Tamil Nadu RERA Orders Casagrand Millenia to Pay Rs. 3 Lakh for Mental Agony Over Delayed Possession

The Tamil Nadu Real Estate Regulatory Authority (the Authority) on 10 February, held that a homebuyer is entitled to compensation for mental agony caused by delayed possession and directed Casagrand Millenia to pay Rs. 3 Lakh. The Authority also awarded Rs. 50,000 towards litigation costs.

Adjudicating Officer Tmt. N. Uma Maheswari observed:

“There is no use of executing the sale deed alone in favour of the complainants without handing over the booked unit to them. Ex.A3 — The Construction Agreement is silent about the stagewise payments. In these circumstances, the delay caused by the respondent is not acceptable and thereby the complainants are entitled for a compensation of Rs.3,00,000/- towards the mental agony they have sustained due to the delay.”

The builder had promoted the residential project “Casagrand Millenia,” promising possession by June 2023. Relying on this representation, the homebuyer booked an apartment by paying a booking amount of Rs. 1 Lakh. The total sale consideration was fixed at Rs. 2.11 Crores, inclusive of GST and corpus fund.

On 13 September 2022, the homebuyer paid Rs. 8 Lakhs even before execution of agreements. The sale and construction agreements were executed on 17 September 2022, along with a tripartite agreement with the bank for loan financing.

Although possession was initially promised for June 2023, the builder extended the completion date to 31 December 2023 and subsequently to 31 March 2024. By that time, the homebuyer had paid Rs. 1.92 Crores, approximately 91% of the total sale price.

The homebuyer alleged diversion of project funds to a sister concern, IRIS Development LLP, and contended that the builder delayed registration of agreements despite receiving the requisite charges. The builder, however, reported to TNRERA that the project was 100% complete, whereas the homebuyer maintained that the unit was still incomplete and not in a habitable condition.

On 31 July 2023, the builder issued a termination notice, cancelling the allotment due to alleged overdue payments and stating that 20% of the booking amount would be retained. Aggrieved, the homebuyer filed a complaint seeking relief.

The Authority noted that under the construction agreement, the builder had undertaken to complete construction by December 2023 with a three-month grace period, extending the deadline to March 2024.

Since possession was not delivered within this timeline, the Authority held the builder responsible for the delay, awarding Rs. 3 Lakh as compensation for mental agony and Rs. 50,000 towards legal expenses.