IN THE MATTER OF: M/s Casa Grande Civil Engineering Pvt. Ltd. Vs. Mr. P. Govindraj, Mrs. Deeparaj (Decided by Hon’ble Tamil Nadu Real Estate Appellate Tribunal- TNREAT)
Issues:
Issue 1 - Whether the provisions of the Real Estate (Regulation and Development) Act, 2016 can be invoked without entering into an agreement between the developer and the homebuyer?
Issue 2 -Whether the order of the Hon’ble Adjudicating Officer is an erroneous one?
Issue 3 -Whether the appeal deserves to be allowed or not?
Facts:
Promoters being the appellant preferred an appeal against the impugned order dated 31.07.2019 passed by the Hon’ble Adjudicating Officer in CCP.No. 78/2019 for settling of an issue pertaining to whether without entering into a contract the homebuyers have the locus standi to invoke the provisions of the Real Estate (Regulation and Development) Act, 2016?
The appellant/ promoter had advertised in newspaper sale of flats in the residential real estate project.
The homebuyer and the developer mutually agreed for consideration payable in respect of the same. The homebuyer was asked to pay amounts towards consideration in respect of the proposed purchase of the residential flat in the real estate project. Thereafter, an acknowledgment letter was issued by the appellant/ promoter acknowledging the receipt of payment and providing for other terms and conditions.
The terms and conditions of the said acknowledgment letter further provided for non-payment of goods and services tax that was subsequently asked to be paid by the homebuyer. Subsequently, the appellant/ promoter even reduced the area of residential flat proposed to be sold. Stemming from the above mentioned facts and events, the homebuyer decided not to sign any definitive agreement.
The homebuyer further appeared before the Hon’ble Adjudicating Officer complaining about of violation of Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016.
The Hon’ble Adjudicating Officer ruled that the appellant/ promoter had violated the provisions of Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016. Hence, in lieu of the same, an appeal was preferred by the appellant/ promoter.
Observations and Findings of the Hon’ble Tribunal:
Findings on Issue 1-
The Hon’ble Tribunal observed that if the letter was only an acknowledgment of payment, why were certain terms and conditions mentioned in the same? The Hon’ble Tribunal even questioned the Appellant/ Promoter for incorporating terms and conditions before entering into any agreement.
The Hon’ble Tribunal further observed that the letter was relied on for repayment so the developer cannot say that it is not binding.
The Hon’ble Tribunal upheld the findings of the Hon’ble Adjudicating Officer that Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016 were violated by the appellant/ promoter, as the project falls within the ambit of an ongoing project.
Thus, the Hon’ble Tribunal observed that the provisions of Real Estate (Regulation and Development) Act, 2016 can be invoked even without entering into an agreement.
Findings on Issue 2-
The Hon’ble Tribunal further modified the compensation to Rs.1,00,000/- awarded as opposed to 9% as awarded by the Hon’ble Adjudicating Officer.
Findings on Issue 3-
As issue 1 was decided against the Appellant/ Promoter and issue 2 was modified by the Hon’ble Tribunal.
Thus, the said appeal was allowed by the Hon’ble Tribunal, in part.
