K-REAT holds builder liable for Rs 7 lakh paid via its own sales manager

The Karnataka Real Estate Appellate Tribunal (K-REAT) on 12 November 2026 dismissed an appeal by Bengaluru builder Space Properties and held that it must count Rs 7 lakh that a homebuyer paid on the instructions of its own customer relationship manager. The tribunal confirmed an order of the Karnataka Real Estate Regulatory Authority (K-RERA) dated 9 December 2025 directing the builder to register the flat in her name.

What Happened

According to the judgment, the homebuyer booked flat No. 68 in the builder's project Sohan Serenity on 30 March 2024 for Rs 92,31,172. She paid Rs 13 lakh directly to the builder. On the instructions of the builder's customer relationship manager, she transferred another Rs 7 lakh to a third party's account.

The builder acknowledged only Rs 13 lakh and asked her to pay the Rs 7 lakh again. It told K-RERA it had filed a police complaint against the employee and others. The tribunal noted that complaint alleged the employee had collected more than Rs 1 crore from several customers.

K-RERA directed the builder to acknowledge Rs 20 lakh, receive the balance, and register the sale deed within 60 days, and barred it from selling the flat to anyone else.

The tribunal held that the builder had not disputed the person was its employee at the time, and that an invoice bearing the builder's seal and its authorised signatory's signature recorded the Rs 7 lakh payment towards the flat. Citing the principles of agency in the Indian Contract Act, 1872, it held that a builder cannot disown acts of its representative done within his authority. The builder may pursue remedies against the employee, the tribunal said, but cannot make the homebuyer pay the same amount twice.

What It Means

Homebuyers who pay a builder's representative in good faith, and hold the builder's receipt, can expect that payment to be counted. Keep every receipt and invoice and pay into the builder's own account where possible.

The K-RERA order now stands. The tribunal's judgment may be appealed to the High Court. Consumers with a complaint can also call the National Consumer Helpline on 1915.

Source: K-REAT judgment