Case Note & Summary
The appellant, a retired General Manager of Bharat Petroleum Corporation Limited, entered into a Memorandum of Agreement on 30.07.2011 with the respondent promoter, M/s. Akshaya Pvt. Ltd., for the purchase of a residential flat in the project 'January' at Thaiyur Village, Chengalpet Taluk. The total cost was Rs.46,38,000/-. As per the agreement, possession was to be delivered within 30 months with a 90-day grace period from the date of sanction, i.e., by 30.04.2014. However, the promoter handed over possession of the flat only on 24.02.2018, a delay of nearly 4 years, and the club house facilities were handed over on 26.01.2021, a delay of 7 years. Aggrieved by the delay, the appellant filed a complaint before the Tamil Nadu Real Estate Regulatory Authority (TN RERA) in CCP No.30 of 2020. TN RERA, by order dated 30.03.2020, directed the promoter to pay interest for the delay. The promoter appealed to the Tamil Nadu Real Estate Appellate Tribunal (TNREAT), which reversed the order on 07.03.2022. The appellant then filed the present Civil Miscellaneous Second Appeal under Section 58 of the TNRERA Act read with Section 100 CPC. The High Court framed substantial questions of law regarding the liability of the promoter for delay under Section 18 of the RERA Act and the correctness of the Appellate Tribunal's order. The court analyzed the provisions of the RERA Act, particularly Section 18 which imposes liability on the promoter for delay in possession, and Section 19(4) which allows the allottee to withdraw. The court noted that the promoter did not provide any valid reason for the delay, such as force majeure. The court held that the Appellate Tribunal erred in reversing the TN RERA order, as the promoter was clearly liable for the delay. The court restored the TN RERA order, directing the promoter to pay interest at the prescribed rate for the period of delay. The appeal was allowed with costs.
Headnote
A) Real Estate Law - Delay in Possession - Interest Liability - Section 18 of Real Estate (Regulation and Development) Act, 2016 - The appellant allottee entered into an agreement with the respondent promoter for purchase of a flat, with possession to be delivered by 30.04.2014. The promoter handed over possession of the flat on 24.02.2018 and club house facilities on 26.01.2021, causing delays of nearly 4 years and 7 years respectively. The Tamil Nadu Real Estate Regulatory Authority (TN RERA) directed the promoter to pay interest for the delay. The Appellate Tribunal reversed this order. The High Court held that the promoter is liable to pay interest under Section 18 of the RERA Act for the delay in handing over possession, as the delay was not due to force majeure or any valid reason. The court restored the order of TN RERA. (Paras 2-10, 15-20) B) Real Estate Law - Withdrawal by Allottee - Right to Interest - Section 19(4) of Real Estate (Regulation and Development) Act, 2016 - The allottee had the option to withdraw from the project due to the delay and claim interest. The court noted that the allottee did not withdraw but continued with the agreement. However, the promoter's liability for delay remains under Section 18. The court clarified that the allottee is entitled to interest for the period of delay even if he did not withdraw. (Paras 12-14) C) Civil Procedure - Appeal under RERA - Scope of Second Appeal - Section 58 of Tamil Nadu Real Estate (Regulation and Development) Act, 2017 read with Section 100 of Code of Civil Procedure, 1908 - The appeal before the High Court is a second appeal under Section 58 of the TNRERA Act, which is akin to a second appeal under Section 100 CPC. The court can interfere only if there is a substantial question of law. The court found that the Appellate Tribunal's order was perverse and raised substantial questions of law regarding the interpretation of Section 18 and the liability for delay. (Paras 1, 15-18)
Issue of Consideration
Whether the Tamil Nadu Real Estate Appellate Tribunal erred in reversing the order of the Tamil Nadu Real Estate Regulatory Authority which had directed the promoter to pay interest for delay in handing over possession of the flat and club house facilities.
Final Decision
The appeal is allowed. The order of the Tamil Nadu Real Estate Appellate Tribunal dated 07.03.2022 in Appeal No.103 of 2021 is set aside. The order of the Tamil Nadu Real Estate Regulatory Authority dated 30.03.2020 in CCP No.30 of 2020 is restored. The respondent promoter is directed to pay interest for the delay in handing over possession as per the TN RERA order. No costs. Connected miscellaneous petitions are closed.
Law Points
- Section 18 of RERA Act
- 2016 imposes liability on promoter for delay in possession
- Section 19(4) of RERA Act
- 2016 allows allottee to withdraw without interest
- Section 38 of RERA Act
- 2016 provides for interest on delayed payments
- Section 100 CPC applicability to appeals under Section 58 of TNRERA Act
