Case law, Tamil Nadu land law
Appeal No. 70 of 2023, D. Sivasankaran and another v. M/s. Casa Grande Builder Pvt. Limited
The Tamil Nadu Real Estate Appellate Tribunal issued its order in Appeal No. 70 of 2023 on 3 November 2023, dismissing an appeal by D. Sivasankaran and N. Usha Kumari against M/s. Casa Grande Builder Pvt. Limited. The Tribunal held that the appellants were not allottees because no construction agreement or agreement for sale had been executed in their favour, but allowed them to pursue recovery of the alleged booking amount before an appropriate forum.
What the case concerned
Appeal No. 70 of 2023 arose from the proposed purchase of Flat A-1401 in the CRESCENDO project promoted by M/s. Casa Grande Builder Pvt. Limited. D. Sivasankaran and N. Usha Kumari said they had paid Rs.1,00,000 as a booking amount and Rs.18,00,000 towards construction costs. They also said that housing loan payments were released by HDFC Bank to the promoter.
The construction agreement dated 15 September 2018 was executed between M/s. Reliable Cashew Company Private Limited, represented by its director R. Gowthaman, and the promoter. The appellants said that the agreement was structured this way because N. Usha Kumari was a homemaker and senior citizen.
Relief requested
The appellants asked for the Single Member, TNRERA order dated 22 August 2023 to be set aside. Their requested relief included:
- Refund of the Rs.1,67,00,000 loan amount to HDFC Bank.
- Refund of Rs.28,98,069 paid towards loan interest and service tax.
- Refund of the Rs.19,00,000 advance amount, with 12% interest from booking until repayment.
The Single Member, TNRERA had rejected the complaint at the initial registration stage.
Tribunal's findings
The Tamil Nadu Real Estate Appellate Tribunal found that:
- No construction agreement or agreement for sale was executed between the appellants and the promoter.
- The agreement documents identified R. Gowthaman as the actual allottee.
- The appellants were neither directors of M/s. Reliable Cashew Company Private Limited nor legal representatives of R. Gowthaman.
- Payment of a booking amount by N. Usha Kumari did not, without an agreement in the appellants' favour, make them allottees under the Real Estate (Regulation and Development) Act, 2016.
- There was no allottee and promoter relationship between the appellants and M/s. Casa Grande Builder Pvt. Limited.
The Tribunal therefore found no reason to interfere with the Single Member, TNRERA decision and dismissed the appeal.
Practical effect
Appeal No. 70 of 2023 did not grant the requested refunds under the Real Estate (Regulation and Development) Act, 2016. However, the Tribunal stated that the appellants could take appropriate legal action before an appropriate forum to recover the booking amount allegedly paid by N. Usha Kumari.
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Common questions
Does paying a booking amount automatically make someone an allottee?
No, not in the circumstances considered in Appeal No. 70 of 2023. The Tamil Nadu Real Estate Appellate Tribunal held that payment of the booking amount did not make the appellants allottees when no agreement was executed in their favour.
Why was the appeal dismissed?
The appeal was dismissed because the construction agreement and agreement for sale were not in the appellants' names. The Tribunal found no contractual or allottee and promoter relationship between them and M/s. Casa Grande Builder Pvt. Limited.
Did the Tribunal order the promoter to refund the housing loan and advance?
No. The Tamil Nadu Real Estate Appellate Tribunal dismissed the request for refunds under the Real Estate (Regulation and Development) Act, 2016.
Can the appellants still seek recovery of the booking amount?
Yes. The Tribunal stated that they could take appropriate legal action before an appropriate forum to recover the booking amount allegedly paid by N. Usha Kumari.
