Appeal No.38 of 2023
The Tamil Nadu Real Estate Appellate Tribunal issued its decision in Appeal No. 38 of 2023 on 24 July 2023, dismissing an appeal by the Victoria Flat Owners Welfare Association against reliefs denied by the Puducherry Real Estate Regulatory Authority. The Tribunal held that imposing a penalty is within the discretion of the regulatory authority and confirmed that the association may file an execution petition if the developer fails to comply with the existing directions.
What the case concerns
Appeal No. 38 of 2023 concerns Victoria Apartments, a 40 flat residential project developed by Corner Stone Builders at Karuvadi Kuppam Revenue Village, Puducherry. The Victoria Flat Owners Welfare Association challenged the Puducherry Real Estate Regulatory Authority decision dated 13 March 2023 because some of the association's requested reliefs had been refused.
The association alleged that a revised building plan was obtained without the allottees' consent. It claimed that car parking spaces were reduced from 40 to 36, a proposed swimming pool was removed, and other promised amenities were not provided. It also sought directions concerning a loan discharge certificate, sewage outlet, gym, television cable, community hall, generator, corpus fund, and maintenance for unsold flats.
Existing directions to the developer
The Puducherry Real Estate Regulatory Authority had already directed the developer to:
- Comply with approved building plan conditions, including the sewage facility, within three months.
- Submit the occupancy certificate to the authority.
- Pump out sewage water.
- Give the association details of sold and unsold flats.
- Pay maintenance charges for unsold flats.
The authority warned that failure to comply within the stipulated period could result in a penalty under Section 38 of the Real Estate (Regulation and Development) Act, 2016.
Tribunal's findings
The Tamil Nadu Real Estate Appellate Tribunal noted that the regulatory authority had recorded certain violations against the developer. Because the developer had not appealed those observations, the Tribunal did not examine whether they were correct in the association's appeal.
The association's counsel argued that a penalty should have been imposed under Section 61. The Tribunal found that this argument had not been included in the grounds of appeal. It also held that the power to impose a penalty under Section 38(1) is discretionary, not mandatory. Once a penalty is fixed under Section 61, the promoter becomes liable to pay it.
Result and practical effect
The Tamil Nadu Real Estate Appellate Tribunal dismissed Appeal No. 38 of 2023 at the admission stage and closed any pending connected miscellaneous applications. If Corner Stone Builders does not comply with the Puducherry Real Estate Regulatory Authority's directions, the Victoria Flat Owners Welfare Association may file an execution petition before that authority.
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Common questions
Did the Tribunal order the developer to pay a penalty?
No. The Tamil Nadu Real Estate Appellate Tribunal held that imposing a penalty under Section 38(1) is discretionary and dismissed the association's appeal.
What can the flat owners do if the developer does not comply?
The Victoria Flat Owners Welfare Association may file an execution petition before the Puducherry Real Estate Regulatory Authority if the developer fails to comply with its directions.
Must the developer pay maintenance for unsold flats?
The Puducherry Real Estate Regulatory Authority directed the developer to pay maintenance charges for unsold flats. The Tribunal dismissed the appeal without removing that direction.
Did the Tribunal decide whether the revised building plan was valid?
No. The Tribunal did not examine the correctness of the regulatory authority's observations about the developer's alleged violations.
