Appeal No. 27 of 2022, M/S. Grove OMR Properties Private Ltd. v. David Joseph
The Tamil Nadu Real Estate Appellate Tribunal delivered its decision in Appeal No. 27 of 2022 on 26 June 2023, modifying the TNRERA order in C.C.P. No. 147 of 2020 concerning an incomplete apartment in The Gem Grove project. The Tribunal directed M/S. Grove OMR Properties Private Ltd. to refund David Joseph the actual amount paid to the promoter, Rs. 38,51,333, with interest at 9.30% from the respective payment dates until 22 September 2022, while leaving the rest of the TNRERA order intact.
What the case concerned
The Tamil Nadu Real Estate Appellate Tribunal considered a dispute between M/S. Grove OMR Properties Private Ltd., the promoter, and David Joseph, an allottee in The Gem Grove residential project. The allottee had booked Flat No. IR 66 in the Imperial Red Block for a total cost of Rs. 43,25,352.79.
The parties executed a Construction Agreement and an Agreement for sale on 22 May 2013. The promoter agreed to complete construction within 24 months, but the apartment had not been completed or handed over when the allottee filed his complaint on 8 November 2020.
Jurisdiction and project status
The Tamil Nadu Real Estate Appellate Tribunal rejected the promoter's argument that TNRERA lacked jurisdiction because the development was not an ongoing project on 1 May 2017.
Key findings were:
- The Imperial Red Block remained incomplete and unfit for habitation.
- Only the beams and columns of that block had been constructed.
- The incompleteness was not limited to the allottee's apartment.
- The entire project was therefore treated as an ongoing project.
- The Real Estate (Regulation and Development) Act, 2016 prevailed over the rules relied upon by the promoter.
Refund and interest
The Tamil Nadu Real Estate Appellate Tribunal found that TNRERA should not have awarded interest at 9.30% on the full claim of Rs. 60,00,465. That claim included Rs. 38,51,333 actually paid to the promoter and Rs. 21,49,132 paid as interest to HDFC bank.
The Tribunal held that the bank interest represented the allottee's cost of funds, not money received by the promoter. It therefore directed:
- Refund of Rs. 38,51,333.
- Interest at 9.30% from the respective payment dates until 22 September 2022.
- Withdrawal of the amount due from the promoter's appeal deposit after the appeal period expired, together with proportionate interest accrued in the fixed deposit account.
- Return of any remaining balance to the promoter.
The liberty already granted to the allottee to approach the Adjudicating Officer for compensation remained intact. All other parts of the TNRERA order dated 20 April 2022 also remained unchanged.
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Common questions
Did the Tribunal treat The Gem Grove as an ongoing project?
Yes. The Tamil Nadu Real Estate Appellate Tribunal found that the entire Imperial Red Block remained incomplete and unfit for habitation, so the entire project was treated as ongoing.
How much was the promoter directed to refund?
M/S. Grove OMR Properties Private Ltd. was directed to refund Rs. 38,51,333, the amount actually received from the allottee, with interest at 9.30% from the respective payment dates until 22 September 2022.
Was the allottee awarded the Rs. 21,49,132 paid as housing loan interest?
Not as a refund from the promoter. The Tribunal treated that amount as the allottee's cost of funds and stated that the Adjudicating Officer could consider the claim when computing compensation.
Can the allottee still seek compensation?
Yes. The liberty granted by TNRERA to approach the Adjudicating Officer for compensation remained intact.
