Appeal No. 115 of 2021

What the case concerns

Appeal No. 115 of 2021 before the Tamil Nadu Real Estate Appellate Tribunal arose from agreements for the sale and construction of an apartment in the Metrozone project at Anna Nagar, Chennai. The home buyers and M/s. Ozone Projects Private Limited entered into the agreements on 9 April 2015. The promoter agreed to hand over the apartment by September 2016, with a grace period of three months.

The apartment price was Rs.1,36,96,776. The home buyers paid Rs.36,91,462 from their own funds, and the balance was financed through HDFC. Under the financing arrangement, the promoter undertook responsibility for pre EMI payments for a stated period. A separate promoter letter said that if handover was delayed beyond September 2016, the buyers could make the payments and obtain reimbursement after producing proof.

Earlier relief and the appeal

The Adjudicating Officer ordered refund of the buyers' own contribution with interest, repayment of Rs.1,27,00,000 to HDFC with interest, reimbursement of specified pre EMI payments, compensation of Rs.2,00,000 and litigation costs of Rs.25,000. The promoter did not appeal against those directions.

The home buyers appealed because the Adjudicating Officer had not granted reimbursement of pre EMI amounts paid after the complaint was filed. They claimed payments continuing until September 2021.

Tribunal's findings

The Tamil Nadu Real Estate Appellate Tribunal found that:

• The promoter had paid pre EMI interest from April 2015 to June 2019, amounting to Rs.42,19,615.
• The promoter had asked the buyers to continue payments and had agreed to reimburse or adjust them.
• The promoter admitted willingness to adjust pre EMI amounts payable from July 2019 to May 2021.
• Because the buyers sought a refund and no longer wished to complete the purchase, reimbursement had to be considered separately from adjustment against the sale price.
• The promoter had received the benefit of the housing loan funds while the buyers had not received the apartment.

The appeal was therefore allowed only in part. The promoter must reimburse the pre EMI interest component paid from March 2020 to May 2021. The Tribunal did not allow the claim for June 2021 to September 2021 because the promoter had not agreed to reimburse that period. The earlier direction covering August 2019 to February 2020 was confirmed.