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IN THE HIGH COURT OF JUDICATURE AT MADRAS
J. NISHA BANU, R.KALAIMATHI
Army Welfare Housing Organisation(AWHO) – Appellant
Versus
Nagarajan Vasudeva Rao – Respondent
Key Points: - The Court holds that a "No Profit No Loss" organization remains subject to RERA registration and liability for delays; ongoing projects without completion certificates must be registered (!) (!) (!) (!) . - Section 18(1) enforces interest to be paid for delay till possession if the allottee does not withdraw, and compensation may be awarded under Section 18, with remedies and limits governed by Rule 18 and other provisions; the appellate authorities have rightly granted interest at SBI MCLR + 2% and mandated mental agony compensation and litigation costs (!) (!) (!) (!) (!) (!) (!) . - Section 72 provides factors to be considered in awarding compensation (disproportionate gain, loss, repetition, and other just factors); the court confirms that these factors are guidance for quantum, while interest under Section 18 is separate (!) (!) (!) (!) . - Registration is mandated for ongoing projects under Section 3, including projects deemed structurally completed but not fully completed; exemptions under Rule 2(h)(ii) were considered but ultimately the project was held to require registration (!) (!) (!) (!) . - Appeals by AWHO were dismissed; TNREAT and TNRERA orders directing registration and payment of interest and compensation were upheld (!) .
| Table of Content |
|---|
| 1. introduction of the case and parties involved. (Para 1 , 2) |
| 2. key issues to be resolved under rera. (Para 3 , 8) |
| 3. findings of the adjudicating authority. (Para 5 , 6 , 12) |
| 4. arguments from the appellants regarding their liability under rera. (Para 10 , 13 , 14 , 15 , 18) |
| 5. arguments from appellants concerning quantification of compensation. (Para 19 , 20 , 22) |
| 6. examination of legal principles concerning interest liability. (Para 23 , 27 , 28) |
| 7. court's observation on regulatory compliance. (Para 30 , 31) |
| 8. conclusion on the necessity for project registration. (Para 32 , 33 , 34) |
| 9. final ruling of the court. (Para 36) |
JUDGMENT :
J. Nisha Banu, J
The above appeals in C.M.S.A.Nos.23 to 25 of 2024 and 30 & 31 of 2023 have been filed by the Army Welfare Housing Organisation (AWHO) under Section 58 of the Real Estate (Regulation & Development) Act, 2016 (hereinafter referred to as "the Act"), read with Section 100 of the CIVIL PROCEDURE CODE , challenging the impugned orders dated 20.12.2023 and 21.04.2023 passed in Appeal Nos. 12, 13 & 51 to 53 of 2023, on the file of the Tamil Nadu Real Estate Appellate Tribunal, Chennai (hereinafter referred to as "the Tribunal"). Th
A 'No Profit No Loss' organization must comply with the Real Estate Act's provisions, including registration and liability for compensation due to delays.
Enforcement of Act, 2016, comes under the purview of ‘promoter’, as defined under Section 2(zk) of Act, 2016, and necessary compliance of pre-deposit, as enshrined under Section 43(5) of Act, 2016
Complaints under RERA can only be filed for projects capable of registration; lack of necessary permissions renders a project unregistrable, barring complaints.
The court established that a project with delays in completion falls under RERA's provisions, and mere local authority certifications do not suffice as valid completion certificates.
The Real Estate (Regulation and Development) Act does not grant promoters the right to claim compensation from allottees, and such claims must be pursued in civil court.
The court affirmed that ongoing real estate projects must be registered under RERA to protect allottee interests, regardless of title transfer.
The Real Estate (Regulation and Development) Act does not provide promoters with a substantive right to claim compensation from allottees; claims must be pursued in civil courts.
The Real Estate (Regulation and Development) Act mandates registration for ongoing projects, where completion certificates are absent, emphasizing consumer protection in real estate transactions.
The definition of 'promoter' under RERA allows for developers without land ownership to register projects, and failure by UPRERA to act within statutory timeframes results in deemed registration.
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