Appeal No. 11 of 2023
The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman and Nicobar Islands), in Appeal No. 11 of 2023 dated 12 April 2023, dismissed the appeal filed by M/s. Color Homes Developers Private Limited against the Tamil Nadu Real Estate Regulatory Authority order dated 29 September 2022. The Tribunal upheld the direction to register the Poonamallee Farms project with the Tamil Nadu Real Estate Regulatory Authority, finding that it was an ongoing villa project rather than an exempt layout project.
What the case concerned
Appeal No. 11 of 2023 concerned Poonamallee Farms, a project covering about 20 acres at Sorancheri Village, Poonamallee Taluk, Thiruvallur District. M/s. Silver Sands Property Development Private Limited was the landowner and promoter, M/s. Color Homes Developers Private Limited was the authorised co-promoter, and S. Sudarsan Babu was an allottee and purchaser.
The landowner obtained planning permission from the Chennai Metropolitan Development Authority for a layout. Roads and open spaces had been gifted to the Commissioner, Poonamallee Panchayat Union. However, the project brochure proposed 405 constructed villas and advertised amenities.
Why the purchaser complained
S. Sudarsan Babu entered into an agreement for sale on 21 January 2017 to purchase a vacant plot for Rs.22,62,000. On the same date, he entered into a development agreement with M/s. Color Homes Developers Private Limited and paid Rs.9,52,000 towards development charges.
The development agreement required development work and amenities to be completed within two years. The purchaser complained to the Tamil Nadu Real Estate Regulatory Authority after the co-promoter failed to carry out the promised development work and provide the advertised amenities.
Tribunal findings
The Tamil Nadu Real Estate Appellate Tribunal made the following findings:
- The brochure offered luxury, deluxe and grand villa plans, showing that the promoters intended to develop a villa project.
- Sale agreement restrictions required purchasers to use M/s. Color Homes Developers Private Limited for construction, or wait two years and obtain written consent before constructing independently.
- The promoters had converted an approved layout project into an unapproved villa project.
- The exemption under Rule 2(h)(i) of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017 applied only to layout projects and was unavailable to this villa project.
- Because the promised amenities were not fully provided as on 1 May 2017, the project was an ongoing project requiring registration.
Result and practical effect
The Tamil Nadu Real Estate Appellate Tribunal dismissed the appeal at the admission stage and imposed no costs. It upheld the Tamil Nadu Real Estate Regulatory Authority direction requiring the promoters to register Poonamallee Farms with the Authority on or before 31 December 2022. The decision directly affects the project promoters and allottee, and is relevant to purchasers assessing whether advertised villas, amenities and construction restrictions differ from the planning approval.
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Common questions
Was Poonamallee Farms treated as a layout or a villa project?
The Tamil Nadu Real Estate Appellate Tribunal treated it as a villa project. The brochure contained three types of villa plans, and the sale agreement restricted purchasers to construction through the co-promoter.
Why did the project require registration with the Tamil Nadu Real Estate Regulatory Authority?
The Tribunal found that the promised amenities had not been fully provided as on 1 May 2017. It therefore treated Poonamallee Farms as an ongoing project requiring registration.
Did gifting the roads and open spaces to the local body exempt the project?
No. The Tribunal found that the exemption relied on by the co-promoter applied only to layout projects and not to the villa project actually promoted.
What happened to the co-promoter's appeal?
The Tamil Nadu Real Estate Appellate Tribunal dismissed Appeal No. 11 of 2023 at the admission stage and awarded no costs. The direction to register the project was upheld.
