Developers cannot enforce termination clauses to retain liquidated damages once they opted to accept undelivered payments according to the contract's discretion clause, establishing the binding nature of contractual agreements.

JUDGMENT :

J. NISHA BANU, J.

This Civil Miscellaneous Second Appeal is preferred as against the order dated 28.01.2022 passed in Appeal No.30 of 2021, on the file of the Tamil Nadu Real Estate Appellate Tribunal (TNREAT), whereby, the order dated 23.02.2021 passed in C.C.P.No.263 of 2021 on the file of Tamil Nadu Real Estate Regulatory Authority (TNRERA), has been confirmed.

2. In this appeal, the appellants/developers have raised the following substantial questions of law:

“a) Whether the learned Adjudicating Officer, TNRERA and the Hon'ble Tamil Nadu Real Estate Appellate Tribunal can exercise jurisdiction in respect of a project blocks that was completed prior to 01.05.2017.

b) Whether the “Orchid Springs” project not being a project registered/registrable under RERA and consequently, whether the same cannot be subject to any proceedings under the Act, having applied for the completion certificate prior to the commencement of the Act or the Rules and having subsequently obtained the completion certificate?

c) Whether the impugned order is passed beyond the scope of the appeal itself, without hearing the parties on the orders passed, thereby rendering the impugned order null and void for violation of principles of natural justice and the principles of audi alteram partem, forming part thereof? d) Whether an allottee is entitled to receiving compensation under Section 18 of the Act when they are hit by the provisions of Rule 19(2) provision of the Rules?

e) Whether the learned Adjudicating Officer and the Hon'ble TNREAT have failed to consider the implications of the judgment of this Court in Subashini Thulasirani Vs SPR and RG Constructions Private Limited (2020 SCC Online Mad 2020 : (2020) 4 LW 865) and the order of the Hon'ble Supreme Court in M/s. New Tech Promoters Vs. The State of Uttar Pradesh and others (2021 SCC Online SC 1044), which was binding on the said authorities and have consequently passed judgments, which are per incuriam?”

3. The appellants are the developers and the respondent is the complainant. The respondent availed a housing loan for the purchase of a flat and booked a flat with the appellants. They entered into an agreement of sale dated 16.07.2012 and also entered into a tripartite agreement with the finance company. The respondent in total paid a sum of Rs.74,49,847/- to the appellants. Subsequently, the finance company refused to release further amount as the construction work was stalled. On 22.01.2014, the 1^st appellant cancelled the agreement alleging default in payment and stated that a cheque was attached for refund of the amount. Thereafter, on 03.05.2016, the appellants sent another letter for choice of flooring and further assured to hand over the property within 24 months with a grace period of six months. The respondent has been paying EMI to the finance company and living in a rental accommodation on payment of monthly rent of Rs.18,000/-. Since the appellants failed to register the agreement of sale and to hand over possession of the flat as per the terms of the agreement, the respondent filed a complaint before the Tamil Nadu Real Estate Regulatory Authority (TNRERA) vide C.C.P.No.263 of 2019, seeking refund of the amount with interest, compensation and cost.

4. The Tamil Nadu Real Estate Regulatory Authority (TNRERA) ruled in favour of the respondent/complainant vide its order dated 23.02.2021, directing the appellants/developers to pay the amount of Rs.74,49,847/- with 10.05% interest; Rs.5,00,000/- towards compensation for mental agony and inconvenience and Rs.20,000/- toward legal expenses.

5. Challenging the said order passed