A Suit Next Door, Not on Your Land: When a Builder Must Disclose Litigation to RERA
On 29 October 2026, the Telangana REAT set aside TG-RERA findings that a builder hid a civil suit, holding disclosure under Section 4(2)(l)(B) depends on the existence of litigation affecting project land, not its strength, and that the suit here was not shown to cover the site. Lessons for Bengaluru buyers.
In 2008, a man filed a civil suit claiming 5,810.406 square yards at Waddepally village near Warangal under a handwritten agreement of sale dated 12 August 2005. Years later, a builder put up a residential project called CSR 99 on land in some of the same survey numbers and registered it with TG-RERA. When the claimant complained that the builder had hidden his suit, TG-RERA dismissed the complaint but recorded that the builder had prima facie failed to disclose the litigation, and ordered a show cause notice for a penalty.
On 29 October 2026, the Telangana Real Estate Appellate Tribunal set those findings aside. It said the duty to disclose pending litigation "does not depend upon the merits or strength of the claim", but only applies to litigation affecting the project land. Here, the builder had produced documents showing its construction site was not part of the suit property, and nothing contradicted that. For Bengaluru buyers, the case is a lesson in reading survey numbers, not just case numbers.
The short answer. In T.A. No. 56 of 2026, the Telangana REAT held that the complainant was not an "aggrieved person" under Section 31 because he was neither an allottee, promoter nor agent, and that, on the evidence, the builder had "no obligation" to disclose the suit because the project site was not shown to be part of the suit property. It set aside TG-RERA's adverse observations and the direction for penalty proceedings. The trade-off for buyers: a suit naming nearby survey numbers may not need disclosure, but the Supreme Court has made construction in this project subject to the suit's outcome, which buyers should know.
What happened in the CSR 99 case?
According to the Telangana REAT judgment in T.A. No. 56 of 2026, the complainant filed O.S. No. 42 of 2008, later renumbered O.S. No. 373 of 2022, for specific performance of the 2005 agreement in respect of land in Survey Nos. 539/A, 620, 542/A and B, and 549/A and B of Waddepally village, Hanumakonda district. The builder, M/s Mihira Buildcon, built on land in Survey Nos. 539/A, 540, 541, 543, 550 and 620 of open plot No. 69, under a Kakatiya Urban Development Authority building permission dated 31 January 2018 for cellar, ground and eight floors.
The complainant alleged that the builder concealed the suit at registration in breach of Section 4(2)(l)(B), and sold flats despite an ad interim injunction of 30 September 2024 and a Supreme Court observation. TG-RERA, in its order of 22 April 2026, dismissed the complaint for want of locus standi, but in paragraphs 34 to 36 recorded a prima facie finding of non-disclosure and directed its Secretary to issue a show cause notice under Section 60. The builder appealed against those paragraphs.
Before the tribunal, the complainant's counsel added that the builder had not obtained an extension of its building permission or of its RERA registration, and that continuing construction, marketing and sale deeds without valid approvals breached Sections 3 and 6. The builder's side said it held its land through registered sale deeds, Document Nos. 6990 and 6991 of 2016, that its construction covered 4,555.14 square metres, and that a civil court order of 7 February 2024 in I.A. No. 1351 of 2022 had observed that the suit property lay in different survey numbers from the registered documents of the defendants where construction was being carried out. The tribunal's judgment turned on standing and on the disclosure finding; it did not rule on the complainant's separate allegations about extensions.
Who can file a RERA complaint?
The tribunal read Section 31(1), under which "any aggrieved person" may complain against a promoter, allottee or real estate agent. It said "aggrieved person" means "a person who is regulated or governed by the said Act and there is an injury of the right conferred under the said Act", and that "a stranger cannot be permitted to meddle" unless they fall in that category.
The complainant was "neither an allottee, a promoter, nor a real estate agent" in respect of the project, and his claim rested on a handwritten agreement whose existence and enforceability is for the civil court. He had "no registered title". So his grievance was "purely civil in nature" and belonged before the civil court, where the suit is pending.
When must a builder disclose a court case to RERA?
The tribunal stated the rule broadly. Section 4(2)(l)(B), it said, requires "disclosure of all encumbrances, including any rights, claims, or pending litigation affecting the land", reinforced by Rule 3(1)(e) of the Telangana rules. "The statutory requirement does not depend upon the merits or strength of the claim raised in the litigation, but upon the existence of such litigation itself." Non-disclosure "deprives prospective purchasers of critical information necessary for making informed decisions".
But the duty attaches to litigation affecting the project land. The builder had shown, with documents, that its permitted construction did not fall within the suit property, which the tribunal said was "confirmed" by a Kakatiya Urban Development Authority order dated 25 April 2020. With "no prima facie evidence contradicting" that, it held there was "no obligation on the part of the appellant to disclose the pending litigation", and no concealment. It also said that once the complaint was dismissed for lack of standing, TG-RERA's suo motu findings and show cause direction "are not permissible and not tenable in law".
What did the Supreme Court say about construction?
The judgment records that in Civil Appeal No. 1245 of 2025, decided on 29 January 2025, the Supreme Court modified an earlier order so that construction already raised and construction to be raised by the builder under the building permission "shall be subject to and abide by the outcome of the suit". It noted that an injunction granted in 2008 had not been extended beyond 23 September 2008.
The tribunal's finding is about RERA disclosure, not title. The civil suit, it said, is "seized of by the Civil Court". For buyers in this project, the Supreme Court's words about construction being subject to the suit's outcome are worth reading in full with a lawyer, because a RERA ruling on disclosure does not decide who owns the land.
| Point | TG-RERA, 22 Apr 2026 | Telangana REAT, 29 Oct 2026 | Basis | Buyer takeaway |
|---|---|---|---|---|
| Complainant's standing | Not an aggrieved person | Upheld | Section 31(1) | Third-party claimants may need the civil court |
| Duty to disclose | Prima facie breach of Section 4(2)(l)(B) | No duty where site not shown to be suit land | Documents on survey numbers | Match suit survey numbers to the project's |
| Strength of the claim | Not reached | Irrelevant; existence of litigation is what counts | Section 4(2)(l)(B), Rule 3(1)(e) | Weak suits on project land still need disclosure |
| Penalty proceedings | Show cause under Section 60 directed | Set aside as not tenable | Complaint already dismissed | Check the final appellate outcome |
| Construction | Not reached | Notes Supreme Court order of 29 Jan 2025 | Construction subject to suit outcome | Read court orders affecting the project |
What should a Bengaluru buyer check about litigation near a project?
Our report on TG-RERA directing a builder to disclose a suit filed after registration shows the other side of the same duty. Our Section 4(2) registration filing checklist covers where disclosures appear. Use this list.
- Read the litigation section of the project's RERA filing and note every case number.
- Get the survey numbers of the project land from the RERA filing and the building plan approval.
- For any suit you hear about, get the survey numbers in the suit schedule and compare them line by line.
- Where survey numbers overlap, ask the builder for the documents that show the site is outside the suit property.
- Ask whether any court has made construction or sales subject to the outcome of a case.
- Check whether any injunction is in force today, not just whether one was granted years ago.
- Have a lawyer read the court orders and the title documents before you pay a booking amount.
How does this Telangana ruling apply in Bengaluru?
This is an appellate order on a Telangana project, and Bengaluru buyers should read it as guidance rather than a Karnataka ruling. Its central points rest on Sections 4 and 31 of the RERA Act, which apply in Karnataka too, though the rule it cites alongside, Rule 3(1)(e), is from Telangana's rules. The useful principle for buyers is the one that cuts both ways: the strength of a claim does not decide whether it must be disclosed, but whether it concerns the project land does.
The judgment was delivered on 29 October 2026 by a three-member bench of Chairperson Justice A. Santhosh Reddy, Judicial Member P. Pradeep Kumar Reddy and Administrative Member Vemula Sreekar. For advice on a specific project, consult a lawyer who handles RERA and title matters.
Frequently asked questions
Must a builder disclose a weak court case to RERA?
According to the Telangana REAT's 29 October 2026 judgment, the disclosure requirement under Section 4(2)(l)(B) does not depend on the merits or strength of the claim, but on the existence of litigation affecting the project land. A weak claim over project land still needs disclosure.
Why did the tribunal say no disclosure was needed in the CSR 99 case?
The builder showed with documents, including a Kakatiya Urban Development Authority order dated 25 April 2020, that its construction site was not part of the suit property, and there was no prima facie evidence to the contrary. So the tribunal held there was no obligation to disclose that suit.
Who can file a complaint with RERA under Section 31?
The tribunal said an aggrieved person is someone regulated or governed by the Act whose right under the Act has been injured. A claimant who was not an allottee, promoter or agent and relied on an unregistered agreement had a purely civil grievance and lacked standing.
Can RERA start penalty proceedings after dismissing a complaint for lack of standing?
In this case, the tribunal held that after dismissing the complaint because the complainant was not an aggrieved person, TG-RERA's suo motu findings of non-disclosure and its direction for a show cause notice under Section 60 were not permissible and not tenable in law.
Last updated 2026-11-15. PropNewz Team.
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