Appeal No. 101 of 2021
The Tamil Nadu Real Estate Appellate Tribunal, Chennai, in Appeal No. 101 of 2021, issued its order on 24 June 2022 dismissing an appeal by M/s. Indira Projects and Development (T) Private Limited concerning the Sun Ville villa project. The Tribunal upheld the Tamil Nadu Real Estate Regulatory Authority's direction to register the project and ruled that an arbitration clause did not prevent the Authority from hearing the complaint.
What the case concerned
Appeal No. 101 of 2021 arose from a complaint about the Sun Ville project in Mannivakkam Village, Chengalpet Taluk, Kanchipuram District. The complainants bought a villa plot measuring about 910 square feet from the landowner and entered into a separate agreement with M/s. Indira Projects and Development (T) Private Limited to construct an individual house.
The project involved 33 villas on 21.47 cents of land. Although it began after the Real Estate (Regulation and Development) Act, 2016 came into force, it had not been registered with the Tamil Nadu Real Estate Regulatory Authority.
The complainants stated that construction began nearly a year after the agreement and stopped at foundation level following a dispute. They also sought repayment of the amount paid towards construction. The builder denied receiving a construction payment and made a counterclaim for construction costs incurred up to basement level.
What the Tribunal decided
The Tamil Nadu Real Estate Appellate Tribunal, Chennai, upheld the Tamil Nadu Real Estate Regulatory Authority's order dated 19 July 2021 in Complaint No. 156 of 2020.
Key findings were:
- Sun Ville was a real estate project because it involved development and sale of villas and plots.
- A project with 33 proposed villas on 21.47 cents was required to be registered with the Tamil Nadu Real Estate Regulatory Authority.
- The direction requiring M/s. Indira Projects and Development (T) Private Limited to register Sun Ville on or before 31 August 2021 was correct.
- An arbitration clause in the construction agreement did not stop the complainants from approaching the Tamil Nadu Real Estate Regulatory Authority.
- The appeal was dismissed, and each side was directed to bear its own costs.
Refund and compensation claims
The Tamil Nadu Real Estate Regulatory Authority did not decide the complainants' request for refund and compensation in the challenged order. It directed them to file a separate complaint before the Adjudicating Officer attached to the Authority.
If such a complaint was filed, the builder was permitted to raise its counterclaim before the Adjudicating Officer. The Appellate Tribunal therefore found that no adverse refund or compensation order had been made against the builder in the proceeding under appeal.
Who may be affected
The decision is relevant to buyers, landowners and builders involved in villa developments that meet the registration requirements under the Real Estate (Regulation and Development) Act, 2016. It also confirms that including an arbitration clause in a construction agreement does not, by itself, prevent a complaint before the real estate regulator.
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Common questions
Was the Sun Ville villa project required to be registered with the Tamil Nadu Real Estate Regulatory Authority?
Yes. The Tribunal held that the project, involving 33 proposed villas on 21.47 cents of land, was required to be registered.
Did the arbitration clause prevent the buyers from filing a real estate complaint?
No. The Tribunal held that the arbitration clause in the construction agreement did not prevent the Tamil Nadu Real Estate Regulatory Authority from hearing the complaint.
Did the Tribunal order the builder to refund the buyers?
No. The buyers were directed to file a separate complaint before the Adjudicating Officer for refund and compensation, where the builder could also make its counterclaim.
What happened to the builder's appeal?
The Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal. Both sides were directed to bear their own costs.
