Builders and real estate developers cannot escape from the Real Estate (Regulation and Development) Act of 2016 if they had obtained completion certificates without completing the project in all respects and without providing amenities, such as approach roads, water facilities, drainage connections and so on, as agreed between them and the purchasers, the Madras High Court has held.
Justice S.M. Subramaniam held that “mere completion of structural building is insufficient to arrive a conclusion that it is a ‘completion’ within the meaning of the provisions of the RERA or under the Tamil Nadu Town and Country Planning Act of 1971… Even in common parlance, the word ‘completion’ would only mean substantial completion in accordance with the contract between the parties.”
Second appeal
The ruling was passed while dismissing a second appeal preferred by SARE Shelters Project Private Ltd. which had developed a housing project on 100 acres close to Old Mahabalipuram Road (OMR) at Thiruporur in Chengalpattu district. A resident welfare association of Phase I of the project had approached the Tamil Nadu Real Estate Regulation Authority in 2018, complaining about the absence of basic facilities.
However, the Authority refused to entertain the complaint after the developer claimed that it was not an ongoing project to be covered under the RERA and that a completion certificate for Phase I of the project had been issued by the Executive Officer of the Thiruporur panchayat in 2014, much before RERA came into force on May 1, 2016. When the residents took the decision on appeal to the Real Estate Appellate Tribunal, the latter overturned the Authority’s decision and hence, the present second appeal.
Dismissing the appeal, Justice Subramaniam agreed with senior counsel R. Singaravelan, representing the residents, that the completion certificate issued by the Executive Officer of the town panchayat could not be considered a valid certificate.
“This court is of the considered opinion that the certificates are not issued after inspection but obtained. This court is conscious regarding the prevailing situation in the real estate business. For each and everything, corrupt activities are dominating the field and the competent authorities are not initiating appropriate action to control the menace of corruption in the real estate activities,” it said.
“Every protection ensured under the statute must be adequate and proper so as to protect the interest of public in general and more specifically, the bona fide purchasers of the apartments or villas from the developers/promoters. Thus, any certificate issued by such Executive Officers of town panchayats cannot be taken as a conclusive factor,” the judgment read.
The court directed the State government to ensure that appropriate action was initiated against erring officials who issue completion certificates without conducting proper inspection. He directed the Tamil Nadu Real Estate Regulation Authority to entertain the residents’ complaint, hold an inquiry and pass appropriate orders within three months.
The court also recorded the submissions made on behalf of the residents that there were several other irregularities in the housing project. The approach road was actually a land belonging to the deity of Kandasamy temple in Thiruporur. The Hindu Religious and Charitable Endowments department had refused to part with the land though the builder had claimed that the residents had no other pathway.
Coming down heavily on the developer, the HR&CE department had wondered how the Town and Country Planning authorities approved the plan in which a community hall, police station and fire station had also been shown to be constructed on the temple land.
