IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.11.2023 CORAM :

THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ C.M.S.A.No.15 of 2023 &

C.M.P.Nos.1462 and 1463 of 2023 M/s.Alliance Projects, Rep. by its Authorized Signatory, No.36/1, Gandhi Mandapam Road, Kotturpuram Road, Chennai - 600 085. ... Appellant Vs.

Palm Flat Owners Welfare Association, Rep. by its Secretary Mr.B.Sukumar, Having its Registered Office at Palm Block, Alliance Orchid Springs, No.54, Canal Road, Korattur, Chennai - 600 076. ... Respondent Civil Miscellaneous Second Appeal filed under Section 100 of CPC r/w under Section 58 of the Real Estate Regulation Development Act, 2016, against the Judgment and Decree dated 04.01.2023 in Appeal (SR)No.765 of 2022 passed by the Tamil Nadu Real Estate Appellate Tribunal.

For Appellant : Mr.P.L.Narayanan, Senior Counsel for Mr.E.Hariharan For Respondent : Mr.N.L.Rajah, Senior Advocate For Mr.A.Vimalraj

O R D E R

(Order of the Court was made by R. MAHADEVAN, J.)

This Civil Miscellaneous Second Appeal is filed by the appellant / promoter under Section 58 of the Real Estate (Regulation and Development) Act, 2016, (in short "RERA Act") challenging the correctness of the order dated 04.01.2023 passed by the Tamil Nadu Real Estate Appellate Tribunal (in short, "the Appellate Tribunal") in Appeal (SR)No.765 of 2022 preferred against the order dated 22.08.2022 passed by the Tamil Nadu Real Estate Regulatory Authority in C.No.279 of 2021. For the sake of reference, the order passed by the Appellate Tribunal, is extracted hereunder:-

“Pursuant to the orders of this Tribunal dated 14.12.2022, the appellant deposited a sum of Rs.2,03,23,500/- being the amount alleged to have been collected towards corpus fund. However, the appellant has not deposited the accrued interest as directed by the Tamil Nadu Real Estate Regulatory Authority. On a perusal of the order passed by Tamil Nadu Real Estate Regulatory Authority, it could be seen that the Authority directed the appellant / promoter to hand over the proportionate corpus fund, relating to the Palm block along with the actual interest earned before 31.10.2022 to the complainant / association.

Mr.P.L.Narayanan, the learned counsel for the appellant submitted that the amounts collected from the allottees were deposited in the current account of the appellant / promoter. The learned counsel further submitted that the said amount was utilized for the maintenance of the block.

The submission made by the learned counsel for the appellant cannot be accepted for the reasons that the amounts collected from the allottees would have been utilized by the promoter for some other purposes and they would have earned sufficient income from the said amounts. As per Rule 18 of the Tamil Nadu Real Estate (Regulation and Development Rules), 2017, the rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent. Though there is no material to show that the promoter had earned interest over and above the lending rate of the State Bank of India, we are of the considered view that in the interest of justice, the appellant / promoter can be directed to deposit the Fixed Deposit interest paid by the nationalized banks. Accordingly, we direct the appellant / promoter to deposit the interest at the rate of 5.5% p.n on the amounts deposited by the allottees on or before 01.02.2023.

Post the matter on 03.02.2023 for reporting compliance."

2. The necessary facts leading to the filing of this appeal would run thus:

2.1. The respondent herein viz., Palm Flat Owners Welfare Association (POWA), the members of which, had purchased flats from the appellant, lodged a complaint in C.No.279 of 2021 before the Tamil Nadu Real Estate Regulatory Authority (TNRERA), Chennai, under Section 31 of the RERA Act, alleging certain deficiencies and shortcomings on the pa