Appeal No. 33 of 2020
The Tamil Nadu Real Estate Appellate Tribunal, covering Tamil Nadu, Puducherry, Andaman and Nicobar Islands, issued the order in Appeal No. 33 of 2020 on 2 February 2022. It partly allowed the promoters’ appeal and modified the Adjudicating Officer’s order by replacing compensation calculated at 9 per cent of the amount paid with a lump sum of Rs.5,00,000, while confirming delay compensation and litigation expenses.
What the case concerns
Appeal No. 33 of 2020 before the Tamil Nadu Real Estate Appellate Tribunal concerned delayed possession of a villa in the Pacifica Arum Villas project at Padur village, Thiruporur taluk, Kancheepuram district. Sylvanus Builders and Developers Limited and Pacifica (Chennai Project) Infrastructure Company Private Limited appealed against an order obtained by home buyer K. Srikar Reddy.
The home buyer booked the villa on 3 August 2012. A construction agreement dated 11 March 2014 required possession by 30 June 2015, but the promoters offered possession only in March 2019. The home buyer had paid Rs.1,41,98,470 against a total villa cost of Rs.1,47,51,658.
What the Tribunal decided
The Tamil Nadu Real Estate Appellate Tribunal found no error in the award of refund with interest at 10.15 per cent per year. It accepted that delayed delivery caused the home buyer financial difficulty through loan instalments, interest and rent, leading him to withdraw from the project and seek a refund.
The Tribunal nevertheless found that additional compensation at 9 per cent per year on the total amount paid was excessive. It noted that the home buyer had not provided a specific figure or evidence showing the interest or other loss caused by the delay.
The final directions were:
- Compensation for mental agony and inconvenience was fixed at Rs.5,00,000 instead of 9 per cent of the total amount paid.
- The Adjudicating Officer’s award concerning delay compensation was confirmed.
- Litigation expenses of Rs.25,000 were confirmed.
- The promoters’ appeal was allowed only in part, without costs.
- Connected miscellaneous applications were closed.
Why it matters
Appeal No. 33 of 2020 shows that compensation must be fair, reasonable and based on relevant factors, including proven loss. A home buyer may receive compensation for mental agony caused by a long delay even where the exact financial loss is not established, but the amount need not duplicate interest already awarded for the same delay.
The decision directly affects only the promoters and home buyer involved in this appeal. Other buyers and promoters facing delayed possession may find the Tribunal’s treatment of interest, evidence of loss and separate compensation relevant to their disputes.
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Common questions
Did the home buyer keep the refund and interest awarded by the Adjudicating Officer?
Yes. The Tamil Nadu Real Estate Appellate Tribunal found no error in the refund with interest at 10.15 per cent per year and confirmed the delay compensation.
Why was the compensation reduced from 9 per cent to Rs.5,00,000?
The Tribunal considered 9 per cent of the total amount paid excessive because interest had already been awarded and the home buyer had not proved a specific amount of additional loss. It fixed Rs.5,00,000 as reasonable compensation for mental agony and inconvenience.
Were the home buyer’s litigation expenses removed?
No. The Tamil Nadu Real Estate Appellate Tribunal confirmed litigation expenses of Rs.25,000.
How long was possession delayed?
Possession was due by 30 June 2015, but the promoters offered delivery only in March 2019.
