Common Order in Appeal Nos.26 to 29 of 2023 and M.A.Nos.79 to 82 of 2023

What the case covers

The common order in Appeal Nos.26 to 29 of 2023 concerns the residential apartment project originally named "Jeyam Your Dream" at Adambakam Village, Alandur Taluk, Chengelpet District. The Tamil Nadu Real Estate Appellate Tribunal considered whether M/s. Lancor Holdings Limited violated Section 3(1) of the Real Estate (Regulation and Development) Act, 2016 by advertising and distributing brochures for the project when it was not registered with the Tamil Nadu Real Estate Regulatory Authority.

Section 3(1), as reproduced by the Tribunal, prevents a promoter from advertising, marketing, booking, selling, offering for sale or inviting purchases in a real estate project in a planning area without registration.

Background and affected parties

Jeayam Shelters Private Limited was the original promoter. The allottees had entered into separate construction agreements during 2011 and later sought refunds, interest and compensation after the project was allegedly not commenced even after six years.

M/s. Lancor Holdings Limited entered into a Memorandum of Understanding dated 8 August 2017 with the promoter, with the intention of taking over the project with stakeholder cooperation. The company renamed the project "LANCOR AURORA". It argued that the arrangement was never acted upon because all concerned parties did not cooperate and that brochures were given only to existing allottees for understanding.

Tribunal findings

The Tamil Nadu Real Estate Appellate Tribunal found that:

• The project remained unregistered with the Tamil Nadu Real Estate Regulatory Authority.
• M/s. Lancor Holdings Limited had admitted effecting an advertisement, although it claimed this was only to invite public claims and objections.
• Jeayam Shelters Private Limited stated that M/s. Lancor Holdings Limited advertised for purchasers and released brochures dated 27 February 2018.
• Renaming the project, advertising it and releasing brochures were sufficient to treat M/s. Lancor Holdings Limited as a co-promoter.
• Whether the Memorandum of Understanding was ultimately acted upon was immaterial.

Result and practical effect

The common order dismissed all four appeals and upheld the penalty of Rs.1,00,000 in each case. Because M/s. Lancor Holdings Limited had already deposited Rs.30,000 in each case, it was directed to pay the remaining Rs.70,000 in each case to the learned Single Member of the Tamil Nadu Real Estate Regulatory Authority. The connected miscellaneous applications were also closed.