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2025 Supreme(Mad) 5114
IN THE HIGH COURT OF JUDICATURE AT MADRAS
J.Nisha Banu, R.Sakthivel, JJ.
M/s.Alliance Projects and ors. - Appellants
Versus
Uma Maheshwari - Respondent
C.M.S.A.No.38 of 2022 and C.M.P.No.8563 of 2022
Decided On : 08-04-2025
Important Points
Subject
Real Estate Law - Real Estate Regulatory Issues
Act Referred
Headnote
(B) Civil procedure - The court reiterates that parties are bound by their agreements and prior legal findings; terms upon which they settled highlight their obligations to compensate complainants when projects aren't delivered as promised. (Paras 18, 22)
Facts of the case:
The respondent, having entered a sale agreement for a flat, paid Rs.74,49,847/- but faced delays in delivery and stalled construction, leading to a complaint to TNRERA for a refund and compensation. The appellants sought to invoke termination clauses that would allow them to retain 15% of the payment as liquidated damages.
Findings of Court:
The appellants' invocation of termination clauses was found contrary to their previous acceptance of payments under the discretion clause and invalidates their right to deduct liquidated damages.
Issues: Whether the appellants could retain a portion of the payment despite taking prior sums; jurisdictional questions related to the timing of project completion vis-a-vis RERA.
Ratio Decidendi: The court ruled that the appellants could not invoke termination clauses after opting into payment acceptance clauses, emphasizing parties must honor pre-existing agreements and related judicial interpretations.
Result: Appeal dismissed; appellants directed to pay the disputed amount of Rs.11,17,477/- to the respondent.
For the Appellant : Mr.P.H.Manoj Pandian
For the Respondent: Mr.N.Alagu Narayanan
| Table of Content |
|---|
| 1. jurisdiction of tnrera and tnreat over completed projects. (Para 1 , 2) |
| 2. facts of payment and complaint process. (Para 3 , 4 , 5) |
| 3. analysis of defaults and election doctrine application. (Para 6 , 10 , 18 , 19 , 20 , 21) |
| 4. arguments regarding refund and compensation. (Para 8 , 11 , 12) |
| 5. decision on liability for liquidated damages. (Para 22 , 23) |
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 1st 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
