Tamil Nadu REAT Directs Prestige To Hand Over Service Plots To Villa Owners' Association

The Tamil Nadu Real Estate Appellate Tribunal (REAT) on 2 September partly allowed an appeal filed by the Prestige Silver Springs Villa Owners Association and directed Prestige South City Holdings and Ratnavara Developers LLP to hand over two service plots in the villa project within two months.

A Bench comprising Chairperson Justice M. Duraiswamy and Judicial Member K. Babu noted that a developer and landowner cannot retain service plots earmarked for common use in a sanctioned layout on the basis of an arbitral award to which the villa owners' association was not a party. The Tribunal observed:

“The Villa owners purchased the Villas as per the CMDA sanctioned plan. The sanctioned plan clearly mandates that all common areas shall not be utilized otherwise than as indicated in the sanctioned plan. Further, in the Arbitration proceedings, the appellant Association was not a party and the findings of the Arbitration proceedings in which the appellant Association was not a party shall not bind them. The land owner or the builder cannot be allowed to violate the sanctioned plan. In such circumstances, service Plot Nos.4 & 5 (II), which form part of the approved layout in the sanctioned plan, cannot be utilized or retained by the 1st respondent.”

The matter concerned Prestige Silver Springs, a residential villa project at Sholinganallur, Chennai, spread across 18.06 acres.

Prestige South City Holdings and Ratnavara Developers LLP entered into a Joint Development Agreement on 5 September 2011, followed by a Supplementary Development Agreement dated 21 November 2013. The Chennai Metropolitan Development Authority (CMDA) approved the layout on 29 August 2013.

Disputes subsequently arose between the developer and the landowner concerning the sale of plots. The parties referred their disputes to arbitration, which culminated in an award dated 20 April 2021.

The Prestige Silver Springs Villa Owners Association thereafter approached the Tamil Nadu Real Estate Regulatory Authority (TNRERA), seeking registration of the project, refund of the corpus fund, transfer of club-house membership collections, handover of Service Plot Nos. 4 and 5(II), and the original title documents.

By an order dated 4 February 2026, TNRERA held that Prestige Silver Springs was an ongoing real estate project requiring registration under the Real Estate (Regulation and Development) Act, 2016 (RERA). It also directed Prestige South City Holdings to refund a corpus fund of Rs. 95,32,945, but did not grant the Association relief concerning the service plots.

Both sides then filed cross-appeals under Section 44 of RERA, which provides for an appeal against an order of the Real Estate Regulatory Authority before the Appellate Tribunal.

The Association argued that villa buyers had purchased their properties on the basis of the CMDA-approved layout and that land earmarked for service or common purposes could not subsequently be diverted in a manner affecting their rights.

Prestige South City Holdings and Ratnavara Developers LLP relied on the arbitral award and contended that the project had been completed before RERA came into force on 1 May 2017 and therefore did not require registration.

The Tribunal rejected this contention. It noted that a construction agreement was executed as late as 8 March 2017, a completed villa was sold in October 2021, and water and sewerage connections were provided only in June 2023. It therefore upheld TNRERA's finding that Prestige Silver Springs was an ongoing project requiring registration under RERA.

On the service plots, the Bench held that the sanctioned plan governed their permissible use and that the arbitral award between the developer and landowner could not bind the Association, which was not a party to the arbitration.

It held that the landowner or builder could not use or retain Service Plot Nos. 4 and 5(II) contrary to the sanctioned plan and directed Prestige South City Holdings and Ratnavara Developers LLP to hand over vacant possession of the two plots to the Association within two months.

The Tribunal also dismissed Prestige South City Holdings' separate appeal against the project's RERA registration and the corpus-fund refund direction. It recorded that the Association was entitled to receive Rs. 97,08,638 with accrued interest, representing the amount deposited by the promoter towards the corpus-fund direction.

Accordingly, the REAT partly allowed the Association's appeal and dismissed Prestige South City Holdings' appeal.

Appearances for petitioner (Prestige South City Holdings): Advocates Raghavendra Ross Divakar, DUA Associates.

Appearances for respondent (Prestige Silver Springs Villa Owners Association & Anr.): Senior Advocate Chithra Sampath, Advocate M.T.S. Baskaran for the Association; Advocate Aparna Raju for Ratnavara Developers LLP.