Common Order in R.P. Nos. 3 to 8/2022 in A. Nos. 92 to 97/2021

What the proceedings concerned

The Common Order in Review Petition Nos. 3 to 8 of 2022 was delivered by the Tamil Nadu Real Estate Appellate Tribunal under the Real Estate Regulation and Development Act, 2016. The review petitions arose from Appeal Nos. 92 to 97 of 2021 and involved three allottees, Cybercity Mangadu Project Private Limited and Shriram Properties Limited.

The allottees had originally sought refunds of the full amounts paid to the promoters, with interest. The Adjudicating Officer allowed cancellation charges equal to 5% of the amount paid, together with litigation costs. On appeal, the Tribunal had treated Rs.1,59,226 as the booking amount that could be deducted, without interest, Goods and Services Tax or other charges.

What was reviewed

The promoters did not challenge the earlier ruling on the merits. They sought correction of what they described as an error in calculating the booking amount. They relied on Schedule D of the construction agreement, which defined the booking amount as 9.9% of the total flat cost paid in one or more instalments, or payable through the construction agreement and agreement of sale.

The Tribunal found that the earlier indicative price sheet was valid only until 27 May 2018, while the parties entered into agreements in September 2018. It therefore held that the indicative price sheet did not govern the cancellations and that the parties were bound by their construction and sale agreements.

Key findings for the parties

• The promoter may deduct 9.9% of the total amount actually paid by each allottee in instalments up to cancellation.
• The deduction is not 9.9% of the full price payable to obtain possession of the flat.
• Each allottee's refund will vary according to the instalments that allottee paid.
• Cancellation registration expenses and charges did not arise because the construction and sale agreements had not been registered.
• Goods and Services Tax did not arise because the apartments had not reached the handover stage and the agreements contained no specific provision requiring the allottee to pay Goods and Services Tax upon cancellation.

Who is affected

The Common Order directly determines the refund calculations disputed by the named allottees and promoters in Review Petition Nos. 3 to 8 of 2022. Its findings are based on the wording of their construction agreements and the circumstances of their cancellations.