Appeal No. 16 of 2023
The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman and Nicobar Islands), in Appeal No. 16 of 2023 dated 26 April 2023, dismissed an appeal by M.S. Builders and MS Foundations Private Limited at the admission stage. The Tribunal upheld the direction to refund G.K. Vijay's advance of Rs.10,00,000 with interest at 9.30% from the dates of payment until recovery, and upheld a penalty of Rs.1,00,000 for failure to register the project.
What the case concerns
The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman and Nicobar Islands) decided Appeal No. 16 of 2023 on 26 April 2023. The appeal challenged the order dated 3 January 2023 passed by the Single Member attached to the Tamil Nadu Real Estate Regulatory Authority in C.C.P. No. 140 of 2021.
The dispute concerned Plot No. 10 in the Kamakshi Nagar layout project at Vayalanallur, Poonamallee Taluk, Thiruvallur District. The promoters received a total advance of Rs.10,00,000 from G.K. Vijay on three dates between 28 February 2014 and 22 September 2014.
Why the refund was ordered
The Tamil Nadu Real Estate Appellate Tribunal recorded the following findings:
- The promoters admitted that the layout was not approved when the advance was received in 2014.
- Planning approval was obtained from the Chennai Metropolitan Development Authority on 4 November 2019.
- In the approved plan, Plot No. 10 was marked as a park and reserved as open space for public purposes.
- The promoters admitted that Plot No. 10 was reserved for public purposes and therefore could not be sold.
- The buyer chose to withdraw from the project and requested repayment of the advance with interest.
The Tribunal held that, under Section 18(1) of the Real Estate (Regulation and Development) Act, 2016, the promoters were required to return the amount received with interest when the allottee withdrew from the project.
Outcome and financial directions
The Tamil Nadu Real Estate Appellate Tribunal dismissed the promoters' appeal at the admission stage and upheld:
- Refund of Rs.10,00,000 to the buyer.
- Interest at 9.30% from the respective dates of payment until recovery.
- A penalty of Rs.1,00,000 for not registering the project as required by Section 3 of the Real Estate (Regulation and Development) Act, 2016.
The promoters had deposited Rs.19,32,661 under Section 43(5). The penalty of Rs.1,00,000 was remitted to the Government on 13 April 2023. After the appeal period expired, the buyer became entitled to withdraw the balance of Rs.18,32,661 together with subsequent interest earned from the bank investment.
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Common questions
Can a promoter sell a plot marked as a park in the approved layout?
No, according to the finding in Appeal No. 16 of 2023. The Tribunal recorded that Plot No. 10 was reserved for public purposes as a park and therefore could not be sold to anyone.
What refund did the buyer receive in this case?
The upheld direction required a refund of Rs.10,00,000 with interest at 9.30% from the respective dates of payment until recovery.
Why was the promoter fined Rs.1,00,000?
The penalty was imposed because the layout project was not registered as required under Section 3 of the Real Estate (Regulation and Development) Act, 2016.
Did the Tribunal allow the promoters' appeal?
No. The Tamil Nadu Real Estate Appellate Tribunal found no merit in the appeal and dismissed it at the admission stage.
