1. Promoter appealed against regulatory authority order imposing penalties for failure to disclose pending civil litigation regarding project land during real estate project registration under the Act. (Para 1 , 2 )
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2026 Supreme(Telangana) 1129
TELANGANA REAL ESTATE APPELLATE TRIBUNAL: HYDERABAD
A. Santhosh Reddy, Chairperson, P. Pradeep Kumar Reddy, Judicial Member, Vemula Sreekar, Administrative Member
M/s. Gangothri Infraedge Private Limited – Appellant
Versus
Telangana Real Estate Regulatory Authority, Represented by its Secretary/Authorised Officer - Respondent
T.A.No. 81 of 2026
Decided On : 29-10-2026
Advocates Appeared :
For the Appellant : Mr. Hari Kumar
Important Points
Non-disclosure of a pending civil suit does not violate statutory disclosure requirements if the promoter is not a party to the litigation and the specific project site is not proven to be part of the disputed property.
Subject
Real Estate Law - Regulatory Compliance
Act Referred
Headnote
(A) Real Estate (Regulation and Development) Act, 2016 - Sections 4 and 60 - Telangana State Real Estate (Regulation and Development) Rules, 2017 - Rule 3(1)(e) - Disclosure of pending litigation - Penalty for non-disclosure - Statutory declaration under Section 4(2)(l)(B) mandates disclosure of all encumbrances, including pending litigation affecting the land - However, non-disclosure of a civil suit, to which the promoter is not a party and where it is not established that the specific project site is part of the disputed schedule property, cannot be held as a violation of the statutory declaration. (Paras 10, 12)
(B) Jurisdiction of Regulatory Authority - The limited inquiry of the Regulatory Authority is to determine whether a complete and truthful disclosure was made at the time of registration; it does not extend to the adjudication of title disputes. (Para 11)
Facts of the case:
A promoter registered a residential project by submitting an affidavit affirming that the land was free from encumbrances and no litigation was pending. A third party filed a complaint alleging that the project land was subject to a pending civil suit for declaration of title and partition. Based on these allegations, the Regulatory Authority imposed a penalty for violation of disclosure requirements under the Act and Rules and directed the promoter to update the litigation details on the portal.
Findings of Court:
The court found that there was no documentary evidence to prove that the specific project site was part of the disputed area mentioned in the pending civil suit. Additionally, the promoter was not a party to the said litigation. The findings of the Regulatory Authority were based on an improper appreciation of the facts and documents.
Issues: Whether the non-disclosure of a pending civil suit, to which the promoter is not a party and the specific project site is not proven to be the disputed property, constitutes a violation of the statutory declaration under Section 4(2)(l)(B) of the Act.
Ratio Decidendi: The court ruled that when a promoter is not a party to a pending civil suit and there is no evidence to show that the project site is part of the disputed property, the non-disclosure of such proceedings does not satisfy the criteria for a violation of the statutory declaration requirements under the Act.
Result: Appeal allowed and the impugned order is set aside.
(B) Jurisdiction of Regulatory Authority - The limited inquiry of the Regulatory Authority is to determine whether a complete and truthful disclosure was made at the time of registration; it does not extend to the adjudication of title disputes. (Para 11)
Facts of the case:
A promoter registered a residential project by submitting an affidavit affirming that the land was free from encumbrances and no litigation was pending. A third party filed a complaint alleging that the project land was subject to a pending civil suit for declaration of title and partition. Based on these allegations, the Regulatory Authority imposed a penalty for violation of disclosure requirements under the Act and Rules and directed the promoter to update the litigation details on the portal.
Findings of Court:
The court found that there was no documentary evidence to prove that the specific project site was part of the disputed area mentioned in the pending civil suit. Additionally, the promoter was not a party to the said litigation. The findings of the Regulatory Authority were based on an improper appreciation of the facts and documents.
Issues: Whether the non-disclosure of a pending civil suit, to which the promoter is not a party and the specific project site is not proven to be the disputed property, constitutes a violation of the statutory declaration under Section 4(2)(l)(B) of the Act.
Ratio Decidendi: The court ruled that when a promoter is not a party to a pending civil suit and there is no evidence to show that the project site is part of the disputed property, the non-disclosure of such proceedings does not satisfy the criteria for a violation of the statutory declaration requirements under the Act.
Result: Appeal allowed and the impugned order is set aside.
Legal Category Hierarchy
Table of Contents
2. Promoter contended absence of deliberate suppression and that land ownership disputes were pending before civil courts, while complainant alleged suppression of material facts affecting property title. (Para 3 , 8 )
3. The court observed that registration requirements demand disclosure of litigation, but mere pendency of civil suits does not automatically confirm bad faith or non-disclosure if the project site is distinct. (Para 9 , 11 , 12 )
4. Regulatory authorities cannot penalize promoters for non-disclosure under the Act based on pending civil litigation when the project site's specific inclusion in disputed land remains unproven. (Para 12 , 13 )
5. Appeal allowed; the impugned order imposing a penalty and directions for disclosure on the promoter is set aside. (Para 14 )
6. Does the regulatory authority have jurisdiction to adjudicate title disputes during project registration proceedings?
No, the regulatory authority lacks jurisdiction to adjudicate title disputes; its limited inquiry is confined to determining whether the promoter made a complete and truthful disclosure of encumbrances as mandated by the Act. (Para 11 )
7. Is the non-disclosure of pending civil litigation regarding the project land a per se violation of Section 4 of the Act?
Not necessarily; if a promoter is not a party to the pending suit and there is no documentary evidence definitively establishing that the project site constitutes a portion of the disputed property, the failure to disclose does not constitute a statutory violation. (Para 12 )
ORDER :
A. Santhosh Reddy, J.
This appeal is preferred by the appellant/promoter against the Order, dated 22.06.2026, passed by the Telangana State Real Estate Regulatory Authority, Hyderabad, (hereinafter referred to as ‘the Regulatory Authority’), in Suo Motu Case No. 1925 of 2025, whereby the Regulatory Authority, in exercise of the powers conferred under Sections 35, 37, 38 and 60 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as ‘the Act’), issued the following directions:
(a) “The appellant/promoter, represented by Adama Srinivas Reddy, was directed to pay a Penalty of Rs.7,98,000/-, under Section 60 of the Act, for violation of Section 4 of the Act read with Rule 3(1)(e) of the Telangana State Real Estate (Regulation and Development) Rules, 2017 (for brevity ‘the Rules’) i.e., for non-disclosure of pending civil litigation affecting the project land at the time of registration of the Project ‘Prithvi Towers’ bearing Registration No.P02400009392, within 30 days in favour of TGRERA Fund through Demand Draft or Online payment to A/c No.50100595798191, HDFC Bank, IFSC Code: HDFC0007036.
(b) The appellant/promoter was further directed to update and disclose the details of the pending civil litigation in O.S.No.935 of 2019, and any other litigation, if any, pertaining to the project land on the TG RERA portal and the project webpage, if not already updated, and ensure strict compliance with the disclosure requirements prescribed under the Act and the Rules made thereunder.
(c) The appellant/promoter was also informed that failure to comply with the above directions shall attract further penal consequences under Section 63 of the Act.”
2. The learned Regulatory Authority has initiated the present proceedings suo-motu, in exercise of powers conferred under Section 35(1) of the Act, based on a complaint representation, dated 29.05.2025, submitted by one B.Manoj Kumar (complainant) alleging that the project “Prithvi Towers”, promoted by M/s Gangothri Builders (appellant herein), was situated on the land forming part of Survey Nos. 50 and 51 at Neknampur Village, Gandipet Mandal, Ranga Reddy District, which is the subject matter of a pending civil dispute. It has been alleged that the appellant/promoter had obtained registration of the project by suppressing the existence of civil litigation in O.S.No. 935 of 2019 pending on the file of the Principal District Judge, Ranga Reddy District, and had proceeded to advertise and sell flats without disclosing the said litigation to the Regulatory Authority or to the prospective purchasers. It was further stated that land admeasuring Ac. 9.02 guntas in Survey Nos. 40, 41, 50 and 51 of Neknampur Village was originally purchased in the year 1964 by late Venkat Ram in the name of his son Mohan Lal. Upon the demise of Mohan Lal, disputes arose among the legal heirs, and a family arrangement/partition deed, dated 07.05.1995, was stated to have been executed, under which an extent of Ac.1.00 guntas was allotted to the complainant’s mother Smt. B. Laxmi Bai. The complainant claims to be in possession and enjoyment of the said extent along with his family members. It was further stated that disputes subsequently arose inter se the family members regarding the validity and implementation of the said partition, which culminated in the institution of civil proceedings. The complainant and his family members filed a suit for declaration and perpetual injunction, vide O.S.No. 935 of 2019 on the file of the Principal District Judge, Ranga Reddy District, asserting their rights over an extent of Ac.1.00 guntas in Survey Nos. 50 and 51 and the same is pending adjudication. The complainant has alleged that during the pendency of the aforesaid civil suit, B. Prithviraj, who is one of the family members and claims rights over the property, entered into a Development Agreement-cum-Irrevocable General Power of Attorney (DAGPA), vide Document No. 14871 of 2021, dated 08.11.2021, w
