Appeal No.9 of 2024
The Tamil Nadu Real Estate Appellate Tribunal, for Tamil Nadu, Puducherry, and Andaman and Nicobar Islands, issued the order in Appeal No. 9 of 2024 on 9 February 2024 under the Real Estate (Regulation and Development) Act, 2016. The Tribunal dismissed Shymosree Kulothungan's appeal and upheld the Tamil Nadu Real Estate Regulatory Authority's refusal to direct the promoter to deliver an apartment because Axis Bank had already taken possession after loan default proceedings under the SARFAESI Act.
What the case concerned
Appeal No. 9 of 2024 arose from a complaint by Shymosree Kulothungan concerning physical possession of Penthouse Apartment G-1503. The complainant had asked for possession after the promoter, Ozone Projects Private Limited, rectified or repaired defects within a stipulated time.
The Tamil Nadu Real Estate Regulatory Authority rejected that request in C.No.38 of 2022 on 30 October 2023. The complainant appealed to the Tamil Nadu Real Estate Appellate Tribunal.
Relevant facts
The Tamil Nadu Real Estate Appellate Tribunal recorded the following undisputed facts:
- The complainant entered into a construction agreement with Ozone Projects Private Limited for a total sale consideration of Rs.6,15,91,249.
- The complainant obtained a loan of Rs.4,80,89,492 from Axis Bank on 13 December 2018, repayable through equated monthly instalments.
- Following repayment default, Axis Bank classified the loan account as a non-performing asset on 10 December 2020.
- Axis Bank issued a demand notice on 9 May 2022. The complainant did not reply to that notice.
- Axis Bank later issued a possession notice dated 10 August 2022 and approached the promoter for possession.
- Axis Bank took possession of the apartment. The apartment was therefore with the bank, not the promoter.
Tribunal's decision
The Tamil Nadu Real Estate Appellate Tribunal held that the Tamil Nadu Real Estate Regulatory Authority could not direct Axis Bank to return possession after the bank had taken the property under the SARFAESI Act. The Tribunal stated that the complainant's available remedy was to approach the Debts Recovery Tribunal.
The Tribunal found no error or irregularity in the Tamil Nadu Real Estate Regulatory Authority's decision not to direct Ozone Projects Private Limited to deliver physical possession. It dismissed the appeal as having no merit.
Who may be affected
Appeal No. 9 of 2024 is relevant to apartment purchasers whose lender has taken possession after a housing loan default. It shows that a possession claim against a promoter before the Tamil Nadu Real Estate Regulatory Authority may not succeed where the apartment is already in the bank's possession under the SARFAESI Act.
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 direct the promoter to hand over the apartment?
No. The Tamil Nadu Real Estate Appellate Tribunal upheld the refusal to direct Ozone Projects Private Limited to deliver possession because Axis Bank had already taken possession.
Why could the Tamil Nadu Real Estate Regulatory Authority not order Axis Bank to return possession?
The Tribunal held that the Tamil Nadu Real Estate Regulatory Authority could not direct Axis Bank to hand over the apartment after the bank had taken possession under the SARFAESI Act.
Where did the Tribunal say the buyer should seek a remedy?
The Tamil Nadu Real Estate Appellate Tribunal stated that the complainant's remedy was to approach the Debts Recovery Tribunal.
What happened to Appeal No. 9 of 2024?
The Tamil Nadu Real Estate Appellate Tribunal found no error or irregularity in the regulatory authority's decision and dismissed the appeal.
