Common Order, Appeal Nos. 92 to 97 of 2021

What the case concerns

The Tamil Nadu Real Estate Appellate Tribunal heard six appeals arising from three home buyer complaints concerning flats in the Divine City project at Mangadu. Cybercity Mangadu Project Private Limited developed and promoted the project, while Shriram Properties Limited marketed it.

The buyers had entered into separate sale and construction agreements. They later sought cancellation because of financial difficulty and requested repayment without deduction. The promoter offered a refund after deducting cancellation charges and Goods and Services Tax, leading the buyers to approach the Adjudicating Officer.

Who is affected

Common Order, Appeal Nos. 92 to 97 of 2021 directly concerns:

• Three home buyers who booked apartments in Divine City.
• Cybercity Mangadu Project Private Limited as promoter.
• Shriram Properties Limited as marketing agent.

The appeals challenged orders made in three complaints. Both the promoter and marketing agent appealed.

Key findings

The Tamil Nadu Real Estate Appellate Tribunal limited its consideration to the amount that could be deducted as cancellation charges. Its findings included:

• Clause 8(1) of the construction agreement allowed the promoter to cancel and reallot the apartment when an allottee withdrew for reasons other than promoter default.
• The clause permitted deduction of the booking amount and required the remaining money to be refunded without interest, subject to the buyer completing the necessary cancellation formalities and bearing cancellation registration expenses and charges.
• The Tribunal relied on the principle that quantum meruit does not apply when a contract already fixes the consideration or remedy for breach.
• The Adjudicating Officer had not explained why clause 8(1) was not followed.
• The Tribunal therefore found that fixing a deduction of 10 percent of the amount paid was unsustainable.

Limits of the supplied record

The supplied text contains conflicting descriptions of the Adjudicating Officer's direction. An early paragraph refers to a 5 percent deduction, while later paragraphs repeatedly refer to 10 percent. The supplied text also ends before recording the Tribunal's final directions, including the exact refund payable, the formal result of each appeal, and whether the marketing agent remained jointly liable.