Common Order, Appeal Nos. 67 to 72 of 2022

What the appeals concern

The common order in Appeal Nos. 67 to 72 of 2022 was delivered by the Tamil Nadu Real Estate Appellate Tribunal on 8 September 2023. Six allottees appealed against the disallowed portion of a common order passed by the Tamil Nadu Real Estate Regulatory Authority on 29 September 2022.

The allottees had received separate dwelling units built by the Indian Railway Welfare Organization at Ambattur, Chennai. They sought:

• Refund of additional construction costs collected from them.
• A direction requiring the promoter to bear additional stamp duty and registration charges.
• Registration of sale deeds and completion of remaining amenities.

Project background

The Indian Railway Welfare Organization purchased the project land in 2004 and opened bookings in 2006. The land was originally classified for industrial use, and the change to residential classification took until 2011. Planning permission and construction followed, while possession was delivered in 2018.

No construction agreement or agreement for sale was executed between the parties. The source records that no construction completion period was specified. The allottees had, however, submitted letters of acceptance and undertaking.

Tribunal findings

The Tamil Nadu Real Estate Appellate Tribunal relied on the project brochures and the allottees' letters of acceptance and undertaking. Its key findings were:

• Apartment costs shown in the brochures were approximate and subject to revision for matters including approvals, tender costs, labour and material escalation, design changes and delays beyond the promoter's control.
• The brochure excluded stamp duty and registration charges from the stated apartment cost.
• Each allottee had accepted that the estimated cost could be revised and agreed to pay escalation and other charges demanded by the Indian Railway Welfare Organization.
• The promoter therefore could not be directed to refund the additional dwelling unit costs.
• The promoter had stated that it was ready to execute the sale deeds. The allottees were required to pay the necessary stamp duty and registration charges.

Who may be affected

The common order directly concerns the six named Rail Vihar allottees and the Indian Railway Welfare Organization. It is particularly relevant to buyers examining whether a brochure or signed undertaking makes estimated project costs variable and places stamp duty and registration expenses on the allottee.