Appeal No. 41 of 2023 and M.A. No. 131 of 2023

What the case decides

The Tamil Nadu Real Estate Appellate Tribunal order in Appeal No. 41 of 2023 and M.A. No. 131 of 2023 concerns compensation claimed for delayed possession of a row house in the Raman Vihar housing scheme. The Tribunal decided that the allottee was not entitled to compensation for the delay and set aside the Adjudicating Officer, TNRERA order dated 18 January 2023.

The appeal was filed under Section 44 of the Real Estate (Regulation and Development) Act, 2016.

Background

The dispute involved the Army Welfare Housing Organization as promoter and Lieutenant Colonel Prem Abilash Chandran as allottee.

• The allottee applied during December 2010 and was allotted a row house with a stated carpet area of 1,440 ft.
• The construction cost was fixed at Rs.43,60,000.
• The house was expected to be delivered by December 2014 but was delivered during January 2019.
• The allottee sought compensation for delayed possession and an alleged shortage in carpet area.
• The Adjudicating Officer rejected the carpet area claim but awarded interest at 9.30% on the amount paid as compensation for the delay.

Reasons for the Tribunal's decision

The Tamil Nadu Real Estate Appellate Tribunal relied on the payment history, the project documents and the circumstances of the construction delay.

• The allottee paid instalments with a delay of four years.
• The promoter had charged Rs.9,02,633 as interest for delayed payments. A total refund of Rs.9,07,180 was made during February 2022, and the allottee admitted receiving it.
• Clause 74 of the promoter's Master Brochure stated that compensation would not be paid where possession was delayed for reasons beyond the promoter's control.
• The promoter had cancelled the first construction contract and engaged another contractor.
• The promoter offered the allottee an option to withdraw from the project by letter dated 4 June 2015. The allottee did not withdraw and later paid outstanding instalments.
• No agreement between the parties fixed a binding time for delivery. The booking letter described December 2014 only as the probable completion date.

Practical effect

The Tamil Nadu Real Estate Appellate Tribunal allowed the Army Welfare Housing Organization's appeal. The compensation award was removed, the connected miscellaneous application was closed, and the promoter was permitted to withdraw its deposited amount under Section 43(5), together with accrued interest.