Telangana RERA: extra floors cannot shrink a buyer's agreed land share, PBSR told to pay difference

Rules and rates as of 12 October 2026.

What the authority decided

The Telangana Real Estate Regulatory Authority (TG-RERA) has held that a developer who added floors to a Gachibowli project cannot use that revision to shrink the share of land it promised a buyer. The order, dated 5 October 2026, was passed in Complaint No. 254 of 2025, Cherukuri Hema and Cherukuri Vijaya Chandar v. PBSR Developers Pvt. Ltd., by members Laxmi Narayana Jannu and K. Srinivasa Rao.

The buyers booked flat B-1109 in the developer's Smondo Gachibowli project in October 2016 and signed an agreement for sale on 9 January 2017 for ₹72,42,000. Possession was promised by 31 December 2017, with six months' grace to 30 June 2018. The flat had not been handed over, and the order records that the occupancy certificate (OC) had not been obtained.

The land-share dispute

Clause 2 of the agreement fixed the buyers' undivided share of land (UDS) at 0.243%, which the order equates to 431.15 sq ft, or 40.05 sq m. The project was originally sanctioned with 16 upper floors. In 2017 the developer obtained approval for G+20 and told the buyers by email on 11 November 2017. The buyers argued this reduced their share of the land.

The developer relied on Clauses 5 and 12 of the agreement, which reserved its right to use the full development potential and build extra floors. The authority read those clauses differently. In its words, they do not, "either expressly or by necessary implication, authorise alteration, dilution, or variation of the specific UDS". It said the UDS referable to 16 floors "as originally contracted must be recognised", and called a unilateral reduction "unjust enrichment".

What UDS is, and why extra floors dilute it

When you buy a flat, you own the apartment plus a fraction of the land the building stands on, held jointly with every other owner. That fraction is your UDS. It matters most later, in a redevelopment or a sale of the whole plot, where land share usually drives each owner's entitlement.

The plot does not grow when floors are added, so dividing it among more flats shrinks each slice. That is the dilution the buyers complained about.

A worked example (illustrative)

The order does not state the reduced share or how the difference should be valued. The figures below are our own assumptions to show the arithmetic. We assume flats are spread evenly over the floors, so moving from 16 to 20 upper floors cuts each share by the ratio 16/20, and we assume a land value of ₹1,50,000 per sq m. Neither number comes from the order.

• Reduced share = 0.243% × 16 ÷ 20 = 0.1944%
• Reduced area = 40.05 sq m × 16 ÷ 20 = 32.04 sq m
• Land lost = 40.05 − 32.04 = 8.01 sq m
• Value of land lost = 8.01 × ₹1,50,000 = ₹12,01,500

Interest works the same way. The order applies 10.70% a year (SBI MCLR of 8.70% plus 2%) on amounts paid, from 30 June 2018. On an assumed ₹65,00,000 paid and an assumed handover on 31 December 2026, the period is 3,106 days. Excluding the three Covid windows the order lists (15 March 2020 to 14 September 2021, 549 days) leaves 2,557 days. Treating it as simple interest, which the order does not specify: ₹65,00,000 × 10.70% × 2,557 ÷ 365 = ₹48,72,311.

Item	As agreed	After assumed dilution
UDS (%)	0.243%	0.1944%
UDS (sq m)	40.05	32.04
Land value at ₹1,50,000/sq m	₹60,07,500	₹48,06,000
Difference	-	₹12,01,500
Delay interest, 10.70% on ₹65 lakh, 2,557 days	-	₹48,72,311

What the developer must do

• On receiving the balance due under the agreement's payment schedule, hand over the flat with the agreed amenities and a certified copy of the OC, and take steps to resolve a pending dispute with the Rolling Hills House Owners Association.
• Execute and register the sale deed within 60 days of possession or the OC, whichever is later.
• Pay the buyers the difference between the UDS promised and the UDS actually provided. No figure or deadline is set.
• Pay interest at 10.70% a year under Rule 15 of the Telangana RERA Rules, 2017 (SBI's highest MCLR plus 2%), from 30 June 2018 until actual handover, excluding the Covid periods.

The authority also held the developer to the agreed ₹72,42,000, said it cannot demand an indemnity bond before possession or registration, and found that funds collected from buyers were diverted to its holding company, in breach of section 4(2)(l)(D) of the RERA Act, which requires 70% of buyers' money to go into a separate account. It found breaches of sections 11(4)(a) and 17 as well. The buyers' claim for mental agony was left to the Adjudicating Officer under section 71. Non-compliance can attract a daily penalty under section 63, up to 5% of the project's estimated cost.

What this order does and does not settle

This is the authority's decision on one agreement, with an express UDS clause, in one project. It does not lay down a general rule for every project that adds floors, and it does not decide whether the revised plan itself was valid. Under section 44 of the RERA Act, an aggrieved party can appeal to the Telangana Real Estate Appellate Tribunal within 60 days of receiving a copy of the order.