Madras High Court Directs Collector To Recover TNRERA Penalty From SSM Builders Within 3 Weeks

The Madras High Court has directed the Chengalpattu District Collector to enforce a recovery warrant issued by the Tamil Nadu Real Estate Regulatory Authority (TNRERA) against SSM Builders and Promoters over an unfinished residential-cum-commercial project comprising about 2,952 flats and 135 commercial units in Chennai.

Allowing a petition filed by the SSM Nagar Flat Owners Association, a Single Bench of Justice P.T. Asha directed the Collector to recover the penalty imposed on the builder as arrears of land revenue within three weeks.

The court noted that TNRERA had forwarded the recovery warrant in May 2024, but the Collector had taken no steps to initiate recovery proceedings.

“In the light of the above order of the 2nd respondent, a mandamus is issued to the 1st respondent to forthwith execute the recovery orders / warrant issued by the 2nd respondent and recover the sums directed in the aforesaid order from the 3rd respondent as arrears of land revenue under the Tamil Nadu Revenue Recovery Act, 1864, within a period of 3 weeks from the date of receipt of a copy of this order,” the court directed.

The dispute arose from a residential-cum-commercial project developed by SSM Builders and Promoters at Nedunkundram Village, Perungalathur, Chennai.

According to the Association, the builder failed to complete the project in accordance with the sanctioned plan, prompting several flat purchasers, including the Association, to file complaints before TNRERA.

By an order dated October 6, 2021, TNRERA found that the project remained incomplete and directed SSM Builders to register the project, complete the pending works, hand over maintenance of the common areas to the Association under Section 17 of the Real Estate (Regulation and Development) Act, 2016, and furnish the Completion Certificate.

The builder challenged the order in appeal, which was dismissed on February 2, 2022.

Following the builder's continued non-compliance, the Association initiated execution proceedings before TNRERA.

On September 13, 2023, TNRERA passed a common order imposing penalties on SSM Builders under Section 63 of the Act and directing their recovery through the Chengalpattu District Collector.

The penalty was fixed at ₹1,000 per day, subject to a maximum of ₹1 lakh, until the builder furnished the Completion Certificate issued by the Chennai Metropolitan Development Authority (CMDA).

Subsequently, on May 23, 2024, TNRERA issued a recovery warrant under Section 40(1) of RERA, read with Rule 26 of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017.

The warrant required the Collector to recover the penalty from the builder as arrears of land revenue under the Tamil Nadu Revenue Recovery Act, 1864.

However, despite the Association's formal representations and personal visits, the Collector failed to execute the warrant.

Consequently, the Association approached the High Court under Article 226 of the Constitution, seeking directions to enforce TNRERA's recovery order.

Upon examining the records, the Court noted that TNRERA had forwarded the recovery warrant to the Collector on May 23, 2024, but no steps had been taken to initiate revenue recovery proceedings.

The High Court accordingly allowed the writ petition, directing the Chengalpattu District Collector to recover the amounts within three weeks from receipt of a copy of its order. No costs were awarded.

For Petitioner (SSM Nagar Flat Owners Association): Advocate Mahima Makhija.

For Respondent (District Collector, Chengalpattu): Government Advocate J.V. Sakthi Baalakrishnan.