Appeal SR. No. 310 of 2019
The Tamil Nadu Real Estate Appellate Tribunal, in Appeal SR. No. 310 of 2019 delivered on 4 July 2019, rejected an appeal by M/s. Asvini Foundations at the maintainability stage. The Tribunal held that registration of the admitted ongoing project was mandatory and unaffected by internal partnership, profit sharing, civil court or arbitration disputes.
What the case concerned
Appeal SR. No. 310 of 2019 arose from directions concerning registration of an ongoing real estate project. M/s. Asvini Foundations, represented by its partner Aarti Razee, challenged a consequential order dated 13 February 2019 rather than the original order dated 31 January 2019.
The appellant argued that disputes among the partners, including a disputed supplemental agreement and changes to the profit sharing ratio, were pending before civil and arbitration forums. The appellant also claimed that directing the property owners to register the project affected her individual rights.
Findings of the Tribunal
The Tamil Nadu Real Estate Appellate Tribunal found that the project was admittedly an ongoing project and therefore required registration under the Real Estate (Regulation and Development) Act, 2016.
Key findings were:
- Internal disputes about partnership terms or profit sharing had no bearing on the statutory requirement to register the project.
- Partnership disputes had to be decided under the Partnership Act or through the civil and arbitration proceedings already initiated.
- The appellant admitted an original profit share of 10 percent, while stakeholders holding 90 percent had stated that they had no objection to registration by the property owners.
- The project had already been registered and the earlier direction had been complied with.
- The appeal challenged only the consequential order dated 13 February 2019, not the original order dated 31 January 2019.
- Registration did not make the appellant an aggrieved person because her rights were not affected merely by registering the project.
Outcome and practical effect
The Tamil Nadu Real Estate Appellate Tribunal upheld the office objections and rejected the appeal at the maintainability stage. It did not decide the merits of the partnership, profit sharing, development agreement or power of attorney disputes.
For buyers and owners, the decision confirms that an admitted ongoing project must be registered even when its promoters or partners have separate commercial disputes. Registration was treated as protecting both purchasers and promoters, while private partnership disputes remained for the appropriate civil or arbitration forum.
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Common questions
Can a partnership dispute prevent an ongoing project from being registered?
No. The Tamil Nadu Real Estate Appellate Tribunal held that internal partnership and profit sharing disputes do not affect the mandatory registration of an admitted ongoing project.
Did the Tribunal decide who was right in the profit sharing dispute?
No. The Tribunal said partnership disputes should be decided under the Partnership Act or in the pending civil and arbitration proceedings.
Why was the appeal rejected?
The appeal was rejected at the maintainability stage because the project had already been registered, the appellant was not treated as an aggrieved person, and the appeal challenged the consequential order rather than the original order.
Does project registration affect a partner's separate civil claims?
The Tribunal treated registration and the partner's civil claims as separate matters. Registration could proceed while disputes concerning partnership rights, agreements and powers of attorney remained before other forums.
