Appeal No. 1 of 2021
The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman and Nicobar Islands), in Appeal No. 1 of 2021 dated 26 April 2021, dismissed an appeal filed by M/s. Vijay Shanthi Builders Ltd. because the builder did not make the required pre deposit of 40 per cent of the amount ordered by the Adjudicating Officer, despite receiving an extension of time. The underlying complaint concerned proposed purchasers seeking a refund after the promoters failed to construct and deliver a villa.
What the case concerns
Appeal No. 1 of 2021 arose from a villa purchase and construction dispute. Mrs. Urmila Modi and Abhishek Modi entered into a tripartite agreement with M/s. Influence Infrastructure and M/s. Influence Enterprises (India) Pvt. Ltd. on 7 June 2012. M/s. Vijay Shanthi Builders Ltd. was associated with development of the project.
The total sale consideration was Rs.2,52,25,000. The proposed purchasers paid Rs.1,83,72,550, which was 72 per cent of the villa's total value. M/s. Influence Infrastructure and M/s. Influence Enterprises (India) Pvt. Ltd. agreed to complete construction and deliver possession by 7 February 2013.
Complaint and appeal
The proposed purchasers approached the Adjudicating Officer because the promoters had not delivered the villa and had not commenced construction. They requested a refund of the amount paid and other reliefs.
The Adjudicating Officer partly allowed the complaint in C.C.P. No. 168/2019 on 28 October 2020 and ordered:
- Refund of the amount paid.
- Interest on the refund.
- Compensation.
M/s. Vijay Shanthi Builders Ltd. challenged that decision before the Tamil Nadu Real Estate Appellate Tribunal. The appeal was taken on file on 4 January 2021, along with an application seeking waiver of the pre deposit requirement.
Tribunal's decision
The Tamil Nadu Real Estate Appellate Tribunal ordered M/s. Vijay Shanthi Builders Ltd. to pre deposit 40 per cent of the total amount ordered by the Adjudicating Officer. The builder did not comply, even after an extension of time was granted in M.A. No. 2 of 2021.
At the hearing on 26 April 2021, the builder's counsel stated by video conference that a writ petition was pending before the Madras High Court and sought more time. The Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal for failure to comply with the pre deposit direction. No costs were awarded, and the connected miscellaneous applications were closed.
Why it matters
Appeal No. 1 of 2021 shows that a promoter's appeal can be dismissed when the pre deposit directed under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 is not made. The stated basis for dismissal was non compliance with the pre deposit direction, rather than a fresh determination of the purchasers' underlying refund claim.
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Common questions
Why was M/s. Vijay Shanthi Builders Ltd.'s appeal dismissed?
The Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal because the builder did not make the ordered pre deposit of 40 per cent of the total amount awarded by the Adjudicating Officer, despite an extension of time.
How much had the proposed purchasers paid for the villa?
The proposed purchasers paid Rs.1,83,72,550 out of a total sale consideration of Rs.2,52,25,000. The tribunal recorded that this was 72 per cent of the villa's total value.
What relief had the Adjudicating Officer granted?
The Adjudicating Officer partly allowed the complaint and ordered refund of the amount paid, with interest and compensation.
Did the pending writ petition prevent dismissal of the appeal?
No. Although the builder's counsel stated that a writ petition was pending before the Madras High Court and requested time, the Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal for non compliance with the pre deposit direction.
