Appeal No. 50 of 2020

What the appeal concerns

Appeal No. 50 of 2020 before the Tamil Nadu Real Estate Appellate Tribunal arose from an order of the Adjudicating Officer in C.C.P. No. 216 of 2019, dated 21 February 2020. The Adjudicating Officer had directed M/s. K.G. Foundations (Private) Limited, the promoter, to refund a booking advance with interest and compensation.

The buyers stated that they agreed to purchase a flat in the project called KG Signature City for Rs.35,68,000 and paid Rs.1,00,000 as a booking advance on 27 June 2015. They claimed that the proposed agreement did not contain mutually agreed terms, that the promoter did not respond adequately to later communications, and that the promoter eventually stated that the booking amount had been forfeited.

Promoter's challenge

M/s. K.G. Foundations (Private) Limited argued that:

• No sale or construction agreement was signed.
• The buyers were not allottees under the Real Estate (Regulation and Development) Act, 2016.
• The project had received a completion certificate before the relevant rules were notified and was not an ongoing project.
• The Adjudicating Officer therefore lacked jurisdiction.
• The promoter was entitled under the application terms to deduct Rs.50,000 as charges.
• Refund, interest and compensation were not justified under the provisions relied upon by the Adjudicating Officer.

The buyers argued that the Adjudicating Officer had properly considered the promoter's conduct and correctly granted refund, interest and compensation.

Issues examined by the Tribunal

The Tamil Nadu Real Estate Appellate Tribunal identified questions concerning jurisdiction, refund under Section 18(1), interest under Rule 19(2), compensation under Section 18(2), and whether the appeal should be allowed.

On project registration, the Tribunal referred to a Madras High Court decision dated 15 September 2020. The quoted decision stated that the parent Act prevails over inconsistent rules and that Rule 2(h)(ii) could not provide an exemption contrary to Section 3. The Tribunal then compared the completion certificate requirements in Section 3(2)(b) and Rule 2(h).

Practical significance

The case is relevant to buyers and promoters disputing booking advances where no final agreement was signed, and to projects claiming exemption based on completion certificate status. The supplied extract ends during the Tribunal's analysis and does not state whether the appeal was allowed, dismissed or otherwise disposed of.