Promoters sell OSR land, directed to refund

CHENNAI: Directing the promoters, who sold a plot that has been earmarked as open space reserve (OSR) land of layout project, to refund the amount paid by the buyer, the Tamil Nadu Real Estate Appellate Tribunal (TNREAT) has upheld an order passed by Tamil Nadu Real Estate Regulatory Authority (TNRERA).

Buyer GK Vijay booked a plot in a layout project developed by MS Builders and MS Foundation Private Limited in Vayalanallur near Poonamallee. The buyer alleged that the promoters suppressed that the project was not an approved one and offered to sell a plot. Believing the words of the promoters, the builders agreed to purchase the plot at Rs 10 lakh and paid the money on different dates in 2014.

Subsequently, the promoters obtained planning approval from Chennai Metropolitan Development Authority (CMDA).

Meanwhile, Vijay came to know that the plot purchased by him was earmarked as OSR and marked as 'park' in the approved layout. He wanted to withdraw from the project and demanded a refund of Rs 10 lakh with interest. He noted that being an ongoing project, the layout project ought to have been registered with the TNRERA.

As the promoters failed to refund, Vijay filed a complaint with TNRERA.

Hearing the complaint, the single member bench of TNRERA directed the promoters to refund Rs 10 lakh with interest. Also, a penalty of Rs. 1 lakh has been imposed against the promoters for failing to register the project with TNRERA.

Instead, the promoters filed an appeal in front of TNREAT. While hearing the appeal, TNREAT observed that viewing from any angle, the promoters are bound to return the amount with interest. The tribunal also upheld the direction of imposing a penalty.

While dismissing the appeal petition at the admission stage, the tribunal noted that the promoters have already deposited Rs 19.32 lakh and entitled the buyer to withdraw the amount (excluding Rs. 1 lakh penalty) from the bank after expiry of appeal time.