Case law, Tamil Nadu land law
Appeal No. 40 of 2020
The Tamil Nadu Real Estate Appellate Tribunal issued Appeal No. 40 of 2020 on 1 December 2021, examining a challenge by two Viva City homebuyers to the Tamil Nadu Real Estate Regulatory Authority order in C.No.353 of 2019, dated 9 January 2020. The appeal considers whether the promoter could revise plans for later phases without obtaining written consent from two thirds of the existing allottees. The supplied text ends during the Tribunal's analysis and does not contain the final outcome.
What the appeal concerns
The Tamil Nadu Real Estate Appellate Tribunal heard Appeal No. 40 of 2020 concerning the Viva City project. Homebuyers J. Sethu Ragu Raman and D. Sathiyapriya appealed against M/s. XS Real Properties Private Limited, its Chief Executive Officer, and the Deputy Director of the Directorate of Town and Country Planning at Chengalpattu.
The homebuyers said advertisements described Viva City as seven blocks with 352 residential units and various amenities. The original planning approval covered Blocks A, B, C and D, with 176 dwelling units. Blocks B and C were completed, sold and handed over in April 2017.
The promoter later obtained a revised plan dated 31 October 2017 for Blocks A, D, E and F, proposing 475 dwelling units. Blocks E and F were proposed under a housing scheme in the name “En Veedu”.
Homebuyers' objections
The homebuyers argued that the revised plan was obtained without properly informing or consulting purchasers in Blocks B and C. Their main claims were:
- Consent contained in the agreements was blanket consent given without full disclosure.
- Revised plans required consent from two thirds of the purchasers.
- Purchasers in Blocks B and C were co-owners of the entire land.
- More dwelling units could cause road congestion, drainage and garbage disposal problems.
- Emergency vehicle movement, open space, parking, resale value and rental value could be affected.
The promoter relied on the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017, along with the construction agreement dated 13 July 2013 and sale deed dated 8 August 2013.
Provisions considered by the Tribunal
The Tamil Nadu Real Estate Appellate Tribunal examined Section 14(2)(ii) of the Real Estate (Regulation and Development) Act, 2016. It requires previous written consent from at least two thirds of allottees for alterations or additions to sanctioned plans, layouts, specifications or common areas within a project.
The Tribunal also examined Rule 4(1), Explanations II and III, of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017. These explanations provide an exemption for later phases where phased development was agreed in the contracts. Explanation III also requires no reduction in common area and no change in the total built up area of the registered phase or project.
The Tribunal noted that phased development was accepted in the agreements and that neither side alleged a reduction in common area or a change to the built up area of the registered project. The supplied extract then begins examining whether the contractual consent was informed consent, but it does not provide the Tribunal's final decision.
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Common questions
Did the Tribunal decide that the promoter could revise the Viva City plan without buyer consent?
The supplied text does not contain the final outcome. It records that the phased development exemption could apply if the contractual and common area conditions were met, but the analysis of whether consent was properly informed is incomplete.
What consent requirement did the homebuyers rely on?
They relied on Section 14(2)(ii) of the Real Estate (Regulation and Development) Act, 2016, which requires previous written consent from at least two thirds of allottees for specified alterations or additions within the project.
When can later phases be exempt from the two thirds consent requirement?
The Tamil Nadu Real Estate (Regulation and Development) Rules, 2017 provide exemptions where phased development was agreed between the promoter and allottee. For the exemption discussed under Explanation III, there must also be no reduction in common area and no change in the total built up area of the registered phase or project.
What practical concerns did the Viva City homebuyers raise?
They raised concerns about congestion, drainage, garbage disposal, emergency vehicle access, open space, parking, and possible reductions in resale and rental value.
