Appeal No.98 of 2021, M/s. Kgeyes Residency Private Limited Vs. Dr.S.Gnanasundaram
On 21 February 2022, the Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman & Nicobar Islands) delivered its order in Appeal No. 98 of 2021, M/s. Kgeyes Residency Private Limited versus Dr. S. Gnanasundaram, on whether a landowner's complaint against a joint development developer was maintainable under the Real Estate (Regulation and Development) Act, 2016. The Tribunal concluded that, for the six apartments to be handed over to the landowner as consideration, the developer acted as a builder rather than the landowner's promoter, so there was no promoter and allottee relationship between them; the supplied text does not include the final operative direction on the appeal.
What the appeal concerns
Appeal No. 98 of 2021 arose from a joint development arrangement for property at Palaniappa Cross Street, Velachery, Chennai. The landowner and developer entered into a joint development agreement in April 2013 and a supplemental agreement on 14 June 2017.
The property was to be divided into Parts A, B and C. The arrangement provided that:
- The landowner would retain Part C and an undivided share in the private passage.
- The developer would construct six flats with proportionate car parking on Part C, provide service connections and hand them over to the landowner.
- The landowner would transfer Parts A and B and an undivided share in the private passage to the developer.
- The six flats were consideration for that transfer, instead of a cash payment.
- The developer had no right, title or interest in the landowner's Part C property and six flats.
- The landowner had no right, title or interest in Parts A and B transferred to the developer.
Complaint and appeal
The landowner complained to the Tamil Nadu Real Estate Regulatory Authority about delay in construction. The requested relief included project registration, handover, rental compensation, compensation for mental agony, permission to supervise the work and proper construction.
The Tamil Nadu Real Estate Regulatory Authority held on 10 June 2021 that the complaint was maintainable and directed the developer to file a counter. The developer appealed, arguing that the landowner was not a homebuyer or allottee and that the subdivided plots were each below 500 square metres.
Tribunal's reasoning
The Tamil Nadu Real Estate Appellate Tribunal found that the developer was required to build the six Part C apartments only for the landowner and had no right to sell them. The landowner also had not paid money for their construction. The Tribunal therefore concluded that the developer acted as a builder paying consideration through constructed apartments, not as the landowner's promoter under Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016.
For apartments developed on Parts A and B, the Tribunal stated that the developer would become a promoter in relation to people who purchased those apartments. It treated that sale activity as separate from the developer's obligation to construct and hand over the landowner's six apartments. The supplied text ends before any final operative direction allowing or dismissing the appeal.
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Common questions
Was the landowner treated as a homebuyer or allottee of the developer?
No. The Tamil Nadu Real Estate Appellate Tribunal found no promoter and allottee relationship because the six flats were to be handed over as consideration for the transfer of Parts A and B, and the developer had no right to sell those flats.
Why did the landowner approach the Tamil Nadu Real Estate Regulatory Authority?
The landowner alleged that construction had not been completed and sought project registration, handover, rental compensation, compensation for mental agony, supervision access and proper construction.
What did the Tribunal say about apartments sold by the developer on Parts A and B?
The Tribunal said that if the developer sold apartments constructed on Parts A and B, the developer would be the promoter in relation to the purchasers of those apartments.
Did the supplied decision finally allow or dismiss the appeal?
The supplied text records the Tribunal's conclusion that the developer was not the landowner's promoter, but it ends before the final operative direction allowing or dismissing the appeal.
