Case law, Tamil Nadu land law
Appeal No. 18 of 2022, M.N. Varadarajan and another v Tapovan Residents Welfare Association and others
The Tamil Nadu Real Estate Appellate Tribunal, Chennai, issued its order in Appeal No. 18 of 2022 on 26 August 2022, dismissing the promoters' appeal because they did not make the required pre-deposit. The Tribunal also directed the appellants to pay the remaining penalty of Rs.5 lakhs to the Tamil Nadu Real Estate Regulatory Authority immediately.
What the case concerns
Appeal No. 18 of 2022 concerned Tapovan Complex, a senior citizens' residential development involving M.N. Varadarajan, Tapovan Senior Citizens Foundation Trust, Tapovan Residents Welfare Association and Tapovan Kovai Retirement Homes Private Limited. The dispute involved plots, proportionate undivided shares of land, residential construction and charges collected from allottees for a dining hall and meditation hall.
The Tapovan Residents Welfare Association had complained to the Tamil Nadu Real Estate Regulatory Authority in C.No.128 of 2021. On 21 March 2022, the Authority allowed the complaint, issued several directions and imposed a penalty of Rs.10 lakhs for failure to register the real estate project. It also directed the refund of excess rental charges collected from allottees for the dining hall and meditation hall, but did not quantify the refund.
Why the appeal was dismissed
The Tamil Nadu Real Estate Appellate Tribunal, Chennai, initially required the appellants to deposit 50 per cent of the Rs.10 lakh penalty. The appellants deposited Rs.5 lakhs.
After both sides filed statements of account, the appellants admitted that Rs.42,37,756 had been collected as rental charges for the dining hall and meditation hall from 2013 onwards. The Tribunal directed them to deposit that admitted amount by 25 August 2022 so that the main appeal could be heard.
The appellants challenged that direction before the High Court in CRP No.2676 of 2022. The High Court dismissed the petition on 24 August 2022. When the matter returned to the Tribunal on 26 August 2022, the appellants stated that they could not make the deposit.
Key directions and practical effect
The Tamil Nadu Real Estate Appellate Tribunal, Chennai, made the following decisions in Appeal No. 18 of 2022:
- The appeal was dismissed for failure to deposit Rs.42,37,756 as directed.
- The Tribunal did not discuss or decide the full facts and merits of the dispute.
- Pending miscellaneous applications were closed.
- The Rs.5 lakhs already deposited towards half of the penalty had been remitted to the Government.
- The appellants were directed to pay the remaining Rs.5 lakhs to the Tamil Nadu Real Estate Regulatory Authority immediately.
- The Tribunal office was directed to send the order to the Authority so that it could take action to recover the balance penalty.
The decision primarily affects the promoters, builder, residents' association and allottees involved in Tapovan Complex.
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Common questions
Did the Tribunal decide whether the residents' refund claim was correct?
No. The Tamil Nadu Real Estate Appellate Tribunal stated that it did not discuss the full facts because the appeal was dismissed for failure to make the required deposit.
How much did the appellants admit collecting for the dining hall and meditation hall?
The appellants stated that they had collected Rs.42,37,756 as rental charges for the dining hall and meditation hall from 2013 onwards.
What happened to the Rs.5 lakhs already deposited as penalty?
The Tamil Nadu Real Estate Appellate Tribunal recorded that the Rs.5 lakhs deposited in two instalments had been remitted to the Government.
Does any penalty remain payable after the appeal was dismissed?
Yes. The appellants were directed to pay the remaining Rs.5 lakhs of the Rs.10 lakh penalty to the Tamil Nadu Real Estate Regulatory Authority immediately.
