Madras High Court
Spr & Rg Constructions Private ... vs Mr. K.Venkataramanan on 19 April, 2021
C.M.S.A. Nos. 49 to 53 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 06.05.2021 Pronounced on : 28.07.2021
CORAM :
THE HONOURABLE MR. JUSTICE R. SURESH KUMAR
AND
THE HONOURABLE MR. JUSTICE P.D. AUDIKESAVALU
C.M.S.A. Nos. 49 to 53 of 2021
and
C.M.P. Nos. 8683 to 8687 of 2021
1.SPR & RG Constructions Private Limited,
Represented by its Managing Director,
Mr.Hitesh Kumar P. Kawad
2.Mr.Hitesh P. Kawad
3.Mr. M.G.Surendranath ... Appellants in all C.M.S.A.s
-vs-
1.Mr. K.Venkataramanan
2.Mrs. Latha Venkataramanan ... Respondents in C.M.S.A. No.49 of 2021
1.Ms.Anju Anna Thomas
2.Mrs.Annie Thomas ... Respondents in C.M.S.A. No.50 of 2021
1.Mr. S.Suresh
2.Mrs. S.Srividhya ... Respondents in C.M.S.A. No.51 of 2021
Ronald Lamech ... Respondent in C.M.S.A. No.52 of 2021
P. Suresh ... Respondent in C.M.S.A. No.53 of 2021
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C.M.S.A. Nos. 49 to 53 of 2021
COMMON PRAYER:- Civil Miscellaneous Second Appeals filed under Section
58 of the Real Estate (Regulations & Development) Act, 2016 read with Section
151 of C.P.C., (a) to allow the appeals by setting aside the order of the Tamil
Nadu Real Estate Appellate Tribunal, Chennai, dated 19.04.2021 made in Appeal
Nos. 13 to 17 of 2021 and the order of the Tamil Nadu Real Estate Regulatory
Authority, Chennai, dated 04.02.2021 made in I.A. Nos. 5 to 9 of 2021 in C. Nos.
21, 38, 39, 40 and 41 of 2020; (b) to dismiss the complaints in C. Nos. 21, 38, 39,
40 and 41 of 2020 as not maintainable due to lack of jurisdiction;
For Appellants : Mr. S.Prabhakaran, Senior Counsel
for Mr. R.Satishkumar
For Respondents : Mr. Ravikumar Paul, Senior Counsel
for M/s. Paul and Paul
COMMON JUDGMENT
(through video conference)
Heard Mr. S.Prabhakaran, Learned Senior Counsel appearing for the
Appellants and Mr. Ravikumar Paul, Learned Senior Counsel appearing for the
Respondents and perused the materials placed on record, apart from the pleadings
of the parties.
2. The Appellants in these appeals are the 'promoters' of the multi-storied
building project known as 'Osian Chlorophyll' comprised in S. Nos. 148/5A,
148/7A, 137/1 and 138/1 situated at Karambakkam Village, Ambattur Taluk,
Tiruvallur District. The Respondents in each of these appeals are the 'allottees' of
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C.M.S.A. Nos. 49 to 53 of 2021
some apartments in that project of the Appellants. According to the Respondents,
it had been represented to them by the Appellants that in terms of the Planning
Permit No. 7125 dated 20.07.2012, it was proposed to construct only 950 units of
residential buildings in the said project. Though the apartments allotted to the
Respondents had been handed over to them after construction in the years 2017
and 2018, to their shock and surprise, they came to know that the Appellants had
clandestinely revised the initial plan without any intimation or consent from them
and had made several deviations and the total number of dwelling units had been
increased from 950 to 1050, apart from failure of the Appellants to provide for all
the amenities that had been promised to them. It is the specific case of the
Respondents that the said project of the Appellants is covered by the provisions of
the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to
as the 'Real Estate Act' for short) and the Appellants have miserably not followed
the mandatory provisions of that statute, which is prejudicial to their interests. In
that backdrop, the Respondents had on 13.01.2020 filed separate complaints in
C. Nos. 21 and 38 to 41 of 2020 before the Tamil Nadu Real Estate Regulatory
Authority (hereinafter referred to as 'TNRERA' for short) under Section 31 of the
Real Estate Act claiming the following reliefs:-
(i) to direct the Appellants to register the project 'Osian Chlorophyll'
comprised in New S. Nos.148/5A, 148/7A, 137/1 and 138/1 situated at
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C.M.S.A. Nos. 49 to 53 of 2021
Karambakkam Village, Maduravoyal Taluk, Tiruvallur District with the
Real Estate Regulatory Authority under the Real Estate Act and the Tamil
Nadu Real Estate (Regulation and Development) Rules, 2017 (hereinafter
referred to as the 'TN Real Estate Rules' for short);
(ii) to direct the Appellants to provide club houses and other amenities as
provided in the original approved plan and agreement, or alternatively to
provide equivalent alternate club house spaces and amenities;
(iii) to direct the Appellants to provide the periodic local body inspection
reports;
(iv) to direct the Appellants to produce evidence to show the buildings are
structurally safe in the wake of the Appellants putting up a Mezzanine floor
above the basement contrary to the original approved plan;
(v) to direct the Appellants to refrain from putting up or altering any
constructions unilaterally contrary to the terms of the agreement;
(vi) to direct the Appellants to complete the entire project by providing all
amenities agreed to by the Appellants in the agreement with the
complainants;
(vii) to direct the Appellants to provide car parks as per the
CMDA/Development Control Rules including visitors parking and as per
the agreement with the Respondents;
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C.M.S.A. Nos. 49 to 53 of 2021
(viii) to direct the Appellants to pay such compensation which is deemed fit as
well as costs to the Respondents;
(ix) to initiate appropriate action against the Appellants for violations of the
Real Estate Act and the TN Real Estate Rules;
(x) to hand over all the original parent documents on formation of the
association, to the office bearers of the association within 15 days of
intimation of association formation; and
(xi) to transfer the corpus fund to the association within 15 days of intimation of
formation of the association by the office bearers.
The Respondents have also sought for orders of interim injunction restraining the
Appellants or any of their agents, representatives acting on their behalf and
Directors from alienating or dealing in any manner with the unsold apartments in
the project until the project is completed.
3. The Appellants, who had entered appearance in the said complaints filed by
the Respondents before TNRERA, raised preliminary objection on maintainability
in I.A. Nos. 5 to 9 of 2021, contending that the complaints do not relate to an
'ongoing project' under the purview of the Real Estate Act, relying upon the order
dated 19.06.2019 in Appeal No. 2 of 2019 passed by the Tamil Nadu Real Estate
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Appellate Tribunal (hereinafter referred to as 'TNREAT' for short) in respect of
another allottee of the same project of the Appellants. The Respondents had filed
their Counter-Affidavit and after hearing both parties, TNRERA by order dated
04.02.2021 overruled the objections raised by the Appellants by holding that the
order of TNREAT relied by the Appellants had been set aside by the Division
Bench of this Court by order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 and
directed the Appellants to file Counter-Affidavit with specific reference to the
relief prayed for by the Respondents before 18.02.2021 as a last chance. The
Appellants were also restrained from marketing or booking or selling the unsold
apartments in their project until further orders from TNRERA and direction was
issued to the concerned Sub-Registrar Office not to register any agreement or
sale-deed in respect of unsold apartments in the project of the Appellants until
further orders, and the matter was posted for next hearing on 04.03.2021.
Aggrieved thereby, the Appellants had preferred appeals on 18.02.2021 in Appeal
Nos. 13 to 17 of 2021 before TNREAT under Section 44 of the Real Estate Act.
It was the contention of the Appellants in those appeals that as they have preferred
Petition for Special Leave to Appeal in S.L.P. (Civil) No. 14103 of 2020 under
Article 136 of the Constitution of India before the Hon'ble Supreme Court of India
against the order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 passed by the
Division Bench of this Court, the question as to whether the provisions of the
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Real Estate Act could be resorted by the Respondents for the project of the
Appellants has not yet attained finality and till the same was ultimately decided,
the complaint before TNRERA could not be proceeded on merits. TNREAT by
order dated 19.04.2021 passed in the said appeals declined to accept the said
arguments by pointing out that the Hon'ble Supreme Court of India has not stayed
the order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 passed by the Division
Bench of this Court, in which a direction has been issued to TNRERA to proceed
with the complaint of the concerned allottee before TNRERA on merits after
giving opportunity to both parties with the time-frame, and dismissed those
appeals.
4. The Appellants have preferred these Second Appeals against the common
order dated 19.04.2021 in Appeal Nos. 13 to 17 of 2021 passed by TNREAT,
under Section 58 of the Real Estate Act, which provides that any person aggrieved
by any decision or order of the Appellate Tribunal, may file an appeal to the High
Court on any one or more of the grounds specified in Section 100 of the Code of
the Civil Procedure, 1908, which are extracted below:-
“(1) Save as otherwise expressly provided in the body of this Code
or by any other law for the time being in force, an appeal shall lie to
the High Court from every decree passed in appeal by any Court
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subordinate to the High Court, if the High Court is satisfied that the
case involves a substantial question of law.
(2) An appeal may lie under this section from an appellate decree
passed exparte.
(3) In an appeal under this section, the memorandum of appeal
shall precisely state the substantial question of law involved in the
appeal.
(4) Where the High Court is satisfied that a substantial question
of law is involved in any case, it shall formulate that question.
(5) The appeal shall be heard on the question so formulated and
the respondent shall, at the hearing of the appeal, be allowed to
argue that the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to
take away or abridge the power of the Court to hear, for reasons to
be recorded, the appeal on any other substantial question of law,
not formulated by it, if it is satisfied that the case involves such
question.”
In furtherance thereof, the Appellants have raised the following substantial
questions of law in their memoranda of grounds of appeals before this Court:-
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(i) Whether the Respondents seeking for invocation of the Real Estate Act
against the Appellants can be continued to be maintained in the light of the
fact that the contesting Respondents and other allottees have taken
possession of their respective flats. When there is no pending lis between
the parties, how can they still maintain the litigation?
(ii) When the contesting Respondents have taken possession of their fully
constructed flats, whether they are estopped form continuing with further
proceedings under the Real Estate Act?
(iii) Whether the project of the Appellants is a structurally completed project as
on the date of notification of the TN Real Estate Rules and whether the
project of the Appellants has been exempted under the TN Real Estate
Rules?
(iv) Whether when TNRERA was established in Tamil Nadu on 22.06.2017, the
project of the First Appellant was listed as completed project as per the
Rule 2(h)(ii) of the TN Real Estate Rules immediately after the notification
of the TN Real Estate Rules and further, whether the said facts were
corroborated by entry No. 53 in the list titled 'List of Completion Certificate
Applications submitted in CMDA prior to 22.06.2017 for Chennai
Metropolitan Area' published in the website of TNRERA itself?
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(v) Whether the project of the Appellants is structurally completed project well
early before the date of notification of the Real Estate Act and the TN Real
Estate Rules?
(vi) Whether the project of the Appellants is exempted by satisfying section
2(h)(ii) of the TN Real Estate Rules?
(vii) Whether the Appellants are entitled to market or book or sell the unsold
apartments in the above structurally completed project and accordingly, to
register any agreement or sale-deed in respect of the unsold apartments in
the above structurally completed project?
5. It is sought to be canvassed by the Appellants in substantial question of law
nos. (i) and (ii) that an 'allottee', who has taken possession of his constructed
apartment from the promoter, cannot seek any redressal of grievances by way of
complaint under Section 31 of the Real Estate Act. Before proceeding further to
examine the said questions sought to be raised, it would be useful here to read the
Statement of the Objects and Reasons of the Real Estate (Regulation and
Development) Bill, 2013, as follows:-
“ The real estate sector plays a catalytic role in fulfilling the
need and demand for housing and infrastructure in the country.
While this sector has grown significantly in recent years, it has been
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C.M.S.A. Nos. 49 to 53 of 2021
largely unregulated, with absence of professionalism and
standardisation and lack of adequate consumer protection. Though
the Consumer Protection Act, 1986 is available as a forum to the
buyers in the real estate market, the recourse is only curative and is
not adequate to address all the concerns of buyers and promoters in
that sector. The lack of standardisation has been a constraint to the
healthy and orderly growth of industry. Therefore, the need for
regulating the sector has been emphasised in various forums.
2. In view of the above, it becomes necessary to have a Central
legislation, namely, the Real Estate (Regulation and Development)
Bill, 2013 in the interests of effective consumer protection,
uniformity and standardisation of business practices and
transactions in the real estate sector. The proposed Bill provides for
the establishment of the Real Estate Regulatory Authority (the
Authority) for regulation and promotion of real estate sector and to
ensure sale of plot, apartment or building, as the case may be, in an
efficient and transparent manner and to protect the interest of
consumers in real estate sector and establish the Real Estate
Appellate Tribunal to hear appeals from the decisions, directions or
orders of the Authority.
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3. The proposed Bill will ensure greater accountability towards
consumers, and significantly reduce frauds and delays as also the
current high transaction costs. It attempts to balance the interests of
consumers and promoters by imposing certain responsibilities on
both. It seeks to establish symmetry of information between the
promoter and purchaser, transparency of contractual conditions, set
minimum standards of accountability and a fasttrack dispute
resolution mechanism. The proposed Bill will induct professionalism
and standardisation in the sector, thus paving the way for
accelerated growth and investments in the long run”.
On perusal, it is apparent that the Real Estate Act is a sister enactment of the
Consumer Protection Act, 1986, to achieve the same objectives more effectively.
In that context, it must be recapitulated here that the Hon'ble Supreme Court of
India in the decision in Lucknow Development Authority -vs- M.K.Gupta [(1994)
1 SCC 243] has explicated the manner in which the provisions of the Consumer
Protection Act, 1986, have to be construed, in the following words:-
“2. ....it appears appropriate to ascertain the purpose of the Act,
the objective it seeks to achieve and the nature of social purpose it
seeks to promote as it shall facilitate in comprehending the issue
involved and assist in construing various provisions of the Act
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effectively. To begin with the preamble of the Act, which can afford
useful assistance to ascertain the legislative intention, it was
enacted, ‘to provide for the protection of the interest of consumers’.
Use of the word ‘protection’ furnishes key to the minds of makers of
the Act. Various definitions and provisions which elaborately
attempt to achieve this objective have to be construed in this light
without departing from the settled view that a preamble cannot
control otherwise plain meaning of a provision. In fact the law
meets long felt necessity of protecting the common man from such
wrongs for which the remedy under ordinary law for various
reasons has become illusory. Various legislations and regulations
permitting the State to intervene and protect interest of the
consumers have become a haven for unscrupulous ones as the
enforcement machinery either does not move or it moves
ineffectively, inefficiently and for reasons which are not necessary to
be stated. The importance of the Act lies in promoting welfare of the
society by enabling the consumer to participate directly in the
market economy. It attempts to remove the helplessness of a
consumer which he faces against powerful business, described as, ‘a
network of rackets’ or a society in which, ‘producers have secured
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power’ to ‘rob the rest’ and the might of public bodies which are
degenerating into storehouses of inaction where papers do not move
from one desk to another as a matter of duty and responsibility but
for extraneous consideration leaving the common man helpless,
bewildered and shocked. The malady is becoming so rampant,
widespread and deep that the society instead of bothering,
complaining and fighting against it, is accepting it as part of life.
The enactment in these unbelievable yet harsh realities appears to
be a silver lining, which may in course of time succeed in checking
the rot....
....The provisions of the Act thus have to be construed in
favour of the consumer to achieve the purpose of enactment as it is a
social benefit oriented legislation. The primary duty of the court
while construing the provisions of such an Act is to adopt a
constructive approach subject to that it should not do violence to the
language of the provisions and is not contrary to the attempted
objective of the enactment.”
The said principles of interpretation would equally apply to the Real Estate Act
also. Having due regard to the common course of natural events, human conduct
and public and private business, it would be usually only after the allottee obtains
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possession of the apartment from the promoter that he would be in a position to
ascertain whether what had been represented or promised in the contract has been
carried out in the construction by the promoter in entirety and it is for the
shortcomings in that regard that the resort to the redressal mechanism in the Real
Estate Act would be made. A plain reading of the various provisions of the Real
Estate Act do not give any scope to even speculate that taking possession of the
apartment by an allottee would forfeit his right to make any complaint against the
promoter under Section 31 of the Real Estate Act. In such circumstances, the
substantial question of law nos. (i) and (ii) sought to be raised by the Appellants
have to be necessarily answered against them at the threshold itself.
6. The substantial question of law nos. (iii) to (vi) sought to be raised by the
Appellants are matters, which have been extensively deliberated on the same
project in the order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 passed by the
Division Bench of this Court, where it has been held as follows:-
(i) as on the date of the commencement of the Real Estate Act on 01.05.2017,
the First Appellant has not applied for the Completion Certificate and
therefore, the project of the First Appellant is an 'ongoing' project;
(ii) the Appellants cannot take shelter under Rule 2(h)(ii) of the TN Real Estate
Rules stating that the First Appellant has applied for the Completion
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Certificate on 29.05.2017 as the said Rule gives an exemption only to the
developers who applied for the Completion Certificate on or before
01.05.2017;
(iii) according to the First Appellant, the entire project was completed on
03.05.2017, whereas the First Appellant applied for the Completion
Certificate on 29.05.2017;
(iv) after completion of the project on 03.05.2017, the First Appellant applied
for revised approval plan on 20.07.2018 for dwelling units of 1050, altering
the original dwelling units of 950 and the revised plan was obtained on the
very same day on 20.07.2018;
(v) after completion of the entire project, the Environmental Clearance
Certificate was obtained on 27.06.2018 only as a formality;
(vi) admittedly there is no Environmental Clearance Certificate obtained before
commencement of the construction of the project by the First Appellant as
stated in the Environmental Clearance Certificate itself;
(vii) the application for the Completion Certificate without Environmental
Clearance Certificate is a defective application in the eye of law and it
cannot be called as an application for the Completion Certificate; and
(viii) the State Level Environmental Impact Assessment Authority cannot issue
post facto Environmental Clearance Certificate, inspite of the admission
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made by the First Appellant in his letter of apology/commitment dated
01.07.2013 that is violating EIA Notification, 2006. The construction
activities have already been started without mandatory prior environmental
clearance from the competent authority.
The aforesaid conclusions arrived in that binding decision of the Co-ordinate
Bench of this Court clinches the issue against the Appellant. It would be
necessary at this juncture to refer to the ruling of the Hon'ble Supreme Court of
India in Hero Vinoth (Minor) -vs- Seshammal [(2006) 5 SCC 545], while
summarising the principles relating to Section 100 of the Code of Civil Procedure,
1908, it has been observed as follows:-
“24.... (ii) The High Court should be satisfied that the case
involves a substantial question of law, and not a mere question of
law. A question of law having a material bearing on the decision of
the case (that is, a question, answer to which affects the rights of
parties to the suit) will be a substantial question of law, if it is not
covered by any specific provisions of law or settled legal principle
emerging from binding precedents, and, involves a debatable legal
issue. A substantial question of law will also arise in a contrary
situation, where the legal position is clear, either on account of
express provisions of law or binding precedents, but the court below
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has decided the matter, either ignoring or acting contrary to such
legal principle. In the second type of cases, the substantial question
of law arises not because the law is still debatable, but because the
decision rendered on a material question, violates the settled
position of law.”
Applying the said principles, it is evident that the impugned orders of TNRERA
and TNREAT are in consonance with the dictum laid down by the Division Bench
of this Court in the order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 and as
such, the Appellants cannot re-agitate the same controversy which has already
been decided against them qua these appeals.
7. The remaining substantial question of law no. (vii) sought to be raised by
the Appellants is as to whether the Appellants are entitled to market or book or
sell the unsold apartments in the structurally completed project and register any
agreement or sale-deed in respect of unsold apartments in their project. Learned
Senior Counsel appearing on behalf of the Appellants submits that the directions
issued in this regard by TNRERA in the order dated 04.02.2021 in I.A. No. 5 to 9
of 2021 in C. Nos. 21 and 38 to 41 of 2002 is working against the financial
interests of the Appellants causing undue hardship by depriving them of their
entitlement to reap the benefits after completing the entire construction in the
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project. It must, at once, be noticed here that the said order passed by TNRERA is
an interim order granted under Section 36 of the Real Estate Act until further
orders, meaning thereby that like any other interlocutory relief granted during the
pendency of the main legal proceeding, application to vacate or vary the same
could be made by placing the change in circumstances or such other facts
warranting modification before TNRERA. In the present case, it has been
pointedly contended by the Respondents that at the time when they booked for
apartments in the project of the Appellants, it had been represented that only 950
dwelling units were to be constructed as per the approved plan obtained from the
Competent Authority, but the same has been increased to 1050 dwelling units
behind their back without their consent, which they have come to know only after
they have taken possession of their allotted apartments. It would not be out of
place here to highlight that Section 14(2) of the Real Estate Act contains an
overriding provision that alteration and addition in the sanctioned plans and
specifications of the common areas within the project cannot be made without the
previous written consent of the atleast two-thirds of the allottees other than the
promoter who has agreed to take apartments in such building. The Division Bench
of this Court in the order dated 15.09.2020 in C.M.S.A. No. 22 of 2019 has
expressly held that the revised plan approval dated 20.07.2018 increasing the
number of dwelling units from 950 to 1050 made after obtaining Completion
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Certificate on 29.05.2017 for the entire project is contrary to law. The inference
that could be drawn from this fact situation borne out from the record is that the
construction of the apartments in excess of 950 dwelling units being prima facie
illegal, it would not be fair or proper to allow the Appellants to transfer the same
in favour of third parties, which would cause unnecessary further legal
complications till the disputes raised by the Respondents against the Appellants in
that regard is resolved. As such, when the grant of the said interim order appears
to be justified, it does not warrant any interference by this Court at this pre-mature
stage of the legal proceedings. It is hastened to add here that the aforesaid
observations made in this order shall not inhibit or influence the exercise of
powers by TNRERA to modify the interim order based upon the evidence to be
produced by the parties in accordance with law.
8. The result of the foregoing discussion is that there is no question of law,
much less any substantial question of law that has arisen in these Second Appeals,
to interfere with the impugned common order dated 19.04.2021 in Appeal Nos. 13
to 17 of 2021 passed by TNREAT confirming the common order dated
04.02.2021 in I.A. Nos. 5 to 9 of 2021 in C. Nos. 21 and 38 to 41 of 2020 passed
by TNRERA.
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9. In the upshot, these Second Appeals, which do not deserve to be
entertained, are dismissed. Consequently, the connected miscellaneous petitions
are closed. No costs.
(R.S.K., J.) (P.D.A., J.)
28.07.2021
Sm/vjt
Index: Yes
Internet: Yes
To
1. The Chairperson,
Tamil Nadu Real Estate Regulatory Authority,
No. 1-A, III Floor,
Gandhi Irwin Bridge Road,
Egmore,
Chennai – 600 008.
2. The Chairperson,
Tamil Nadu Real Estate Appellate Tribunal,
No. 1-A, III Floor,
Gandhi Irwin Bridge Road,
Egmore,
Chennai – 600 008.
https://www.mhc.tn.gov.in/judis/
C.M.S.A. Nos. 49 to 53 of 2021
R. SURESH KUMAR, J.
and
P.D. AUDIKESAVALU, J.
sm
Pre-delivery Judgment in
C.M.S.A. Nos. 49 to 53 of 2021
28.07.2021
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