Madras High Court
P.Anandasundaresan vs M/S.Akshaya Pvt. Ltd on 10 January, 2025
Author: J.Nisha Banu
Bench: J.Nisha Banu
C.M.S.A.No.41 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 09.12.2024
PRONOUNCED ON : 10.01.2025
CORAM:
THE HON'BLE MRS. JUSTICE J.NISHA BANU
AND
THE HON'BLE MR. JUSTICE R.SAKTHIVEL
C.M.S.A.No.41 of 2022
and C.M.P.Nos.9256 of 2022
P.Anandasundaresan ... Appellant
-vs-
M/s.Akshaya Pvt. Ltd.
Rep. by its Director, Mr.J.Ravi,
No.117/1, LB Road, 7th Floor,
Adyar, Chennai 600 020 ... Respondent
PRAYER: Civil Miscellaneous Second Appeal filed under Section 58 of the
TNRERA Act, 2017 r/w section 100 of Civil Procedure Code, 1908, against
the order of the Tamil Nadu Real Estate Appellate Tribunal, Chennai dated
07.03.2022 passed in Appeal No.103 of 2021 on the file of TNREAT, by
______________
Page No.1 of 24
https://www.mhc.tn.gov.in/judis
C.M.S.A.No.41 of 2022
reversing the order dated 30.03.2020 passed in CCP No.30 of 2020 on the
file of TNRERA, Chennai.
For Appellant : Mr.C.K.Chandrasekar
For Mrs.W.R.Subhashini
For Respondent : Mr.Mani Sundaragopal
******
JUDGMENT
(Judgment of this Court made by J.Nisha Banu, J.)
The appellant has approached this Court under Section 58 of the Real
Estate (Regulation and Development) Act, read with Section 100 of the Civil
Procedure Code against the order of the Tamil Nadu Real Estate Appellate
Tribunal, Chennai dated 07.03.2022 passed in Appeal No.103 of 2021 on the
file of TNREAT, which reversed the order dated 30.03.2020 passed in CCP
No.30 of 2020 on the file of Tamil Nadu Real Estate Regulatory Authority
(TN RERA), Chennai filed by the appellant herein.
2. The essential facts of the case would run thus:-
2.1. The appellant herein is a retired General Manager of Bharath
Petroleum Corporation Limited, a Public Sector Undertaking. The
respondent /Promoter has advertised for constructing a residential apartment
______________
https://www.mhc.tn.gov.in/judis
complex at Thaiyur Village, Chengalpet Taluk in Thiruporur bearing the
project name “January”. The said project comprised of construction of
residential flats measuring 1396 sq.ft. in an undivided share of land, in a total
land measuring about 5 Acres and 23.79 cents. The appellant being
interested in the same, approached the respondent/ Promoter and on
30.07.2011, the appellant entered into a Memorandum of Agreement with the
respondent/ Promoter. The total cost payable by the appellant was fixed at
Rs.46,38,000/- (Rupees Forty-Six Lakhs Thirty-Eight Thousand Only) by the
respondent/ Promoter for the alloted plot.
2.2. The schedule of payments, the specification of the flat and the
amenities were provided under the Project name "January" as mentioned in
the above said Memorandum of Agreement. As per the said Agreement, the
flat was to be constructed within a period of 30 months, with a grace period
of 90 days from the date of obtaining the sanction from the Authorities
concerned. The respondent/ Promoter also agreed to provide ten other
amenities which includes Club House, ATM, Restaurant, Supermarket,
Gymnasium ...etc. apart from other common facilities.
______________
https://www.mhc.tn.gov.in/judis
2.3. As per the aforesaid Agreement dated 30.07.2011, the respondent
/Promoter has to complete the construction and deliver the flat at least, on or
before 30th April 2014. But the respondent / Promoter handed over the keys
of the flat only on 24.02.2018 and the club house facilities were handed over
only on 26.01.2021. Therefore, the respondent/ Promoter has handed over the
possession of the flat with a long delay of nearly 4 years from 30.04.2014 to
24.02.2018 and with regard to the other club house facilities, a delay of 7
years has been incurred on the side of the respondent/ Promoter.
2.4. Aggrieved against the delay incurred in handing over of the flat by
the respondent/ Promoter, the appellant filed a complaint before TNRERA,
seeking a direction to the respondent/ Promoter to pay a compensation of
Rs.7,56,358/- (Rupees Seven Lakh Fifty-Six Thousand Three Hundred and
Fifty-Eight Only), with interest at 18% per annum. By an order, dated
30.03.2021, the learned Adjudicating Officer, TNRERA, Chennai, directed
the respondent / Promoter to pay a sum of Rs.5,56,358/- as compensation for
delay and interest on the said amount at 10.05% per annum from the date of
filing of the complaint until the date of payment, and a further sum of
______________
https://www.mhc.tn.gov.in/judis
Rs.1,00,000/- towards compensation of mental agony, loss and hardship and
additionally a sum of Rs.20,000/- towards litigation expenses.
2.5. Challenging the aforesaid order of the learned Adjudicating
Officer, TNRERA, Chennai, the respondent/ Promoter has filed an appeal
before the Tamil Nadu Real Estate Appellate Tribunal. The Appellate
Tribunal reversed the order of the learned Adjudicating Officer, TNRERA,
Chennai, vide order, dated 07.03.2022 made in Appeal No.103 of 2021, on
the file of TNREAT, Chennai, thereby allowing the appeal filed by the
respondent/ Promoter by holding that the project “January” of the
respondent/ Promoter was 'not an ongoing project' and therefore, the same
does not attract the provisions of the TN RERA Act and also inferred that the
complaint made by the appellant is not maintainable. Since the Appellate
Tribunal reversed the order of the learned Adjudicating Officer, TNRERA,
Chennai, aggrieved against the same, the appellant has approached this Court
by way of filing this civil miscellaneous second appeal.
3. Mr.C.K.Chandrasekar, learned counsel appearing on behalf of
Mrs.W.R.Subhashini, learned counsel for the appellant, canvassed the
______________
https://www.mhc.tn.gov.in/judis
following arguments before this Court.
3.1. According to the learned counsel for the appellant, there was a
delay in construction. Despite the delay that incurred on the side of the
respondent/ Promoter, demand was made by the respondent/Promoter
through email, to the appellant insisting on making payment of installments.
Even then, the appellant has paid those installments promptly. Apart from the
above said amount of Rs.46,38,000/-, the respondent/ Promoter has collected
amount towards Service Tax, VAT, interest for delayed payment,
infrastructure and basic amenities charges, amounting a total sum of
Rs.3,93,368/- . Therefore, a total sum of Rs.50,31,368/- (Rupees Fifty Lakhs
Thirty One Thousand Three hundred and Sixty Eight only) was paid by the
appellant to the respondent / Promoter for the purchase of the flat.
3.2. Further, the learned counsel submitted that the appellant has
purchased the apartment with a Housing Loan of Rs.35,00,000/- availed from
M/s.Corporation Bank and the payments were released to the respondent/
Promoter directly by the Bank starting from December 2011 to November
2013. The minor delays in release of payments to the respondent/Promoter
______________
https://www.mhc.tn.gov.in/judis
was due to the delay in submission of information sought by the Bank from
the respondent/ Promoter. Nevertheless, the appellant paid the interest
element on receipt of Demand Notice from the respondent/ Promoter. An
amount of Rs.16,58,091/- was paid to the bank as an interest, till taking
possession of the apartment on 24-02-2018.
3.3. According to the learned counsel for the appellant, the respondent/
Promoter has admitted before the Adjudicating Officer that the project was
"an ongoing project" on the date of the commencement of the Act. But the
learned Appellate Tribunal has failed to consider the definition of
'completion certificate' as per Section 2 (q) of the RERA Act, 2016. It is the
contention of the learned counsel that the conclusion reached by the
Appellate Tribunal is contrary to records and it ought to have discredited the
document submitted by the respondent/ Promoter, which is not a completion
certificate.
3.4. The learned counsel for the appellant drew the attention of this
Court to Clause 8 of Memorandum of Agreement dated 30.07.2011, wherein
the respondent/ Promoter has undertaken to pay a sum of Rs.7,500/- per
______________
https://www.mhc.tn.gov.in/judis
month as compensation for the delay of delivery of possession. The
respondent has revised the said amount of compensation, increasing the same
from Rs.7,500/- to Rs.10,000/- per month with effect from May 2016 vide
e-mail dated 26.10.2015, in respect of 'Wednesday Block', by their revised
timeline. But the respondent/ Promoter has not paid any amount, towards the
said compensation for delayed delivery, when they handed over the
possession on 24.02.2018 and for the other amenities in the year 2021.
3.5. It is the contention of the learned counsel for the appellant that the
Appellate Tribunal erred in considering the letter issued by the President of
the Panchayat as that of "Completion Certificate" and the same is contrary to
law. The said letter cannot be equated with the Completion Certificate issued
by the competent authority and admittedly, the project was incomplete on the
date of issuance of such letter. Moreover, the Appellate Tribunal failed to
see that the respondent/ Promoter did not submit any application to the
CMDA enclosing any certificate from the Architect / Licenses Surveyor/
Structural Engineer as mandated in Rule 2 (h)(ii) of the TN RERA Act, Rules
2017.
______________
https://www.mhc.tn.gov.in/judis
3.6. The learned counsel vehemently argued that an application
seeking completion certificate could be submitted only to the CMDA, as they
are the Competent Authority to issue the certificate after verification about
the compliance of the approved plan and completion of the project as per the
plan. But in the present case, no such completion certificate obtained from
the CMDA was furnished by the respondent/ Promoter. Moreover, at the time
when the Panchayat President issued a letter on 26.02.2014, the project was
still under construction, which aspect was not looked into by the Appellate
Tribunal.
3.7. The learned counsel for the appellant further submitted that the
Tribunal failed to see the interest statement of the builder, dated 17.2.2020
which proved that the construction itself was undertaken after 14.2.2017,
where the project got extended due to the delay/fault of the Builder and
respondent also collected interest at 18% for the belated payment by the
buyer, for the lapse on their part in not constructing and handing over the
Flat/Project within the agreed period i.e 30.04.2014.
______________
https://www.mhc.tn.gov.in/judis
3.8. Even though there was abundant material to prove that the
construction was incomplete, handing over the flats to the owner was
incomplete till 2018 and the common amenities were not even constructed as
per the project plan till 2021 and maintenance was also not complete until
2017, the learned Tribunal failed to consider the same and passed an
erroneous order, which deserves to be set aside.
3.9. The learned counsel for the appellant relied on the judgment of
this Court made in C.M.S.A.No.27 of 2020 dated 16.02.2021, wherein the
term 'completion certificate' was extensively discussed and in that case, it
was held as follows:-
“.... completion must be with reference to the
provisions of the Act and not based on the certificate of
completion issued by the Executive Officer, Town
Panchayat, who issues such certificates mostly on
extraneous considerations. Thus, this Court is of the
considered opinion that the certificates are not issued after
inspection but obtained ....
.... Thus, any certificate issued by such Executive Officer,
Town Panchayat cannot be taken as a conclusive factor, If
______________
https://www.mhc.tn.gov.in/judis
a literal meaning is adopted, with reference to Section
3(2)(b) of the RERA Act, then many number of builders/
Developers who are all in the process of construction will
escape from the clutches of law and that is not the intention
of the Parliament.”
Therefore, considering the above, the learned counsel for the appellant
submitted that the order of the Tamil Nadu Real Estate Appellate Tribunal,
Chennai dated 07.03.2022 passed in Appeal No.103 of 2021 on the file of
TNREAT is liable to be dismissed and prayed for allowing the appeal.
4. Mr.Mani Sundaragopal, learned counsel appearing for the
respondent / promoter would submit that the Completion Certificate for the
above said Project was issued by the Thaiyur Panchayat on 26.02.2014 and
he relied on section 2(q) of the RERA Act which defines Completion
Certificate as follows:-
“means the completion certificate, or such other
certificate, by whatever name called, issued by the
competent authority certifying that the real estate
______________
https://www.mhc.tn.gov.in/judis
project has been developed according to the sanctioned
plan, layout plan and specifications, as approved by the
competent authority under the local laws ”.
4.2. The learned counsel further relied on Section 3 of the RERA Act
which stipulates that projects for which Completion Certificate has not been
issued on the date of commencement of this Act ie., on 01.05.2017 (Section
3 to 9 etc., were notified only on 01.05.2017), alone are liable to be
registered under the Act. In view of the same, the provisions of the Act are
not applicable in respect of the said Project, "January" and hence the
complaint for Compensation u/s 18, 70 and 71 of the Act, made by the
appellant is not maintainable.
4.3. The learned counsel further submitted that the appellant
committed several defaults by making delayed stage-wise payments. As per
Clause 8 of the Memorandum of Agreement, dated 30.07.2011 entered
between the parties, the appellant becomes eligible for rental compensation
only in the event of making timely stage-wise payments without any delay.
______________
https://www.mhc.tn.gov.in/judis
Therefore, it is the contention of the learned counsel that the appellant is
fully aware that he is not entitled for rental compensation for the alleged
delay in delivery of possession and that is the reason why the appellant has
taken delivery of possession on 24.02.2018 without insisting on rental
compensation.
4.4. Further, the learned counsel for the respondent/ Promoter
submitted that the complaint for compensation was filed by the appellant on
29.11.2019 i.e., after 1 year and 7 months of taking possession and after 2
years and 6 months after commencement of the Act in respect of a Project for
which Completion Certificate was issued on 26.02.2014, i.e.3 years and 3
months prior to commencement of the Act. Such an attempt would amount to
giving retrospective operation to the provisions of the Act in respect of
concluded past transactions, contrary to the spirit and intent of the
Legislation in Sec.3 of the RERA Act and therefore, according to the learned
counsel for the respondent/ Promoter, the complaint of the appellant for
compensation is not maintainable.
4.5. Moreover, the learned counsel for respondent / Promoter
______________
https://www.mhc.tn.gov.in/judis
submitted that the allegation made by the appellant that the Completion
Certificate is a false document, merely on the basis that the delivery of
possession was given on 24.02.2018 is unsustainable in law. The parameters
and criteria for issuance of 'Competition Certificate' are totally different from
the parameters for the issuance of 'Occupancy Certificate'. Therefore,
according to the learned counsel for the respondent/Promoter, the handing
over of possession does not have any significance with regard to the
exemption from Registration of Projects for which Completion Certificate
has been issued on the date of commencement of the Act. In view of the
same, the order passed by the Tamil Nadu Real Estate Appellate Tribunal,
Chennai dated 07.03.2022 in Appeal No.103 of 2021 on the file of TNREAT,
by reversing the order dated 30.03.2020 passed in CCP No.30 of 2020 on
the file of TNRERA, Chennai is a well – reasoned order and the same does
not seek the interference of this Court and accordingly, prayed for dismissing
the appeal.
5. Heard the learned counsel for the appellant as well as the respondent
and perused the materials placed before this Court.
______________
https://www.mhc.tn.gov.in/judis
6. Perusal of records would reveal that the learned Adjudicating
officer, TNRERA, Chennai, vide order dated 30.03.2021 has directed the
respondent/ Promoter to deposit a sum of Rs.7,90,000/- to the credit of
Appeal No.103 of 2021 on the file of Tamil Nadu Real Estate Appellate
Tribunal, Chennai. When this matter was taken up for hearing, this Court had
granted an interim order of Status Quo, dated 15.06.2022, in C.M.P.No.9256
of 2022 with an observation that the respondent/ Promoter shall not
withdraw the aforesaid amount which was earlier deposited to the credit of
Appeal No.103 of 2021 on the file of Tamil Nadu Real Estate Appellate
Tribunal, Chennai till the disposal of this Appeal and framed the following
substantial questions of law.
(i) Whether a letter issued by President of Panchayat will
be equivalent to a Completion Certificate as contemplated
under Sec.2(h)(ii) of TN RERA Act?
(ii) Whether a certificate issued by an incompetent person
other than CMDA will amount to a completion certificate
as defined under Sec.2(h)(ii) of TNRERA Act?
(iii) Whether the Tribunal is correct in holding that the
______________
https://www.mhc.tn.gov.in/judis
TNRERA Act is not applicable to the appellant's case,
when the building and the amenities of the gated
community were not completed by the builder, even after
TNRERA Act came into force and therefore the Act was
applicable?
(iv) Whether the statutory mandate of getting completion
certificate be waived by the issuance of a mere letter by
Panchayat, especially when the actual project completion
was delayed by more than 4 years after 2014 and the
entire gated community with amenities were not handed
over by the Builder until 2018 as per the project plan?
(v) Whether the Appellate Tribunal, in the absence of
material evidence hold that an ongoing project as
completed and thereby take way a builder from the
purview of the RERA Act, which is applicable to ongoing
projects on the date of the introduction of the Act and also
deprive the compensation to an affected buyer for the
delayed handover?
7. Questions (i), (ii) & (iii): For the purpose of answering these
issues, it would be appropriate to extract Sec.2(h)(ii) &(iii) of TN RERA Act
and the same reads as under:-
“Section 2: Definitions
______________
https://www.mhc.tn.gov.in/judis
(h) “Ongoing project” means, a project where
development is going on and for which completion
certificate has not been issued but excludes such projects
which fulfill any of the following criteria on the date of
coming into force of sub-section (1) of section 3 of the Act:-
(i) ...
(ii) the projects in Chennai Metropolitan Area for
which application for completion certificate has been filed
with Chennai Metropolitan Development Authority subject
to furnishing certificate from the architect/licensed surveyor/
structural engineer associated with the project to the effect
that all the buildings in the projects have been structurally
completed i.e. all the columns, beams and slabs have been
erected supported with photographs. Chennai Metropolitan
Development Authority will issue, completion certificate for
those projects in compliance with Completion Certificate
norms prescribed. In Completion Certificate filed cases, if
the Completion Certificate is rejected by Chennai
Metropolitan Development Authority for violation of norms,
such projects will be intimated to the Real Estate Regulatory
Authority and will be bound for registration with Real Estate
Regulatory Authority. The details of all projects where
Completion Certificate application has been filed with
______________
https://www.mhc.tn.gov.in/judis
Chennai Metropolitan Development Authority prior to
notification of these rules will be disclosed to the public by
publishing the list of all such projects on the website of
Chennai Metropolitan Development Authority and Real
Estate Regulatory Authority immediately after notification of
these rules.”
(iii) in the case of projects under execution outside
Chennai Metropolitan Area, as no provision and procedure
has yet been prescribed for issue of completion certificate, if
the construction is structurally completed meaning that all
the columns, beams and slabs have been erected and
certified by the architect or structural engineer/licensed
surveyor associated with the project supported with
photographs. Such projects shall be intimated to the
concerned Local Planning Authority or Regional Deputy
Director of the Town and Country Planning Department
within 15 days from the date of notification of these rules
with a copy marked to the office of the Director of Town and
Country Planning. The Director of Town and Country
Planning will make public the list of all such projects in his
official website, on the 16th day of notification of the rules
besides publication of the same in the website of Real Estate
Regulatory Authority.”
______________
https://www.mhc.tn.gov.in/judis
(a) First and foremost, it can be inferred that the completion certificate
obtained by the respondent/ Promoter from Thaiyur Panchayat on 26.02.2014
cannot be considered as a valid completion certificate, since at that point of
time, the construction of the subject building was not completed and the
respondent/ Promoter himself has requested the buyers through an email,
dated 26.10.2015 stating that they would regret for the inconvenience caused
to the buyers with regard to the delay incurred in completing the Project and
has rescheduled the dates of completion and also vide the same email, has
revised the compensation amount for 1 BHK, 2BHK & 3BHK as Rs.5,000/-,
Rs.7,500/- & Rs/10,000/- per month post the revised timeline.
(b) Obviously, this would suffice answering the issues in favour of the
appellant, since the handing over of the building was made only on
24.02.2018 and handing over of the amenities mentioned by the
respondent/Promoter was made only on 26.01.2021 with a long delay of
nearly 4 years and 7 years respectively from 30.04.2014, which is the actual
date of handing over as stated by the respondent/ Promoter.
______________
https://www.mhc.tn.gov.in/judis
(c) Moreover, in the above said clause 2(h) (ii) of the TN RERA Act,
the competent Authority to issue Completion Certificate will be the Chennai
Metropolitan Development Authority. For projects under execution outside
Chennai Metropolitan Area, as no such provision and procedure are
prescribed for issue of completion certificate yet, such projects shall be
intimated to the concerned Local Planning Authority or Regional Deputy
Director of the Town and Country Planning Department within 15 days from
the date of notification of these rules with a copy marked to the office of the
Director of Town and Country Planning. After which, the Director of Town
and Country Planning will make public the list of all such projects in his
official website, on the 16th day of notification of the rules besides
publication of the same in the website of Real Estate Regulatory Authority.
Since no such procedures were found to be followed in the respondent/
Promoter's case, the Project “January” is concluded only to be 'an ongoing
project', which would fall under the provisions of the TN RERA Act.
Accordingly, Issues (i), (ii) & (iii) are answered in favour of the appellant.
______________
https://www.mhc.tn.gov.in/judis
8. Question no.(iv): When Section 2(h) (ii) of the TN RERA Act is
read in consonance with Section 11 (4)(b) of the RERA Act, which states
that it is the duty of the promoter to obtain the completion certificate or the
occupancy certificate, or both, as applicable, from the relevant competent
authority as per local laws or other laws for the time being in force and to
make it available to the allottees individually or to the association of
allottees, as the case may be. In the present case on hand, as obtaining
completion certificate is not a discretionary but a mandatory one as per the
provisions mandated under the TNRERA Act, the same cannot be waived by
any other similar letter issued by the Panchayat under the guise of alleged
completion. Hence, Question (iv) is answered in favour of the appellant.
9. Question no.(v): From the submissions made by the learned counsel
appearing on either side as well as the perusal of the material evidences
submitted before this Court, this Court is of the considered opinion that the
project 'January' of the respondent/ promoter is an ongoing project and it
definitely falls under the provisions of the TN RERA Act. Therefore, the
______________
https://www.mhc.tn.gov.in/judis
respondent/ Promoter cannot evade from paying compensation to the
appellant for delayed handover as ordered by the learned Adjudicating
Officer,TNRERA, Chennai vide order dated 30.03.2020 passed in CCP
No.30 of 2020. Accordingly, the Question no.(v) is also answered in favour
of the appellant.
10. In the result,
(i) This Civil Miscellaneous Second Appeal stands
Allowed;
(ii) The order passed by the Tamil Nadu Real Estate
Appellate Tribunal, Chennai dated 07.03.2022 in Appeal
No.103 of 2021 is hereby setaside and the order passed by
the learned Adjudicating Officer,TNRERA, Chennai vide
order dated 30.03.2020 passed in CCP No.30 of 2020 is
upheld; and
(iii) The compensation awarded to the appellant by the
learned Adjudicating Officer,TNRERA, Chennai vide order
dated 30.03.2020 passed in CCP No.30 of 2020 stands
confirmed. No costs. Consequently, connected
miscellaneous petition stands closed.
______________
https://www.mhc.tn.gov.in/judis
(J.N.B.J) (R.S.V.J)
10.01.2025
______________
https://www.mhc.tn.gov.in/judis
J.NISHA BANU, J.
and
R.SAKTHIVEL, J.
sts
Internet : Yes/No
Index: Yes/No
Speaking Order: Yes/No
sts
To:
The Tamil Nadu Real
Estate Appellate Tribunal,
Chennai.
Judgment made in
Dated:
10.01.2025
______________
https://www.mhc.tn.gov.in/judis
