Appeal No.46 of 2023 and M.A.No.141 of 2023
The Tamil Nadu Real Estate Appellate Tribunal, covering Tamil Nadu, Puducherry and the Andaman and Nicobar Islands, delivered its decision in Appeal No.46 of 2023 and M.A.No.141 of 2023 on 11 August 2023. The Tribunal dismissed an appeal by nine allottees of Neelkamal Residential Complex and declined to interfere with the Tamil Nadu Real Estate Regulatory Authority's dismissal of their complaint against demands for contributions to complete unfinished construction and amenities.
What the case concerned
Appeal No.46 of 2023 arose from Neelkamal Residential Complex, a project promoted by Real Value Promoters Private Limited with 551 allottees. Nine allottees appealed against the Tamil Nadu Real Estate Regulatory Authority order dated 20 April 2023 dismissing Complaint No.112 of 2022.
The allottees said that the promoter had abandoned the project without completing several works. These included CCTV cameras, pipelines, terrace leak repairs, exterior painting, generators, car parking allocation, fire-fighting equipment, second lifts in five blocks, a compound wall and a sewage treatment plant.
Earlier permission to complete the project
The Tamil Nadu Real Estate Regulatory Authority had previously passed an order in Complaint No.80 of 2020 dated 19 August 2021. It permitted the Neelkamal Apartments Buyers Association to carry out the remaining construction and common amenities, estimated to cost Rs.14,71,90,120.
That permission required the Neelkamal Apartments Buyers Association to:
- Obtain written consent from the other allottee association or associations in the project.
- Obtain authorisation to carry out the remaining construction and amenities.
- Secure a commitment that the proportionate cost would be borne.
The appellants challenged a demand by the Neelkamal Apartments Buyers Association for Rs.1,20,000 from each allottee. They argued that they had already paid the full construction cost to the promoter and that written consent had not been obtained from the other association.
Tribunal's findings
The Tamil Nadu Real Estate Appellate Tribunal found that the appellants were continuing members of the Kazhipattur Neelkamal Owners' Association but had not included that association as a respondent. It held that, while the Tamil Nadu Real Estate Regulatory Authority's order dated 19 August 2021 remained intact, the appellants could not claim that no contribution was payable for completing the project.
The Tribunal also found that a dispute between an allottee association and its members about the association's functioning could not be resolved under the Real Estate (Regulation and Development) Act, 2016. It said the appellants should have included their own association in the complaint.
The Tribunal could not direct the National Company Law Tribunal to allocate Rs.14.70 crores in the promoter's alleged insolvency proceedings. It stated that the appellants must approach the National Company Law Tribunal for that relief. The appeal was dismissed at the admission stage, and any remaining connected miscellaneous applications were closed.
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Common questions
Did the Tribunal stop the association from collecting Rs.1,20,000 from each allottee?
No. The Tamil Nadu Real Estate Appellate Tribunal dismissed the allottees' appeal and declined to interfere with the dismissal of their complaint.
Could the Neelkamal Apartments Buyers Association complete the unfinished work?
The Tamil Nadu Real Estate Regulatory Authority had permitted it to do so, subject to obtaining written consent and authorisation from the other allottee association or associations, with a commitment to bear proportionate costs.
Can disputes between an allottee association and its members be decided under the Real Estate (Regulation and Development) Act, 2016?
The Tribunal held that the dispute raised about the functioning of the appellants' own association could not be resolved under that Act.
Did the Tribunal direct the National Company Law Tribunal to provide money for completing the project?
No. The Tribunal said it could not direct the National Company Law Tribunal to allocate Rs.14.70 crores and that the appellants must approach that Tribunal for relief.
