Appeal No. 100 of 2021

What the case was about

Appeal No. 100 of 2021 before the Tamil Nadu Real Estate Appellate Tribunal concerned whether an Adjudicating Officer could hear a homebuyer's claim for refund of the amount paid towards a flat. The homebuyer had filed a complaint seeking several remedies, including refund of the sale consideration paid to M/s. Akshaya Pvt. Ltd.

The promoter challenged the maintainability of the refund claim before the Adjudicating Officer. The Adjudicating Officer rejected that challenge and held that the complaint was maintainable, leading the promoter to appeal.

How refund and compensation jurisdiction was divided

The Tamil Nadu Real Estate Appellate Tribunal followed the Supreme Court of India's decision dated 11 November 2021 in M/s. Newtech Promoters and Developers Pvt. Ltd. versus State of Uttar Pradesh and others.

The Tribunal identified the following division of powers under the Real Estate (Regulation and Development) Act, 2016:

• The Regulatory Authority can examine and decide claims for refund of amounts paid by an allottee.
• The Regulatory Authority can decide interest on a refund amount.
• The Regulatory Authority can direct payment of interest for delayed delivery of possession.
• The Regulatory Authority can determine penalty and interest on that penalty.
• The Adjudicating Officer exclusively determines compensation and interest on compensation under sections 12, 14, 18 and 19.
• Appointment of an Adjudicating Officer under section 71 does not give that officer general jurisdiction over refund claims.

Result and directions

Appeal No. 100 of 2021 was allowed in part without costs. The Tamil Nadu Real Estate Appellate Tribunal set aside the Adjudicating Officer's decision dated 17 August 2021 that had treated the refund complaint as maintainable before that officer.

The Tribunal directed the Adjudicating Officer to return the complaint to the Regulatory Authority. The Regulatory Authority was directed to take the complaint on file, give both parties sufficient opportunity to present their cases, and decide the refund and related interest claims on their merits under the Real Estate (Regulation and Development) Act, 2016.

Who may be affected

The decision is relevant to homebuyers seeking refunds from promoters and to promoters responding to such claims. It explains that a refund claim should be placed before the Regulatory Authority, while a claim specifically seeking compensation and interest on compensation falls within the Adjudicating Officer's role.