Case law, Tamil Nadu land law
Appeal Nos. 18 and 19 of 2023, Common Order
The Tamil Nadu Real Estate Appellate Tribunal issued the common order in Appeal Numbers 18 and 19 of 2023 on 31 July 2023, concerning two purchasers who sought refunds after apartments in the Embassy Residency project were not handed over for seven years. The Tribunal set aside the Tamil Nadu Real Estate Regulatory Authority Single Member's common dismissal dated 13 February 2023 and found that the purchasers were entitled to refunds with interest because possession had not been delivered as agreed.
What the case concerns
The Tamil Nadu Real Estate Appellate Tribunal decided together the appeals of Vijay Shankar Venugopal and S.K. Balasubramanian against M/s. RGE Constructions and Development Private Limited and its authorised signatory. Each purchaser had booked a three bedroom apartment in the Embassy Residency residential project in 2012.
The construction agreement required possession within three years. According to the Tribunal, possession had still not been handed over when the purchasers filed complaints in January 2020.
Why the earlier decision was set aside
The Tamil Nadu Real Estate Regulatory Authority Single Member dismissed both complaints on 13 February 2023 after concluding that the purchasers had taken possession in 2019. The Appellate Tribunal examined the complaints and found that they contained no admission that possession had been taken.
Key findings included:
- The purchasers had stated that the promoter was forcing them to take possession in 2019, not that possession had already been delivered.
- The promoter rejected their request to accept possession under protest.
- The cancellation letters and the promoter's replies did not show that possession had been handed over.
- The Single Member had misunderstood the purchasers' pleading and had not properly considered the relevant correspondence.
The Appellate Tribunal therefore held that the dismissal was liable to be set aside.
Refund entitlement
After inspecting the apartments, the purchasers raised concerns about incomplete work, construction quality, water and sewage treatment capacity, water supply, structural stability, electrical wiring, fire fighting equipment and lifts. Emails were exchanged from April 2017 to April 2019, but the dispute remained unresolved.
The purchasers cancelled their bookings on 3 December 2019 and requested repayment with interest and compensation. The Tribunal applied Section 18 of the Real Estate (Regulation and Development) Act, 2016 and found that a promoter who cannot provide possession according to the agreement must, when an allottee withdraws, return the amount received with prescribed interest and compensation as provided by the Act.
The Tribunal concluded that the unexplained seven year failure to deliver possession gave both purchasers the right to cancel and obtain refunds with interest. The supplied text begins discussing the refund calculation for Vijay Shankar Venugopal but does not include the complete calculation or final operative directions for both appeals.
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Common questions
Can a buyer seek a refund if an apartment is not handed over as agreed?
Yes. The Tribunal found that the promoter's failure to deliver possession for seven years entitled these purchasers to cancel their bookings and receive refunds with interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016.
Did the purchasers accept possession of the Embassy Residency apartments?
No. The Tribunal found no admission that they had taken possession. Their proposal to accept possession under protest was rejected by the promoter.
Why was the Tamil Nadu Real Estate Regulatory Authority decision set aside?
The Single Member incorrectly treated a statement that the promoter was forcing the purchasers to take possession as an admission that possession had already been delivered. The Appellate Tribunal also found that relevant cancellation and reply letters had not been properly considered.
Does the supplied order text state the complete refund amount for both purchasers?
No. It refers to a revised calculation of Rs.1,14,32,198 for Vijay Shankar Venugopal, inclusive of interest at 9 percent per year up to 31 January 2020, but the supplied text ends before completing the calculation and final directions for both appeals.
