up to 8 November 2025). Buyers should verify the current status on the TGRERA portal.

Sources / Legal Authorities

• Real Estate (Regulation and Development) Act, 2016 — Sections 2(zm), 9, 10, 11(5), 17, 19, 31, 37, 61, 62, 63, 65.
• Telangana Real Estate (Regulation and Development) Rules, 2017 — Rule 34(1).
• TGRERA order dated 24 January 2025 in Complaint No. 32 of 2024 and connected complaints (Coram: Sri K. Srinivasa Rao and Sri Laxmi Narayana Jannu, Members) — Green Metro Infratech Projects Pvt. Ltd. and Bhuvanteza Infra Projects Pvt. Ltd.; project Tulasi Bhagyanagar, Dundigal, RERA No. P02200002031.
• Interim order dated 14 August 2024 in Complaint No. 32 of 2024 restraining alienation.
• CITI Bank N.A. v. Standard Chartered Bank, (2004) 1 SCC 12.
• Economic Times report (Neelanjit Das, 15 March 2025) and LiveLaw report (3 February 2025) summarising the order.
• Deccan Chronicle report (25 January 2025).

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