Appeal No.81 of 2021

What the case concerned

Appeal No.81 of 2021 concerned Plot No.54 in the Thillai Nataraja Nagar Layout at Chikkarayapuram Village, Mangadu, Chennai. The appellants were brothers and joint owners who developed the layout. The first and second respondents claimed rights as buyers, while M/s. KNR Realty Properties Private Limited and persons connected with it were also respondents.

The Tamil Nadu Real Estate Regulatory Authority had directed the appellants to execute a sale deed in favour of the buyers on or before 31 May 2021, after receiving the balance sale consideration if it had not already been received. The promoters challenged that direction before the Tamil Nadu Real Estate Appellate Tribunal.

Key findings

The Tamil Nadu Real Estate Appellate Tribunal considered the parties' evidence and found:

• The buyers admitted that their dealings were with the third respondent.
• The buyers paid Rs.1,00,000 by cheque and Rs.7,00,000 through funds transfer to the third respondent.
• An earlier sale agreement dated 31 March 2016, referred to in a police complaint, was not produced.
• The promoters denied signing the later agreement dated 3 August 2016 and denied receiving the claimed demand draft for Rs.20,18,250.
• The buyers did not produce their bank statement or summon officials from ICICI Bank to prove what happened to the demand draft.
• A handwriting expert from the Government Forensic Science Department reported that the disputed signatures were not made by the persons who made the admitted signatures.
• The alleged agreement dated 3 August 2016 was therefore found to be forged.
• The evidence did not prove that M/s. KNR Realty Properties Private Limited or its representatives were agents of the promoters.
• No contract existed between the promoters and the buyers, and the promoters had received no sale consideration from them.

Result and practical effect

The Tamil Nadu Real Estate Appellate Tribunal allowed Appeal No.81 of 2021 and set aside the Tamil Nadu Real Estate Regulatory Authority decision in C.No.48 of 2020 dated 19 April 2021. The promoters were therefore no longer required under that decision to execute the sale deed. No costs were awarded, and any connected miscellaneous applications were closed.

For property buyers and owners, the decision shows that payment to an intermediary and an alleged agreement will not bind landowners when agency, signatures, payment and a direct contractual relationship are not proved.