Case law, Tamil Nadu land law
Appeal Nos.44 and 45 of 2023 and M.A.Nos. 175 and 176 of 2023, Common Order
The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman & Nicobar Islands) delivered the common order in Appeal Nos.44 and 45 of 2023 and M.A.Nos.175 and 176 of 2023 on 17 November 2023. It concerns a developer's failure to construct six villas promised to landowners under joint development agreements and finds that the failure amounted to unfair trade practice under the Real Estate (Regulation and Development) Act, 2016. The supplied text ends before the Tribunal's final directions on the appeals, compensation and penalties.
What the dispute concerns
Appeal Nos.44 and 45 of 2023 arose from separate joint development agreements dated 4 June 2010 between landowners R. Mangayarkkarasi and R. Kokilam and M/s. Shanmugam Foundation Private Limited. The developer agreed to construct 21 villas within 36 months. Six completed villas, three for each landowner, were to form the landowners' 30 per cent share, while the remaining 15 villas formed the developer's 70 per cent share.
The agreements required the developer to pay each landowner Rs.25,000 per month if the villas were not completed and handed over within the agreed period. The landowners alleged that the developer constructed villas from its own share but did not even begin their six villas.
Earlier proceedings
The landowners sought construction costs, monthly damages, interest and compensation for mental agony before the Tamil Nadu Real Estate Regulatory Authority. A Single Member dismissed both complaints on 9 February 2023 and imposed a penalty of Rs.1,00,000 on each landowner for not disclosing civil litigation details.
The landowners appealed under Section 44 of the Real Estate (Regulation and Development) Act, 2016. They also applied to submit additional documents concerning the will, partition litigation and related court proceedings. The Tamil Nadu Real Estate Appellate Tribunal allowed both applications and marked the documents as Exs.A10 to A17.
Tribunal findings
The Tamil Nadu Real Estate Appellate Tribunal recorded that the developer had not constructed any of the six villas due to the landowners. It rejected the developer's reliance on partition litigation because the construction injunction operated for only two months.
Key findings include:
- The developer constructed 11 of the 15 villas falling to its own share.
- The developer sold nine of those villas and entered into an agreement for sale concerning remaining plots.
- The civil litigation did not justify a delay exceeding ten years.
- The developer intentionally violated the joint development agreements and used the powers of attorney to benefit itself.
- The conduct amounted to unfair trade practice within Section 7(1)(c) of the Real Estate (Regulation and Development) Act, 2016.
Who is affected
The findings directly concern the two landowners and M/s. Shanmugam Foundation Private Limited. They are also relevant to landowners and developers using joint development agreements where the developer completes and sells its own allocation while leaving the landowners' promised construction unfinished. The supplied text does not contain the final appellate directions, so it does not show whether compensation was awarded or the earlier penalties were cancelled.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Did the Tribunal accept the developer's argument that civil litigation prevented construction?
No. The Tamil Nadu Real Estate Appellate Tribunal found that the injunction operated for only two months and that the developer continued constructing and selling villas from its own share.
Were the landowners allowed to file additional court documents in the appeals?
Yes. M.A.Nos.175 and 176 of 2023 were allowed, and the additional documents were marked as Exs.A10 to A17 in both appeals.
Did the Tribunal find the failure to construct the six villas to be an unfair trade practice?
Yes. The Tamil Nadu Real Estate Appellate Tribunal found that the developer intentionally violated the joint development agreements and that its conduct amounted to unfair trade practice under Section 7(1)(c) of the Real Estate (Regulation and Development) Act, 2016.
Did the Tribunal award compensation or cancel the penalties against the landowners?
The supplied text does not include the final directions on compensation or the Rs.1,00,000 penalties imposed on each landowner. Those outcomes cannot be determined from the provided extract.
