CHENNAI: Small housing projects that do not exceed eight apartments and are less than 500 square metres cannot be registered under the Tamil Nadu Real Estate Regulatory Act. The buyers of apartments in such projects who have grievances will have to approach either a civil or consumer court in accordance with the law, the Madras High Court has ruled.
Setting aside an order by the Tamil Nadu Real Estate Regulatory Authority (TNRERA) that directed a developer to pay compensation to home buyers, the HC said the authority does not have the jurisdiction. TNRERA had earlier imposed a compensation of Rs 13.31 lakh besides Rs 25,000 in legal expenses in a case related to delay in handing over the flats.
‘Act’s provisions can’t be used beyond its scope’
Though the project under the provisions of TNRnrERA could not be registered under the regulatory body and tried under the Act, TNRnrERA took up the case on the pretext that the flat size was over 500 square metres.
Under Section 3(2) (a) of the RERA Act, the project could not be registered with TNRnrERA under two conditions. These include that the land should not be developed exceeding 500 sqm ‘or’ the project should not exceed eight apartments, inclusive of all phases.
However, Madras HC ruled in favour of Devinarayan Housing Board and Property Developments, which challenged the orders passed by Tamil Nadu Real Estate Appellate Tribunal (TNRnrEAT). “The builder constructed the apartment consisting of eight flats, in an area measuring 5,935 square metres and out of the two criteria mentioned in the Act for grant of exemption, the appellants have fulfilled one of the criteria and therefore, they are not liable to get their project register under the said Act. Hence, this court holds the real estate project is not required to be registered under the RERA as the same does not fall within the purview of the Act,” said Justice Krishnan Ramasamy.
On whether the allottee of an unregistered real estate project under Section 3(2) of the RERA, 2016, will have any protection under the provisions of RERA, to address their grievances before the regulatory authority or the adjudicating officer or the TNRnrEAT, the court said the definitions and provisions of an Act cannot be used the beyond its scope.The authority or adjudicating officer or RERA will not have any control over the unregistered project, so as to empower them to deal with the grievances of the allottees of the unregistered projects.
The developers had built three-bedroom residential apartments at Uruur Village, Jayaram Avenue, Vannanthurai in Shastri Nagar. Under the sale and construction agreement, the price of the apartment was fixed at Rs 3.3 crore and the handing over of the property, on August 30, 2017. Despite home buyers having paid the amount as per the agreement, the developers failed to hand over the property. The TNR EAT had subsequently ordered that the developer is liable to pay a sum of Rs 13.31 lakh to the home buyers as compensation and Rs 25,000 towards litigation expenses.