The has cleared the way for a compensation dispute to proceed under the (RERA), ruling that a property who enters into an agreement to purchase an apartment is entitled to the protections afforded to an "." Justice P.B. Balaji set aside a lower authority’s order that had previously dismissed the complaint on the grounds that the transaction was commercial in nature and therefore outside the jurisdiction of the .
The dispute originated from a signed on , involving and four companies—, , , and . Under the original arrangement, Bennett Property Holdings was to develop the land owned by the respondents. However, the parties mutually agreed to terminate the , fundamentally changing their relationship. Following this termination, the landowners took over the role of developers, while Bennett Property Holdings transitioned to the role of an apartment purchaser within the proposed project.
The petitioner subsequently alleged that the landowners failed to adhere to construction timelines and did not hand over possession as promised under the new . Seeking compensation for this delay, the petitioner approached the of TNRERA. On , the rejected the complaint, concluding that the earlier -landowner relationship rendered the subsequent apartment purchase a commercial transaction, thus barring the petitioner from seeking relief under RERA.
Challenging this decision, the petitioner approached the Madras High Court via a . Despite being served with notice and receiving via paper publication, the respondents did not appear before the court, leading to the matter being heard . During the proceedings, counsel for the petitioner argued that the termination of the initial rendered the prior business relationship moot, and the petitioner’s status as a purchaser brought it squarely within the definition of an "" under .
Justice P.B. Balaji, in his order, found the reasoning of the to be misplaced. The court held that the and construction were independent of the defunct . By assuming the role of builders for the project, the landowners became subject to the mandated by RERA, regardless of the petitioner’s historical involvement in the property’s development.
Reflecting on the statutory definition of an "
," the court observed:
"A careful consideration of the above clearly bring the petitioner within the definition of '
', under
, I am unable to see how the agreement of sale for undivided share and the
entered into between the petitioner and the respondents/land owners, who had taken upon the task of development of the property upon themselves to be termed as a commercial transaction."
The court further emphasized that the regulatory framework of RERA is designed to protect allottees from the very type of delays experienced in this project. The court noted that the
had erred by allowing the extinguished commercial relationship to influence the determination of the current dispute.
"Once the land owners have assumed the role of a
, then they are also equally bound to comply with the provisions of RERA and become liable to address the grievances of apartment buyers, like the petitioner,"
the judge remarked in his order.
Furthermore, the High Court clarified a point of significant relevance for homebuyers, noting that even if a real estate project is not formally registered under the provisions of the RERA Act, an aggrieved retains the right to move the authorities for necessary relief. The court concluded that labeling the current dispute as a purely commercial matter to be tried by a civil court was both improper and unsubstantiated.
The High Court has now directed the of TNRERA to officially take the complaint of the revision petitioner on file. The officer is required to assign a case number to the complaint and issue fresh notices to the respondent companies. Once the respondents are provided with an opportunity to file their counters or objections, the must decide the merits of the compensation claim in accordance with the law. This ruling affirms the scope of RERA protections, ensuring that parties who shift from to purchaser roles are not unjustly deprived of legal recourse when construction projects falter.
real estate law - property litigation