Case law, Tamil Nadu land law
Common Order, Appeal Nos. 108 to 113 of 2021
The Tamil Nadu Real Estate Appellate Tribunal, covering Tamil Nadu, Puducherry and the Andaman and Nicobar Islands, issued the common order in Appeal Nos. 108 to 113 of 2021 on 4 February 2022. It reviews claims by Metro Zone home buyers against Ozone Projects Private Limited and upholds the Adjudicating Officer's treatment of claimed delay compensation and the prescribed interest rate, although the supplied text does not include the final operative outcome of the appeals.
What the case concerns
The common order in Appeal Nos. 108 to 113 of 2021, dated 4 February 2022, concerns home buyers who booked flats in the Metro Zone project at Koyambedu, Chennai. Ozone Projects Private Limited and its Managing Director were the respondents and promoters.
The promoters had agreed to deliver the flats in May 2018. Some buyers used a subvention arrangement under which the bank would initially receive only interest from the promoters. According to the common order, construction did not start, the bank withdrew from the arrangement, and the promoters stopped paying pre EMI interest from September 2019.
Earlier decision and appeals
The Adjudicating Officer had partly allowed the buyers' complaints and directed the promoters to:
- Refund the amounts paid by the home buyers.
- Pay interest at 10.20% per year.
- Pay compensation of Rs.1,00,000 to each buyer.
- Pay litigation costs of Rs.25,000 to each buyer.
The buyers appealed, seeking consideration of payments made directly to the bank, a higher interest amount, increased compensation for mental agony, action concerning non-refund and diversion of funds, and restraint against sales to third parties.
Findings recorded by the Tribunal
The Tamil Nadu Real Estate Appellate Tribunal rejected additional delay compensation claims made in Appeal Nos. 110 and 113 of 2021. The buyers had not produced promoter receipts or confirmation showing that delay compensation from earlier flats had been carried forward to new flat allotments. The Tribunal also found that buyers who withdrew from one project and opted for another could not claim monthly delay compensation for remaining in the original project.
The Tamil Nadu Real Estate Appellate Tribunal also found no error in the 10.20% interest rate awarded by the Adjudicating Officer. It stated that the Adjudicating Officer, Regulatory Authority and Appellate Tribunal could not fix a rate higher than the rate prescribed under the Real Estate (Regulation and Development) Act, 2016 and the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017.
Compensation considerations
The common order says compensation must be fair and reasonable, not a windfall or a token amount. It identifies relevant considerations including unfair gain, loss caused, repeated default and other factors needed for justice. The supplied text discusses the Rs.1,00,000 compensation and the interest already awarded, but ends before giving the final operative result of all six appeals.
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Common questions
Does this common order affect every buyer in the Metro Zone project?
The common order deals specifically with the home buyers in Appeal Nos. 108 to 113 of 2021 and their complaints against Ozone Projects Private Limited. The supplied text does not state that it grants relief to every Metro Zone buyer.
Did the Tribunal increase the interest rate above 10.20%?
No increase is recorded in the supplied text. The Tamil Nadu Real Estate Appellate Tribunal found no error in the Adjudicating Officer's award of interest at 10.20% per year.
Can a buyer claim delay compensation after withdrawing from one project and choosing another?
The Tamil Nadu Real Estate Appellate Tribunal held in these appeals that buyers who withdrew from the original project and opted for another project could not claim monthly delay compensation for the original project.
What refund and compensation had the Adjudicating Officer awarded?
The Adjudicating Officer directed refund of the amounts paid, interest at 10.20% per year, compensation of Rs.1,00,000 for each buyer and litigation costs of Rs.25,000 for each buyer.
