The Tamil Nadu Real Estate Regulatory Authority (TN-RERA) has pulled up prominent developer Casagrande Homes, directing the immediate handover of possession of an apartment to an allottee. Finding the promoter in “complete contravention” of the Real Estate (Regulation and Development) Act, 2016 (RERA), the Authority further slapped a penalty of ₹3,00,000/- for statutory non-compliance.

The order was passed following a complaint highlighting significant delays and unauthorized financial demands by the developer.

Counsel’s Arguments: A Case of Systematic Statutory Breach

Mr. Rahul Jagannathan, appearing for the homebuyer, argued that the developer’s actions were not merely a breach of contract but a blatant violation of the protective framework of the RERA Act, causing severe mental and financial hardship to the client.

The core of Mr. Jagannathan’s submissions rested on four critical pillars:

• No Interest on Delayed Payments During Promoter’s Default: Mr. Rahul Jagannathan contended that the promoter is legally barred from demanding interest on delayed payments from the homebuyer when the promoter themselves have failed to deliver the project as per the committed timeline. He argued that the developer cannot benefit from their own default.
• Violation of the 10% Statutory Ceiling: In a significant charge, the Counsel pointed out that the promoter had collected more than 10% of the total sale consideration before executing a registered Agreement for Sale. He emphasized that this is a direct violation of Section 13 of the RERA Act, which prohibits such collection to prevent the exploitation of buyers.
• Strict Compliance with Agreements: It was argued that the promoter is duty-bound to strictly adhere to the terms of the Sale and Construction Agreement. Any deviation from the agreed-upon technical specifications or timelines constitutes a breach of the trust reposed by the allottee in the regulatory framework.
• Bifurcation of Claims (Form N Jurisprudence): Addressing the procedural aspect, Mr. Rahul Jagannathan clarified that while the Authority can direct possession and hand over the apartment, all disputes regarding specific compensation and interest amounts are to be adjudicated separately. He submitted that these claims would be pursued through a ‘Form N’ complaint before the Adjudicating Officer of TN-RERA, as per the statutory scheme.

The Authority’s Ruling

Taking note of the arguments, TN-RERA observed that the developer had indeed overstepped the legal boundaries set by the 2016 Act. The Authority held that the collection of funds exceeding the 10% limit without a registered agreement was a serious lapse.

While directing the promoter to hand over the apartment immediately, the Authority imposed the ₹3 lakh penalty to serve as a deterrent against the “cavalier attitude” toward RERA mandates. The homebuyer has also been granted the liberty to approach the Adjudicating Officer for a detailed assessment of compensation under Form N.

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