Appeal No. 51 of 2020
The Tamil Nadu Real Estate Appellate Tribunal issued Appeal No. 51 of 2020 on 17 December 2020, holding that M/s. Medhika Infrastructures, as the new promoter of the project, was a necessary party to an allottee's pending refund complaint. The Tribunal found no merit in the promoter's appeal against being added as a party and concluded that the appeal was liable to be dismissed, while clarifying that impleading alone does not establish liability.
What the case concerns
Appeal No. 51 of 2020 arose from a complaint by Mrs. Santhakumari seeking refund of an advance amount, interest, compensation and costs. She and her husband had booked two 2BHK units at Vandaloor and paid Rs.17,13,460. One unit was cancelled, and its amount was transferred to the other unit before she was offered a unit in another residential project.
The original complaint named Crescentz Homes and Infrastructures Private Limited and Altimiz Infrastructures Limited. Mrs. Santhakumari later applied to add M/s. Medhika Infrastructures because the Tamil Nadu Real Estate Regulatory Authority had recognised it as the project's new promoter. The Adjudicating Officer allowed that application, and M/s. Medhika Infrastructures appealed.
Why the new promoter was added
The Tamil Nadu Real Estate Appellate Tribunal found that M/s. Medhika Infrastructures was a proper and necessary party because:
- The Tamil Nadu Real Estate Regulatory Authority had directed the new promoter to independently comply with pending statutory obligations and obligations under agreements for sale made by the former promoter.
- A tripartite agreement required M/s. Medhika Infrastructures to continue and complete buildings in the lapsed project.
- The complainant produced a flat allotment letter and acknowledgement issued by M/s. Crescentz Square.
- Documentary evidence showed payment of a booking advance amounting to 20 percent of the sale consideration.
- Questions about the agreements, amounts received and the parties' eventual liability required evidence and could be decided in the complaint proceedings.
Result and practical effect
The Tamil Nadu Real Estate Appellate Tribunal rejected the argument that the absence of a direct contract meant M/s. Medhika Infrastructures could not be added. It found no sustainable ground to interfere with the Adjudicating Officer's decision and concluded that the appeal was liable to be dismissed.
For an allottee in the project, the decision means the new promoter can remain a party to the refund and compensation proceedings so that any adjudication can bind the necessary parties. For the new promoter, being added does not by itself create or determine liability. The Tribunal stated that liability could be fixed only after examining evidence and the terms between M/s. Medhika Infrastructures and M/s. Crescentz Square.
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Common questions
Did the Tribunal order M/s. Medhika Infrastructures to refund the buyer?
No. The Tribunal decided only that M/s. Medhika Infrastructures was a necessary party to the pending complaint. It stated that merely adding a party does not establish liability.
Why was the new promoter included when the original booking was with other entities?
The Tamil Nadu Real Estate Regulatory Authority had recognised M/s. Medhika Infrastructures as the new promoter and required it to comply with pending project and sale agreement obligations. A tripartite agreement also required it to continue and complete the project.
What relief was the allottee seeking in the underlying complaint?
Mrs. Santhakumari sought refund of the advance amount with interest, compensation and costs.
What happened to Appeal No. 51 of 2020?
The Tamil Nadu Real Estate Appellate Tribunal found no merit in the appeal and concluded that it was liable to be dismissed. The Adjudicating Officer's decision to add M/s. Medhika Infrastructures as a party therefore remained undisturbed.
