Hyderabad: The Telangana State Consumer Commission has ruled that homebuyers have the right to seek a refund with interest and compensation from a builder if a pre-launch agreement fails.
The commission observed that a builder cannot escape liability merely by offering to pay rent when construction has not even begun, and the villa is not handed over within the agreed timeline.
The commission stated that if the builder is unable to complete construction and deliver the property within the stipulated period, buyers are entitled to recover the amount paid along with applicable interest.
Commission’s order
In its order, the commission directed SARK (SAARC) Projects India Private Limited to refund Rs 1.08 crore paid by the complainants with 12 percent interest. It also ordered the company to pay Rs 3 lakh as compensation and Rs 15,000 towards litigation costs for violating the pre-launch agreement without even commencing construction work.
The dispute pertains to a villa project named “SARK Prime North Meadows-2” spread across seven acres at Mokila in Shankarpally mandal of Rangareddy district. Hyderabad residents Koka Srikrishnapatrulu and his wife had booked a villa under the project’s pre-launch offer.
Case details
In 2020, the couple agreed to purchase a 2,600-square-foot villa built on 220 square yards for Rs 1.08 crore. While the agreement was formally executed in March 2021, the final instalment was paid in 2022.
According to the agreement, the builder was required to complete the construction and hand over the villa by September 2024, including an additional six-month grace period beyond the original 36-month timeline.
The builder had also agreed to pay market-rate rent in case of delay. However, the complainants approached the Consumer Commission after alleging that construction work had not even started, and the builder failed to refund the money.
A bench comprising Commission President Justice Dr G Radha Rani and members T Meena Ramanathan and TRS Rajesri heard the matter and delivered the verdict.
The commission noted that even after the promised deadline had expired, the builder failed to provide evidence regarding additional land acquisition or approvals from HMDA. It further observed that one-sided agreements forcing consumers to wait indefinitely are not legally sustainable.
Accordingly, the commission ordered the builder to refund the entire amount with 12 percent interest and pay compensation to the complainants.
