Case law, Tamil Nadu land law
Common Order, Appeal Nos. 85, 87 and 107 of 2021
The Tamil Nadu Real Estate Appellate Tribunal issued the Common Order in Appeal Nos. 85, 87 and 107 of 2021 on 15 February 2023, recording a settlement between Serene Kshetra Owners Association and Adinath Srinivasa Foundations LLP. The Tribunal directed the release of ₹68,63,750 plus accrued interest to the association, disposed of Appeals 85 and 107 under the compromise, and dismissed Appeal 87 as withdrawn.
What the Common Order decides
The Tamil Nadu Real Estate Appellate Tribunal recorded the joint memorandum of compromise dated 15 February 2023 between Serene Kshetra Owners Association and Adinath Srinivasa Foundations LLP. The compromise terms form part of the Common Order in Appeal Nos. 85, 87 and 107 of 2021.
The Tribunal dealt with the appeals as follows:
- Appeals 85 and 107 of 2021 were disposed of under the compromise.
- Appeal 87 of 2021 was dismissed as withdrawn because the parties had settled outside court.
- Any pending connected miscellaneous applications were closed.
- The Tribunal Registry was directed to issue ₹68,63,750, together with accrued interest, to Serene Kshetra Owners Association.
Corpus fund payments
The memorandum records that Adinath Srinivasa Foundations LLP collected ₹79,00,000 as corpus fund from allottees or residents of 158 units in the Serene Kshetra project. Of this, ₹57,00,000 in corpus fund and ₹11,63,750 in interest had been deposited with the Tribunal.
Adinath Srinivasa Foundations LLP also agreed to transfer a further ₹27,50,000 to Serene Kshetra Owners Association, comprising:
- ₹22,00,000 as balance corpus fund.
- ₹3,00,000 as interest.
- ₹2,50,000 collected after five additional units were handed over.
The compromise required ₹10,00,000 to be paid by demand draft on or before 28 February 2023. The remaining ₹17,50,000 was to be paid by a cheque dated 25 March 2023, with the balance transfer due on or before 31 March 2023. A payment default would allow the association to recover the unpaid amount with interest at 24% per year.
Effect on buyers and owners
The compromise directly concerns Serene Kshetra Owners Association, Adinath Srinivasa Foundations LLP, and allottees or residents of the Serene Kshetra project.
Key terms affecting future transactions include:
- Corpus fund collected from future allottees must be transferred to the association within one month after handover.
- Agreements with prospective purchasers of remaining units must require membership in Serene Kshetra Owners Association.
- Agreements between the promoter and allottees or purchasers must follow the form in Annexure A of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017.
- Serene Kshetra Owners Association may seek enforcement of the compromise before the Regulatory Authority.
- After completion of the agreed payments, the parties agreed not to revive the claims contested in Appeals 85 and 107 of 2021.
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Common questions
Does the Tribunal direct payment to Serene Kshetra Owners Association?
Yes. The Tribunal directed its Registry to issue ₹68,63,750, together with accrued interest, to Serene Kshetra Owners Association.
Must a future buyer in Serene Kshetra join the owners association?
The compromise requires agreements for prospective purchasers of the remaining units to include a clause making membership in Serene Kshetra Owners Association mandatory.
What happens to corpus fund collected from future allottees?
Adinath Srinivasa Foundations LLP must transfer corpus fund collected from future allottees to Serene Kshetra Owners Association within one month from the date of handover.
What happened to Appeal No. 87 of 2021?
The Tamil Nadu Real Estate Appellate Tribunal dismissed Appeal No. 87 of 2021 as withdrawn because the parties had settled the matter outside court.
