Appeal No. 07 of 2022
The Tamil Nadu Real Estate Appellate Tribunal, covering Tamil Nadu, Puducherry and the Andaman and Nicobar Islands, issued the order in Appeal No. 07 of 2022 on 28 March 2022. It dismissed the appeal by M/s. K.G. Foundations (P) Ltd. because the promoter failed to make the required 100 percent pre-deposit, and it closed the connected miscellaneous applications without costs.
What the case concerns
Appeal No. 07 of 2022 before the Tamil Nadu Real Estate Appellate Tribunal arose from a homebuyer complaint against promoter M/s. K.G. Foundations (P) Ltd. The respondents were V. Gnanasambandam and G. Danya.
The appeal challenged the Adjudicating Officer's order in C.C.P. No. 215 of 2019, dated 23 September 2021. The homebuyers had sought a refund of the sale consideration with interest, compensation and litigation costs.
Directions made by the Adjudicating Officer
The Adjudicating Officer directed the promoter to:
- Repay Rs.3,61,109 with interest at 10.35 percent.
- Pay compensation of Rs.1,00,000.
- Pay litigation costs of Rs.25,000.
- Pay to the bank the balance amount that had been paid by the bank.
M/s. K.G. Foundations (P) Ltd. appealed against these directions.
Pre-deposit and dismissal
The Tamil Nadu Real Estate Appellate Tribunal ordered the promoter, in M.A. No. 25 of 2022 under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016, to pre-deposit 100 percent of the total amount ordered by the lower authority on or before 15 March 2022.
The promoter did not deposit the required amount. Its counsel stated that an appeal had been filed before the High Court in C.R.P. No. 900 of 2022 and was at the admission stage. The matter was adjourned, but the required pre-deposit remained unpaid on 28 March 2022. The promoter had paid only the cost on 26 March 2022.
Because of this non-compliance, the Tamil Nadu Real Estate Appellate Tribunal dismissed Appeal No. 07 of 2022. It made no order as to costs and closed the connected miscellaneous applications.
Who is affected
Appeal No. 07 of 2022 directly affects M/s. K.G. Foundations (P) Ltd., V. Gnanasambandam and G. Danya. For other promoters and homebuyers, the decision shows that failure to comply with a pre-deposit direction can result in an appeal being dismissed without consideration of its merits.
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Common questions
Why was the promoter's appeal dismissed?
The Tamil Nadu Real Estate Appellate Tribunal dismissed Appeal No. 07 of 2022 because M/s. K.G. Foundations (P) Ltd. did not make the ordered 100 percent pre-deposit.
What amounts had the Adjudicating Officer ordered the promoter to pay?
The Adjudicating Officer ordered repayment of Rs.3,61,109 with interest at 10.35 percent, compensation of Rs.1,00,000 and litigation costs of Rs.25,000. The balance amount paid by the bank was also directed to be paid to the bank.
Did paying the cost alone satisfy the pre-deposit direction?
No. The promoter paid the cost on 26 March 2022 but did not deposit the required amount, so the appeal was dismissed for non-compliance.
Did the Tribunal award any further costs when dismissing the appeal?
No. The Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal with no costs and closed the connected miscellaneous applications.
