The Tamil Nadu Real Estate Regulatory Authority (TN-RERA) has ruled in favor of homebuyers, directing Alliance Villa Pvt Ltd to strictly adhere to the terms of the registered Construction Agreement. The Authority held that the promoter cannot unilaterally deviate from agreed-upon costs or demand additional payments that were not part of the original contractual framework.

Counsel’s Arguments: Binding Nature of Agreements

The complainants/allottees were represented by Mr. Rahul Jagannathan, who argued that the promoter’s demands for additional payments under various heads were legally untenable.

Mr. Rahul Jagannathan, primary submissions included:

• Contractual Sanctity: He contended that the Construction Agreement, once registered, becomes the final word on the financial obligations of the allottee. The promoter is bound by the total cost mentioned therein.
• Unjustified Additional Demands: Mr. Rahul Jagannathan,  pointed out that the promoter was attempting to levy charges for “statutory requirements” and other amenities that were already inclusive of the total project cost or should have been factored into the initial pricing.
• Violation of RERA Provisions: It was argued that under the Real Estate (Regulation and Development) Act, 2016, promoters are prohibited from making unauthorized additions or claiming costs beyond the scope of the disclosed agreement without the explicit consent of the allottees.
• Demand for Possession: Mr. Rahul Jagannathan, submitted that the allottees had fulfilled their payment obligations as per the construction milestones and were entitled to the handover of the villa without being subjected to further arbitrary financial demands.

The Authority’s Findings and Directions

The Authority, after examining the registered Construction Agreement and the payment schedule, found merit in the arguments advanced on behalf of the allottees. TN-RERA emphasized that the relationship between a promoter and an allottee is governed by the registered documents, and any oral or supplementary demands outside that scope lack legal standing.

Key directions issued by TN-RERA:

• Compliance with Agreement: The Authority directed Alliance Villa Pvt Ltd to act strictly in accordance with the terms and conditions of the Construction Agreement dated between the parties.
• Handover of Property: The promoter was directed to complete the construction (if any pending) and hand over possession of the villa to the complainants upon receipt of only the balance amounts explicitly mentioned in the registered agreement.
• Restriction on Extra Charges: The Authority restrained the promoter from demanding any “extra” or “additional” charges that did not find a place in the original payment schedule of the registered agreement.
• Adherence to Timelines: The promoter was reminded of its obligation to deliver the project as per the RERA-registered timelines, failing which statutory interest for delay would be applicable.

Conclusion

This order reinforces the protection granted to homebuyers against arbitrary cost escalations by developers mid-way through a project. By holding the promoter to the “letter of the law” as defined in the Construction Agreement, TN-RERA has sent a clear message that registered contracts are not mere formalities but binding legal mandates.

“The promoter is duty-bound to deliver the villa as per the cost agreed upon in the registered Construction Agreement. Demanding additional sums under heads not disclosed at the time of agreement is a violation of the trust and the statutory framework of the RERA Act.”

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