1. Maintainability of RERA complaint for pre-registration unregistered agreement vs. jurisdiction of civil court for specific performance. (Para 9 , 10 , 11 )
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2026 Supreme(Online)(RERA) 884
REAL ESTATE REGULATORY AUTHORITY
Santhosh Reddy, J
V.S.M.A. Hyderabad Propex Private Ltd. – Appellant
Versus
R.R. Ventures – Respondent
Complaint No. 695 of 2025
Important Points
Disputes arising from unregistered agreements of sale executed prior to the registration of a real estate project are not maintainable under RERA if the party is not an 'allottee' under Section 2(d), and such matters fall within the jurisdiction of Civil Courts.
Subject
Real Estate - Regulatory Authority
Act Referred
Headnote
(A) Real Estate (Regulation and Development) Act, 2016 - Sections 2(d), 2(zg), 31, 36 and 44(4) - Specific Relief Act, 1963 - Maintainability of complaint - Whether an unregistered agreement of sale executed prior to project registration confers the status of an 'allottee' - The Regulatory Authority restrained appellants from alienating plots based on an oral undertaking and an unregistered agreement - It was found that the agreement of sale dated 23.03.2017 was superseded by an agreement dated 21.06.2018 and expressly provided for specific performance suits in Civil Courts - RERA is intended to protect allottees in registered projects and is not a forum for adjudicating pre-registration land development disputes between landowners or consenting parties who are not allottees within the meaning of the Act - An interim order passed without considering the counter-arguments or assigning reasons violates the principles of natural justice. (Paras 18, 24, 26, 27)
Facts of the case:
The first respondent entered into an unregistered agreement of sale in 2017 with the second appellant for several plots. Subsequently, in 2018, a second agreement was executed involving the second respondent, where the first respondent agreed to give up rights under the 2017 agreement. After the second appellant changed its name to V.S.M.A. Hyderabad Propex Private Ltd., the first respondent filed a complaint before the Regulatory Authority alleging misrepresentation. The Regulatory Authority passed an interim order restraining the appellants from creating third-party rights in the project 'Asta Meadows'.
Findings of Court:
The court found that the first respondent does not qualify as an 'allottee' under Section 2(d) of the Act because the dispute arises from an unregistered commercial transaction and an agreement executed long prior to the registration of the project. Such disputes are exclusively within the domain of Civil Courts under the Specific Relief Act, 1963. Furthermore, the Regulatory Authority's order was vitiated by a lack of due process, as it relied on oral proceedings and ignored the filed counter-arguments.
Issues: Whether the impugned interim order dated 22.01.2026 passed by the Regulatory Authority is sustainable in law.
Ratio Decidendi: The court ruled that RERA cannot adjudicate contractual rights arising out of unregistered agreements executed prior to the registration of a project, as such matters fall under the jurisdiction of Civil Courts; additionally, quasi-judicial authorities must strictly adhere to the principles of natural justice.
Result: Appeal allowed.
Facts of the case:
The first respondent entered into an unregistered agreement of sale in 2017 with the second appellant for several plots. Subsequently, in 2018, a second agreement was executed involving the second respondent, where the first respondent agreed to give up rights under the 2017 agreement. After the second appellant changed its name to V.S.M.A. Hyderabad Propex Private Ltd., the first respondent filed a complaint before the Regulatory Authority alleging misrepresentation. The Regulatory Authority passed an interim order restraining the appellants from creating third-party rights in the project 'Asta Meadows'.
Findings of Court:
The court found that the first respondent does not qualify as an 'allottee' under Section 2(d) of the Act because the dispute arises from an unregistered commercial transaction and an agreement executed long prior to the registration of the project. Such disputes are exclusively within the domain of Civil Courts under the Specific Relief Act, 1963. Furthermore, the Regulatory Authority's order was vitiated by a lack of due process, as it relied on oral proceedings and ignored the filed counter-arguments.
Issues: Whether the impugned interim order dated 22.01.2026 passed by the Regulatory Authority is sustainable in law.
Ratio Decidendi: The court ruled that RERA cannot adjudicate contractual rights arising out of unregistered agreements executed prior to the registration of a project, as such matters fall under the jurisdiction of Civil Courts; additionally, quasi-judicial authorities must strictly adhere to the principles of natural justice.
Result: Appeal allowed.
Legal Category Hierarchy
-
real estate and property
-
real estate regulation and development act 2016
- jurisdiction of regulatory authority
- definition of allottee
- interim relief and injunctions
-
agreements of sale
- unregistered agreements
- specific performance
-
real estate regulation and development act 2016
-
practice and procedure
-
principles of natural justice
- audi alteram partem
- jurisdiction of civil courts
-
principles of natural justice
Table of Contents
ORDER:: (Per Hon'ble Sri Justice A. Santhosh Reddy)
This appeal is directed against the interim Order, dated 22.01.2026, passed by the Telangana State Real Estate Regulatory Authority (hereinafter referred to as ‘the Regulatory Authority), in Complaint No. 695 of 2025, whereby the Regulatory Authority restrained the appellants and 2"4 respondent herein from undertaking any booking, sale, alienation, advertisement, marketing or invitation to the public in respect of the subject plots of the real estate project ‘Asta Meadows’ till further orders.
2. The case of the 1% respondent/complainant, in brief, as per the complaint, is that the lands situated in Sy.Nos. 864, 865/P, 866, 867, 868, 869, 877/P, 878/P, 879, 880, 881/P and 882/P of Ameenpur village, Sangareddy District, are Inam lands, for which Occupancy Rights Certificates (ORCs) were granted by the competent authority. The 2nd appellant herein (M/s.VBHC Hyderabad Value Homes Private Limited) purchased the said lands from the prior agreement holder, M/s. Priority Homes Private Ltd. and the ORC holders during the years 2015-2017. The said Priority Homes Private Ltd. had already applied for layout approval before HMDA through proceedings No.200116/LO/Plg/HMDA/2015, dated 02.01.2017, for an extent of 69,524.47 sq.mtrs., covering Plot Nos.1- 275 admeasuring 39,003.53 sq-mtrs. (46,645.64 sq.yds.), for which HMDA demanded development charges. It is submitted that based a said proceedings, 24 appellant entered into an Agreement of Sale, dated 23.03.2017, with the 1st respondent/ Complainant for sale of the entire plotted extent of 39,003.53 sq.mtrs. (46,645.64 sq.yds.) in Plot Nos.1- 275 at the rate of Rs.15,000/- per sq.yd. Pursuant thereto, the 1st respondent/complainant paid a total amount of Rs.6,15,00,000/- to the 2nd appellant including Rs.1,00,00,000/- vide cheque, dated 22.02.2017, Rs.3,00,00,000/ - vide cheque, dated 23.03.2017, and Rs.1,00,00,000/ -in cash as recorded in the agreement, Rs.50,00,000/- vide cheque, dated 01.02.2018, Rs.40,00,000/- vide cheque dated 18.05.2018, and a further sum of Rs.25,00,000/- in cash. It is further submitted that after payment of development charges and completion of necessary requirements, and with the consent of Priority Homes Private Ltd., HMDA approved the draft layout in favour of the 2nd appellant through Permit No. 08/LO/Pl¢g/ HMDA/2018, dated 11.05.2018. However, due to financial constraints, the 2nd appellant could not undertake development as per the draft layout conditions and was, therefore, unable to comply with its obligations under the Agreement of Sale, dated 23.03.2017. Under such circumstances, 2nd appellant requested the 1st respondent/complainant to enter into an agreement with the 2nd respondent herein (M /s. Pride India Mansion Private Ltd). for sale of 39,789.84 sq.yds. out of 46,645.64 sq.yds., retaining 8,664.04 sq.yds. for the 1st respondent/complainant. Accordingly, 2"4 appellant and the 1% respondent/complainant executed an agreement, dated 21.06.2018, for sale of 39,789.84 sq.yds. in favour of the 2nd respondent herein (Pride India Mansion). As the 2nd respondent herein failed to comply with the terms of the said agreement, the agreement, dated 21.06.2018, stood cancelled and the 24 respondent herein no longer retained any rights in the subject land. It is further submitted that M/s BHEL filed W.P.No.18217 of 2011 challenging the ORC proceedings, and W.P.No.26350 of 2018 challenging the layout proceedings, and obtained interim orders. The ORC holder also filed W.P. No.25787 of 2011 against M/s BHEL alleging encroachment beyond the land acquisition award. In WP. No.26350 of 2018, the 1st respondent/complainant was impleaded as Respondent No.6, and all writ petitions were disposed of by common order, dated 19.06.2023, whereby the ORC was set aside only to the limited extent of Ac.0.06 gts in Sy.No.876 and Ac.1.00 gts in Sy.No.870 and remanded the said portion to the Joint Collector, Medak, for fresh consideration
