Madras High Court Holds Former Developer Qualifies As RERA Allottee For Subsequent Apartment Purchase

The Madras High Court has held that an agreement to purchase an apartment cannot be treated as a commercial transaction merely because the buyer had earlier agreed to develop the same property. It held that the buyer qualified as an allottee under the Real Estate (Regulation and Development) Act, 2016 (RERA).

Justice P.B. Balaji observed, “A careful consideration of the above clearly bring the petitioner within the definition of 'allottee', under Section 2 of RERA, I am unable to see how the agreement of sale for undivided share and the construction agreement entered into between the petitioner and the respondents/land owners, who had taken upon the task of development of the property upon themselves to be termed as a commercial transaction.”

The dispute arose from a Joint Venture Agreement executed on November 6, 2012, under which Bennett Property Holdings Company Limited initially agreed to develop property belonging to four companies: PNB Techwaves Private Limited, PNB Exporters Private Limited, PNB Realty Limited and Artha Real Estate Corporation Limited.

The agreement was subsequently terminated by mutual consent. The landowners took responsibility for construction, while Bennett agreed to purchase an apartment in the proposed building. The parties entered into an agreement for the sale of an undivided share in the land and a separate construction agreement.

Bennett alleged that the landowners delayed construction and failed to hand over possession as promised. It approached the Tamil Nadu Real Estate Regulatory Authority (TNRERA) seeking compensation.

However, on July 15, 2026, TNRERA's Adjudicating Officer rejected the complaint as not maintainable, treating the transaction as commercial in nature and holding that the dispute could only be adjudicated by a Commercial Court.

Challenging this decision, Bennett approached the high court under Article 227 of the Constitution. The four companies did not appear despite service of notice and newspaper publication and were proceeded against ex parte.

Examining Sections 2(d) and 2(zk) of RERA, which define an allottee and promoter respectively, the court held that Bennett's earlier contractual relationship with the landowners had ended with the termination of the Joint Venture Agreement. Its subsequent apartment purchase and construction agreement had to be considered independently.

The court further held that landowners who assume the role of developers must comply with RERA and address apartment buyers' grievances. It also clarified that an aggrieved allottee can approach RERA authorities for relief even if the project is not registered under the Act.

"Once the land owners have assumed the role of a developer, then they are also equally bound to comply with the provisions of RERA and become liable to address the grievances of apartment buyers, like the petitioner. Unfortunately, the Adjudicating Authority has unnecessarily weighed the earlier arrangement between the petitioner and the respondents to non suit the petitioner and hold that the petitioner's Construction Agreement would fall outside the scope of the RERA Act", the court ruled.

Accordingly, the court allowed Bennett's revision petition and set aside the July 15, 2026 order. It directed the Adjudicating Officer to entertain and number the complaint; if otherwise in order, issue notices to the respondents, allow them an opportunity to file objections and decide the complaint on its merits.

For Petitioner (Bennett Property Holdings Company Limited): Advocate R. Venkat Raman, for M/s. TATVA Legal, Chennai.