TNRERA Orders Tamil Nadu Housing Board to Execute Sale Deed and Formally Hand Over Flat After Full Payment by Homebuyer
Pranav B Prem
The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has directed the Tamil Nadu Housing Board (TNHB) to execute the sale deed and officially hand over the keys of a flat to a homebuyer who had already made full payment, but was not given formal possession or legal title to the property. The Authority held that the Housing Board failed in its obligations under the Real Estate (Regulation and Development) Act, 2016 by neither executing a sale agreement nor registering the undivided share (UDS) of land in favor of the allottee.
Also Read: Karnataka RERA Slams Mantri Developers For Delay, Orders Rs. 2.56 Crore Refund
The case concerned a complaint filed by a homebuyer, S.D.V. Chandru, who was allotted Flat No. 100 in the SAF Games Village Scheme, Koyambedu, Chennai, through an allotment letter dated 01.11.2021. The total consideration for the flat was Rs. 1,71,07,100/-, and an initial booking amount of Rs. 5,00,000/- was paid on the date of allotment. As per the payment plan, the complainant paid the first major installment of Rs. 1,57,51,745/- (inclusive of Rs. 10,40,780/- as interest) on 20.11.2021. The remaining 5% was to be paid at the time of possession.
Though the builder had promised delivery by January 2022, there was a delay of over eight months. On 22.07.2022, the Housing Board demanded Rs. 10,96,300/- as interest for belated installment payment, without offering a proper breakup or justification. Despite the objections raised by the complainant, the board did not provide a transparent explanation and instead sent vague and misleading calculations. The flat was informally handed over on 04.08.2022 without any formal handover letter. Later, the Housing Board demanded the remaining 5% of the flat cost, corpus fund of Rs. 50,000, and maintenance charges of Rs. 5,000 per month. The complainant made the full payment by December 2022.
However, even after receiving the full payment, the builder failed to execute the sale agreement or register the UDS in the complainant's name. The complainant argued that there was no clear mention of any additional charges or interest in the allotment order, and the demand for such amounts was arbitrary. He filed a complaint before TNRERA seeking execution of the sale deed, official handover of the keys, interest for delay in possession, and litigation expenses.
The Housing Board, in its response, claimed that the complainant had failed to pay an additional capitalization interest of Rs. 10,40,780/-, which was due by 30.11.2021. It further alleged that even after issuing letters requesting payments, the complainant had not cleared the full interest and maintenance dues, and therefore the Board was not obligated to execute the sale deed or handover the flat.
Upon reviewing the evidence and submissions, the Authority found that the complainant had largely adhered to the payment schedule. It noted that the first installment was paid even before the due date and that the remaining flat cost was paid in December 2022. Although there was a delay in payment of maintenance and corpus fund, the Authority held that this did not justify the builder’s failure to officially hand over possession.
The Authority observed that the allotment order did not clearly specify the interest component. Referring to the Supreme Court’s judgment in Haris Marine Products v. Export Credit Guarantee Corporation (ECGC) Ltd., it held that ambiguous clauses must be interpreted in favor of the beneficiary. Since the allotment order lacked clarity on the interest liability, the Authority held that the Housing Board could not claim interest for belated payments.
Further, the Authority emphasized that under Section 13(2) of the Real Estate (Regulation and Development) Act, 2016, the promoter is required to execute a written agreement for sale. In this case, the Housing Board failed to do so. Moreover, Section 17 of the Act mandates the execution of a registered conveyance deed and handover of possession upon full payment, which had also not been fulfilled.
Holding the Housing Board accountable for the delay and non-compliance with statutory obligations, the Authority directed the Respondents to execute the sale deed and officially hand over the keys of the flat to the complainant. This direction was made subject to the complainant paying the pending corpus fund of Rs. 50,000 and maintenance charges of Rs. 5,000 per month for the period from December 2022 to June 2023. The payment is to be made on or before 30.06.2025. With these directions, the complaint was disposed of by TNRERA.
Cause Title: Thiru S.D.V. Chandru V. Tamil Nadu Housing Board & Anr
Case No: C.No.109/2023
Coram: Thiru L. Subramanian, IAS [Hon'ble Member], Advocate M. Krishnamoorthy [Hon'ble Member]
[Read/DOwnload order]
